Index Funds: the greatest fund

Index Funds are mutual funds represent the index at the market. Meanwhile, index is bunch stock of some companies. E.g., Standard & Poor’s Composite (S&P 500) has represent five hundreds firms. Wilshire 5000 is union of New York Stock Exchange (NYSE), American Exchange (Amex) plus some National Association Dealers Automated Quoted (NASDAQ) stocks.

Investor who has limited money may consider index funds. You can invest in one hundred or more companies with limited money. You must provide money over many times to buy one hundred individual stocks.

Index is equally weighted average of all stock. The performance of index is depending on market. They may give you rate of return high. This index may consider as one of your investment portfolios.

Although this investment has good prospectus that does not mean you always get money every month. You must realize that index may go down. Therefore, you must prepare for it. Although this index contains good company but these stock companies may go down too. Stock 100 companies change because demand and economic condition. You can watch in TV that index always move irregular or volatile.

Unfortunately, index usually contains of good stock. Index does not like portfolio that could reduce the risk. Some index contains stock with some correlation (? = 1). E.g., Dow Jones contains about 30 blue chip stocks. Your index will rise when economic growth. When economic bearish your index may go down. On contrary, Index, which contains different type of stocks, could reduce risk. E.g., Wilshire may reduce the risk because contains variety stock.

Buying index Funds is passive strategy. Beginner Investor may try this investment. Investment in Index Funds is easy too. You do not have to work hard for making portfolio. You do not have to analyze companies, economics factor, markets, and stocks.

What index fund should I buy?

Usually, Jon’s the one who gets up in the morning and checks the Asian and European stock markets, for clues to what our market will do when it opens. But this morning it was me. For weeks, he’s been saying we should buy, and I’ve been pointing out that we have a $8800 tuition bill due in January. Finally, on Saturday, we discussed the fact that the market rose 11 percent last week, and decided we should probably buy before it rose much further.  

We still have to put some money in our IRAs to max them out for this year. And since I know we’ll do that at some point before April, we might as well do it now. So I decided to check the foreign markets, and if signs were pointing up, I’d put in an order to buy. If it looked like there would be a selloff after last week’s gain, I would wait. So I checked, and signs are, indeed, pointing up.

What should we buy? I want to buy an index fund, partly because I’ve been reading Vanguard founder John Bogle’s new book (more on that later). So I checked out Morningstar’s trusty ETF performance tracker. (I defined an ETF in an earlier post.) Jon only wants to buy stocks or funds with high dividend yields. So I identified two: First Trust Value Line Dividend Index, with a 3.71 percent yield, and Vanguard Value ETF, with a 3.48 percent yield.

Any other ideas?

Add iShares S

17:38:23 BWM bought 2 units of IOO US at Usd 46.36

BWM is buying on weakness the ETF reflecting the 100 World Biggest Corporation, as the market is still dominated by fear and uncertainty

Best Regards

Go Long iShares S

9/26/2008 3:43:42 PM: Basic Wealth Management bought 1 units of IOO US at Usd 64.39

Considering today’s bad news (WaMu taken over by JPM and uncertainty about the bailout), we find the market reacting very good on this news. (Dow and S&P are up and Nasdaq almost flat) A market going up on a bad news is a market that wants to go higher. Additionally the market is still in oversold territory and BWM expect a relief rally to take place soon.

Mutual Fund says SET Index at 570 at Year End: Ouch, that Hurts!

14.38-One Investments, the old Thai mutual fund noted for being very computer-modeling-like, says it it switching to holding cash as it analysis indicates the Thai stock market, SET, will be hovering around 570 by year end-ouch!

“Little things like the department of economics adjusting Thailand’s growth down just a little never bothered investors befor but today, it is big news and that pretty much says all there is to say about investors confidence,” said Chaiprug, MD of One.

He said Wall Street will continue to haunt investors and that will pretty much sap all interest in stock market investment away. On top of that he said he figure more funds and brokerage houses all over the globe will start to transform themselves into financial institutions and so to get their capital adequacy ratio of BIS under the rules, lots of selling of stocks will be occurring through out the world, and thuse lowering the standard price to earnings standard globally.

“There will not be a great deal of premium the market will support,” he said, adding that the only hopes lies in retail and small investors globally to come in and pick up the cheap pieces.

“Retail and small investors may return and it is important mutual funds start structuring their funds to attract this segment, who may not be so interested blue chip but want high growth and low price,” he said.

Ain

It’s pretty gratifying to pick a stock that’s a three bagger.  Peter Lynch used the term “bagger” to say that a stock has multiplied in value. ie three bagger stock is one that tripled in value.  Note: If you looked up the term three bagger in Urban Dictionary it is a different definition, but pretty funny.

He’s one of the few institutional investor that has outperformed the market over a long period of time, Warren Buffett being the other notable one.  However, the number of investors that can outperform the market in the long run is few and far between.

The reality is, for an investor who’s career is not in following the market everyday it’s very hard to outperform the market.  That Mad Man, Jim Cramer recommends that you spend an hour a week for each security that you have.  I spend about an hour a month for all of my portfolio.  The market moves everyday and it’s hard to keep track, let alone read and understand the earnings and quarterly reports for each stock.  You really have to do your homework.  I’ll leave that to the professionals.

In the long run it’s better to own the market than to try to pick stocks that outperform it.  Markets are efficient; especially in the world that we’re in now, with information being so easy to obtain.  Index funds lets you own sections of the markets, eg Dow Jones, S&P, and other International markets.

With that said, I’m not planning to give up all my stock picking ways.  I just plan to move my longer term portfolios over to index funds (ie IRAs and retirements).  That way I can just focus on a few and can be a little more risky with it.  Like 50% stock, 25% Las Vegas, 15% Macau, 10% Atlantic City.

It’s still fun to pick a big winner and feel like you know something that most people don’t.  Like somebody I know used to say, “I was doing that before it was cool.”  Index funds gives you a broad exposure to the market with no need to constantly follow the market.  It is especially powerful if you also join the automatic investment program, this mitigates the risk of the market.  Economist like to talk about the long run and short run.  In the long run, I think Index funds are the way to go.  But like famed economist John Maynard Keynes said, “In the long run, we’re all dead”

Next Time:  This post talked more about why I’m deciding to forgo picking stocks in my retirement accounts and moving to index funds.  Next time, I’ll talk more about why index funds instead of a mutual funds and have some statistics on it.  John Bogle has a book about mutual vs index funds.

Until next time, Go Blue!

Stock market index Funds - What Is An Index Fund?

You may use at times heard of the term prior to, fiscal indexes, however good what exactly are it. Indexes, likewise referred to as stock market indexes, come the list of equities & any savings comparisons that indicate a full of value of any given index in the index.

These indexes are typically wont to show a character of all the stocks taken together. These characteristics could include short term trading on a equivalent market, belonging to the equivalent industry or market capitalisation that come the equivalent or similar. Super typically these stock market measure come utilized as benchmarks in portfolios called mutual funds. There come funds retired there that contain the securities that are the share of a given stock. Non surprisingly, these funds come called stock funds.

There are a few different ways to categorize financial indexes. It can be referred to as broad-base indexes for instance. This typically occurs as reflection of a entire stock exchange & is a reflection of the investors sentiment about the economy. Much of the most common indexes mentioned come broad-depending indexes. These include however are non limited to the Our contries Dow Jones Industrial Typical & S&P 500 Index.

But then there are several others that are considered specialised indexes.

The difference is that the specialised ones just track certain segments of the market. Examples of these types of financials include a Morgan Stanley Biotech Stock or even the Linux Weekly News. These can track different aspects such as corporations of the certain size or even with certain types of management. A Linux Weekly News tracks corporations that use or sell products or even services that have their basis in the Linux operating patterns. Morgan Stanley Biotech (MVB) as a name suggests tracks a group of corporations from a biotech sector.

Rogers Van Eck Index Captures Global Market

An in-depth analysis of the new Rogers Van Eck Hard Assets Producers Index.

With oil at $130/barrel and gold at $850/ounce, commodities have gone mainstream.

Commodity-producing companies like Exxon and BHP Billiton play an increasingly important role in the global economy, and commodities - in various guises - play an increasingly important role in investors’ portfolios.

Index providers and exchange-traded fund developers have jumped on the trend. Thanks to the ETF revolution, you can now choose from eight flavors of broad, index-based commodities futures ETFs, linked to indexes like the S&P GSCI, DJ-AIG and UBS CMCI. That’s on top of any number of ETFs covering microcosms of the commodities world - water, solar energy, traditional energy, agriculture, gold, etc.

Against this backdrop, Jim Rogers, Van Eck and S-Network indexes have launched a new commodities index this week: the Rogers Van Eck Hard Asset Producers Liquid Index (RVE for short.)

Why does the world need yet another index? We asked Jan Van Eck, executive vice president of Van Eck Global. “There’s been a lack of a good benchmark for commodity equities,” he claims.

LINK TO FULL ARTICLE: hardassetsinvestor.com

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Asia Real Estate Lure

THE credit crisis in the United States has turned out to be an opportunity for the Asian property market, rather than slowing it down.

Cash flow into Asian property from outside the region is accelerating, according to a global report published yesterday.

The Financial Times (FT), quoting data from the study, said that property investment in Asia grew 27 per cent to US$121billion (S$165.8 billion) last year, and it continues to grow.

Credit problems and declining real estate prices in the US and Europe have prompted investors to focus more on Asia, both for long-term returns and opportunistic investments.

Most Asian markets recorded direct real estate returns above the global average of 10 per cent last year, FT reported.

This growth is expected to continue, according to the report, although at a lower rate.

Still, the outlook in Asia is more optimistic than that of Europe and North America, where investments slowed dramatically in the second half, said FT.

The report, published by KPMG, the Asia Pacific Real Estate Association, and index provider FTSE, came at a time of aggressive fund-raising activity for new global property funds.

FT said many of these funds are raising their investment allocations to Asia to tap into economies that are relatively shielded from the credit crisis in the US.

MGPA, the private equity fund manager part owned by Australia’s Macquarie Bank, for instance, launched a global fund this week that will invest mostly in Asia. The fund, of which 40 per cent came from North American investors, has already committed US$2.2 billion to investments in Singapore, Japan, China and Thailand.

Source: My Paper via Asiaone

The Curious Capitalist - TIME.com

It's just been announced that David Booth, co-founder of Dimensional Fund Advisors, is giving $300 million to the University of Chicago Graduate School of Business, which will be renamed the University of Chicago Booth School of Business. Given that pretty much all of DFA's product line has grown out of research done at the Chicago business school, the gift seems only appropriate.

It started with Rolf Bänz's Chicago doctoral thesis, which found that small-cap stocks had outperformed the overall stock market over time. In 1981, the year Bänz's findings were published in the Journal of Financial Economics, Chicago Ph.D Booth and MBA Rex Sinquefield started DFA as the first manager of small-cap index funds.

Funny thing is, the small-stock advantage seemed to disappear after 1983. But as Shawn Tully (another Chicago MBA) explained in a wonderful Fortune article 10 years ago, DFA's obsession with keeping costs down made its funds still worth owning:

In addition to charging low management fees, DFA gains on the competition by sharp trading. Part of its advantage is size: As the nation's largest market maker in small caps, DFA is the first stop for active managers desperate to buy or sell blocks of small stocks. Says Robert Deere, the head of trading: "We make it as painful for them as possible."

In 1992, DFA added another line of business, based on research by Chicago professors Eugene Fama and Kenneth French (who has since moved to Dartmouth): value funds that buy only stocks with low price-to-book ratios. Smart investors (Roger Babson, Ben Graham, Warren Buffett) had known for going on a century that cheap stocks were a better deal than expensive ones. But doing value investing in a quantitative, low-cost fashion was a worthwhile endeavor, and a lucrative one.

DFA now manages about $220 billion. Even with very low fees, that adds up to a lot. Enough to get a business school named after you.

In praise of index funds

Wow, it’s been a rough week in the market, hasn’t it? My IRA is now down 35 percent. Even VDC, the consumer products ETF I bought a couple weeks ago, is down 15 percent.

And we sure picked a bad time to start playing around with buying individual stocks. Except for RQI, a real estate ETF that’s down 64 percent since I bought it, the individual stocks that we own (GE, Bank of America, Manitowoc) are by far our worst performers. When BAC fell below $20, my husband wanted to buy, and he kicked himself when he didn’t and the stock nearly doubled. Now, it’s back down again, but I think we’re too skittish to buy back in, especially since we have a big tuition bill coming due–and no idea yet whether we’ll be able to get any student loans.

Also, I am becoming more and more convinced that index funds are the way to go. This recent Wall Street Journal article pointed out that index funds have outperformed actively managed mutual funds during this recent downturn. That’s partly because many actively managed funds were heavily invested in banks.

And the other advantage of index funds is that they don’t take over your life. When you choose individual stocks, you can beat yourself up over your bad decisions. If you just stick to a plan and invest a certain amount in index funds every month, however, then you’re less likely to wake up in the morning, as my husband does, and immediately check how your stocks are doing in pre-market trading.

It’s amazing how much can change in a week or two. When this crisis first started, we wanted to keep buying, because stocks were so much cheaper than they were a year ago. Now, as many businesses prepare for a protracted downturn, we’re staying on the sidelines. My gut feeling is that the market will be higher a year from now than it is today. But my gut feeling has been wrong too many times for me to trust it now.

Hedge Funds, Index Funds, and Buffet

Warren Buffet has bet  with one million dollars going to charity that the S&P 500 will beat the top five hedge funds (picked by Protege, a hedge fund to fund) net of fees over a ten year period.  We are currently in year two.  Read full article here

Hedge funds are known for their daring bets, secretive (proprietary) strategies, and the 2 and 20 fee (2% of assets and 20% of profits).  It has come to many people’s attention that hedge funds have not been hedging market risk for their clients since several have shut down this year during the bear market.  Hedge funds are not required to report earnings, investments they hold, or strategy.  During booming markets many hedge funds publish their unbelievable returns and attract many high net worth clients looking for above ordinary returns. 

It was reported today in the WSJ that some of these hedge funds are being forced out of business because in some cases 50% of their entire portfolios consisted of one company.  The idea is to take big bets proving their excelent forecasting skills, but one unforeseen mistake have cost many managers their funds and businesses.  Also other hedge funds have been unable to find ways around the temporary ban on short selling stocks. Here’s a quote from this morning’s WSJ article, “Big Bets Come Back to Bite Fund Managers”

To wit, a basket of stocks most popular among hedge funds tumbled 19% in September, more than the 9% drop for the Standard and Poor’s 500, according to Goldman Sachs.

Who would have thought that an S&P 500 ETF would have beaten hedge funds who have always attracted the best analyst and have the ability to side step companies who are plummeting?  Warren Buffet does.    Investment strategies must be able to weather all economic conditions because all economic conditions happen.  Again, diversification wins and the lower the cost, the more money you keep.

Not Peter Lynch or a Warren Buffett? Try Index Funds

The average opinion of the stock market is expressed through a stock market index. While following an indexing strategy the idea is to try and earn similar returns as given by a stock market index. One way to execute this strategy is by investing in constituents of a stock market index in the same proportion as their proportion in the index. But, this is a complicated strategy for individual investors as weight-ages keep changing and the investor will have to keep adjusting investments all the time. The other way is to invest in an Index fund – a mutual fund that collects money from investors and invests in stocks that make up a stock market index in the same proportion as their proportion in the index.
 
What is the logic behind an index fund?

It’s very difficult for an investor to keep beating the market. In the last two decades more than 85% of the fund managers in the United States have underperformed the S&P 500, one of the most broad-based indexes in the US. May be a Peter Lynch or a Warren Buffett can keep doing it all the time, but of the lesser mortals very few are able to do it consistently. Given this why not just ride the market? And this is the very reason that led to the innovation of an index fund.

Another reason that makes index funds attractive is their lower expense ratio. Expense ratio represents the expenses of the mutual fund expressed as a percentage of the total assets. Index funds do not require the services of high price fund managers or any sort of research. This tends to keep the expense ratios of the fund low. The Vanguard 500 index fund in the US has an expense ratio of 0.18%. The index funds in India do not have such low expense ratios but they are low vis-a-vis other funds.

All index funds do not return as much as their benchmark index. This difference between the returns from the index fund and the returns from the index is known as tracking error. This error occurs because of two reasons – the index fund may not fully track the index plus the index fund will have transaction costs to take care of.

Short selling hedge funds pushing up the Russell 2000 small-cap index 13.7%

Investors are continuing to have a difficult time devising a consistent winning strategy.

If anything, the large-cap stocks are better poised to ride out the rocky economy with a larger portion of their customer base in non-US economy.

Much of the fuel for the small stocks are coming from hedge funds closing out their bearish bets to lock in profits. And since small-cap stocks can be thinly traded, a rush of traders buying back stocks during the summer, when volume typically is light, is increasing the Russell 2000’s move.

In the Spring, nearly 11% of the shares in the Russell 2000 were sold short vs 2% for the Russell Top 200 index.  The Russell 2000 is trading at 14.3 times analysts’ earnings forecasts for the next 12 months, compared with a historic multiple of 14.8, according to Merrill Lynch. Other factors?

The SP500 has more energy companies which aren’t doing as well with lower commodity prices.

Source

http://online.wsj.com/article/SB121900598984147701.html

What are Index Funds?

Index funds might be just for you if you’re the kind of person who wants to get into investing but don’t want to be involved with your investment each and everyday. Index funds often are good for people who want to wait for their investment to mature.

With index funds they try to copy the movement of the index of the stock market. Index funds are not micromanaged by mutual fund managers like mutual funds so typically they don’t have as high fees involved with them. They are often also a good investment idea when trying to pay lower taxes in the long run.

So if you think you’d like some passive investments strategies and would be happy with just average returns then index funds may just be right for you.

To your stock market success!

August 11, 2008 at 1:35 pm

Do Country Index Funds Add Diversification?

I have to question the need for the wide variety of international country index funds. The AssetCorrelation website has an excellet correlation matrix which covers exchange-traded index funds from various countries around the world.

Take a careful look at the matrix for the various countries. Other than Brazil and Israel (with correlations of 0.73 and 0.35 respectively versus the S&P 500) the rest of the countries’ index funds are all tracking the S&P 500 with >0.90x correlation coefficients.

It might be that the time period is only 90 trading days (about 4 months) and this represents a time in the market which has seen a greater herd mentality than usual. Or it might be that global inflation fears do justify a simultaneous downward revision in global equity asset prices. Either way, lately it has been hard to see the benefits of international equity exposure. Even emerging markets like Turkey, Mexico and Chile have been strongly correlated recently. Inflation really is the great leveller.

No comments yet.

Short selling hedge funds pushing up the Russell 2000 small-cap index 13.7%

Investors are continuing to have a difficult time devising a consistent winning strategy.

If anything, the large-cap stocks are better poised to ride out the rocky economy with a larger portion of their customer base in non-US economy.

Much of the fuel for the small stocks are coming from hedge funds closing out their bearish bets to lock in profits. And since small-cap stocks can be thinly traded, a rush of traders buying back stocks during the summer, when volume typically is light, is increasing the Russell 2000’s move.

In the Spring, nearly 11% of the shares in the Russell 2000 were sold short vs 2% for the Russell Top 200 index.  The Russell 2000 is trading at 14.3 times analysts’ earnings forecasts for the next 12 months, compared with a historic multiple of 14.8, according to Merrill Lynch. Other factors?

The SP500 has more energy companies which aren’t doing as well with lower commodity prices.

Source

http://online.wsj.com/article/SB121900598984147701.html

Hedge Funds, Index Funds, and Buffet

Warren Buffet has bet  with one million dollars going to charity that the S&P 500 will beat the top five hedge funds (picked by Protege, a hedge fund to fund) net of fees over a ten year period.  We are currently in year two.  Read full article here

Hedge funds are known for their daring bets, secretive (proprietary) strategies, and the 2 and 20 fee (2% of assets and 20% of profits).  It has come to many people’s attention that hedge funds have not been hedging market risk for their clients since several have shut down this year during the bear market.  Hedge funds are not required to report earnings, investments they hold, or strategy.  During booming markets many hedge funds publish their unbelievable returns and attract many high net worth clients looking for above ordinary returns. 

It was reported today in the WSJ that some of these hedge funds are being forced out of business because in some cases 50% of their entire portfolios consisted of one company.  The idea is to take big bets proving their excelent forecasting skills, but one unforeseen mistake have cost many managers their funds and businesses.  Also other hedge funds have been unable to find ways around the temporary ban on short selling stocks. Here’s a quote from this morning’s WSJ article, “Big Bets Come Back to Bite Fund Managers”

To wit, a basket of stocks most popular among hedge funds tumbled 19% in September, more than the 9% drop for the Standard and Poor’s 500, according to Goldman Sachs.

Who would have thought that an S&P 500 ETF would have beaten hedge funds who have always attracted the best analyst and have the ability to side step companies who are plummeting?  Warren Buffet does.    Investment strategies must be able to weather all economic conditions because all economic conditions happen.  Again, diversification wins and the lower the cost, the more money you keep.

The Curious Capitalist - TIME.com

It's just been announced that David Booth, co-founder of Dimensional Fund Advisors, is giving $300 million to the University of Chicago Graduate School of Business, which will be renamed the University of Chicago Booth School of Business. Given that pretty much all of DFA's product line has grown out of research done at the Chicago business school, the gift seems only appropriate.

It started with Rolf Bänz's Chicago doctoral thesis, which found that small-cap stocks had outperformed the overall stock market over time. In 1981, the year Bänz's findings were published in the Journal of Financial Economics, Chicago Ph.D Booth and MBA Rex Sinquefield started DFA as the first manager of small-cap index funds.

Funny thing is, the small-stock advantage seemed to disappear after 1983. But as Shawn Tully (another Chicago MBA) explained in a wonderful Fortune article 10 years ago, DFA's obsession with keeping costs down made its funds still worth owning:

In addition to charging low management fees, DFA gains on the competition by sharp trading. Part of its advantage is size: As the nation's largest market maker in small caps, DFA is the first stop for active managers desperate to buy or sell blocks of small stocks. Says Robert Deere, the head of trading: "We make it as painful for them as possible."

In 1992, DFA added another line of business, based on research by Chicago professors Eugene Fama and Kenneth French (who has since moved to Dartmouth): value funds that buy only stocks with low price-to-book ratios. Smart investors (Roger Babson, Ben Graham, Warren Buffett) had known for going on a century that cheap stocks were a better deal than expensive ones. But doing value investing in a quantitative, low-cost fashion was a worthwhile endeavor, and a lucrative one.

DFA now manages about $220 billion. Even with very low fees, that adds up to a lot. Enough to get a business school named after you.

Should the rich invest in Index Funds?

When I glanced at the incoming stats to this blog this morning, I happened to see that a number of people had come to this site because they had typed the following search into Google: “should the rich invest in Index Funds”?

If you want to BECOME rich: No

If you have a high salary and can save a lot of it (see yesterday’s post) … and are happy to keep doing this for 30 years (to ‘guarantee’ the return), then plonking your money into an Index Fund (preferably via a series of 401k’s, ROTH’s, etc. etc. to get the tax benefits) may be all that you need to do.

But, even with some employer matching and tax benefits, for many salary earners the low returns (and, the costs built in) to such funds might not be enough to get you to where you need to go

If you are ALREADY rich: Yes

Here the rules change … you are more concerned about wealth-preservation than wealth-building. Therefore, ’saving’ in a way that ‘guarantees’ your principle and living standards can be a suitable alternative to ‘investing’ for high returns in retirement (or close to it .. i.e. within 10 years).

The typical choices here are:

1. CD’s: Just keep your money in the bank - but, inflation will kill you.

2. Bonds: Preferably inflation-protected - and, low returns will probably put a damper on your long-term spending habits.

3. Real-Estate: Using low-or-no borrowings (opposite to our wealth-building real-estate strategies!)  - reasonable (and, reasonably safe returns) provided that you invest wisely, manage the property well (using an expert and reputable property manager, of course!), have a suitable cash buffer for expenses and loss of tenants, etc. You live off the rents and you may have the added benefit of a larger estate to leave to the rug-rats and/or donate.

4. Index Funds - you may need to be prepared to sell down 2.5% to 4% of your holding every year (that becomes your ‘replacement salary’), but - over a 30 year period - that should be enough to self-sustain (i.e. keep up with inflation and your annual salary). The lower the % that you withraw, the greater the chance that your money won’t run out before you do (and, if the market goes well, you COULD even have the added benefit of a larger estate to leave to the rug-rats and/or donate).

But, when planning for retirement, don’t make this mistake: the market has returned an average of 12% - 14% p.a. for the last 100 years …

… but, if the market crashes just before - or in the early stages of - retirement, it can have a major impact on the longevity of your portfolio … in other words, you are screwed!

So, do what I do and plan for the worst: plan to have the bulk of your money in the Index Fund for 30 years, because that’s how far out you need to go to ensure an 8% return … then take off another 1% for fees … another 3% or 4% (5%?) for inflation …

If you only plan for 20 years, the ‘guaranteed’ return drops to a measly 4% and inflation will just say “thanks for the snack” and leave you with nothing!

So, are Index Funds for you?

Hi AJC,

Would you do a post that considers the lifetime earnings of different people? Reason being I read an article that high school graduates earn an average lifetime earnings (from 25 to 64) of $1.2 Million. For people with a college degree this goes up to $2 million, with a Masters it’s up to $2.5 million and a PhD brings in $2.9 million. For people with professional degrees (doctors & lawyers I presume) the number goes up further to $4.4 million. Still not bad, an average of $100K per year for the latter category. For the purpose of this article I’m assuming that all earnings are reconciled to net present values.

So you’ve managed to earn $7 million in 7 years… that’s really impressive and nearly twice that of a doctor’s lifetime earnings. What have you earned throughout your life?

For me I’ve earned $2 Million in my life to date. More than half of this has come in the last 3 years. I’m 35 now and have been working since I was 23. I figure between now and age 65 I should be able to earn a total of about $8 million more with an medium / optimistic case. I will pursue investments but realize high risk brings high reward but potentially devastating losses. For example I’ve taken a large position ($110,000) in a Chinese stock with what I believe to be very strong fundamentals and have researched this company for the last 4 months in detail. In the last 3 weeks the stock is down 30% from where I bought in…! So I don’t put everything into high risk investments for that reason.

I think starting a business has elements of this… if your business crashed you would have lost it all I guess?

-Mike

@ Mike - thanks for the comment, Mike. Yes, I will post on this; in the meantime keep in mind that it’s not what passes through your hands that matters … it’s what ’sticks’ that counts!

can you elaborate on the best inflation protected bond investments?

Thanks AJC,

I look forward to your perspective on this in a future post.

Regards,

Mike

@ Creeping - if a TIPS-based retirement strategy is one that you are interested in, then I highly recommend that you ‘invest’ in a copy of the highly qualified/respected Zvi Bodie’s book: Worry Free Investing.

The only problem with the strategy that he outlines that I can see relates to the potential tax implications unless you are investing via a ROTH etc. An alternative that you may want to explore with a suitably qualified financial adviser might be selected inlfation-protected Municipal Bonds (MUNI’s).

Is Electricity From Wind Just A Lot Of Hot Air?

You could think of it as “energy sailing.”

Hoping to catch the financial breeze powering alternative energy, First Trust Advisors will launch the world’s first wind energy exchange traded fund on Wednesday. The First Trust ISE Global Wind Energy Index Fund will trade on NYSE Arca under the ticker FAN.

All the companies must actively provide or develop wind energy and have market caps of at least $100 million. The index, owned and developed by the International Securities Exchange, is calculated in real time and maintained by Standard & Poor’s. It will be rebalanced semi-annually.

Soaring Oil

It’s no coincidence that the fund sets sail just as oil hit a record high Monday of $139.89, Carey said. “This has been a matter of some urgency. We’ve been working very hard on it for about six months” as oil prices skyrocketed, he said.

“In addition to rising oil and natural gas prices, there’s supply security and mitigation efforts related to environmental problems and climate change,” he said. Global warming issues aside, wind energy proponents point out that its use reduces acid rain and oil spills.

Industry Growth

Ten years ago, the U.S. had less than 2,000 megawatts of wind capacity. Last year, wind energy generation companies saw 27% growth as they boosted their capacity to 94,000 megawatts. A megawatt — 1 million watts of electric power — provides power for about 380 U.S. residents, according to the American Wind Energy Association.

The Worldwatch Institute estimates that turbines in all 48 contiguous states could provide about 20% of U.S. power needs.

“Most of the interest and use has been in Europe up until now, but we think we’ll see that growing fast in the U.S. and in Asia,” Carey said. “The idea with the ETF is to give investors as pure a play on wind as you can get.”

Many of the fund’s largest holdings are European and Asian companies that don’t trade on U.S. markets. The top three holdings are Vestas Wind Systems of Denmark, Hansen Transmissions International of the U.K. and Spanish wind giant Gamesa.

On Tuesday, Gamesa and fellow Spanish company Iberdola Renewables agreed to the largest turbine supply contract ever.

Of the American-listed companies, Woodward Governor (WGOV) currently has an IBD Relative Strength Rating of 94.

fan-factsheet fan-investorguide fanprospectus

American Economy Writhing In Deflation

I saw the data this afternoon; the bubbles continue to burst. In “Consumer Price Decline Prompts Fear Of Deflation,” NY Times, we get the sense of this. There will be a great deal made of deflation but the reality is when you permit greed to inflate illusory wealth bubbles, they break–and when they break there is a painful readjustment. That pain is deflation. 

“It’s funny that just a few months ago everyone was wringing their hands over inflation,” said Nariman Behravesh, chief economist at Global Insight. “It’s gone. It’s over.”

AND …

“The risk to the economy from pricing has rapidly moved from that of rapid inflation to the disinflation that is now moving through the system,” Joseph Brusuelas, chief economist of Merk Investments …”

The stock market took another dirt dive today, investors cashing out and running for cover in droves. “Dow Drops Below 8,000 On Latest Economic Data,” 11/19/2008.  

“It’s painful,” said Howard Silverblatt, senior index analyst at Standard & Poor’s. “A lot of people have pulled a lot of cash out. They’re sitting on the side. It’s all I hear all day: ‘Where can I hide?’ ”

The economy built up over the last several decades looks like it is dying. Underneath it is a very sick financial system. I cannot help but wonder if the world is heading towards an entirely new monetary system. It almost sounds impossible. It leaves me almost breathless to contemplate. I need time and staff and powerful econometric models to sort it all out. My pencil is not sharp enough and the reality is nobody’s is sharp enough. 

The Big Three from Detroit are on their way back home, seen as filthy beggars in Lear Jets. No bailout. Go home and drink Ripple, get you some of that Night-Train or Mad Dog 20-20, and then when you wake up, and have soiled yourself, go and file for Chapter 11 bankruptcy. The American automobile industry is going to be a bloodbath–an absolute bloodbath. The union is about to get economically bludgeoned. 

These times are truly incredible. The economy is writhing in its efforts to remain alive. It is dying and does not even know that it is dying. Stag-deflation appears to be arriving on our shores in waves. The critical waves to watch are these three: (1) the slow goods market, (2) the slow labor market, (3) prices–particularly commodity prices. Lastly, we will need to watch the response of the rest of the world to the American economy. It looks like they are running in droves to get out of her. what have we missed? 

Wow. These are really exciting times. Nobody is going to know which way to turn. Hold on to your money. Keep it safe. Get out of the stock market. Get out of the money markets. Get out of any mutual funds. Look closely at your retirement plan. do not look down. If you’re losing, see what you can do about it. Maybe it is better to have it in your mattress. 

More later …

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Commodity speculators

Commodity speculators in line of fire

By John Dizard

Published: May 25 2008 19:25 | Last updated: May 26 2008 16:19

As is well known, speculators are clearly responsible for high commodities prices. All of them are using the high profits from their market manipulation to buy yet more gold chains and magnums of champagne, though not for their long-divorced, betrayed spouses.

Fortunately, the tribunes of the people are out to stop them. Of course neither the public’s representatives nor we are attacking the innocent hedgers, who, unlike the speculators, are only seeking to protect themselves against volatility and risk of loss. They have done no wrong.

Senator Joe Lieberman, the Connecticut Democrat, last week expressed public sentiment after hearings on commodities speculation when he said he and his colleagues were “very impressed with testimony that speculation, particularly so-called index speculators, and institutional investors are having a very significant effect on dramatic increases in commodities prices . . . creating a lot of stress among average families and terrible suffering among people who are poorer”.

Well. That is a powerful statement of conviction. So powerful that it apparently cannot be affected by the US government’s own economic studies of the market effects of commodities index investors, hedgers, and speculators. The political reaction to high prices is likely to lead to legislated changes in commodities markets regulation in the US and elsewhere. I am fairly certain the changes will take effect after the coming decline in commodities prices.

I say decline because there always is one, and the late-stage political reaction suggests it is coming soon. But let’s deconstruct the premises of that political reaction.

The US Commodity Futures Trading Commission regulates public US futures exchanges, and also has some ability to examine the activities of non-exchange commodities traders, such as swaps dealers. Two weeks ago, its Office of the Chief Economist provided Congress an extensive study of the effect of commodities index funds and speculators on prices. In the oil market, specifically, the CFTC stated: “Our studies consistently find that when new information comes to the market and prices respond, it is the commercial traders [such as oil companies, utilities, airlines] that react first by adjusting their futures positions. When these commercial traders adjust their futures positions, it is speculators who are most often on the other side of the trade. Price changes that prompt hedgers to alter their futures positions attract speculators who change their positions in response.

“Simply stated, there is no evidence that position changes by speculators precede price changes for crude oil futures contracts . . . Commercial trader group positions are those found to significantly precede crude oil futures price changes.”

Furthermore, the commission’s staff found: “The recent crude oil price increases have occurred with no significant change in net speculative positions.”

This is not to say, in my view, and in the view of others I respect, that today’s oil prices reflect the economics of marginal supply and demand. There are people out there who have bought physical oil and stored it so as to sell it in the future. But the real commodities buying frenzy has been defensive buying by consumers, government stockpilers, and processors trying to protect themselves from the adverse effects of future price increases.

Eugen Weinberg, a commodities specialist with Commerzbank, who does think we are in the late stages of a bubble, says: “At the moment we have big inventories worldwide, about 3.5bn barrels in the OECD countries, which does not include China. That is enough so that if Saudi Arabia stopped exporting, the world could run at its present level of demand for a year and a half with no increases in production from other countries.”

You don’t have to buy the evil-specs-caused all this argument to believe there are problems with the way parts of the commodities markets work. As Mr Weinberg points out: “The West Texas Intermediate oil contract, based on delivery in Cushing, Oklahoma, is good for 300,000-400,000 barrels per day. The storage capacity in Cushing is about 20.5m barrels. The trading volume on which that is based is between 500m and 600m barrels per day. If you are going to manipulate the price, you would think about doing that in Cushing.”

That’s why some passive, or indexed commodities investors are diversifying the markets they use; eg using the Brent contract for North Sea oil as well as the funnel in Cushing.

What about those index longs? While they are thrown in with speculators, they don’t actively bet on short-term price moves. Nevertheless, one of the proposed components of American commodities markets reform bills are restrictions on pension funds’ holdings of commodities positions.

So are index funds taking the bread out of the mouths of Darfurian children, or, as Mr Lieberman says, “average families”? The CFTC study says: “Increased index fund positions do not lead to price increases [in agricultural products]”. Being researchers they believe more research is needed, which I think is a good idea.

johndizard@hotmail.com

Copyright The Financial Times Limited 2008

Some of them are much more good than the others, because they speculate on gold and silver which are more volatile and visible

$5.1 Trillion Down Payment: What Has It Bought?

“In America, toxic mortgage-backed securities sank mighty investment banks. In Russia, it is the empires of the oligarchs and the loans they took out from Western banks, using shares in their companies as collateral, that are at risk.”

“In a number of cases the value of shares pledged by Russia’s rich has fallen below the value of the loans, an ominous sign for the market here, where the benchmark RTS index is already down 71 percent from its peak in May.”

“Western banks are not immune. Their exposure to oligarch debt came into focus last week when the Russian central bank reported that, all told, Russian companies have to repay $47.5 billion to foreign creditors by the end of this year, and $160 billion by the end of 2009.”

“If banks require businesses to sell shares to repay these loans, “the Russian stock market could come down like a house of cards,” Michael Kavanagh, a mining sector analyst at Uralsib bank, said.”

“This could be a game changer for a lot of very, very large players,” Rory MacFarquhar, an economist at Goldman Sachs in Moscow, added. “The ground is shifting under them.”

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STOCKS GAINS IN THIN TRADE, S

Have a great weekend.

Japón regresa a los ochenta

pero en cuestiones económicas. La bolsa japonesa está en los niveles en los que se encontraba en la era “Pre-Thriller” en 1982

The last time Japan’s Nikkei 225 Stock Average was at today’s level, headbands and legwarmers were in, Steven Spielberg’s E.T. topped box offices, and Michael Jackson’s Thriller was about to be released.

That was 1982, the fifth year of a rally that pushed the Nikkei to nearly 40,000 by the end of 1989 in an asset bubble that purportedly made the land around the Imperial Palace as valuable as all of California. The Nikkei today slumped 6.4 percent to 7,162.90, the lowest since Oct. 7, 1982. That values its members at 8.6 times reported earnings, compared with about 70 times at the 1989 peak.

A tal grado está la crisis que las companías valen más si fueran liquidadas que por lo que venden o por sus ganancias:

Shares on the Topix index, the broadest gauge of Japan’s stock market, trade at 0.89 times book value, the first time the average has been below 1, according to Mizuho Securities Co. That means the companies would be worth more if liquidated.

Y no la tienen fácil para el futuro próximo:

Today, Japan is struggling with weak domestic demand and intensifying global competition for its largest exporters as the economies of Asia caught up. The median age in Japan was 32.5 in 1980; today it’s 43.6, with three elderly for every two children.

Masayuki Kubota, a senior fund manager at Daiwa SB Investments Ltd. in Tokyo, who helps oversee $1.7 billion, thinks the stock market has echoed its excessive movement of a generation ago, but in the opposite direction this year.

“We’re in a reverse bubble now,” he said. “Large mountains make deep valleys. It’s an old Japanese saying and it’s true for markets as well as economic cycles.”

Via Bloomberg

Role of domain name in web business!

With registration of trademarks, the domain of any business, whether big or small, should also be registered. Neglecting it can be costly in future terms to any business. Some legal companies now recognize this important issue and started advising their customers in this regard. Many smaller businesses do however not realize these facts and should wake up to reality. Many smaller businesses can grow into bigger enterprises over time after giving proper value to their domain names.

Neglecting the domain names a business may end up spending huge amounts on legal costs to protect their interests. Domain name is like a brand in web marketing. Hence the name must be catchy and should represent you and your products appropriately. This is the name through which your business is known over net. This is the word by which your business and your website will be known in the internet marketing. Hence the Key words should be choose from the niche. It should be a unique name. It should be sensible and easy to remember.

These tips will also help you with better search engine placement since a domain name that contains key words related to your product or service will ultimately place better than one that doesn’t.

Having an own domain name is the first step to make money online. Your customers will feel more comfortable buying whatever it is that you are selling if you have your own domain name. It makes this will give an image of a trustworthy company rather than with some fly by night operator.

Having a Domain name is the way to success of an online entity. This will create a first impression of your business. You should always aim for the dotcom version of a name, that’s what most people will go to after doing a search or after typing something directly into their address bar. You’re likely to have more traffic to your website with your own domain name because more people will be returning as they can remember your address and because many search directories such as Yahoo only index websites with their own domain name.

An own domain name means that the address of the web site will be of the form http://www.yourcompany.com. Definitely it sounds more professional and reliable too than hosting some other free sites for the company like http://www.somefreewebsite.com/yoursitename/.

In short domain names are essential factor to be considered to protect their rights in a world where Internet marketing and web business increase on a daily basis.

REPRINT RIGHTS statement: This article is free for republishing by visitors provided the Author Bio box is retained as usual so that all links are Active/Linkable with no syntax changes.

Author Alok Vats is associated with many SEO activities at AN Info Solutions. They deal with Search Engine Optimization and Graphic design activities.

Friday, November 28 2008

The S&P 500 ended the month, down 7.5%.  During November, the S&P plunged to levels not seen since 1997.  Although the final week was strong (up 12%), we are still firmly entrenched in a bear market.  The technicals, on a weekly basis, are still very bearish.  In fact, we’d need to see a rise of over 300 points to even begin to question the down market trend that began at the end of 2007.

What we experienced this week was a very normal bounce from a very oversold level.  The VIX (fear index) is still near record highs suggesting more turbulence ahead.  At today’s close, the S&P is 43% off its peak close in October 2007.  There’s certainly no cause for celebration or to declare the end of the bear market.

The economic fundamentals were terrible: new and existing home sales, durable goods orders, Chicago PMI, personal spending, and Michigan sentiment all came in below expectations.  Q3 revised GDP, Case-Shiller, and weekly jobless claims roughly met expectations that were already weak.  Credit markets continue to be tight and show few signs of easing.  The junk bond market is effectively shut down; even non-junk spreads are near record highs.  Consumer credit is still tightening: lenders are tightening standards and consumers are borrowing less.  In some ways, the US government is stepping in to become the lender of first resort.  Unfortunately, the government’s liquidity and credit programs are akin to pushing on a string.  It can provide all the credit in the world, but that doesn’t mean that corporations or consumers will increase borrowings and therefore purchases.  The upcoming fiscal stimulus, although massive, will not arrive for several months, allowing aggregate demand to continue slipping into deep recession territory.

Corporate fundamentals are still weak.  Although Q3 reporting is just about over, most new announcements this week have warned about poor or cloudy outlooks for Q4 and beyond–hardly the stuff to signal an imminent turnaround in earnings trends.  Analysts have continued to slash Q4 (and 2009) estimates, but they’re still–in aggregate–far higher than the top-down estimates.  Either the analysts or the economists are dead wrong.  Given that, in the last year, the economists have been right, I’d bet on the economists.

Looking ahead, The Big Three return to Washington DC to present a new and improved pitch for a $25 billion bailout.  US auto and truck sales for November should show another month of dismal sales.  And most importantly, the November jobs figure and unemployment rate will provide another clue about the severity of the recession.  The numbers will very likely be weak.  But much of this weakness is already baked into the S&P.  If the numbers are far worse than predicted, expect another downturn in the equity markets.  Also look for more blow-ups, defaults and bankruptcies–a couple of US auto makers, and many regional banks, LBO deals, retailers and hedge funds are hanging on by a thread.

Efficient Market Hypothesis revisted

John Forman has a post regarding EMH, which ties into the recent discussions with regard to Gaussian distributions.

The question of whether the markets are efficient was broached again by a fellow blogger recently. The idea is that if the markets are efficient, then it’s not really worth attempting to trade them (meaning stock market investors should stick to index funds). This is all based on the Efficient Market Hypothesis (EMH).

There’s a bit of confusion in the public about what market efficiency really means. It does not mean that the price in the market reflects the value of the asset in question (like a company in the case of a stock). It means that current price reflects the array of potential future outcomes. Basically, the theory says that every idea of what could happen in the future is incorporated into the current price.

Actually I disagree. “Efficiency” means exactly that. That the “current market price” reflects the value of the asset.

With regard to the future, the future is unknown and unknowable. Thus, the market follows a “random walk” as new information is released to the market. Here is the catch, a “random walk” relies upon “independant observations.” The market however does not display independant observations, the market displays “dependant observations.”

Here’s my view.

The more actively traded a market is, the more it tends toward efficiency - especially in relatively low volatility and quiet news environments. Those are times when information can be distributed most efficiently and participants are most likely to act rationally. As you get into less actively traded markets, and as you start adding pressure to a market efficiency becomes less and less the case. Information distribution becomes less efficient and participants act increasingly less rationally.

Here we have a number of interesting problems. The first, measuring the “activity” of a market. Are we talking about the “number” of participants, or the volume of shares? Does it even matter which? Is the market consisting of a small handful of huge institutions the same as a market consisting of a huge number of more moderately sized participants?

Volatility and “news events” are linked, that this is causative seems to be implied. There is news every day. In fact the flow of news has expanded exponentially. How to assign causation to “relevant” or “important” news, in other words, separating out the noise.

Rationality and market participants are linked to a decreasing efficiency in distribution of information flow. An interesting hypothesis, however, this hypothesis is not pursued.

Financial Mayhem to Fuel Gold

 

Best Luck and God Bless;

 

Bridges to Hope Foundation Newsletter and Blog

www.BTHF.org

Seven financial principles derived from the scriptures

1. Purify your heart

“For the love of money is the root of all evil” (1 Timothy 6:10).

“Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also” (Matthew 6:19-21).

“But wo unto the rich, who are rich as to the things of the world. For because they are rich they despise the poor, and they persecute the meek, and their hearts are upon their treasures; wherefore, their treasure is their god. And behold, their treasure shall perish with them also” (2 Nephi 9:30).

“He also that received seed among the thorns is he that heareth the word; and the care of this world, and the deceitfulness of riches, choke the word, and he becometh unfruitful” (Matthew 13:22).

“The getting of treasures by a lying tongue is a vanity tossed to and fro of them that seek death” (Proverbs 21:6).

“Then said Jesus unto his disciples, Verily I say unto you, That a rich man shall hardly enter into the kingdom of heaven. And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God. When his disciples heard it, they were exceedingly amazed, saying, Who then can be saved? But Jesus beheld them, and said unto them, With men this is impossible; but with God all things are possible” (Matthew 19:23-6).

“And he spake a parable unto them, saying, The ground of a certain rich man brought forth plentifully: And he thought within himself, saying, What shall I do, because I have no room where to bestow my fruits? And he said, This will I do: I will pull down my barns, and build greater; and there will I bestow all my fruits and my goods. And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry. But God said unto him, Thou fool, this night thy soul shall be required of thee: then whose shall those things be, which thou hast provided? So is he that layeth up treasure for himself, and is not rich toward God” (Luke 12:16-21).

“Think of your brethren like unto yourselves, and be familiar with all and free with your substance, that they may be rich like unto you. But before ye seek for riches, seek ye for the kingdom of God. And after ye have obtained a hope in Christ ye shall obtain riches, if ye seek them; and ye will seek them for the intent to do good—to clothe the naked, and to feed the hungry, and to liberate the captive, and administer relief to the sick and the afflicted” (Jacob 2:17-9).

“And you are to be equal, or in other words, you are to have equal claims on the properties, for the benefit of managing the concerns of your stewardships, every man according to his wants and his needs, inasmuch as his wants are just— And all this for the benefit of the church of the living God, that every man may improve upon his talent, that every man may gain other talents, yea, even an hundred fold, to be cast into the Lord’s storehouse, to become the common property of the whole church— Every man seeking the interest of his neighbor, and doing all things with an eye single to the glory of God” (D&C 82:17-9).

“And I say unto you, Make to yourselves friends of the mammon of unrighteousness; that, when ye fail, they may receive you into everlasting habitations. He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much. If therefore ye have not been faithful in the unrighteous mammon, who will commit to your trust the true riches? And if ye have not been faithful in that which is another man’s, who shall give you that which is your own? No servant can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon” (Luke 16:9-13).

“And now, verily I say unto you, and this is wisdom, make unto yourselves friends with the mammon of unrighteousness, and they will not destroy you” (D&C 82:22).

2. Pay the Lord first

“Honour the Lord with thy substance, and with the firstfruits of all thine increase: So shall thy barns be filled with plenty, and thy presses shall burst out with new wine” (Proverbs 3:9-10).

“Will a man rob God? Yet ye have robbed me. But ye say, Wherein have we robbed thee? In tithes and offerings. Ye are cursed with a curse: for ye have robbed me, even this whole nation. Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it. And I will rebuke the devourer for your sakes, and he shall not destroy the fruits of your ground; neither shall your vine cast her fruit before the time in the field, saith the Lord of hosts” (Malachi 3:8-11).

“Verily, thus saith the Lord, I require all their surplus property to be put into the hands of the bishop of my church in Zion, For the building of mine house, and for the laying of the foundation of Zion and for the priesthood, and for the debts of the Presidency of my Church. And this shall be the beginning of the tithing of my people. And after that, those who have thus been tithed shall pay one-tenth of all their interest annually; and this shall be a standing law unto them forever, for my holy priesthood, saith the Lord. Verily I say unto you, it shall come to pass that all those who gather unto the land of Zion shall be tithed of their surplus properties, and shall observe this law, or they shall not be found worthy to abide among you. And I say unto you, if my people observe not this law, to keep it holy, and by this law sanctify the land of Zion unto me, that my statutes and my judgments may be kept thereon, that it may be most holy, behold, verily I say unto you, it shall not be a land of Zion unto you. And this shall be an ensample unto all the stakes of Zion” (D&C 119:1-7).

3. Avoid unnecessary debt

“The rich ruleth over the poor, and the borrower is servant to the lender” (Proverbs 22:7).

“And again, verily I say unto you, concerning your debts—behold it is my will that you shall pay all your debts” (D&C 104:78).

A letter from the First Presidency dated 2/27/08 counsels us to “avoid unnecessary debt, especially consumer debt.”

4. Save

“There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up” (Proverbs 21:20).

“A good man leaveth an inheritance to his children’s children” (Proverbs 13:22).

“There be four things which are little upon the earth, but they are exceeding wise: The ants are a people not strong, yet they prepare their meat in the summer” (Proverbs 30:24-5).

5. Diversify and properly allocate assets

The Parable of the Entrusted Talents is at Matthew 25:14-30.

The Parable of the Pounds is at Luke 19:11-27.

“For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, Saying, This man began to build, and was not able to finish” (Luke 14:28-30).

We would like security. We would like our overall portfolio to be “crash-proof”. We avoid putting 100% of our savings into one stock, because if that stock crashes, we could lose everything.

A letter from the First Presidency dated 2/27/08 states that “While all investments carry an element of risk, that risk can be managed by following sound and proven financial principles.”

Asset allocation is key. What if last year you had the following annual return for your various investments:

Did you make money or lose money last year? You cannot tell from only the numbers above. How well your overall portfolio does depends on asset allocation.

If you invest in something with leverage (options, futures, Forex, etc.), it’s theoretically possible to obtain very high returns. However, it would be unwise to bet 100% of one’s life savings on, for example, buying one call option that expires within a few days.

Therefore, asset allocation is key.

Why? If the stock market ever crashes, and everyone else is selling, you could have difficulty closing out your position. Because of leverage, you could lose everything you have . . . and more.

Resist the temptation, for even a day trade, no matter unlikely a market crash is.

Resist the temptation, no matter how “sure” you are the market will go up in the time period you’re contemplating.

6. Monitor assets

“Be thou diligent to know the state of thy flocks, and look well to thy herds. For riches are not for ever: and doth the crown endure to every generation?” (Proverbs 27:23-4).

7. Acknowledge that you cannot predict the future

If we assume that for us the market is practically random, perhaps we may use probability analysis to aid us. The Dow may move 0.1%, 0.2%, or 0.5% in one day. It may move 2% in one day every so often. It rarely moves 10% in one day.

There is a saying that “the world is long.” Given the historical rise of the stock market, many people buy stocks and equity mutual funds believing that they have a good chance (P > 50%?) they can sell them in the future at a higher price.

For many people T is measured in years. These people would like their investments to double, triple, etc. while they’re still alive.

A low T allows you to take your money and move on. A high T ties up your money. Would you rather make 1% in one month or one year? One month, of course. Then after one month has passed, you can do something else with the money.

Putting these two variables together, the probability of “success” over a given time period = P/T. You want to have a high P/T.

Quest For Social Justice In Malaysia-Who Is Right? What is Left? When Is Centre?

Raja Petra Kamarudin published an article in his Malaysia Today entitled MISSION AND VISION STATEMENT, REVISITED and it appeared like a reaffirmation to me…maybe he is fortifying his spirit for impending war.

The crux of the article is about the fight for social justice being what Malaysia Today is about. He says,

In describing the scenario today:

He proposes the strategy and philosophy to ensure government accountability and integrity:

(…read the whole RPK article here)

RPK makes the quest for social justice sound so simple but is it really? Whether it is or not, we know RPK will be at the forefront; a fact that is both comforting and disturbing. So much hinges on just this one man. I agree with his ideals for Malaysia but I am personally unconvinced that the majority of Malaysians can afford to agree.

In RPK’s own words, we have been divided; and might I add that in some instances the differentiation is acute to the point of mutual exclusivity yet veiled by expedient restraint. The cracks have begun to show.

Two factors make me apprehensive about real hope for social change in Malaysia:

1. Different segments of Malaysian society today have different ideals about just society and

2. The very nature of Malaysian politics having evolved into factions of incompatible ideologues that the probability of having tenable coalitions will always be undermined by the selective myopia which is ingrained in the Malaysian psyche.

The question of can Malaysian politics really evolve into an effective two party system even if racial lines were erased seems superfluous. Can racial lines be erased?

The lines are blurred even further when we consider that Malaysian politics defies definition of left wing and right wing political ideologies. Social ideals are apt to differ.

Social justice or civil justice, as it is sometimes called, refers to the concept of a society in which justice is achieved in every aspect of society, rather than merely the administration of law. It is generally thought of as a world which affords individuals and groups fair treatment and an impartial share of the benefits of society. It can also refer to the distribution of advantages and disadvantages within a society.

As such, social justice is both a philosophical problem and an important issue in politics, religion and civil society. By broad definition, social justice should ideally be an apolitical philosophical concept (insofar as any philosophical analysis of politics can be free from bias) based on the concepts of human rights and equality in a socially just world. Obviously, most individuals wish to live in such a just society, yet political ideologies are an intrinsic part of society. And different political ideologies have different conceptions of what a ‘just society’ actually is; therefore, the constant polemics as different proponents of social justice have developed different interpretations of what constitutes fair treatment and an impartial share.

The political left describes just society as one with a greater degree of economic egalitarianism, which may be achieved through progressive taxation, income redistribution, or property redistribution.

The term social justice is also used by the political right wing but it generally thinks that a just society is best achieved through the operation of a free market, which they believe provides equality of opportunity and promotes philanthropy and charity.

3. We, Malaysians of all races and of various faiths, pledge to collectively:
· work to create a just and prosperous Malaysian nation based on a truly
democratic system of government;
· protect and defend the rights and dignity of all the people and
guarantee justice
for all;
· act to enhance economic prosperity through greater productivity,
efficiency, and
sound economic management in order to enable the country to face global
challenges;
· channel the country’s resources not only to meet the basic needs of
the people
but, more importantly, to ensure that the quality of life and social harmony are
enhanced;
· distribute wealth and opportunities fairly among all; and
· develop quality social infrastructure and a clean and comfortable
physical
environment; enhance the quality of education, health and other social services;
build mosques and other places of worship; build public parks and libraries;
build arts and cultural centres; and provide the widest opportunities for
information technology and other methods of communication.

1. We will initiate measures to build and foster unity among the various ethnic and religious groups, having as our aim the evolution of a people with the common aspiration of justice and equality for all. To that end, we will :
· immediately dismantle any and all remaining practices of “divide and rule” in

public administration from the days of the BN administration;
· cause to be established a Ministry in charge of Non-Islamic Religious Affairs;
· put in place an affirmative action programme at Federal and all State levels to

eradicate poverty and marginalization from amongst the weak and backward
groups irrespective of race, social background and religion;
· pay special attention to the Orang Asli in the Peninsula and all the indigenous

groups in Sabah and Sarawak, and amend various laws and regulations
pertaining to them so that justice is served, including establishing a Commission
to protect Native Customary Rights (NCR) land and to resolve disputes relating
to such lands while respecting their traditions and customs;
· strengthen national integration by restoring the rights and privileges that were

promised to the people of Sabah and Sarawak;
· establish an independent Ethnic Relations Council, reporting directly to

Parliament to help in building a united Bangsa Malaysia;
· establish a Commission for Shari’ah Law at the Federal level;
· reduce the influence of party politics in the respective State Religious Councils,

mosques and other religious institutions;
· allocate land for graves and places of worship for all faiths without any

discrimination;
· increase inter-cultural and inter-religious dialogues to strengthen mutual

understanding among the people; and
· encourage the development of a Malaysian culture based on common moral

values and ideals. This requires an open attitude towards the diversity of
cultures of the various ethnic and sub-ethnic groups in the country, taking
account of the country’s history and evolution.

1. Genuine democracy must provide meaningful space for the people to express their views and to participate in various processes of daily administration and not merely to voting once in five years. All interest groups must be allowed to present and debate their views. Information will be free available subject to strictly defined restrictions. To that end, we will :
· repeal the Internal Security Act and and all laws that presently permit detention

without trial;
· form an Independent Commission to consider if any form of preventive
detention
laws are necessary and, if thought so, to draft a bill to provide for the same and
the necessary checks and balances;
· form an Independent Commission to review all acts and laws (such as the

Official Secrets Act, Sedition Act, Police Act, University and University Colleges
Act, Printing Presses and Publications Act, etc.), with the objective of repealing
whatever violates basic human rights;
· take the necessary measures to ensure and safeguard the freedom of the press

and the rights of peaceful assembly, expression and organisation, by amending
the appropriate acts and laws and RTM will be corporatised and subject to an
independent Broadcasting Commission;
· ensure that the Human Rights Commission is independent and has

representation from all major groups;
· formulate a Freedom of Information Act to guarantee transparency and free flow

of information from the government to the people;
· to pass the necessary legislation to provide for local council elections;
· so at to allow for more certainty in the electoral process, thereby affording to

all parties participating in that process the most equitable opportunity to
make preparation for the same and to remove any and all elements of surprise,
make all necessary amendments to the law so that the date of dissolution of
Parliament and general elections following thereafter shall respectively occur
and be held every 5 years on a date or within a fixed period stipulated by law;
· review and, where necessary, revise all previous redelineation of constituencies

so as to ensure that differences in the numbers of registered voters in any two
constituencies shall not exceed 20%;
· enact a law to protect “whistle-blowers” of official misconduct and corruption;
· sign and ratify the International Covenant on Civil and Political Rights and the

International Covenant on Economic, Social and Cultural Rights;
· improve the quality and effectiveness of human rights education at all levels of

education and institutions of higher learning as well as training centres for
public servants; and
· improve prison administration and conditions in line with with international

standards.

(a) Reduce the tax burden
· Raise the level of personal income tax exemption, in addition to increasing
child
allowance to a reasonable level;
· Raise the level of personal income tax deduction for wives who are full-time

home makers in recognition of their important contribution;
· Raise the level of service tax exemption to a turnover exceeding one million

ringgit a year;
· Review the tax system with the objective of strengthening government revenues

while reducing the tax burden on the people, especially the low- and middle-
income groups.

(b) Eradicate absolute poverty
· Eradicate absolute poverty by the middle of the next parliamentary term;
· Reduce poverty levels in the next parliamentary term to half the levels of 1999;
· Improve poverty eradication programmes so that they are free from political

interference and truly help the poor;
· Streamline various existing poverty eradication programmes;
· Narrow the income and wealth gap without infringing on legitimate rights.

(c) Assist petty traders and hawkers
· End the practice of using the licensing of small traders and hawkers as a source

of revenue and as a party political tool, and instead use it purely for
management and regulatory purposes to safeguard the well-being and health of
the people, small traders and hawkers;
· Provide comfortable, clean and attractive infrastructure and facilities for

hawkers.

(d) Improve public transport services
· Improve the quality of public transport and reduce fares to a level

commensurate with the people’s living standards;
· Issue taxi permits to individual entrepreneurs and their cooperatives, rather

than to large companies;
· Enhance the efficiency and quality of taxi services by private entrepreneurs

through the establishment of cooperatives, associations, councils and the like;
· Reduce the fares of domestic flights between Peninsular Malaysia and Sabah and

Sarawak to promote national unity and domestic tourism;
· Modernise and enhance rail services in Peninsular Malaysia;
· Develop the road system in Sabah and Sarawak;
· Provide suitable facilities and regulations to reduce of road accidents and

enhance public road safety;
· Study the possibility of new forms of public transport in the main towns to

improve the quality of urban life;
· Provide more orderly and reasonably-priced school services bus to reduce the
burden on parents.

(2) Just economic growth

(a) enhance domestic demand and productive, not wasteful, domestic investment
· Review the existing regulatory framework and address its weaknesses;
· Enhance private sector corporate governance, transparency and responsibility,

and end the abuse of the banking and finance sector;
· Give priority to projects which generate the greatest benefit to the people,

projects such as medium and low-cost housing, modernisation of the railway
system, road projects in Sabah and Sarawak, and others;
· Halt mega-projects which are wasteful, environmentally destructive and of little

or no benefit to the people;
· Enhance economic opportunities for all by giving specific emphasis and

appropriate support to groups that are weak, and effective support to local
businesses, especially small and medium-sized enterprises.
· Ensure that economic development is equitable and sustainable, and does not

threaten social integrity or destroy the environment and natural resources;
· Develop special development programmes for the poor and the low income in
traditional villages, new villages and estates so that they are brought into the
mainstream of development and provided with better income sources, jobs and

title to land;
· Ensure that special privileges are not abused to enrich only a small elite of those

in power and their cronies.

(b) strengthen competitiveness, greater geographical dispersal of industry, develop resource based and hi-tech, information- and knowledge-based industries
· Modernise and expand high productivity industries to increase the country’s
economic competitiveness and to encourage high-value exports;
· Address our technological weaknesses, in particular the technology gap between

the backward and the advanced industries;
· Ensure that large projects, including heavy industry projects, are managed in an

integrated manner and in line with a practical industrial development
master plan;
· Provide incentives and greater support for small and medium-sized industries;
· Encourage, by means of appropriate incentive schemes, further linkages between

local, especially small and medium-sized industries, and large international
corporations in order to accelerate technology transfer to local industries and
increase the use of local inputs;
· Support local entrepreneurs and encourage the upgrading of local skills and

human resource capacity;
· Utilise foreign capital, expertise, markets and technology in order to reinforce

local economic fundamentals;
· Enhance the role of science and technology by strengthening basic science

education and developing appropriate technical training facilities;
· Increase and improve the efficiency of financial allocations and other incentives

for scientific and technological research and development.

(c) Strengthening small and medium-sized agriculture and fisheries
· Enhance food production for the security and stability of the country;
· More research in agriculture, particularly in areas of high technology, food crops

and the industrial use of agricultural output;
· Protect biodiversity and encourage research in biodiversity conservation and
the use of natural products;
· A review of FELDA, FELCRA, RISDA, MAJUIKAN and other agriculture and

fisheries development agencies to improve management and technology use for
the benefit of settlers, farmers and fishermen;
· Restructuring government monopolies to become more efficient, effective and

market-driven;
· Firm implementation of laws regulating fisheries exclusion zones to protect in-

shore fishermen against encroachment by large fishing vessels and trawlers
which cause extensive damage to coastal fisheries resources;
· Development of idle land.

(d) Information technology and economy for all
· Speed-up the installation of telecommunications and electricity infrastructure

nationwide and seek to reduce usage costs;
· Expand information technology (IT) education in all schools, beginning with

primary schools;
· Develop more effective IT appreciation programmes for the general public;
· Launch a “One Village, One IT Centre” programme by giving appropriate

incentives to encourage the dissemination of information technology facilities to
small towns and rural areas;
· Make compulsory information technology infrastructure planning in all new

housing schemes, including low and medium cost housing, and push for the
modernisation of the infrastructure in existing housing schemes;
· Negotiate with software manufacturers to obtain cheaper software for the local

market.

(e) Prioritising small and medium enterprises
· Establish an investment fund, under-written by the government, for the

development of small and medium enterprises and allocated according to
performance and not political favouritism.

(f) Reorganising the privatisation policy framework
· Details of privatisation contracts to be made public in the interests of

transparency. The interests of consumers and workers, and the rights of the
people, will be safeguarded. All future privatisations to be conducted on the
basis of competitive bids;
· Ensure that public monopolies do not become private monopolies;
· Basic public facilities and services – such as water, education, health and public

housing – will only be corporatised to improve management but will not be
privatised;
· Public enterprises that have already been privatised will be monitored closely to

safeguard public interests. Enterprises that have been privatised will not be re-
nationalised but any invalid contracts can be terminated in the interest of the
people and the country;
· Establish an independent commission to audit all large privatised projects in the

interests of transparency and accountability.

(g) Strengthening the financial system
· encourage and promote investment and credit facilities to productive sectors

and not to speculation;
· rehabilitate the image, prestige and integrity of Bank Negara;
· ensure that Federal expenditure is channeled particularly to enhance the

standard of living of the poor, and to interior and rural areas which are still
marginalised.

(1) Education
· Education is a fundamental responsibility of the state, although private
education is allowed;
· Establish a National Education Consultative Council to ensure that the practice

and implementation of the national education policy and philosophy is both
effective and just;
· Stop the privatisation of public institutions of higher learning and review the

implementation of the corporatisation policy so that it adheres to the principles
of education and not financial gain;
· Allocate the education budget in a fair and equitable fashion, without neglecting

any group;
· Provide more scholarships and other financial assistance on the basis of need;
· Increase nursery and kindergarten facilities, especially for the lower income

group;
· Guarantee access to compulsory and free and compulsory education at the

primary and secondary levels;
· Improve standards and facilities for schools in the interior, especially in Sabah

and Sarawak;
· Review the schemes of service for teachers and introduce additional incentives

for serving in the interior;
· Raise the standard of teacher training for all levels of schools and increase the

number of trained teachers according to demand;
· Increase advanced training opportunities for teachers and lecturers so that they

are always current in their respective knowledge and skills;
· Strengthen the position of Malay language as lingua franca among the people;
· Encourage and develop the Malay language as a dynamic literary and cultural

language, which is accepted and used by all communities in Malaysia;
· Recognise the right to study the mother tongue like Chinese, Tamil, Iban,

Kadazandusun and others in schools, and improve the implementation of
policies on mother tongue education, so that it is more efficient and responsive
to the demands of parents. Trained mother tongue language teachers must be
supplied by government schools when at least ten students need such teachers,
and the training of mother tongue teachers must be improved at teacher training
colleges and public institutions of higher learning;
· Retain the various language streams in primary schools while encouraging
greater integration among students of different ethnic groups, for example
through co-curriculum activities;
· Increase the number of mother tongue schools and upgrade their facilities

according to need and demand;
· Improve the teaching and learning of international languages, especially English

and Arabic languages;
· Improve the quality of and facilities in primary and secondary religious schools;
· Strengthen the position of the existing public institutions of higher learning and

improve their performance;
· Systematically increase the number of public institutions of higher learning

without weakening the existing ones, so that more qualified students have access
to higher education at minimum fees or for free;
· Guarantee the autonomy and standards of universities and other institutions of

higher learning by establishing a Universities Commission as an independent
supervisory body, and amend the University and University Colleges Act to
ensure the fundamental rights of the academic community, including students;
· Provide an educational television channel to complement formal education and

to encourage life-long continuing education, with the help of the private
corporate sector as well as public and private educational institutions;
· Widen the scope of the National Accreditation Authority to monitor, investigate

and propose recognition of certificates, diplomas and degrees outside the
national education system. Degrees from institutions of higher learning in
Arabia, Indonesia, Philippines, Taiwan, India, Pakistan, China and other
countries, and local educational certificates such as the United Independent
Schools Examination (UISE) will be considered based upon academic standards.

(2) Health
· Establish a National Health Council, with the objective of protecting the

interests of the people and advancing the quality of health;
· Abolish all programmes to privatise the public health system;
· Review the cost and quality of service of all the health support services that have

been privatised;
· Increase expenditure allocations for the health sector;
· Restructure the scheme of service for government medical staff to be more

commensurate with their work load and responsibility;
· Maintain low cost healthcare services for all the people;
· Establish a commission to study the deficiencies in the existing health system

and to make recommendations for improving the public health system;
· Monitor private medical services and check any abuses;
· Establish a national centre for disease control;
· Increase continuing educational and specialist training opportunities for

doctors, nurses and laboratory staff;
· Review the possibility of incorporating complementary healthcare methods such

as homeopathy and traditional medicine within the Malaysian health system;
· Step up health promotion activities, health education, preventive measures and

monitoring of diseases;
· Encourage the greater involvement of women in the health sector, including

training more women doctors to handle female patients.

(3) Housing
· Increase the number of good and comfortable low cost houses which meet
household space and environmental needs;
· Overcome the “squatter” problem as quickly as possible, preferably through
development of housing in situ and/or land sharing;
· Mandate a system of consultations between the “squatters”, developers and the

authorities to reach settlement on matters of alternative housing or land or
other compensation;
· Provide public facilities around flats to ensure a balanced and healthy

personality development;
· Carry out efforts to provide easy and cheap credit facilities to help “squatters” to

buy and own their houses.

(4) Social Services
· Carry out the responsibility of the government to provide comprehensive social

services that are fair and efficient;
· Ensure that every housing project above a particular size provide social

facilities, such as playing fields, public recreational clubs, libraries and so forth,
for the use of the general public;
· Provide a systematic and comprehensive arrangement to protect and provide

assistance to the poor, orphans and single parents;
· Ensure equal opportunities for the disabled to achieve self-improvement,

education, careers, social participation and the provision of the necessary
facilities to enable them to be independent in all public areas, facilities and
buildings.

(5) Environment
· Formulate a long term sustainable development policy involving all strata of

society, to promote full support from all levels of government, non-
governmental organisations, political parties and the public at large;
· Amend the Environmental Protection Act so that no project can be started

without the approval of the Environmental and Social Impact Assessment and
the written commitment of the project proponents to implement all provisions
for mitigation, as determined by the Department of Environment, with clear
procedures for providing information and for consultations in the
Environmental Impact Assessment process involving the main stakeholders;
· Coordinate the environmental protection laws at the state and federal levels so

that enforcement and supervision can be more efficient and cost-effective;
· Implement laws relating to the protection of the national heritage, and increase

fines for breaching the Environmental Protection Act and laws to protect our
natural heritage;
· Ensure that every state gazettes a reasonable number of national parks,

conservation parks, sites for new urban centres and housing development areas
in its master plan;
· Work towards the standardisation of laws relating to forestry and logging among

the various states and establish an independent inspection system to ensure
that all these laws are firmly implemented;
· Encourage all the states to immediately gazette sufficient water catchment areas

to meet the needs of the future;
· Consult with the state governments so that they implement the existing

conservation plans and provide new conservation plans wherever necessary.

(6) Consumerism and Prices
· Strengthen consumer protection laws, especially those relating to price control,

cost of services and their quality, particularly during festive seasons;
· Review the Consumer Act so that an independent Tribunal can be established,

with participation from non-governmental organisations, to identify the list of
necessary products and control price increases by establishing a price index for
the purpose;
· Encourage the cooperative movement for production and distribution of

necessary goods;
· Encourage consumer organisations to be more active in raising the awareness of

consumers regarding their own rights;
· Regulate advertisements so that they will not degrade the dignity of women or

other groups.

(7) Workers
· Form a framework of tripartite consultation that is effective, just and

democratic, and amend laws relating to labour, trade unions and industrial
relations consistent with it;
· Repeal or amend laws which restrict the right of workers to form, participate

and be active in trade unions;
· Review and update retrenchment benefits and study the establishment of a

national retrenchment fund to help retrenched workers;
· Fix a reasonable minimum monthly wage for daily paid workers;
· Fix a reasonable monthly wage for estate workers and seriously implement a

housing scheme for estate workers;
· Provide an example for a five day work week with normal working period of not

more than 40 hours a week;
· Review methods of recruitment and pay for foreign workers and reduce

dependency on them;
· Recognise the right of trade unions and union leaders to participate in national

politics;
· Increase the retirement age to 60 years for the public sector, consistent with the

improvement of health and life span;
· Ensure equal pay and benefits for men and women doing equal work or

performing similar duties;
· Increase maternity leave in the public sector to 90 days and introduce leave of 7

days for the husband;
· Develop programmes with the private sector for continuing education and

training in order to improve flexibility, expertise and productivity of workers;
· Introduce retraining programmes for retrenched workers;
· Review the effectiveness of the National Institute for Work Safety and Health

and overcome its deficiencies.

(8) Women
· Enforce strictly laws regarding the rights, interests and dignity of women and

abolish laws and regulations that discriminate against women;
· Protect the rights and welfare of women who have been abandoned by their

husbands without any reasonable support;
· Continue payments of pensions for widows even after they remarry;
· Provide creches within the community and also at places of work;
· Introduce flexible working hours for working women;
· Study the Women’s Agenda for Change in order to implement appropriate

recommendations therein.

(9) Youth
· Give encouragement and facilities to youths in order to improve their talents in

the fields of arts, sports and culture;
· Provide projects aimed especially at discovering leadership talent in individual,

cultural, entrepreneurial and social development;
· Overcome problems, such as unemployment, drug abuse, drop-out and moral

questions, faced by some youths with innovative methods;
· Provide greater opportunities for youths of different social backgrounds to

participate in skills training and in economic projects;
· Provide more effective rehabilitation centres and work opportunities for youths

that have become victims of social problems, so that they can be absorbed back
into the community.

(10) The elderly and pensioners
· Fix a minimum pension level that will enable pensioners to sustain themselves;
· Encourage pensioners who are still able to work to contribute towards national

development;
· Have a half fare system for the elderly and pensioners for all types of public

transport;
· Make it obligatory for children or close relatives to look after the aged and

support such moves by tax exemptions or some other incentives;
· Ensure that the elderly are given priority to go on the pilgrimage;
· Encourage non-governmental organisations to develop programmes and courses

for the elderly and pensioners to improve their talents, develop new skills,
participate in study tours; language courses, physical education and so forth.

“Hindu Terror

It’s Hindu vs Christians in Orissa, Brahmans vs the Maoists in 40% of the land mass of India, the 800,000 Indian Army soldiers against Kashmir in Indian Occupied Jammu and Kashmir, the entire vs the secessionist Seven Sisters, the extremist Hinduvata (RSS,BJP,Advani,Modi) vs the penury stricken Muslims, Tamil vs Sinhalese, and the Center vs Khalistani Sikhs. Almost every state of India has rebellion in it. The state as a country is a colossal failure and Bollywoods panglossian gloss cannot hide the fact that 75% of the population lives below Sub-Saharan poverty. Swami Agnivesh on Fascism & Hindutva Ideology

Two years on, the Maharashtra Anti-Terrorism Squad (ATS) has arrested Sadhvi Pragya Thakur. In Madhya Pradesh, Mahashtra and Gujarat, a number of other Hindutva extremists have been detained for interrogation. They have reportedly found solid evidence of the existence of an elaborate, well-ramified terrorist network, which they suspect was involved in several recent bombings in different States, including the blasts in Malegaon and in Modasa in Gujarat in September. Saffron Terror. Praful Badawi

Indian Red Saffron terrorism in India: Roots & funding in USA

Indian Gujarat woman raped, killed & burned by mobs along with 2000 other innocents under direction of Mr. Modi. The US has refused a via to Mr. Modi the Chief Minister of Gujarat supported by Governor Bobby Jindal. Bobby Jindal supported by and supports Indian Hotel Association. The same Association supports Modi Christians in India raped & murdered by Hinduists supported by network in the US

Women Genocide in “Incredible India”: Women harassed. GENDER MURDER:-10 million baby girls killed before & after birth in India

Modi & Hindu fundamentalist Modi in “India” funded by US Gujeratis

A recent article in the Washington Post highlights the Hinduist terror. It does not give us a complete picture, but it does inform us about some of the recent happenings. The world has now begun to notice the facts about “Incredible India”.

MALEGAON, India — Every morning, dozens of Muslim men gather at a tea shop in this western textile town near the spot where a motorcycle bomb exploded in September during the Islamic holy month of Ramadan. The bomb killed six people, injured 101 and punctured the walls of the shop, whose clock stands frozen at the exact minute the bomb went off.

The men, slurping hot tea, pass around the newspaper to keep up with the ongoing investigation into the blast, which has led to the arrests of 10 Hindus here in Maharashtra state in recent weeks.

“We have always known that Hindu extremists were behind the blast, but we never thought the government would have the courage to arrest Hindus. The suspicion is always on Muslims,” said Ejaz Ahmad, the 32-year-old shop owner, who was injured in the bombing. “Now we feel there is justice.” Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

Gandhi adored “friend” Hitler: Today BJP Modi use Nazi policies. This is an article written by the pugnacious Praful Bidawi sent to us by Bangladeshi Isha Khan.

The Gandhi Page

But in the rest of the country, the arrests of Hindus in a terrorism case and the use of the new tag “Hindu terror” have sparked enormous controversy. The acrimonious political debate and the street demonstrations in support of the accused threaten to paralyze India’s concerted response to terrorism. The controversy also points to the growing complexities of combating tit-for-tat terrorism in this predominantly Hindu but officially secular nation.

Then, in the past month, came the arrests of the 10 Hindus, including a self-styled female saint and an army officer. Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

Police say that most of the 10 have been associated with or have attended meetings of a little-known group called Abhinav Bharat, or “New India,” which is under scrutiny on suspicion of plotting the Malegaon bombing. At meetings across the country in the past two years, according to police, members of the group have given fiery speeches advocating the creation of a Hindu nation, attacked India’s secular policies and urged Hindus to rise up against the Muslim extremist groups implicated in bomb attacks in India.

“They criticized the government and the police for being soft on terrorism,” said Shailendra Shrivastava, inspector general of police in the central Indian city of Bhopal, where some of the meetings were held. “What we are seeing today is reprisal bombings against Muslims.”

With every bombing this year, Hindu nationalist politicians played to the Hindu vote with denunciations of the growth of Islamist groups. And when the government arrested Muslim suspects, politicians vying for the Muslim vote would visit their families to express sympathy. This brazen appeal along religious lines has come to dominate India’s response to terrorism. Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

Extremist Hindus revere Hitler and use the Swastika as the Indian flag

How long to extripate penury from india? 300 years! India’s budget– fit for a superpower

The ruling Congress party government in New Delhi, which had been under criticism for cracking down on Muslim suspects, is now being accused of placating Muslims ahead of crucial six-state elections by going after Hindu extremists.

“It is a great balancing act by the Congress government. To appease the Muslims, they are now arresting Hindus for terrorism,” said Himani Savarkar, 62, a Hindu nationalist and the president of Abhinav Bharat. Savarkar denied that the group had discussed bombs but said it works to “rouse Hindus out of their slumber and become alert to the danger around them from jihadi terrorism.” Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

The government’s reluctance to bring Sangh Parivar fanatics to book is premised on the belief that Hindu extremists are somehow more “patriotic” and, therefore, less evil than Islamist extremists. This is a Hindu-majoritarian, anti-secular view. It presumes that Hindus, by virtue of being the majority, are quintessentially more committed to the Indian nation than Muslims or Christians, and hence deserving of sympathy. Saffron Terror. Praful Badawi

Such rhetoric has been part of India’s political landscape for two decades, as Hindu nationalist parties gained center stage with strident appeals to Hindu sentiment. But although scores of Hindu activists have been arrested for rioting, this is the first time any have been arrested on suspicion of terrorism.

The police got their first lead in the Malegaon case when forensic analysis revealed that the motorcycle was owned by a 36-year-old Hindu holy woman, Pragya Singh. They also claim to have records of telephone conversations that include Singh. Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

There is a plethora of material available on the rising tide of Hinduist Saffronism. The “Drive By” mainstream media has not highlighted it because this philosophy has not challenged the West YET! For the past 100 years the philosophy has focused on building a cadre of youth who could help them in “nation building”. The struggle has been internally focused in trying to wrest the reigns of power inside “India”. Much like the Nazis the Hinduists work by blaming all other minorities. Much like Moussoulini “democracy” is a tool to be used to come into power.

These fascists used hate mongering to come to power. The Babri Masjid was was used to propel the Hindusists to power. A significant members of the Indian armed forces now subscribe to this philosophy. This interview with Swami Agnivesh is very telling and a bell weather of the times.

Murder of 10 million Indian girl babies:Before or right after birth. The media is silent.

Sino-Indian relationship

“We have evidence against all the accused for their respective roles in instigation, abetment, providing explosives and funding,” said Ajay Misar, the public prosecutor in the case, citing cellphone call records, bank statements, diaries, laptop data and confessions. “All the evidence will be scrutinized by court, not by political pressure or public opinion.”

But Singh’s attorney, Ganesh Sovani, said police beat his client with “flour-mill conveyor belts” to extract false confessions. “She sold her motorcycle in 2004. How can she be held responsible now? She had no control or knowledge of how and who used her bike,” Sovani said.

Police say that another suspect, Lt. Col. Srikant Prasad Purohit, provided combat training and explosives to Hindu activists and that they have a text message he sent to another accused after Singh’s arrest. The message allegedly reads: “Cat is out of the bag. Singh has sung. Please delete my number.”

Many Indians have expressed shock and embarrassment at the sensational findings unfolding daily on television. Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

Sex life of Mohandas Gandhi, his failures and sexual perversion

Clearly, behind such attacks is a certain ideology at work whose major objective is to create hatred between the different communities. That, rather than just killing innocent people, is the real objective of those behind these dastardly and cowardly acts. These forces, who could be both internal as well as external, and who could include extremist Hindus, extremist Muslims or others, clearly do not want people of the different communities to live in peace with each other.Swami Agnivesh is the President of the Sarvadeshik Arya Pratinidhi Sabha (’World Council of the Arya Samaj’). A well-known social activist, he has played a leading role in the struggle against communalism in India , including against Hindutva terrorism, about which he talks in this interview with Yoginder Sikand.

As soon as police, politicians and the news media uttered the term “Hindu terror,” Hindu nationalist groups across India began protesting. “Hindus can never be terrorists,” the opposition Bharatiya Janata Party (BJP) said, adding that terrorists do not have a religion. Others said Hindus were peaceful people and had never invaded any other civilization in history. One columnist suggested that the phrase “Hindu terror” be replaced with “Hindutva terror,” separating the attacks from mainstream Hinduism by using a political term denoting Hindu chauvinism or pride.

“You cannot call it Hindu terrorism. If you must, then call it retributive terrorism,” said Ram Madhav, a spokesman for Rashtriya Swayamsevak Sangh, the umbrella group for most of the country’s Hindu activists.

At each appearance of the accused before the judge, hundreds of Hindu activists stormed the court chanting, “We are with you,” waving orange flags and showering marigold petals on the vehicles carrying the prisoners. They charged the government with demonizing “Hindu saints, Hindu society and the Indian army.”Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

The Singh Doctrine Fails to achieve Akhand Bharat

“The cases are fabricated. But even if they have done anything, I would say it is a reaction, not an action,” Savarkar said. “We cannot keep showing the other cheek. The Hindus are fed up.” She set up a legal aid fund this month to help Hindus booked in the Malegaon case.

The BJP is running campaign ads on TV accusing the Congress government of smearing the names of soldiers who sacrifice their lives for the nation. On Friday, Purohit, the accused army officer, alleged in court that the police had threatened to kill him if he did not confess.

“His whereabouts are all a matter of record with the military. Every hour of his life is accounted for,” said his attorney, Avinash Bhide. “The media coverage has already tried and proven him guilty.”

In the coming days, hundreds of orange-robed self-styled Hindu saints will march to New Delhi to launch a “Hindu mobilization drive.”Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

Chilled Urine drinking hot in India. Gandhi to PM Desai.

There is ample evidence to show that Hindutva groups have been involved in planning and executing acts of terror, but, unfortunately, for its own political purposes, the Government has done little to curb this and has sought to play this down. Nor has the media given this the serious attention that it deserves. Such terror attacks obviously help the Hindutva lobby as they widen the Hindu-Muslim chasm, which, in turn, makes it easier to play on Hindu sentiments in order to win Hindu votes. One cannot rule out the possibility of Hindutva elements in being behind some of the other blasts besides the ones in Malegaon, Modassa, Nanded, Kanpur and so on that are now coming to light. Blasts could have been done by any group, Hindu or Muslim or whatever, but it is wrong to jump to a conclusion without proper investigation. Swami Agnivesh is the President of the Sarvadeshik Arya Pratinidhi Sabha (’World Council of the Arya Samaj’). A well-known social activist, he has played a leading role in the struggle against communalism in India , including against Hindutva terrorism, about which he talks in this interview with Yoginder Sikand.

“We have to be cautious,” said Sanjay Nirupam, a Congress leader. “We don’t want to be called an anti-Hindu party. We should isolate the extremist groups but not alienate the entire Hindu community.”

But Fareeda Sheik Liaqat, who lost her 10-year-old daughter in the bombing that Ramadan night in Malegaon, says the naked politicking over terrorism reopens her wounds constantly.

“I do not understand politics, but the person who killed my beautiful girl should be punished,” said Liaqat, 35, as she ran her hand over her daughter’s pink-and-blue Spiderman school bag. “She wanted to be a doctor.” Washington Post: In India, Controversy Over Hindus’ Arrests, Terrorism Case Sets Off Politicking, Protests. By Rama Lakshmi Washington Post Foreign Service, Monday, November 24, 2008; A12

How long to end poverty in “Bharat”? 3 Centuries!

Chapter 2_New

STATE OF OUR U.S. ECONOMY

At a news conference in which he introduced New York Federal Reserve President Timothy Geithner as his treasury secretary and named other top economic officials, Obama said restoring the economy to health took priority over deficit concerns. Still, he said he would be looking for “meaningful cuts and sacrifices” to restrain federal spending.

At the same time, the juxtaposition of the outgoing and incoming chief executives grappling — publicly and simultaneously — with the economy underscored the severity of a crisis that has sent joblessness rising, caused a large spike in mortgage foreclosures and crippled the credit markets.

Encouraged by the action, investors sent the Dow Jones industrials up 397 points. Coupled with Friday’s gain, that mean an 891 point increase over two trading days, the biggest percentage rise since October 1987.

Obama made a point of saying his administration “will honor the public commitments made by the current administration to address this crisis,” words of reassurance to the financial markets.

Remarkably for a president-elect, he said he wanted Congress to act “right away” on a stimulus measure that would blend spending and tax cuts. Asked for details, he said without elaboration that he wanted a measure “of a size and scope that is necessary to get this economy back on track.”

Democratic officials in Congress said the stimulus plan could include aid to cash-strapped states to provide health care to the poor, along with road and bridge funding. More money for food stamps is also likely, they said.

His forecast was sober. He said there are neither shortcuts nor quick fixes.

“The economy is likely to get worse before it gets better. Full recovery will not happen immediately,” he said. At the same time, he coupled those sentiments with optimism. “I know we can work our way out of this crisis because we have done it before.”

Democratic leaders have said they are eager to spend the time before then working on the legislation he wants, and Obama had scarcely made his remarks when political jockeying broke out over the details.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Treasury Secretary Henry Paulson has been criticized for continually revising the focus of the government’s response to the crisis.

Paulson on Tuesday defended all the changes, saying that there was no one response adequate by itself to deal with what he termed a once- or twice-in-a-century financial crisis. He said that was why the government was having to keep modifying its response.

“It is naive for any of us to think that when you are dealing with a situaiton of this magnitude that a bill could be passed or a single action taken to make all the issues go away,” Paulson told reporters at a briefing on the new programs.

The program on consumer debt will lend up to $200 billion to the holders of securities backed by various types of consumer loans. It will be supported by $20 billion of credit protection from the $700 billion bailout package that was enacted last month.

Meanwhile, data released Tuesday provided further proof the country is almost certainly in the throes of a painful recession.

The Commerce Department’s updated reading on the economy’s performance showed gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter, weaker than the 0.3 percent rate of decline first estimated a month ago, and the worst showing since the third quarter of 2001.

GDP measures the value of all goods and services produced within the U.S. and is considered the best barometer of the country’s economic fitness.

Meanwhile, the Standard & Poor’s/Case-Shiller national home price index released Tuesday tumbled a record 16.6 percent during the quarter from the same period a year ago. Prices are at levels not seen since the first quarter of 2004.

That, in turn, has made it harder for businesses and consumers to borrow.

Economists surveyed by Thomson Reuters expected the November reading to slip to 37.9. Still, this month’s figure hovers around levels not seen since December 1974, with Americans’ views on the economy the gloomiest in decades as they grapple with massive layoffs, slumping home prices and dwindling retirement funds.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

 

further Osbornewatch

Back in the spring of 1997, the sterling trade-weighted index stood at 93, exactly the average since 1990, and the deficit (PSBR at the time) was 8% of GDP. This, according to the Conservative Party, was a golden legacy Labour were squandering. Now, the sterling trade-weighted index is at 93, exactly the average since 1990, and the Treasury is forecasting a deficit (PSNCR this time) of 8% of GDP. This, according to the Conservative Party, is national bankruptcy, brought about by the Labour Party for its own inscrutable ends (dog whistle: they’re all communists).

Further, according to the Conservative Party, the State should establish “an institution to lend to small businesses”. (Hey, we could call it the Industrial Reorganisation Corporation, or maybe the National Enterprise Board - that one has just the right sound to it, no?) Let’s recap: first of all, the Bank of England was right to lend taxpayers’ money to Northern Rock. Then the Government was wrong to do so. Then the Government was wrong to nationalise Northern Rock because it put taxpayers’ money at risk, and (dog whistle) they’re secretly plotting to take over all the banks. Instead, the Government should have the Bank of England pay for it because its funds suddenly weren’t taxpayers’ money any more. The same procedure was followed for Bradford & Bingley, but the Conservative Party also held that there was no need for this because everything was really OK.

Then it turned out to be not OK at all, and for a while the Conservative Party kept schtum. The Government came up with a plan, which was rapidly taken up by every other OECD nation, to (essentially) underwrite an absolutely huge rescue rights issue for several banks, to guarantee wholesale interbank lending, and to top the whole lot off with a fiscal reflation. The Tories were silent. Now, with this actually in place, they are incoherent with rage; things are so bad, apparently, that the assets of NR, B&B, RBS, and HBOS are worth absolutely nothing and the interbank guarantees will all be called in (even though most of them will net-out). However, things are still not actually so bad that we need the reflation.

Now, apparently, although the Government should not be spending any taxpayer funds, it should also be lending them directly to industry to substitute the banks, which you will recall there is nothing wrong with, but which are also worthless.

On top of this, Private Finance Initiative costs are now, according to the Conservative Party which invented the things so as not to include them in the national debt, part of the national debt. If they really believed that, this would imply that Ken Clarke, John Redwood, Malcolm Rifkind, and William Hague should be drummed out of the party as a gang of fraudsters. Hey, they were plotting to conceal the government’s true indebtedness in sinister Enronlike off-balance sheet vehicles!

All these funny figures are necessary to keep Gideon and Dave from PR from being caught deceiving the House of Commons. Why? Because he decided to say that the UK “has the debt levels of Italy”. Italy has a national debt equal to 103% of GDP; the peak forecast figure for the UK is 57%. But if you torture the data enough, by reclassifying the PFIs, by deciding that all those square miles of Victorian terraces with HBOS mortgages don’t keep the rain out any more, by capitalising all the future public pension liabilities (but strangely not the “unfunded nuclear missile liability” or the “unfunded tax break for Conservative client groups liability”) you can kindasorta get there - if you have absolutely no intellectual integrity at all, that is. After all, if you did that, you’d have to do the same for the Italian public sector as well - and can you imagine what that balance sheet would look like if it had to roll up all those retired posties’ pensions to an infinite horizon? If you want any more of this stuff, try Daniel Davies.

Bravo! Remind me why we have to put up with these fucking people. Meanwhile, for everything else, I think it would be better to spend more of this money on capital investments rather than a VAT cut. Which apparently puts me in harmony with the political party I’m a member of. Perhaps I should take maverick lessons.

Port Phillip Apostle No. 5 John Moffat Chisholm

Ah, now THIS Port Phillip Apostle seems well connected with some of the other ones.  As you’ll remember, I’m trying to work out the connections between this group of 12 men who agreed to become liable “jointly and severally” for the debts of one of their number, W. F. A. Rucker.  I’ve been surprised so far by how most  of them had traceable connections with  only one or two of the other men, which seemed strange given that they were throwing their lot altogether.  But, unlike the others, our John Moffat Chisholm seems to have links with several of them.

He was born in Edinburgh, Scotland (no date) and arrived in Melbourne in 1838 and set up business quickly as a merchant.  He married a Miss Osbourne in 1838, and purchased ‘Maryvale’ at Moonee Ponds in 1841.

His business was located in Collins Street, but in 1839 was burnt down. Garryowen hints at ‘mysterious gossip’ over the origin of the fire.   He was well insured, and rebuilt on the same frontage.  He joined with the other drapers in February 1841 to announce their agreement to their shop-assistants’ demands to close by 8.00p.m. except on Saturday nights.  He also made an appearance as employer when he took his servant to the Police Court, presided over by the police magistrate St John, over forfeited wages, and as was common at the time he handed the proceeds over to the hospital building fund.  The Master and Servants legislation of the time, which initially was used mainly against employees when times were good, worked more to the advantage of employees once the depression started to bite.   In April 1841 he sold his business to C. Williamson, then moved his office a month later to Hind and Co.  In January 1842 he bought land at a forced sale in Bourke Street at the very cheap price of 4 guineas per foot.   He fell victim to the “swindler” Barrett   who was execrated by many for skipping off to New Zealand rather than face his creditors.

He also had a property somewhere along the Plenty River where the Plenty Valley bushrangers moved freely, terrorizing the settlers in April 1842, but the exact location has not been determined.

He attended Debating Society meetings, where he signed a letter of support for George Arden when he was facing Judge Willis over libel charges.

He posted bail for H.N. Carrington when he, too,was confined to ‘the rules’ on Willis’ orders but when he found that Carrington was intending to break bail to travel to Sydney, he and his fellow guarantor Peers surrendered their bail, no doubt anxious that they were going to have to pay the penalty.  So here’s a connection with one of the Twelve Apostles- Carrington.

He was on the Committee of Management of the Mechanics Institute, and here we see a further strand of connections with other Twelve Apostles.  William Highett, who was fundamental to Rucker’s arrangement with the bank, was the Treasurer of this organisation, and Alexander McKillop and P.W. Welsh were fellow committee men and, more significantly, fellow Twelve Apostles.

He appeared in court, along with Fawkner and Purves as part of the court cases that fell out of the arrangement with Rucker in February 1843.  The other Apostles seem to have submitted quietly to their fates.

If personal status was protected and attacked in diverse ways, the law carried the most weight as a weapon against scandal.  For those who could afford it- and were undeterred by the publicity it inevitably involved- it was the final line of defence…  Kirsten McKenzie ‘Scandal in the Colonies’ p. 70

(Actually, I find myself wondering whether EVERYBODY, even today, has a court appearance of one sort of another in their life?  I haven’t yet….  Perhaps the establishment of bureaucracies to do the tasks of fining and penalizing as mere administrative acts have reduced the need to appear in court?)

So what happened to John Moffat Chisholm for the rest of his life, I wonder?  He was obviously in Melbourne in 1872 to have his photograph taken by T. F. Chuck, and he died in Melbourne in 1874.

So, I’m really none the wiser.  He seemed to have social connections with Carrington, McKillop and Welsh.  He resisted the fallout from the Rucker arrangement, but had to declare himself insolvent in any event.  He must have recovered financially enough by 1845 to recommence business, and he breathed his last in Melbourne.

References

Costs of Empire:

TU#106 26NOV2008; rally

TRADING UPDATE

Today the S&P500 was up another 30 points after starting down 16 this morning.  That’s almost another 50 point move.  This morning I figured this rally was probably for real for a while, and the rest of the day proved that to be true.  The news about Obama building his action team to take on the general financial crisis and of another $800B of taxpayer money to directly support mortgages (triggering a mortgage rate drop) is being taken to heart by the market, and the fourth up day in a row is fairly bullish considering where we are starting from.  And just the general tone of the market felt firm, even with the morning’s early and very temporary weakness.  All those great low-hanging fruit bargains that were all around you yesterday could start evaporating pretty quickly here.  Strong bear market rallies can run for months, and t’is the season (the beginning of the November to April seasonal).

Despite the fact that I’ve reduced down the number of groups and number of 2x leveraged ETFs, REAP has still been quite busy, and today was no exception with another 3 re-allocation trades.

The TAN to HNU was nice, since, though TAN continued to move up another 5% during the day, HNU doubled that with a 10% move right after the trade.  CME has done really well off the low as well.  Just last Friday REAP was buying it at $166 and today the same quantity went out today $45 higher at $211 - ploughed into a Canadian alternative energy income trust paying about 10.4% at today’s buy price.  UYG to HSD was a repeat of Monday’s trade, only at a greater spread between the two.  Just last Thursday UYG was bought at $3.96; some sold at $4.61 on Monday and now today at $5.84 - 47% higher than Thursday’s buy.  This great volatility just continues.

The portfolio recovered to being down just 5.9% on the year, and is still tracking ahead of the benchmark total return S&P500 index by 12.5%.  The portfolio yield has been climbing, and is now over 4% on average.  The total share count has almost exactly doubled since the end of August.

Today I received an email from Aeroplan about a 2-day seat sale by Air Canada.  From Ottawa, they were offering return-trip deals like CAD $950 from Ottawa to Sydney Australia, $550 to Lima Peru, $320 to London or Paris, and so on.  I remember that right after 9/11, Cathay Pacific offered a $1200 package where you could fly to 30 cities in Asia for 30 days unresistricted - like a Eurail pass.  Now THAT was a heck of a deal.  At the time we couldn’t take it because our kids were too young to schlep all over Asia.   Today’s wasn’t quite as sweet, but it got the juices going.  When we travel, it’s in a pack of 5, so we pay attention to airfares.  Also, a couple of Scouts have been suggesting grandiose plans to travel to an exotic place like Thailand (although they’ve cooled their heels on that since today’s news of the Bangkok airport being overrun by rioters, and of the coordinated terrorist attacks in Mumbai).  However, Britain, the south of France, maybe Italy, Spain, or Portugal all sound quite appealing and doable, say over March break or a little later in April when it’s a bit warmer.  Despite the decline in oil prices, the airlines must be seeing a significant drop-off in bookings, and these deals are opening a window of opportunity for some interesting world travel.  I’m in the hunt.

économie-europe_26/11/2008

Source : NEP (New Economics Papers) | RePEc

U.S. Lender Audit Helps California Attorneys with Foreclosure Case Law

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

default on payments or charging fees for loan modification.

www.uslenderaudit.com/case_law

1.888.828.3484 or 1.888.8.AUDITING

 

 

U.S. Lender Audit helps California Attorneys with Case Law Applications

 

PETITION AGAINST A MASSIVE NEW ANIMAL BREEDING FACILITY- PORTUGAL

c. Involved parties

http://www.politics.co.uk/opinion-formers/press-releases/opinion-former-index/animal-welfare/adi-european-commission-guilty-hypocrisy-over-replacing-animals-in-experiments-$1251262$464772.htm

Animal Defenders International (ADI) and the National Anti-Vivisection Society (NAVS) have strongly condemned an announcement that the European Commission plans to help fund a massive new animal breeding facility in Portugal.

Official council documents confirm that a research lab is planned in Azambuja, a district of Lisbon. The President of the Champalimaud Foundation, Leonor Beleza, announced that up to 25 thousand cages would be built for animals for breeding and scientific experiments, including brain and cancer research.

The aim is to supply animals to companies, university labs and research institutes in Lisbon, and also to other parts of Portugal and abroad. The official documents mention exporting to Europe, especially Spain and the South of Europe, and perhaps Africa.

The new facility will cost 36 million Euros. Nine million will come from private sources. The remaining 75 per cent; 27 million, will come from the European Commission.

This sum dwarfs the amount spent on the European Centre for the Validation of Alternatives Methods (ECVAM), which received 2.2 million this year and 1.7 million in 2007. ADI has been campaigning for more money to be spent on the centre. In the last five years, ECVAM received 11.3 million Euros, which is less than half of what the EU will spend on this new lab.

The species of animals involved has not yet been released, but there is concern that if it involves primates, this would be in direct conflict with the will of the European Parliament. In September 2007, the European Parliament adopted Written Declaration 40/2007, which calls for the replacement of primate experiments with non-animal alternatives. With signatures from 433 MEPs, the declaration achieved record-breaking support. It was hoped the adoption of the declaration signalled a move away from animal testing towards non-animal alternatives. Earlier this month, the long-awaited announcement of the revision of Directive 86/609 included a ban on the use of apes and wild caught monkeys in laboratories but fell short of a phase out of primate experiments.

On that day, European Environment Commissioner Stavros Dimas said: “It is absolutely important to steer away from testing on animals. Scientific research must focus on finding alternative methods to animal testing.”

ADI and NAVS Chief Executive, Jan Creamer, says “It is hypocritical that the European Union could consider funding a massive new animal breeding centre, when it claims to be committed to finding alternatives for animal testing. The amount spent on researching alternatives is dwarfed by the massive sums being given to this facility in Portugal. It sends a clear and disturbing message that the welfare and lives of thousands of animals are dispensable. That is completely unacceptable.”

ENDS

NOTES TO EDITORS

For further information, contact ADI / NAVS Public Relations Officer, Ally MacDonald

Tel: 020 7630 3344

Out of Hours Mobile: 07785 552548

Email: pr@ad-international.org

In 2004 and 2006, Animal Defenders International inspected a large primate supply operation built by French company Noveprim/CRP in Camarles, Spain, with a capacity for 3,000 monkeys. The macaques were held in barren cages, far removed from their natural habitat. Video footage from the undercover ADI operation is available here: http://uk.youtube.com/watch?v=uLykJI9sXkE.

The original footage is available from the press office.

Further photographs of monkeys from the undercover ADI Spanish investigation are available from the press office.

The official documents detailing the Portugese project can be found here:

http://www.cm-azambuja.pt/NR/rdonlyres/64490937-702C-42CE-A605-1D3DA782A949/0/Biot%C3%A9rioCentral1.pdf

The 27 million Euros of European Union funding is split between three different funds; European Regional Development Fund, The European Social Fund and Cohesion Fund.

The National Anti-Vivisection Society (NAVS)

The National Anti-Vivisection Society (NAVS), founded in 1875, was the world’s first group to campaign for the abolition of cruel and futile experiments on animals. Through its sister organisation, the Lord Dowding Fund (LDF), the group promotes non-animal research by awarding grants in excess of £3 million to researchers to develop alternatives to animal testing.

NAVS: http://www.navs.org.uk/home/

LDF: http://www.navs.org.uk/research/

ADI

With offices in London, San Francisco and Bogota, Animal Defenders International (ADI) campaigns to protect animals in entertainment, replacement of animals in experiments; worldwide traffic in endangered species; vegetarianism; factory farming; pollution and conservation. ADI also rescues animals in distress worldwide. Our evidence has led to campaigns and legislative action all over the world to protect them.

http://www.ad-international.org

Choosing the Right Vehicle for the Trip?

So you’ve figured out your number, that is, THE NUMBER that will enable you to live the life you’ve always dreamed of living, starting in the time frame that you would like to begin. Now what? How are you going to get there? Or in another way of looking at it, how will you choose the right vehicle for the trip to get you there?

For myself, after coming to the realization that I don’t actually need quite so high of a number in the next 10 years to fulfill my life’s purpose as I previously thought, I now have to pick the right vehicle, or investment vehicle that is, to be able to make this trip in due time. I pretty much think of this “trip” and this “vehicle” in much of the same way that I would think of any other form of traveling.

For example, living in Louisville, KY, if I needed to get to Indianapolis, Indiana in the next 3 hours, it would be very reasonable for me to make this trip by car. Seeing as though this is about a 2 1/2 hour driving trip, automobile transportation would be the best mode of travel, possibly getting me there a few minutes early to spare. But what if I needed to get to Los Angeles California in the next few hours? Well a car just ain’t cutting it! I’m going to need an airplane. You get the point.

This is kind of the way I see the next stage required for all of the 7 Millionaires in training (and any of you following along and applying these principles of wealth building for yourselves). Adrian has kindly pointed out a table for us all to follow, courtesy of Michael Masterson, that simply shows various percentages of annual required compound growth vs. the vehicle needed achieve that growth, eg. cd’s, index funds, stocks, etc…that is needed to get you to where you currently are to where you NEED to be:

According to Michael Masterson in his book Seven Years To Seven Figures:

Growth Rate                             Required

4%                                                  CD’s

8%                                           Index Funds

15%                                              Stocks

30%                            Real-Estate together with Stocks

45%              Real-Estate together with Stocks and Small Businesses

50%+                           Start Your Own Business

And looking at where I am starting out in net worth on this journey vs. where I need to be:

It appears that I will need a 40% annual compound growth rate in order to land safely at my final destination over the 10 year period, from where I am departing from.

Now to back things up just a notch, my original vehicle of choice, even before getting to this stage of decision making on how I’m going to pull this off has been to use an expected combination of real estate together with stocks, all the while “fueled” if you will, by money seeded from my small business. As you can see, these tables match my personal goals completely across the board.

More specifically, I’ve estimated that I can invest an average dollar amount of between $3,500 to $5,500 per month beginning this January 2009 from my business, after personal living expenses are met at my family’s current chosen level of lifestyle. I can continue this amount of investing for 3 years due to expected income from business revenues, however, in 3 years, this amount will increase to approximately $8,000 per month to invest over the remaining 7 years of my 10 year journey. This is if I choose to do nothing else but continue to get dressed and head out to the office 5 days a week (and stay healthy and motivated to do so, of course, but more on this later, as I pursue additional businesses with which to gather more “seeds” from ).  When I put these figures together and apply this “seed money” toward an expected annual compound growth rate of 26.3%, I’ll finish with $4,050,000.00 in exactly 10 years.

However, if I jump in a bit more powerful “jet” , let say, perhaps pushing the annual compound growth rate on up to around 40%, I can reach my destination between 7 and 8 years instead.

So I guess the next question to ponder would be “How willing are you to upgrade your mode of transportation?”

I hope some of us aren’t afraid of flying!

Fyi: Business - Tulsa World


The amount of money set aside for emergency loans needs to be increased following a rise in demand of more than 40%, the Lib Dems have said.Figures obtained by the Party show in the last year the number of people on low-incomes applying for the Crisis Loans rose to a total of 2.5m.But in the last six months Jobcentre Plus has turned down more than a third of these - more than ever before.The government said those in greatest need were getting their loans approved.The figures revealed by the Lib Dems showed that the number of applications for Crisis Loans in October was the largest in any month since the scheme was established.In the last year, an extra 729,000 people applied for help from the government.The political party said this was an early indication of how people on low incomes were affected by the economic downturn.However, Jobcentre Plus turned down more applications in the last six months than it has done in the past three years.During that period, it turned down an average 300,000, or 19% of all applications.The Lib Dems believe this is because there are only limited funds now available and have urged ministers to ensure more money is put into the scheme.

India return up to us - Pietersen
England captain Kevin Pietersen insists none of his players will be forced to return to India for the two-Test series after the terror attacks in Mumbai.The tourists fly home on Friday but are scheduled to return in December.”We will make every effort to come back and play in the Tests, but at the end of the day if it’s not safe we won’t be coming back,” Pietersen told BBC Sport.”I’ll never force anybody to do anything. A man is a man and he can make his own decisions for himself.”More soonThis article is from the BBC News website. © British Broadcasting Corporation

Measles cases reach 13-year high
By Fergus WalshMedical correspondent, BBC NewsThe number of measles cases in England and Wales has topped 1,000 in a year for the first time since 1995, Health Protection Agency figures show.In the first 10 months of 2008 there were 1,049 cases, more than in the whole of 2007, the agency said.It said measles was spreading more easily because of the low uptake of the combined MMR jab over the past decade.In Cheshire, an outbreak of more than 60 cases has prompted the launch of a programme to vaccinate 10,000 pupils.The decade of relatively low vaccination coverage was triggered by now-debunked research claims of a link between the combined measles, mumps and rubella jab and autism.YEARLY MEASLES CASES1996 - 112 cases1997 - 1771998 - 561999 - 922000 - 1002001 - 702002 - 3192003 - 4372004 - 1882005 - 782006 - 7402007 - 9902008 to October - 1,049Public health experts say the growing number of children who are unprotected - about 3m or one in four have not had both MMR doses - means there is a real risk of an epidemic.It is estimated this could result in between 30,000 and 100,000 cases of measles in England alone.Although MMR coverage is higher in Scotland and Northern Ireland, experts said an epidemic could affect children anywhere.Dr Mary Ramsay, an immunisation expert at the Health Protection Agency, said: “Over the last few years we have seen an unprecedented increase in measles cases and we are still receiving reports of cases across the country.”The 1,049 figure is the highest number of measles cases recorded in England and Wales since the current method of monitoring the disease was introduced in 1995.”This rise is due to relatively low MMR vaccine uptake over the past decade and there are now a large number of children who are not fully vaccinated with MMR.”This means that measles is spreading easily among unvaccinated children. There is now a real risk of a large measles epidemic.”These children are susceptible to not only measles but to mumps and rubella as well.”School visitsIn central and eastern Cheshire, health officials are so concerned about their outbreak of cases that they are embarking on a mass vaccination programme.More than 10,000 children are being offered the MMR jab by teams of nurses who will visit primary and secondary schools in the next few weeks. Vaccination will not take place without the consent of parents.A measles vaccine was introduced in the late 1960s, followed by the three-in-one MMR jab in 1988.Although most children recover fully from measles, it can be a serious illness.One in 10 cases requires hospital treatment and it can lead to pneumonia, brain damage and even death.In 1965 there were 115 deaths from measles, but the rates fell off dramatically after the introduction of the vaccine.Has your family been affected by the rise in measles cases Did you decide not to allow your children to take the MMR jab You can send us your experiences using the form below:In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below.


Shares of Chesapeake Energy Corp., the nation’s largest producer of natural gas, fell nearly 17 percent Friday after the company said it plans to sell common shares to fund drilling and exploration activities and to guard against the effect of lower

CANADA STOCKS-TSX extends rally as financials rise - Reuters
TORONTO, Nov 28 (Reuters) - The Toronto Stock Exchange’s main index rose 200 points on Friday afternoon on strength in financial issues. The S&P/TSX composite index .GSPTSE was up 206.76 points, or 2.36 percent, at 8,960,53 in trading that was muted

Stocks end short session with 5th straight gain - Yahoo News
AFP/Getty Images/File File photo shows a sign for Wall Street near the New York Stock Exchange. Wall Street finally found something NEW YORK Wall Street climbed again Friday, wrapping up its biggest five-day rally in more than 75 years

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Strike Update from Union

NOVEMBER 28: The Bargaining Team met with the employer yesterday and today to emphasize areas that must be addressed to end the strike. Yesterday we presented the Employer with our revised framework and they presented us with some revised and new proposals. Their new proposals do not come near to reaching the heart of our key demands, however it is good to see that the employer has recognized the importance of certain important issues. The following are some of the areas where we have begun negotiating: • We would be willing to accept their counter proposal on vision care to be set at $400 every 24 months (up from 300 every 24 months and down from our $450 proposal), as well as their proposal that “paramedical services” (including chiropracty, physiotherapy, massage therapy, naturopathy, podiatry, psychology – now covered only by our Extended Health Benefits plan) would be moved into the normal insurance plan. However, they have offered this with the condition that we delete the existing 175k Extended Health Benefits Fund, which we must insist on retaining for the purpose of covering other necessary health costs and for subsidizing extra costs incurred by members. • We are excited about the inclusion of “fund protection” – which would ensure that future membership growth does not affect the level of funding per member. However, the employer has only attached this “fund protection” to a limited number of funds. Without adequate catch-up of all funds, targeted growth to certain funds, and an expansion on the funds that would qualify for indexation of the proposed “fund protection” we are not yet prepared to settle this issue. The employer will thus have to make more significant strides in order to lead us to settlement. [This is seen by many in the Union to be very important. Since our last contract in 2005 the university has increased our enrollment by 28%, and plans are underway to increase graduate student enrollment even more in the coming next few years. Many of our benefits and funding are a fixed dollar amount over the entire union, so increasing the size of our membership is a means by which the university can increase its own funding through tuition fees and government transfers, and simultaneously lower our funding per student by a hefty amount - 28% since 2005. The Union's position is to restore these funds per member to 2005 levels and "index" these funds to any increase in enrollement] • One exception to the funds that have not acheived sufficient catch-up levels is the UHIP fund, which is a fund to pay for half of the health insurance premiums of international students that is not covered by FGS. The combined sum of the Unit 1 and Unit 3 funds will now reach 77,000, up from 44,500. This will cover all of our current international members and leave 9,000 that can be used to subsidize insurance premiums for family members. • Another positive move was the inclusion in the Unit 3 Collective Agreement of many leaves that are now in the Unit 1 agreement . • We also saw a first overture on the idea of post-retirement benefits. However, as it is would only cover $1500 per year, this still promises to be insufficient for retirees whose health bills will undoubtedly exceed this limit if they have any serious health problems. Consequently, we responded that this offer is clearly insufficient and we will be pushing to raise this limit. [This is an important aspect of the package for contract faculty. Imagine working your whole working-life at a university, teaching classes and performing student and committee services - just like tenured faculty do - and then you retire without any benefit package whatsoever!] • The key sticking point remains ensuring job security measures for Unit 2. In response to our suggestions of an renewed SRC program (which has the full support of the YUFA executive), they have offered 10 positions of a 5-year teaching stream YUFA appointments (spread over their proposed 3 year contract). Unit 2 CUPE members with 5 or more years in the affirmative action pool would be able to apply to be moved to YUFA with a 4.0 course load + service for $60,000. Currently we have 67 members that would be eligible for SRCs, and we are seeking a 3.0 course load at $75,000, which not only takes into account job security but acknowledges the important role that these members of CUPE have contributed to the York community. Not only are we unwilling to accept this proposal, but YUFA is very unlikely to accept the two-tier employment structure that it would institute within their collective agreement. [This is another very important aspect of the contract. Unit 2's - contract faculty - are currently forced to reapply for their jobs every semester/year and make far less money as tenured profs for doing the same work. Many contract faculty have been hired semesterly/yearly by the university for well over 10 years, but still have to go through the hiring process as well as receive less wages and benefits from the university as a tenured professor would. The Union hopes to re-introduce a system (which had been used and worked well before) by which contract faculty with many years of service (I think it's 10 years) can be given longer reknewable contracts at pay and benefits that is closer to what tenured faculty make. In this round of negotiations the University has offered that a pool be set up whereby a limited number of them can be given a 4.0 course load for 60K and transfered to the Faculty's union YUFA, rather than remain CUPE. This workload is still larger than regular faculty and the pay is still less, so as suggested, the unioin is hoping for further movement in the employer's position. While these developments are not all that we would hope for, we are encouraged that we have resumed fruitful negotiations. We spent the bulk of today developing responses to the employer's proposals, and going through our outstanding non-financial proposals by reasserting our position on some, while revising and withdrawing others. We continue to seek more serious movement in our stated key areas of job security for Unit 2 [contract faculty], raising the Minimum Guarantee for Units 1 [TAs] and 3 [GAs and RAs], and restoring our funds to their levels prior to major membership growth [28% since 2005] We will be meeting tomorrow [today, as this was posted yesterday]…

 

This was emailed to me by a member of CUPE this morning. 

 

Cheers everyone!

Personal and Professional Profile of Mr. Steven R. Zoernack

An Executive at former investment banking powerhouse Bear Stearns and also at Refco (the world’s largest futures and commodities firm at that time), Mr. Steven Zoernack has been well known in the Investment Industry since 1982. Mr. Zoernack studied at Boston University’s School of Engineering and played on the school’s Lacrosse team. Early in his professional career, he was involved with large grain negotiations (for human consumption) at the Continental Grain Company’s Conti-Commodity division at 4 World Trade Center in New York, which was later bought by Refco. He was one of the few Advisors that had correctly predicted the huge Coffee price increase during the 1985 summer drought in Brazil and his portfolio of discretionary accounts that he managed were enjoying day after day of “limit up” markets. Mr. Zoernack was known as one of the few the Advisors who had the highest volume of CPI Index Futures when first introduced and helped pioneer t he creation of the first ever Derivatives on Crude Oil, Heating Oil and Gasoline Futures while at Bear Stearns. From 1997 to 2007, as an investment Banker in the Commercial Real Estate Group at Wall Street Credit LLC, he originated and securitized large CMBS (Commercial Mortgage Backed Securities) transactions in healthcare facilities, offices, multifamily housing, retail malls, and warehouse buildings that others said couldn’t be done. He advised on the financing on a buyout for the famous Las Vegas Desert Inn for a client who was a Real Estate Investment Trust. More recently he correctly predicted the sharp decline of financial and banking sector stocks.

In his new role as President of the African Peace Fund, an Alternative Investment Vehicle wholly owned by GlobalHedge, Inc., Mr. Zoernack has chosen to use his Investment skills in helping the Governments of Emerging Nations in Africa with his unprecedented ability to see investment ideas before others. The African Peace Fund is unique in that the Fund reinvests profits back into the sponsoring Country’s economy where needed most, whether it be to help maintain peace, improve Global Image, to build schools, infrastructure, medical facilities, to attract tourism, develop a financial center or assist in the cultivation and mining of natural resources. Rather than relying on the World Bank for additional debt, the African Peace Fund helps give citizens of Emerging Nations the confidence to reinvest in their own economy by opening their markets to free trade and encouraging Foreign Capital. The African Peace Fund is now accepting investment s of $25 million or more from Governments, Institutions and other Key Global Organizations, Corporations and Individuals.

Mr. Zoernack is also a respected member of his community and continues his extensive past and present volunteer work, including teaching Sunday school to 3-7 year old children, coaching Little League baseball, serving as Commissioner of Little League, and judging Special Olympics competitions for the handicapped.

Mr. Zoernack wishes to be remembered as having made a positive change in the World we live in.

panch-tattva talk

Friends,

The economic malaise emanated from USA and afflicts USA the most but paradoxically the fllowing figures show that it has been least affected in terms of loss in indices:

You may have observed that the DoW has lost minimum over the year of turmoil. It may be so that the emerging markets had investements flowing into from USA and this was keeping their indices high and being small markets , the impact of withdrawal of such investment, has been more. The withdrawal was necessitated by the need to have dollars back to USA for the last ditch attempt at saving the day. This way , not only the indices have suffered heavily , these indices have representatives with tremendous value in terms of assets and earning potential. This opportunity will be exploited by some or the other long term investor as soon as the confidence returns. Indian PE at 11.8 (forward PE of 8.7) is very enticing as India is expected to post second best performance in GDP growth at 8.4pc . China would grow at slightly higher rate. The developed world economies may only grow at sub-2pc . There will be middle range performance for other countries covered above.

The October end inflation rate was 11.1 pc and 10 year G-sec Yield at 7.8pc , the real interest is negative therefore. The inflation was at under 2pc in Jan 2002 and the yield at 8pc . This is clear that the real rate of interest was at good +5pc. It may therefore be seen that the industry in not foing to be adversely affected in India in medium to long-term, however, the short term may see irrational moves.

Now the money supply situation in terms of M3 is quite comfortable which is plus 20.3pc over the year at 43,14,125 crs . The only component that was showing the lower number was deposits with RBI. Term deposits with banks are up 20.8pc. Clearly people are seeking comfort with bank deposits particularly with PSUs. I am sure this will be corrected and the funds of local people too will be getting back in to equity arena. Sheer values do not keep lying around for long. It is only that some have to show leadership and some companies start their upward march.

Young Israeli companies riding the storm

Yesterday in Synagogue, I sat next to a friend who works for an international IT company in Jerusalem. Between the prayers, he voiced concern that his company was about to lay off 10% of staff and cut the salaries of the survivors.

Yes, the recession has reached Israel. The retail price index for October is expected to show  a drop of a whole percentage point. Car sales are down 19.7% as against the previous quarter. Gloom, but not doom.

I continue to maintain that the Israeli economy is facing this downturn in good shape. And the Tel Aviv stock market has picked up on that. Over the past 3 months, it has fallen 22%; difficult, but brilliant compared to the 35% of the FTSE’s world index. Let’s take some specific recent success stories.

For all the problems of its pension funds and aging politicans fighting for their reputations, the Israeli economy is telling the world that it has a lot more to shout about. Worth listening, in my view.

Roger Biduk - Wall Street

Roger Biduk writes:

Four Tips on Raising Venture Capital

Today I pass along four sources of advice – with a bit of my own advice thrown in for good measure – ranging from advice for the person wanting to plan for all their VC rounds as they are just starting out (analogous to the plan-ahead friend seeking advice on the process of finding that perfect person to marry,) to advice for the person just days from making a big VC pitch (analogous to the last-minute friend seeking advice the night before he’s going to propose!)

So whether you’re the long-range planner or the last-minute proposer, maybe you’ll find one of these right for you.

“Raising Venture Capital for the Serious Entrepreneur” by Dermot Berkery

On that April day, Dermot gave sage advice on our move to Ireland - a move he’d made a few years earlier with his American wife and three children.  Last year, Dermot packaged into this book his sage advice for entrepreneurs needing to raise venture capital.  Dermot’s advice, based on his time at Delta Partners, is less about “How to raise venture funding for the business you’ve created” than it is about, “How to create your business such so you’ll be able to raise venture funding,” a subtle but key difference.  Dermot talks about organizing the business around fundable “stepping stones,” each a “proof point” that a VC will require.

For those just starting out and wanting to plan the entire funding process in advance, the price of Dermot’s book will be the best investment you can make.

“Due Diligence” and “Prep for Series B” Posts From Jeff Bussgang

The first details the three stages of the due diligence process, with a couple of key takeaways for me:

1.    After seeing what the due diligence process will entail you might just decide not to even seek venture funding!  Better to decide this up front and plan your cash flow accordingly.

2.    If you decide to proceed with seeking venture funding, Jeff lists the requisite data / information you will need to have collected well in advance of the due diligence process.  Life will go better if you collect this data as you are actually running the business, not waiting until you approach the funding process.

Jeff’s second post details the process of going through a Series B fundraising, relevant for a couple of reasons:

1.    I’ve found that VCs often try to reduce risk by answering as many Series B questions in the Series A round. (Ditto answering Series A questions in the Seed round.)  Therefore many of these “later stage” questions will be asked early in the process. Be prepared.

2.    Jeff shows you the type of “proof points” that you’ll need to put into your operational plan early on.  If you wait until it’s time to do the funding round, you may find it too late to collect the data required.

“12 Steps to Short-Circuit the Fundraising Marathon” by Scott Painter

I’m not sure I agree with his “high numbers” process, just like I don’t agree with the process of sending out 1,000 resumes to land a new job.  But Scott’s 12-step process has two key takeaways for me:

1.    He has a technique for determining exactly which VCs actually take the time to look at your PowerPoint, and for preventing the VC from forwarding it to others.

2.    He then has an intriguing three-meeting process he has used successfully cement the deal.  Check it out.

“Three Tips For Making A Winning Pitch to a VC” by John Zagula

Rather than offering a slide-by-slide recipe, Zagula’s post, contained in a brief article in Xconomy,  provides just three tips on how to make a pitch interesting and relevant.  In particular, I like his first tip about beginning with a personal story that is relevant and impressive.

I passed Zagula’s advice along to a friend who promptly binned the 25+ slide presentation they’d labored over for months1  Starting from scratch they followed a technique I learned from my wife; “blank slide” the entire presentation using 3 by 5 index cards, writing just one key point on each card – “Great team”  “Defensible IP” “Cash positive in 9 months” – then organizing the cards into a logical order, and finally writing a crisp, interesting presentation – a story, really, based on the flow of these cards.

In all four cases, you’ll be glad you listened to the advice these guys have to offer.

How to Make Money As Oil Prices Rise

S’pore property fund index in the works

Compiler seeking more data from portfolio managers

THE Investment Property Databank (IPD), a global provider of real estate investment indices, is calling for more support from property fund managers in Singapore to develop a national index.

‘An IPD Singapore Index would bring an internationally recognised property benchmark to the regional property sector, enhancing market transparency . . . and would, for the first time, facilitate property derivatives trading in Singapore,’ said IPD yesterday.

IPD has been compiling publicly available data since the first quarter of this year to determine returns from the local real estate sector last year. But because data is incomplete, it is urging property fund managers to provide more specific information on their portfolios. IPD has written to the managers to garner support and outline the steps required to create the index.

‘With the cooperation of the Singapore property market, IPD is confident it could produce the first definitive set of returns for 2007 early (next year),’ said IPD director and head of Asia-Pacific Kevin Swaddle.

According to Dr Swaddle, the proposed IPD Singapore Index will measure the return on capital employed in each period, not just the change in property values. This makes the index different from price indices already available in Singapore.

He also cited Trade and Industry Minister Lim Hng Kiang who said in a speech last year: ‘A key criterion to develop the property derivative market in Singapore would be the existence of transparent, reliable and well-followed direct property indices, which serve as reference points or benchmarks for structuring of property derivative products.’

PULLING DERIVATIVE BEAST OUT OF THE HAT

So they are now simply TRANSFERRING this ugly monster to the taxpayer’s obligations to pay! Isn’t that a cute magic trick? Instead of arresting the creators of this monster, we get to tame it by our lonesomes. Isn’t this fun? Heck, it is as much fun as fixing economic problems via wars.

 

-A derivative is financial contract whose value is derived from something else, such as the value of a stock or bond, referred

2. Question: What is a derivative?

To be more technical, the TIC form D collects data on derivatives contracts that meet the FASB Statement No. 133 (FAS 133) definition. FAS 133 defines a derivative as a financial instrument or other contract with all three of the following characteristics:

3. Question: Why aren’t the derivatives data collected on existing TIC forms?

There is a lot of discussion about splitting bankrupt banks into ‘good’ and ‘bad’ banks with all the Derivatives Beast’s dinners parked in the ‘bad’ banks while the ‘good’ banks are capitalized via government fiat printing presses.  Then, like Little Red Riding Hood, we can all skip off to grandma’s house and not find the Derivatives Beast in her bed, ready to eat us.  

 

Alas, getting rid of the Beast by making all the paper worthless, magically, won’t work.  This is because a lot of this worthless paper is held by our entire retirement systems, a host of crazed banking gnomes who sold this to each other or fear lawsuits over selling these to others.  And then a lot of these things are held by our trade rivals and dragons, etc.  Dangerous enemies to stiff.  They can and will, retaliate.  Especially since we sell most of our debt to them.  As my previous article detailed, Japan buys all but 8% of its own debts.  We sell most of our debts to foreigners.

 

 

The perils of incrementalism | The Economist

Seeing the threat to the world economy’s vital functions, the policymakers have been working overtime. Interest rates have been cut dramatically. American rates are already down to 1%; Britain’s are at a 50-year low; and this week China’s central bank lopped 108 basis points off its main policy rate. Hundreds of billions have been pumped into banks and financial markets. Many financial institutions have been bailed out: the rescue of the once mighty Citigroup is merely the latest unthinkable to happen.

Despite all this, the patient has not responded. This is partly because some traditional remedies, such as looser monetary policy, are weakened in a credit crunch…. Halting the world economy’s decline will demand something rather bolder than anything seen so far in this crisis. The starting-point for many policymakers remains lowering interest rates. Central banks in some rich economies, in particular Britain and the euro zone, still have room to cut rates—though it is notable how even fairly dramatic cuts are not working as they once did. The Bank of England reduced rates by one and a half percentage points in one go this month. But with banks reluctant to lend, lower rates from central banks will not work miracles.

That suggests there is a lot to be gained in most places by concentrating more on the banks. The fact that Citigroup, the world’s biggest bank not so long ago, needed a rushed weekend rescue was an indictment of the authorities’ failures thus far, especially in America. Above all, Citi’s collapse showed the dangers of leaving huge quantities of toxic assets to fester on banks’ balance-sheets. Pumping in capital—as governments have been doing—is essential, but may not be enough. The history of successfully handled banking crises, such as Sweden’s in the early 1990s, suggest that governments also need to remove bad assets from banks’ balance sheets.

 

Banks are never reluctant to lend.  They ARE reluctant to HOLD.  This is the critical problem.  If the banks wanted, they could ink any loans they wish.  But they can’t because they are not capitalized.  The US government as well as the governments of other nations all try the same trick: while very deep in debt, they try to FOOL everyone into thinking a bank is capitalized when they move a huge bundle of government debts into banks.

 

According to modern banking rules [which OBVIOUSLY DO NOT WORK!!!!!] all the banks can then lend based on these government debts which are treated as assets.  The only problem is, it doesn’t fool the people who count in this business: the buyers of these debts.  They want certainty.  They want to know if the money will be coming in tomorrow.  They look, in the past, at the AAA ratings of various devious organizations touting their ability to see into the health of banks or companies.  But right now, this has been revealed to be a total fraud.  

 

The US government is rated at AAA but everyone knows this is a fake rating.  So the Treasury AAA bonds held by the banks that get this via the magic windows  in the Treasury and Federal Reserve are not so hot.  Everyone buying these things in any shape or form are increasingly, ONLY our direst enemies and trade rivals.  Nations that hold obvious malice towards us are the buyers.  Not because they love us but because they wish to own us.  And supervise our demise.

 

I think it should be crystal clear that nearly all the banking/currency crisis events of the last 35 years are essentially the same.  They all feature housing booms.  They all feature corporate buy-outs and funds for many start-ups.  They all crash the same way: when credit is no longer extended from OUTSIDE sources.

 

In the present case, I would suggest the people who ceased being able to extend endless credit is the Bank of Japan.  It is no coincidence that the unwinding of the Japanese carry trade coincides with the end of the US, Europe and Asian booms and the instant, nearly total banking collapse that is not confined to any locality but is international.

 

The bail out has grown faster than the Derivatives Beast who grew from less than a billion dollars to over $60 trillion [or over $600 trillion!] in less than ten years.  Here is an interesting graph;

 

How Much Does the Bailout Really Cost? - Seeking Alpha

Government bailout hits $8.5 trillion

The money has been committed to a wide array of programs, including loans and loan guarantees, asset purchases, equity investments in financial companies, tax breaks for banks, help for struggling homeowners and a currency stabilization fund.

Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in “unusual and exigent circumstances,” to other financial institutions.

 

 

Our national debt is at least half of our GNP right now, if not worse!  It might be rising to over 100% in the next three years.  I have said in the past, we can’t run trillion dollar budget deficits or trillion dollar trade deficits to eternity.  Not even for a decade!  There are limits!  We are basically handing over 60% of our economy to capitalize the banks!  This is insanity.  It is also worthless.

 

What the hell are banks?  

 

They are places where we deposit our CAPITAL and the bankers pay us a fee and in turn, use this capital as the basis for LENDING.  They then get fees for this service.  These loans are then sold again, to investors who use CAPITAL to buy them and get to collect the profits over long-term rates of return.  They, in turn, bet that inflation won’t turn a 6.5% loan into worthless pieces of paper. So  investors demand that the bankers not make TOO much loans which created money out of thin air and thus, can devalue the worth of the paper IOU promises issued previously!

 

Got that?  This is why stockholders get mad if a business keeps issuing more and more stocks, diluting the value of their own stocks.  Only if the stocks ’split’ so everyone has double, then they can sell half of their stocks if they want, if the market for these stocks is hot.  Some corporations refuse to split their stocks and thus, make them more and more expensive.  The fact remains, we have to control the amount of dollars floating about or all previous loans become worthless.

 

We just went through a violent inflation spurt.  This was a warning shot across the prow.  All investors now fear for the future.  They see governments running up huge debts in a futile effort to re-capitalize bankrupt banks.  So they buy government bonds, hoping this will be safe.  Only the more the governments bail out the banks, the more uncertain these things become.  There is palpable fear in the investing community. This is the freeze-up.  Not the banks needing to lend.

 

Everyone is borrowing now: namely, the banks!  Since the derivative contracts are a total failure, we have this government-backed farce being held that pretends these CDOs and CDXs and SIVs and What the Hells are all papered over with government debts.  This is to reassure the investors overseas, we won’t force them to eat all of our losses.  But we can’t afford to do this.

 

Iceland, for example, wants to pay up the trillions owed this way.  But can’t.  Already, the krone is basically worthless.  It is early in the cycle.  Today, it buys half of what it bought last month.  In six months, it will buy 1/10th of what it bought before the fall.  Eventually, it will be like Weimar Germany.  To fix the mess, Iceland is going into debt to international banks like the fearsome IMF.  Who is handling Iceland with kid gloves so it doesn’t scare the next domino here: Ireland.

 

Oh, and Scotland is going under!  U.K. Takes Majority Stake in RBS - NYTimes.com

 

So, the sale was basically a total failure.  The government couldn’t move obvious three-legged horses onto the race track.  So the British taxpayers ate the losses.  If the banks can restart lending like crazy, why, they will be happy!  Only this will cause global hyperinflation.  We already saw this flood of funny money trigger a massive series of commodity bubbles once the housing/buy-out mania collapsed.

 

There is a need for everyone to recapitalize the system with capital, not debts or with magic money that vanishes into thin air.  This is why tricks and illusions aren’t working at all.  It is like practicing magic with the stage on fire.  You can’t wave a magic wand and have a rabbit come out of the hat if the hat is on fire!

 

National Statistics UK Online

These are graphs showing Public Sector Finance

This graph shows that England, doing what we are doing, is having the same result: the GDP is being hammered by rapidly rising national debts!  This steals capital from the system.  How is that?  

 

Via taxes!  It has to be covered!  If it is paid for via borrowing, this also sucks all the oxygen out of other systems.  And creates the worst sort of inflation.  Also, we are standing economics on its head: when debtors increase debt ratios vis a vis, income, their interest rates must go up.  Iceland’s rates are going up, for example.

 

But not for the US, EU, UK or Japan!  Even when the debt ratios are horribly out of whack!  They drop their interest rates to 0%, one after the other, starting with Japan.  This banking crisis is due exactly to this activity.  Yet, all of them wish to do it more, not fix it.  The graph above on the right is interesting: the GDP grew rapidly not because England was exporting anything or producing anything. It was rising rapidly because of a flood of funny money from Japan.  This is why the graph has England’s debt ratios dropping very rapidly from 1996 to 2003.  Then, as the housing bubble took over the economy, the debt ratio began to climb, taking off exactly when the Japanese carry trade abruptly ended.

 

Here is a breakdown of the US rescue:

 

Click here to see enlarged image from SF Gate: Multimedia 

We are told again and again, not to worry. This won’t all be zero returns so the extra $8 trillion in obligations will end up being less at some point. But we see from the  Historical ABX Graphs at Markit.com, these things can and are dropping from 100% return to near zero!  These things have a very real chance of returning nearly nothing.

 

Only if something else changes, can they go ‘up’ instead of ‘through the floor.’  Namely, if the global economy flourishes.  But this requires the US sucking down endless imports we can’t afford.  This is also why I hammer away at trade issues all the time.  They are at the bottom of this mess.  

 

What Obama Needs to Know About Tim Geithner, the AIG Fiasco and Citigroup - Seeking Alpha

Christopher Whalen:  If the rule of driving money to the strong banks (see “View from the Top: A Prime Solution to the US Banking Crisis”) safety and soundness is to be effective, it must be applied to all. And now you know why we have questions about the nomination of Tim Geithner to be the next Treasury Secretary.

 

The CDS market is being swept under the Oval Office rug.  They hope no one will notice the bulge there that goes as high as Mount Everest!  Well, you can’t create a $60 trillion monster and then hope to nickel and dime it to death.  This is like fighting King Kong with bananas and cherries!  They all know this is a total mess.  Geithner, being a ‘genius’, thinks he has the wit to do this trick.  He is a classic magician on a burning stage trying to pull a Derivatives Beast out of a hat only getting his arm chomped off.

 

Rushed law will undermine derivatives contracts - International Financial Law Review - 1 July 2008

In the link above, lawyers working in the banking sector worry that if a ‘bridge bank’ is launched where all the ‘good’ assets are parked, the ‘bad bank’ that is left behind will mean all those stupid derivatives contracts will be left behind in the ‘bad bank’ and won’t be able to hold hostage, all the solvent parts.

 

This means, the holders or ‘bettors’ in that stupid Cave of Wealth and Death casino will be left holding deuces, not aces.  Back, even last summer, the hopes of everyone running this goofy casino banking system was, they would be able to keep the games going.  They dreaded ending it as it should  have ended: their arms bitten off!  Note that Bullwinkle, at least, stuffs all those monsters BACK into his hat. He didn’t toss them into the audience to let them be eaten, instead.

 

And last of all, here is an old story I wrote over six months ago, talking about these strange contracts:

 

Culture of Life News, April 7, 2008: Waiting For Godot/ Derivative Beast

SEC Fuels New Mark-to-Market Conspiracy Theories: Jonathan Weil

Once again, the Securities and Exchange Commission is fueling suspicions that it has crafted yet another new accounting loophole for financial institutions trying to avoid big write downs.

 

The discussion of accounting issues surrounding the creditworthiness of issuers may open the biggest hole in FASB’s standard on accounting for derivative instruments and hedging activities.Financial Accounting Standard 133 — Accounting for Derivative Instruments and Hedging Activities — which took effect in 2000, requires companies to include their derivatives on balance sheets and adjust their earnings to reflect changes in market value.

 

The ‘Mark to Market’ deal has completely collapsed into the ‘Mark it on the Taxpayer’s Bill!’  

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PULLING DERIVATIVE BEAST OUT OF THE HAT

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Skip to search - Accesskey = s

 

-A derivative is financial contract whose value is derived from something else, such as the value of a stock or bond, referred

2. Question: What is a derivative?

To be more technical, the TIC form D collects data on derivatives contracts that meet the FASB Statement No. 133 (FAS 133) definition. FAS 133 defines a derivative as a financial instrument or other contract with all three of the following characteristics:

3. Question: Why aren’t the derivatives data collected on existing TIC forms?

 

 

There is a lot of discussion about splitting bankrupt banks into ‘good’ and ‘bad’ banks with all the Derivatives Beast’s dinners parked in the ‘bad’ banks while the ‘good’ banks are capitalized via government fiat printing presses. Then, like Little Red Riding Hood, we can all skip off to grandma’s house and not find the Derivatives Beast in her bed, ready to eat us.

Alas, getting rid of the Beast by making all the paper worthless, magically, won’t work. This is because a lot of this worthless paper is held by our entire retirement systems, a host of crazed banking gnomes who sold this to each other or fear lawsuits over selling these to others. And then a lot of these things are held by our trade rivals and dragons, etc. Dangerous enemies to stiff. They can and will, retaliate. Especially since we sell most of our debt to them. As my previous article detailed, Japan buys all but 8% of its own debts. We sell most of our debts to foreigners.

 

Seeing the threat to the world economy’s vital functions, the policymakers have been working overtime. Interest rates have been cut dramatically. American rates are already down to 1%; Britain’s are at a 50-year low; and this week China’s central bank lopped 108 basis points off its main policy rate. Hundreds of billions have been pumped into banks and financial markets. Many financial institutions have been bailed out: the rescue of the once mighty Citigroup is merely the latest unthinkable to happen.

Despite all this, the patient has not responded. This is partly because some traditional remedies, such as looser monetary policy, are weakened in a credit crunch…. Halting the world economy’s decline will demand something rather bolder than anything seen so far in this crisis. The starting-point for many policymakers remains lowering interest rates. Central banks in some rich economies, in particular Britain and the euro zone, still have room to cut rates—though it is notable how even fairly dramatic cuts are not working as they once did. The Bank of England reduced rates by one and a half percentage points in one go this month. But with banks reluctant to lend, lower rates from central banks will not work miracles.

That suggests there is a lot to be gained in most places by concentrating more on the banks. The fact that Citigroup, the world’s biggest bank not so long ago, needed a rushed weekend rescue was an indictment of the authorities’ failures thus far, especially in America. Above all, Citi’s collapse showed the dangers of leaving huge quantities of toxic assets to fester on banks’ balance-sheets. Pumping in capital—as governments have been doing—is essential, but may not be enough. The history of successfully handled banking crises, such as Sweden’s in the early 1990s, suggest that governments also need to remove bad assets from banks’ balance sheets.

Banks are never reluctant to lend. They ARE reluctant to HOLD. This is the critical problem. If the banks wanted, they could ink any loans they wish. But they can’t because they are not capitalized. The US government as well as the governments of other nations all try the same trick: while very deep in debt, they try to FOOL everyone into thinking a bank is capitalized when they move a huge bundle of government debts into banks.

According to modern banking rules [which OBVIOUSLY DO NOT WORK!!!!!] all the banks can then lend based on these government debts which are treated as assets. The only problem is, it doesn’t fool the people who count in this business: the buyers of these debts. They want certainty. They want to know if the money will be coming in tomorrow. They look, in the past, at the AAA ratings of various devious organizations touting their ability to see into the health of banks or companies. But right now, this has been revealed to be a total fraud.

The US government is rated at AAA but everyone knows this is a fake rating. So the Treasury AAA bonds held by the banks that get this via the magic windows in the Treasury and Federal Reserve are not so hot. Everyone buying these things in any shape or form are increasingly, ONLY our direst enemies and trade rivals. Nations that hold obvious malice towards us are the buyers. Not because they love us but because they wish to own us. And supervise our demise.

I think it should be crystal clear that nearly all the banking/currency crisis events of the last 35 years are essentially the same. They all feature housing booms. They all feature corporate buy-outs and funds for many start-ups. They all crash the same way: when credit is no longer extended from OUTSIDE sources.

In the present case, I would suggest the people who ceased being able to extend endless credit is the Bank of Japan. It is no coincidence that the unwinding of the Japanese carry trade coincides with the end of the US, Europe and Asian booms and the instant, nearly total banking collapse that is not confined to any locality but is international.

The bail out has grown faster than the Derivatives Beast who grew from less than a billion dollars to over $60 trillion [or over $600 trillion!] in less than ten years. Here is an interesting graph;

How Much Does the Bailout Really Cost? - Seeking Alpha

Government bailout hits $8.5 trillion

The money has been committed to a wide array of programs, including loans and loan guarantees, asset purchases, equity investments in financial companies, tax breaks for banks, help for struggling homeowners and a currency stabilization fund.

Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in “unusual and exigent circumstances,” to other financial institutions.

Our national debt is at least half of our GNP right now, if not worse! It might be rising to over 100% in the next three years. I have said in the past, we can’t run trillion dollar budget deficits or trillion dollar trade deficits to eternity. Not even for a decade! There are limits! We are basically handing over 60% of our economy to capitalize the banks! This is insanity. It is also worthless.

What the hell are banks?

They are places where we deposit our CAPITAL and the bankers pay us a fee and in turn, use this capital as the basis for LENDING. They then get fees for this service. These loans are then sold again, to investors who use CAPITAL to buy them and get to collect the profits over long-term rates of return. They, in turn, bet that inflation won’t turn a 6.5% loan into worthless pieces of paper. So investors demand that the bankers not make TOO much loans which created money out of thin air and thus, can devalue the worth of the paper IOU promises issued previously!

Got that? This is why stockholders get mad if a business keeps issuing more and more stocks, diluting the value of their own stocks. Only if the stocks ’split’ so everyone has double, then they can sell half of their stocks if they want, if the market for these stocks is hot. Some corporations refuse to split their stocks and thus, make them more and more expensive. The fact remains, we have to control the amount of dollars floating about or all previous loans become worthless.

We just went through a violent inflation spurt. This was a warning shot across the prow. All investors now fear for the future. They see governments running up huge debts in a futile effort to re-capitalize bankrupt banks. So they buy government bonds, hoping this will be safe. Only the more the governments bail out the banks, the more uncertain these things become. There is palpable fear in the investing community. This is the freeze-up. Not the banks needing to lend.

Everyone is borrowing now: namely, the banks! Since the derivative contracts are a total failure, we have this government-backed farce being held that pretends these CDOs and CDXs and SIVs and What the Hells are all papered over with government debts. This is to reassure the investors overseas, we won’t force them to eat all of our losses. But we can’t afford to do this.

Iceland, for example, wants to pay up the trillions owed this way. But can’t. Already, the krone is basically worthless. It is early in the cycle. Today, it buys half of what it bought last month. In six months, it will buy 1/10th of what it bought before the fall. Eventually, it will be like Weimar Germany. To fix the mess, Iceland is going into debt to international banks like the fearsome IMF. Who is handling Iceland with kid gloves so it doesn’t scare the next domino here: Ireland.

Oh, and Scotland is going under! U.K. Takes Majority Stake in RBS - NYTimes.com

So, the sale was basically a total failure. The government couldn’t move obvious three-legged horses onto the race track. So the British taxpayers ate the losses. If the banks can restart lending like crazy, why, they will be happy! Only this will cause global hyperinflation. We already saw this flood of funny money trigger a massive series of commodity bubbles once the housing/buy-out mania collapsed.

There is a need for everyone to recapitalize the system with capital, not debts or with magic money that vanishes into thin air. This is why tricks and illusions aren’t working at all. It is like practicing magic with the stage on fire. You can’t wave a magic wand and have a rabbit come out of the hat if the hat is on fire!

National Statistics UK Online

These are graphs showing Public Sector Finance

This graph shows that England, doing what we are doing, is having the same result: the GDP is being hammered by rapidly rising national debts! This steals capital from the system. How is that?

Via taxes! It has to be covered! If it is paid for via borrowing, this also sucks all the oxygen out of other systems. And creates the worst sort of inflation. Also, we are standing economics on its head: when debtors increase debt ratios vis a vis, income, their interest rates must go up. Iceland’s rates are going up, for example.

But not for the US, EU, UK or Japan! Even when the debt ratios are horribly out of whack! They drop their interest rates to 0%, one after the other, starting with Japan. This banking crisis is due exactly to this activity. Yet, all of them wish to do it more, not fix it. The graph above on the right is interesting: the GDP grew rapidly not because England was exporting anything or producing anything. It was rising rapidly because of a flood of funny money from Japan. This is why the graph has England’s debt ratios dropping very rapidly from 1996 to 2003. Then, as the housing bubble took over the economy, the debt ratio began to climb, taking off exactly when the Japanese carry trade abruptly ended.

Here is a breakdown of the US rescue:

Click here to see enlarged image from SF Gate: Multimedia

We are told again and again, not to worry. This won’t all be zero returns so the extra $8 trillion in obligations will end up being less at some point. But we see from the Historical ABX Graphs at Markit.com, these things can and are dropping from 100% return to near zero! These things have a very real chance of returning nearly nothing.

Only if something else changes, can they go ‘up’ instead of ‘through the floor.’ Namely, if the global economy flourishes. But this requires the US sucking down endless imports we can’t afford. This is also why I hammer away at trade issues all the time. They are at the bottom of this mess.

What Obama Needs to Know About Tim Geithner, the AIG Fiasco and Citigroup - Seeking Alpha

Christopher Whalen: If the rule of driving money to the strong banks (see “View from the Top: A Prime Solution to the US Banking Crisis”) safety and soundness is to be effective, it must be applied to all. And now you know why we have questions about the nomination of Tim Geithner to be the next Treasury Secretary.

The CDS market is being swept under the Oval Office rug. They hope no one will notice the bulge there that goes as high as Mount Everest! Well, you can’t create a $60 trillion monster and then hope to nickel and dime it to death. This is like fighting King Kong with bananas and cherries! They all know this is a total mess. Geithner, being a ‘genius’, thinks he has the wit to do this trick. He is a classic magician on a burning stage trying to pull a Derivatives Beast out of a hat only getting his arm chomped off.

Rushed law will undermine derivatives contracts - International Financial Law Review - 1 July 2008

In the link above, lawyers working in the banking sector worry that if a ‘bridge bank’ is launched where all the ‘good’ assets are parked, the ‘bad bank’ that is left behind will mean all those stupid derivatives contracts will be left behind in the ‘bad bank’ and won’t be able to hold hostage, all the solvent parts.

This means, the holders or ‘bettors’ in that stupid Cave of Wealth and Death casino will be left holding deuces, not aces. Back, even last summer, the hopes of everyone running this goofy casino banking system was, they would be able to keep the games going. They dreaded ending it as it should have ended: their arms bitten off! Note that Bullwinkle, at least, stuffs all those monsters BACK into his hat. He didn’t toss them into the audience to let them be eaten, instead.

And last of all, here is an old story I wrote over six months ago, talking about these strange contracts:

Culture of Life News, April 7, 2008: Waiting For Godot/ Derivative Beast

SEC Fuels New Mark-to-Market Conspiracy Theories: Jonathan Weil

Once again, the Securities and Exchange Commission is fueling suspicions that it has crafted yet another new accounting loophole for financial institutions trying to avoid big write downs.

 

The discussion of accounting issues surrounding the creditworthiness of issuers may open the biggest hole in FASB’s standard on accounting for derivative instruments and hedging activities.Financial Accounting Standard 133 — Accounting for Derivative Instruments and Hedging Activities — which took effect in 2000, requires companies to include their derivatives on balance sheets and adjust their earnings to reflect changes in market value.

 

 

 

The ‘Mark to Market’ deal has completely collapsed into the ‘Mark it on the Taxpayer’s Bill!’

FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

21 November 2008 Newz Bits

TALKING POINT

HIGHLIGHTS

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November 20, 2008 Daily Highlights

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Globalcide infrastructre2.0 corruption corrupt child negect ADHD is real Climate Change

Firestarters is an inspiring book that describes interesting professions and fascinating new careers in an informative and positive format. The authors have interviewed 100 strong women, most in their 20s and 30s, about their exciting and sometimes nontraditional jobs. For example, students read about Beth Llewelyn�s experience doing public relations for Nintendo, Johnna Watson�s experience as an associate dean of enrollment management and information systems for a graduate school, and Sandie Salvaggio-Walker�s experience as a general manager for a community orchestra and voice instructor. These amazing but ordinary women share insights on their careers, such as what their jobs involve; what they like and dislike most about their work; what education, experience, and characteristics it took to get them where they are; and advice to young women who might want to follow in their footsteps.

http://en.wikipedia.org/wiki/Subfields_of_sociology

http://en.wikipedia.org/wiki/Globalization#Measuring_globalization

http://info-pollution.com/spring.htm

http://www.nrdc.org/health/pesticides/hcarson.asp

http://en.wikipedia.org/wiki/List_of_important_publications_in_sociology

http://en.wikipedia.org/wiki/List_of_sociology_topics

http://www.sussex.ac.uk/Users/ssfa2/ecology.html

http://en.wikipedia.org/wiki/Rachel_Carson

http://en.wikipedia.org/wiki/Online_learning_community

list of environmentalist audiobooks and pdf’s of magazine articles. to make and open source share, not in double work task, those on torrent files, then make sure the work is done collaboratively with high schooler volunteer idealist.org and volunteermatch and then end the environmental social reform work in 5 years and move on to the next task outline and discussion guide. instructables article. price list. energizing food and nutrient timing.

how much energy profit and cost to install solar and make whole neighborhood produce more electricity than it uses and safe transporation and health care estimates of lifespan to invest in community members skills improvement. cost / risk / gain… assessments

how to run small business failures audio book and how to run meetings and conventions book

clothes shoes  call or email birds and blooms call on wiki NWF vision of students today integration.

List of books from store (Audio check book versions for media audio or updated version):

student purchase lists and site uses for cost levels or functionality of learning disability or diciplines

yeah the use of a (religion chat, buddhism chat, college chat, sociology chat, et cetera) topic outline and discussion guide among people who refuse to resarch the counter points of the religious dogma where modern perspective of economic measureing can be accomplished… well that is a waste of the worlds most powerful communication medium

life coaching service, homesteading, business teamsbuilding, audio books eat that frog, hoemschooling, collaboration, home power book in gardening, community sustainability neighborhood compsting homework center adults researching and turoting students for free professional career development, combineing EQ IQ and effectively applying them.

wiki style collaboration ? talk to highschool students ?

Pasted from <http://www.computer.org/portal/site/pervasive/menuitem.e7bfeea1f36bd84da84840898bcd45f3/index.jsp?&pName=pervasive_level1&path=pervasive/content&file=wip3.xml&xsl=article.xsl&

View the bookmarks list by 100 and you will see a lot of useful things, I think so anyway. http://delicious.com/TradeSkillsLLC/?setcount=100

Google Vs Yahoo A Comparative Analysis

As the search engine wars heat up between Yahoo and Google it’s very interesting to note the similarities and differences between the two. Both companies are based in Silicon Valley with only 5 miles separating the two of them. Google has approximately 3,021 employees whereas Yahoo employs 7,600.

Google was created in January 1996 whereas Yahoo is exactly two years older however Yahoo went public (IPO) on April 12, 1996 - Google’s IPO wasn’t until August 19,2004.

Founders

Yahoo was founded in January 1994 by David Filo and Jerry Yang who were both Ph.D. candidates at Stanford University. Google was founded exactly two years later on the same campus by another pair of Stanford Ph.D candidates named Larry Page and Sergey Brinn. All four were in their early to mid twenties when they founded their respective companies. Today all four are internet legends and multi-billionaires.

What Do Their Names Mean?

Yahoo is an acronym for Yet Another Hierarchical Officious Oracle

Google comes from the mathematical term “Googol” which is 1 followed by 100 zeros.

S&P 500

Yahoo was added to the S&P 500 on December 8, 1999. Google is currently not an S&P 500 company. To be added to the S&P 500 a company must have a market cap of at least $4 billion, be liquid and have a 50% float – all criteria that Google currently has. In most cases the S&P 500 likes to have four public quarters of earnings before a company is added. Google is a behemoth and will soon be added to the index. Once added fund managers (who cover the S&P 500) will be required to buy shares of Google which could potentially result in a stock increase.

Yahoo’s 5 Stock Splits

Yahoo has had 5 stock splits going public. Its first stock split came almost 17 months after its initial public offering (IPO.) Google has yet to split its stock even though it’s approaching $300 but Google has only been public 11 months. Google will be a public company for 17 months around the end of 2005.

Revenues

According to financial results approximately 50% of Google revenues come from ads (Adwords) on Google’s US websites, approximately 33% comes from ads (Adwords) on Google’s international websites and 15% come from network partner revenues who carry Google Ads (Adsense) on their websites. In sum approximately 98% of revenues come from Google ads either on Google or a partner site and either in the US or international.

Google Adwords (adwords.google.com) allows website owners the opportunity to place sponsored ads and links on the right hand column of their search pages. According to Google and Media Metrix the Google Network via Adwords reaches 80% of all internet users.

Yahoo’s revenues also weigh heavily on similar ads and sponsored links on its network implemented by Yahoo Search Marketing, formerly Overture which it acquired in October 2003 for $1.63 billion. Approximately 87% of Yahoo’s revenues come from market service revenues. Approximately 12% are from fees.

Search Engine Traffic

Yahoo leads the world in overall internet traffic. This is due in large part to Yahoo mail which draws approximately 40% of its 345 million monthly visitors.

However where Yahoo is the king of traffic Google is the king of search referrals. According to WebSideStory (www.websidestory.com) Google’s share of all US searches hit 52% in June 2005 up from 45% in June 2004, 38% in June 2003, 32% in June 2002 and just 12% in June 2001.

As Google’s share of referral searches increases over time those of Yahoo have decreased. Yahoo’s share of US searches was just half that of Google’s at just 25% for June 2005, 27% for June 2004, 32% for June 2003, 33% for June 2002 and 37.5% for June 2001.

MSN, the second most visited website thanks in large part to Hotmail, falls far off the charts when it comes to individuals using their search engine. Of all the searches performed in the United States just 10% used MSN in June 2005, 16% in June 2004, 17% in June 2003, 14% in June 2002, and 17% in June 2001.

According to Alexa.com Hotmail accounts for 68% of MSN’s traffic, MSN Search just 7%, MSN.com 5%, MSNBC 2% and most of the others receive 2% or less.

The numbers are even more impressive for Google when going global. According to WebSideStory Google refers 73% of all search engine traffic in the UK, 42% in Japan, 81% in Australia and 91% in Germany.

In response to the amount of traffic that Yahoo Mail and Hotmail draw to their networks Google launched its own free email service in March 2004 called Gmail. Gmail currently attracts 5% of Google’s overall visitors compared to the 80% that search draws. I would imagine that overtime this 5% will most likely increase and could potentially bump up Google ahead of MSN and maybe someday to the number one slot pushing out Yahoo! Either way the top 3 search engines will be constantly keeping tabs on the other with Yahoo and MSN having the most to lose and Google the most to gain.

Acquisitions – Yahoo

Since its creation Yahoo has acquired approximately 28 companies compared to Google’s 5. All of Google’s acquisitions have been of private firms whereas Yahoo has purchased both public and private companies. During the internet boom Yahoo made one of the biggest dot.com purchases ever with the $5.7 billion acquisition of Broadcast.com in July 1999. Broadcast.com was an online audio service created by Mark Cuban to stream live audio coverage of his favorite sporting events. Yahoo’s purchase of Broadcast.com made Cuban an internet legend, a billionaire and a future owner of the NBA’s Dallas Mavericks. At the time of the purchase Broadcast.com was a publicly traded company (BCST) who saw its stock rise over $7 to $125 after the announcement.

Yahoo’s first acquisition was for Net Controls in September 1997 for $1.4 million. Yahoo acquired ViaWeb, a developer of web commerce tools, for $49 million in stock in June 1998. In October 1998 Yahoo began its quest for free email service with the purchase of Four11 (Four11 offered a free email service via a product called RocketMail) for $92 million in stock. Today Yahoo’s free email service accounts for 40% of its overall traffic – the largest driver of traffic to the Yahoo network. Yahoo announced its acquisition of Geocities in January 1999 for $3.6 billion.

Yahoo jumped into the marketing world with the purchase of Yoyodyne in October 1998 for $29.6 million in stock. Yoyodyne allowed Yahoo to collect user data and act as an intermediary between its users and commerce clients. Yahoo purchased its popular Launch music site with its acquisition of Launch Media in June 2001 for $12 million. In December 2001 Yahoo purchased the online job search company HotJobs for approximately $436 million. Inktomi was purchased in December 2002 for $235 million followed by Overture in July 2003 for $1.63 billion. In April 2004 Yahoo purchased Kelkoo, a European comparison shopping site, for $579 million.

Acquisitions - Google

In January 2003 Google announced its purchase of Pyra Labs (Blogger), a weblog publishing tool which is currently the 32nd most visited site in the world (according to Alexa.com.) In June 2004 Google announced its purchase of Picasa, a photo management company based in Pasadena.

In June 2005 Google launched its amazing world satellite imaging tool called Google Earth. This technology was a direct result of its purchase of Keyhole in October 2004 which gained popularity with its satellite imagery during the commencement of the Gulf War in March 2003.

So far all of Google’s purchase acquisitions have been of private companies and therefore they are not required to disclose the financials of the purchase.

Originally published on July 8, 2005

Tom O’Keefe is an internet business consultant and the founder of Research Connect, Inc., a market research database. O’Keefe works with small businesses and start-ups to help develop an affordable and effective online strategy to maximize traffic and exposure via search engine optimization, internet marketing and web development.

For a website evaluation of your site please contact O’Keefe at 617-947-8071 or via tom[at]tomokeefe.com.

Research Connect is an integrated market research database and research service which connects leading researchers and consultants with the corporate and investment community.

[tags]Google, Yahoo, Search Engines[/tags]

Globalization

Globalization

Herman E. Daly argues that sometimes the terms internationalization and globalization are used interchangeably but there is a slight formal difference. The term “internationalization” refers to the importance of international trade, relations, treaties etc. International means between or among nations.

The term “globalization” has been used by economists since the 1980s although it was used in social sciences in the 1960s; however, its concepts did not become popular until the latter half of the 1980s and 1990s. The earliest written theoretical concepts of globalization were penned by an American entrepreneur-turned-minister Charles Taze Russell who coined the term ‘corporate giants’ in 1897.

Globalization is viewed as a centuries long process, tracking the expansion of human population and the growth of civilization, that has accelerated dramatically in the past 50 years. Early forms of globalization existed during the Roman Empire, the Parthian empire, and the Han Dynasty, when the Silk Road started in China, reached the boundaries of the Parthian empire, and continued onwards towards Rome. The Islamic Golden Age is also an example, when Muslim traders and explorers established an early global economy across the Old World resulting in a globalization of crops, trade, knowledge and technology; and later during the Mongol Empire, when there was greater integration along the Silk Road. Globalization in a wider context began shortly before the turn of the 16th century, with two Kingdoms of the Iberian Peninsula - the Kingdom of Portugal and the Kingdom of Castile. Portugal’s global explorations in the 16th century, especially, linked continents, economies and cultures to a massive extent. Portugal’s exploration and trade with most of the coast of Africa, Eastern South America, and Southern and Eastern Asia, was the first major trade based form of globalization. A wave of global trade, colonization, and enculturation reached all corners of the world. Global integration continued through the expansion of European trade in the 16th and 17th centuries, when the Portuguese and Spanish Empires colonized the Americas, followed eventually by France and Britain. Globalization has had a tremendous impact on cultures, particularly indigenous cultures, around the world. In the 17th century, globalization became a business phenomenon when the British East India Company (founded in 1600), which is often described as the first multinational corporation, was established, as well as the Dutch East India Company (founded in 1602) and the Portuguese East India Company (founded in 1628). In the 15th century, Portugal’s Company of Guinea was one of the first chartered commercial companies established by Europeans in other continent during the Age of Discovery, whose task was to deal with the spices and to fix the prices of the goods. Because of the high risks involved with international trade, the British East India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization. Globalization was achieved by the British Empire (the largest empire in history) due to its sheer size and power. British ideals and culture were imposed on other nations during this period.

The 19th century is sometimes called “The First Era of Globalization.” It was a period characterized by rapid growth in international trade and investment between the European imperial powers, their colonies, and, later, the United States. It was in this period that areas of sub-saharan Africa and the Island Pacific were incorporated into the world system. The “First Era of Globalization” began to break down at the beginning of the 20th century with the first World War. Said John Maynard Keynes

The “First Era of Globalization” later collapsed during the gold standard crisis in the late 1920s and early 1930s.

Globalization, since World War II, is largely the result of planning by economists, business interests, and politicians who recognized the costs associated with protectionism and declining international economic integration. Their work led to the Bretton Woods conference and the founding of several international institutions intended to oversee the renewed processes of globalization, promoting growth and managing adverse consequences.

These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade.

Since World War II, barriers to international trade have been considerably lowered through international agreements - GATT. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO), for which GATT is the foundation, have included:

Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity. These movements used the same new technologies to pursue their own goals more efficiently and to appeal for support from world opinion.

The Uruguay Round (1984 to 1995) led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe’s Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.

Global conflicts, such as the 9/11 terrorist attacks on the United States of America, is interrelated with globalization because it was primary source of the “war on terror”, which had started the steady increase of the prices of oil and gas, due to the fact that most OPEC member countries were in the Arabian Peninsula.

World exports rose from 8.5% of gross world product in 1970 to 16.1% of gross world product in 2001.

Looking specifically at economic globalization, demonstrates that it can be measured in different ways. These center around the four main economic flows that characterize globalization:

As globalization is not only an economic phenomenon, a multivariate approach to measuring globalization is the recent index calculated by the Swiss think tank KOF. The index measures the three main dimensions of globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall index of globalization and sub-indices referring to actual economic flows, economic restrictions, data on personal contact, data on information flows, and data on cultural proximity is calculated. Data is available on a yearly basis for 122 countries, as detailed in Dreher, Gaston and Martens (2008).[10] According to the index, the world’s most globalized country is Belgium, followed by Austria, Sweden, the United Kingdom and the Netherlands. The least globalized countries according to the KOF-index are Haiti, Myanmar the Central African Republic and Burundi.

A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006 index, Singapore, Ireland, Switzerland, the U.S., the Netherlands, Canada and Denmark are the most globalized, while Indonesia, India and Iran are the least globalized among countries listed.

Globalization has various aspects which affect the world in several different ways such as:

Whilst it is all too easy to look at the positive aspects of Globalization and the great benefits that are apparent everywhere, there are also several negative occurrences that can only be the result of or major motivating factors that inspire some corporations to globalize.

Globalization – the growing integration of economies and societies around the world – has been one of the most hotly-debated topics in international economics over the past few years. Rapid growth and poverty reduction in China, India, and other countries that were poor 20 years ago, has been a positive aspect of globalization. But globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation.

Business

Globalization has had extensive impact on the world of business. In a business environment marked by globalization, the world seems to shrink, and other businesses halfway around the world can exert as great an impact on a business as one right down the street. Internet access and e-commerce have brought small-scale coops in Third World nations into the same arena as thriving businesses in the industrialized world, and visions of low-income workers handweaving rugs on primitive looms that compete with rug dealers in major cities are not totally far-fetched.

Globalization has affected workforce demographics, as well. Today’s workforces are characterized by greater diversity in terms of age, gender, ethnic and racial background, and a variety of other demographic factors. In fact, management of diversity has become one of the primary issues of 21st-century business.

Trends such as outsourcing and offshoring are a direct offshoot of globalization and have created a work environment in which cultural diversity can be problematic. A U.S. company where punctuality is important and meetings always start on time faces adjustments if it opens an office in South America or France, where being 10 to 15 minutes late to a meeting is considered acceptable: being on time is called ‘British Time’

Sweatshops

It can be said that globalization is the door that opens up an otherwise resource poor country to the international market. Where a country or nation has little material or physical product harvested or mined from its own soil, an opportunity is seen by large corporations to take advantage of the “export poverty” of such a nation. Where the majority of the earliest occurrences of economic globalization are recorded as being the expansion of businesses and corporate growth, in many poorer nations globalization is actually the result of the foreign businesses investing in the country to take advantage of the lower wage rate: even though investing, by increasing the Capital Stock of the country, increases their wage rate.

One example used by anti-globalization protestors is the use of “Sweatshops” by manufacturers. According to Global Exchange these “Sweat Shops” are widely used by sports shoe manufacturers and mentions one company in particular – Nike.There are factories set up in the poor countries where employees agree to work for low wages. Then if labour laws alter in those countries and stricter rules govern the manufacturing process the factories are closed down and relocated to other nations with more liberal economic policies.

There are several agencies that have been set up worldwide specifically designed to focus on anti-sweatshop campaigns and education of such. “The Decent Working Conditions and Fair Competition Act” is a legislation passed by the National Labor Committee in the USA. The legislation now suggests that companies are legally obligated to respect human and worker rights by prohibiting the import, sale, or export of sweatshop goods .There are very strict standards set out by the International Labor Organization and any violations shall be banned from the US market.

Specifically, these core standards include no child labor, no forced labor, freedom of association, right to organize and bargain collectively, as well as the right to decent working conditions.

Tiziana Terranova has stated that globalization has brought a culture of “free labour”. In a digital sense, it is where the individuals (contributing capital)exploits and eventually “exhausts the means through which labour can sustain itself”. For example, in the area of digital media (animations, hosting chat rooms, designing games), where it is often less glamourous than it may sound. In the gaming industry, a Chinese Gold Market has been established.

“”[Culture]“”

One powerful source has blown down cultural boundaries around the entire world. What is this influential tool? It is the Internet and its endless margin of discovery. With the Internet people can easily access someone half way across the world. They could converse with someone living a completely different lifestyle yet still have something in common, the Internet. If language is a barrier then a website like Flickr, a photo sharing site, lets people from Singapore and Germany alike communicate with out words. The Internet in essence makes the world a smaller place. Someone in America can be eating Japanese noodles for lunch while someone in Sydney Australia is eating classic Italian meatballs. One classic culture aspect is food. India is known for their curry and exotic spices. Paris is known for its smelly cheeses. America is known for its burgers and fires. McDonalds was once an American favorite with its cheery mascot, Ronald, red and yellow theme, and greasy fast food. Now it is a global enterprise with 31,000 locations worldwide with locations in Kuwait, Egypt, and Malta. This restaurant is just one example of food going big on the global scale. Meditation has been a sacred practice for centuries in Indian culture. It calms the body and helps one connect to their inner being while shying away from their conditioned self. Before globalization Americans did not meditate or crunch their bodies into knots on a yoga mat. After globalization this is a common practice, it is even considered a chic way to keep your body in shape. Some people are even traveling to India to get the full experience themselves. Another common practice brought about by globalization would be Chinese symbol tattoos. These specific tattoos are a huge hit with today’s younger generation and are quickly becoming the norm. With the melding of cultures using another countries language in ones body art is now considered normal. Culture is defined as patterns of human activity and the symbols that give these activities significance. Culture is what people eat, how they dress, beliefs they hold, and activities they practice. Globalization has joined different cultures and made it into something different. As Erla Zwingle, from the National Geographic article titled “Globalization” states, “When cultures receive outside influences, they ignore some and adopt others, and then almost immediately start to transform them.”

Generally, the ideas of free trade, capitalism, and democracy are widely believed to facilitate globalization. Supporters of free trade claim that it increases economic prosperity as well as opportunity, especially among developing nations, enhances civil liberties and leads to a more efficient allocation of resources. Economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. In general, this leads to lower prices, more employment, higher output and a higher standard of living for those in developing countries.

One of the ironies of the recent success of India and China is the fear that… success in these two countries comes at the expense of the United States. These fears are fundamentally wrong and, even worse, dangerous. They are wrong because the world is not a zero-sum struggle… but rather is a positive-sum opportunity in which improving technologies and skills can raise living standards around the world.

Proponents of laissez-faire capitalism, and some Libertarians, say that higher degrees of political and economic freedom in the form of democracy and capitalism in the developed world are ends in themselves and also produce higher levels of material wealth. They see globalization as the beneficial spread of liberty and capitalism.

Supporters of democratic globalization are sometimes called pro-globalists. They believe that the first phase of globalization, which was market-oriented, should be followed by a phase of building global political institutions representing the will of world citizens. The difference from other globalists is that they do not define in advance any ideology to orient this will, but would leave it to the free choice of those citizens via a democratic process.

Some, such as former Canadian Senator Douglas Roche, O.C., simply view globalization as inevitable and advocate creating institutions such as a directly-elected United Nations Parliamentary Assembly to exercise oversight over unelected international bodies.

Supporters of globalization argue that the anti-globalization movement uses anecdotal evidence to support their protectionist view, whereas worldwide statistics strongly support globalization:

SOURCE: World Bank, Poverty Estimates, 2002

Although critics of globalization complain of Westernization, a 2005 UNESCO report showed that cultural exchange is becoming mutual. In 2002, China was the third largest exporter of cultural goods, after the UK and US. Between 1994 and 2002, both North America’s and the European Union’s shares of cultural exports declined, while Asia’s cultural exports grew to surpass North America.

Anti-globalization is a term used to describe the political stance of people and groups who oppose the neoliberal version of globalization.

“Anti-globalization” may also involve the process or actions taken by a state in order to demonstrate its sovereignty and practice democratic decision-making. Anti-globalization may occur in order to maintain barriers to the international transfer of people, goods and beliefs, particularly free market degregulation, encouraged by organizations such as the IMF or the WTO. Moreover, as Naomi Klein argues in her book No Logo anti-globalism can denote either a single social movement or an umbrella term that encompasses a number of separate social movements such as Nationalists and socialists. In either case, participants stand in opposition to the unregulated political power of large, multi-national corporations, as the corporations exercise power through leveraging trade agreements which in some instances damage the democratic rights of citizens, the environment particularly air quality index and rain forests, as well as national government’s sovereignty to determine labor rights, including the right to form a union, and health and safety legislation, or laws as they may otherwise infringe on cultural practices and traditions of developing countries.

Some people who are labeled “anti-globalization” consider the term to be too vague and inaccurate. Podobnik states that “the vast majority of groups that participate in these protests draw on international networks of support, and they generally call for forms of globalization that enhance democratic representation, human rights, and egalitarianism.”

Joseph Stiglitz and Andrew Charlton write.

Some members aligned with this viewpoint prefer instead to describe themselves as the Global Justice Movement, the Anti-Corporate-Globalization Movement, the Movement of Movements (a popular term in Italy), the “Alter-globalization” movement (popular in France), the “Counter-Globalization” movement, and a number of other terms.

Critiques of the current wave of economic globalization typically look at both the damage to the planet, in terms of the perceived unsustainable harm done to the biosphere, as well as the perceived human costs, such as poverty, inequality, miscegenation, injustice and the erosion of traditional culture which, the critics contend, all occur as a result of the economic transformations related to globalization. They challenge directly the metrics, such as GDP, used to measure progress promulgated by institutions such as the World Bank, and look to other measures, such as the Happy Planet Index, created by the New Economics Foundation. They point to a “multitude of interconnected fatal consequences–social disintegration, a breakdown of democracy, more rapid and extensive deterioration of the environment, the spread of new diseases, increasing poverty and alienation” which they claim are the unintended but very real consequences of globalization.

The terms globalization and anti-globalization are used in various ways. Noam Chomsky believes that

Critics argue that:

In December 2007, World Bank economist Branko Milanovic has called much previous empirical research on global poverty and inequality into question because, according to him, improved estimates of purchasing power parity indicate that developing countries are worse off than previously believed. Milanovic remarks that “literally hundreds of scholarly papers on convergence or divergence of countries’ incomes have been published in the last decade based on what we know now were faulty numbers.” With the new data, possibly economists will revise calculations, and he also believed that there are considerable implications estimates of global inequality and poverty levels. Global inequality was estimated at around 65

Referee - Blow the Whistle NOW!

Hi all,

Unless something changes dramitically, I will be not blogging about the KP UMNO race. What I did last week was to put all the Anti Khairys under a severe examination, the week before I had put the Pro Khairys under the same stress test.  Of all the Berani Berubah blogs, Pemuda IKS actually put up the Berani Berubah Manifesto, and yes I did check it out.

Thats all - nothing futher on this issue. 

In  The Antagonist (yup Piggy thats how its spelt, not anti-gonist, no such word exists), blogger Tunku Aisha suggested that a greater amount of discussion be spent on the issues facing the country. Once again, an unrequested honest, no holds barred opinion from yours truly.

MY PREMISE

If you disagree click here http://google.com and go on your way. Please come again!

 

So your here. That means you agree, so I won’t spend time convincing yourselves.

Let me list the economic issues of great importance

Dollar

In case we are in lala land, the dollar and the yen have risen steadily since September. I wrote about it http://padedoh.wordpress.com/2008/10/24/tsunami-kewanganan-kedua/ dated 24-October. At that time, as the title of the posting suggested, the Government was in denial, saying everything was ok, and the topic of the day was the transfer of power between Najib and Pak Lah.

Lets look at the Dollar Index as of today

The dollar index is calculated against a whole bunch of other currencies. Its geometric weighted i.e. it will understate short term movements. Even with that, we see a sharp rally between August to November. Now between August - November, every single economic indicator from the US turned real ugly, and investors around the world sold every risky asset and invested back to good old US T bills and bonds.

What does it mean for Malaysia ? Simple - if in August, investors were a bit shaky about investing in Emerging Markets, right now they are scared out of their minds. This is why what is happening in Thailand is bad for Malaysia - they will look at the whole region as just one whole bunch of unstable regimes. Surprisingly Indonesia has been rather quiet. The latest to suffer was India - so just bad news all around.

Commodities

We are a net exporter of oil and palm oil. Read the above article to find out why a collapse in the price of oil, and followed by palm oil is bad. Now I was thinking there could be an oil rally, but right now, I say don’t bet on it. Oil will touch USD 30x before it touches USD 70xx. You heard it right - Padedoh is calling for a sharper decline in the price of oil. The catalyst for this I feel will be a huge hedge fund liquidation towards the end of this years, maybe even an I-bank. 

Equities

Personally, my hedge fund had profited greatly from the sharp rebound in the Dow, a 1,300 pt rally, and on Friday I closed many longs and opened many shorts. As i blog, Dow futures are pointing to -100, I’d expect the Dow to be down by -300 pts or greater today.

I am also betting that Bank of America management will wake up and ditch/renogitiate Merrill Lynch - its a bad investment, and has dragged BOA to the dogs!

Factor A - Macro and worldwide picture affects Malaysia

1. Rise in dollar shows investors don’t give 2 cents for emerging market, actually 1 cent after the turmoil in Thailand and the threat of war between India and Pakistan

2. Companies now just cut their orders to 0. You heard me 0, their just gonna to survive on the exisiting inventory. As a trading nation, whatever inventory we had bought in early June expecting some grand Christmas sale, well thats gonna go to waste.

3. (1) and (2) means corporate budgets are slashed. Read the media reports - its clear the Government has a liquidity crunch.

4. Sime Darby, Petronas and the like - well, if your an employee enjoy your bonus. Thats it really.

Factor B -What Complicates This Issue

Now if we had a strong stable Government, the macro and global picture will still look bad. But we don’t - I really am very very disappointed (actually not really lah - does not affect me) with the lack of leadership. We need a strong and fair referree - right now every side is throwing contentious issues into the public. Over the weekend it was Chua Soi Lek. Today GGMM organized a protest march to MCA HQ.  Earlier this week it was Yoga. Then Hindu Sangam came in. Two weeks ago it was Road Signs. Three weeks ago it was something else, why not you tell me.

And soon after this it will be a by-election in KT.

Wow!

Solution

As the year closes, Factor A will push Factor B to become even more unstable.

The only short term thing right now is for Pak Lah to call a meeting of all Ministers and Menteri Besars from ALL the STATES and to say in clear language - THIS HAS TO STOP!

If he does not do that - your guess is as good as mine as to what will happen, and my guess is that it wont be pretty.

And this coming from a person who has very little at stake.

24 November 2008 Property : Is the property market resilient?

Is the property market resilient?

Residential Market Outlook

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November 21, 2008 Daily Highlights

MARKET REVIEW

MEDIA HIGHLIGHTS

ECONOMY HIGHLIGHTS

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20081201

Warsaw Stock Exchange

S

Going with the prior post HERE regarding the World index and ISYN’s forecast for the remainder of 2008, this is a follow up on ISYN’s S&P 500 forecast which can be found reproduced below this posting…

Here’s a couple charts of the VIX & S&P 500.

Looks like we’re going to have some downside here for a little while - until we hit the 800-825 range which coincidentally we’re about 16 points away from right now. ISYN fully expects a very strong rally in December once we sell off to-or-near those lows again. I still stand by what I wrote on the world index posting and the posting below. Don’t fall in love with a trend or that love will blind you to its inevitable end.

The bears are coming up on some serious PAYBACK

As admitted before, I was early on my bullish call by 10% or so. Even so I’m more bullish now than I’ve ever been. While I know it’s rare to see this I won’t change my forecast simply because it’s gotten to the point where it’s easier to do so. I made the bullish forecast statement and with an open mind I stand firm. There has been nothing new that would justify a change of my view. I’m going to lay out the reasoning in support of my decision again and as often as I have to to reaffirm my views.

While there’s plenty of trouble for the economy going forward I don’t see it causing the detriment of the financial markets. The main risks I see are the government screwing up or a Black Swan event. Other than that ISYN believes the game is about to be played and if you’re on the bench looking at the grass or the girls you’re going to miss some of the victory.

Meltdown Monday

Mike:  Welcome back from your holiday. I hope you all had a pleasant weekend with your family. The news is busy this Monday. The holiday cheer has turned back into holiday fear as news of the manufacturing index dropping to a 26-year low and the official announcement that the US has been is a recession since December 2007 reared its ugly head. Job loss numbers are expected to get worse quickly, so let’s get to the news of the day:

Manufacturing index drops to 26-year low as new orders, production fall

http://biz.yahoo.com/ap/081201/economy_manufacturing.html

National Bureau of Economic Research panel says US recession began in December 2007

http://biz.yahoo.com/ap/081201/recession.html 

Unilever to cut 250 research jobs worldwide

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSL158378420081201

Mike: Texas has weathered the storm so far, but it can’t rest on its laurels since the energy economy they so depend on has been damaged by oil prices that are 1/3 what they were only six months ago. Even that TX ego won’t make up for those kind of losses. But if you are seeking a safer haven for the time being, there are worse places to go than TX. 

Unemployment went up from 5.1 percent in September to 5.6 percent in October.

Mike: There is still that glimmer of hope in many locals that see this national problem as one that won’t affect their area. While some areas won’t be as bad as others, all areas will get worse.

Mike: I usually enjoy reading foreign news reports since they offer a more realistic assessment of current and future conditions. US news likes to gloss over bad economic conditions in favor of rose-colored glasses scenarios. Although a positive attitude is important when trying to navigate financial storms, people need to be made aware of the what the true state of affairs are before they can accurately determine the best way to proceed. 

For 2009, “the best-case scenario is 8.2 per cent or 8.3 per cent unemployment, but there’s an increasing risk that we could go up to 9 per cent,” said IHS Global Insight chief economist Nariman Behravesh. 

 

It’s Official: Recession Started One Year Ago

The Best Blog in the History of the Whole Wide World

It’s official: for the last year, the United States economy has been in recession.

The evidence of a downturn has been widespread for months: slower production, stagnant wages and hundreds of thousands of lost jobs. But the nonpartisan National Bureau of Economic Research, charged with making the call for the history books, waited until now to weigh in.

In a statement released Monday, the members of the group’s Business Cycle Dating Committee — made up of seven prominent economists, most from the academic sector — said that the economy entered a recession in December 2007.

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators,” the members said in a statement. “A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough.”

The committee noted that the contraction in the labor market began in the first month of 2008 and said that the declines in most major indicators, like personal income, manufacturing activity, retail sales, and industrial production, “met the standard for a recession.”

“Many of these indicators, including monthly data on the largest component of G.D.P., consumption, have declined sharply in recent months,” they wrote.

The announcement came as the stock market fell sharply, its first decline in five sessions. The Dow Jones industrial average was off more than 430 points or 4. 9 percent as the last hour of trading begin. The Standard & Poor’s 500-stock index was down 5. 9 percent.

Analysts said that after last week’s gains — the biggest five-day rally in decades — a sell-off was to be expected.

“You had the biggest weekly gain in 30, 35 years,” said Anthony Conroy, head equity trader at BNY ConvergEx Group. “Some profit-taking is warranted.”

Still, Monday’s losses were striking. Stocks were dragged down by double-digit declines in shares of financial firms. Citigroup, a source of concern on Wall Street of late, dropped 11 percent; American Express and Bank of America were off about 10 percent.

“Financials led the rally on the way up, and they’re leading on the way down,” Mr. Conroy said.

Investors may also be playing defense ahead of Friday’s report on the job market, one of the most important monthly indicators of the health of the economy. Analysts expect that employers shed more than 300,000 jobs in November, underscoring the problems facing American workers and businesses.

This is the first official recession since 2001, when the economy suffered after the bursting of the technology bubble. The period of expansion lasted 73 months, from November 2001 to December 2007.

Monday brought its own share of poor economic news. The manufacturing industry suffered its worst month since 1982, according to a closely watched index published by the private Institution for Supply Management. The index fell to 36.2 in November from 38.9 in October, on a scale where readings below 50 indicate contraction.

That was the worst monthly reading since 1982, and a sign that the worldwide credit crisis was taking a serious toll on American businesses. New orders fell sharply, although export orders held steady from October.

“However you look at the numbers, the message is the same: manufacturing is in free fall, with output collapsing,” Ian Shepherdson of High Frequency Economics wrote in a note to clients. “We see no prospect for near-term improvement.”

A separate report from the Commerce Department showed that spending on construction projects fell 1.2 percent in October, after staying unchanged in September. Private construction dropped 2 percent with a sharp drop in the residential sector, offering few signs of relief from the housing slump.

The declines on Wall Street came after stocks in Europe and most of Asia moved lower, as investors refocused attention on a gloomy economic outlook.

Benchmark indexes in Paris and Frankfurt were down more than 4 percent, and London’s FTSE-100 dipped 3.6 percent. The declines were minor compared with the 13 percent increase that European stocks enjoyed last week.

“We’re giving back some of the appreciation in equities that we gained in the last few weeks,” said Robert Talbut, a fund manager at Royal London Asset Management.

“I think in terms of valuations there are some good deals starting to appear,” Mr. Talbut said. “But valuations are never enough in themselves.”

Any serious market recovery would require a determined response from global governments, he said, but investors have lots of questions about how the policy measures that have already been announced will work.

Investors were also troubled by mounting evidence that consumer spending in the United States would fall sharply this holiday shopping season, choking off one of the prime fuels of American economic growth. Retailers received more business than expected over the Thanksgiving shopping weekend, but the steep discounts they used to lure customers could undermine profits.

Black Friday sales were 3 percent higher than the year before, according to ShopperTrak, which tracks the industry.

Asian stocks ended mostly lower. The Tokyo benchmark Nikkei 225 stock average fell 1.4 percent, while the S.& P./ASX 200 in Sydney fell 1.6 percent.

The Kospi index in Seoul declined 1.6 percent. But the Hang Seng index in Hong Kong rose 1.6 percent, and the Shanghai Stock Exchange composite index rose 1.3 percent.

United States government debt was strong amid the poor economic outlook and expectations that the Federal Reserve would cut interest rates again soon.

The yield on the two-year Treasury note, which moves in the opposite direction of the price, fell to a record just below 0.95 percent, while the yield on the 10-year note fell to 2.86 percent, the lowest on record.

Investors expect the Bank of England, the Reserve Bank of Australia and the European Central Bank to cut interest rates this week amid evidence that inflation is easing and growth flagging. “Evidence continues to build suggesting that these central banks have further aggressive monetary easing to undertake in order to stem the risks of a dramatic shift in price expectations going forward,” Derek Halpenny, a foreign exchange strategist at Mitsubishi UFJ in London, wrote in a note to investors.

The Federal Reserve’s main rate is aimed at 1 percent currently, though the effective rate in the market is 0.5 percent because of the enormous quantity of cash that the Fed has pumped into the market to keep foundering financial institutions afloat.

Crude oil futures for January delivery fell $4.54, to $49.88 a barrel.

David Jolly contributed reporting.

Andy Barkate: Takes a look at Equity Index Annuities

EIA’s can be a valuable addition to an overall retirement plan, says Andy Barkate President of California Retirement Plans. EIA’s are a hybrid of fixed and variable annuities. Fixed annuities are very conservative and pay a fixed interest rate. The return of variable annuities depends on the returns of the mutual fund-type sub-accounts, meaning you could lose or gain money (many variable annuities now come with various types of principle guarantees).

EIA guarantee to protect your principal, and even past gains. They also guarantee a minimum return—typically around 3 percent—even if the stock market declines. On top of these guarantees, the index annuity gives you the chance to earn significantly above the minimum rate if the stock index the annuity is tied to-grows in value. The S&P 500 index is the most commonly used index, but there are several others, including fixed-income indexes.

EIA’s are commonly used in retirement accounts (IRA’s) as well as regular savings and investment accounts.

Like other forms of annuities, EIA earnings are tax deferred. Also many (not all) carry a surrender penalty, meaning you’ll pay a fee if you cash out before it matures. (Many annuities allow annual withdrawals of up to 10 percent of the value free of penalty.) Therefore, it makes sense that you don’t invest in an annuity whose maturity date is later than when you will need your money.

More on Andy Barkate.

What is Hyperinflation?

The definition used by most economists is “an inflationary cycle without any tendency toward equilibrium.” A vicious circle is created in which more and more inflation is created with each iteration of the cycle. Although there is a great deal of debate about the root causes of hyperinflation, it becomes visible when there is an unchecked increase in the money supply or drastic debasement of coinage, and is often associated with wars (or their aftermath), economic depressions, and political or social upheavals.

The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. This results in an imbalance between the supply and demand for the money (including currency and bank deposits), accompanied by a complete loss of confidence in the money, similar to a bank run. Enactment of legal tender laws and price controls to prevent discounting the value of paper money relative to gold, silver, hard currency, or commodities, fails to force acceptance of a paper money which lacks intrinsic value. If the entity responsible for printing a currency promotes excessive money printing, with other factors contributing a reinforcing effect, hyperinflation usually continues. Often the body responsible for printing the currency cannot physically print paper currency faster than the rate at which it is devaluing, thus neutralising their attempts to stimulate the economy.

Hyperinflation is generally associated with paper money because this can easily be used to increase the money supply: add more zeros to the plates and print, or even stamp old notes with new numbers. Historically there have been numerous episodes of hyperinflation in various countries, followed by a return to “hard money”. Older economies would revert to hard currency and barter when the circulating medium became excessively devalued, generally following a “run” on the store of value.

Hyperinflation effectively wipes out the purchasing power of private and public savings, distorts the economy in favor of extreme consumption and hoarding of real assets, causes the monetary base, whether specie or hard currency, to flee the country, and makes the afflicted area anathema to investment. Hyperinflation is met with drastic remedies, such as imposing the shock therapy of slashing government expenditures or altering the currency basis. An example of the latter occurred in Bosnia-Herzegovina in 2005, when the central bank was only allowed to print as much money as it had in foreign currency reserves. Another example was the dollarization in Ecuador, initiated in September 2000 in response to a massive 75% loss of value of the Sucre currency in early January 2000. Dollarization is the use of a foreign currency (not necessarily the U.S. dollar) as a national unit of currency.

The aftermath of hyperinflation is equally complex. As hyperinflation has always been a traumatic experience for the area which suffers it, the next policy regime almost always enacts policies to prevent its recurrence. Often this means making the central bank very aggressive about maintaining price stability, as is the case with the German Bundesbank, or moving to some hard basis of currency such as a currency board. Many governments have enacted extremely stiff wage and price controls in the wake of hyperinflation, which is, in effect, a form of forced savings.

Because it allows them to hide their spending and avoid an obvious tax increase, governments have frequently resorted to printing money to meet their expenses. However, during hyperinflation, the monetary authorities fail to fund government expenses from taxes or by other means, because:

Theories of hyperinflation generally look for a relationship between seigniorage and the inflation tax. In both Cagan’s model and the neo-classical models, a crucial point is when the increase in money supply or the drop in basic money stock makes it impossible for a government to improve its financial position. Thus when fiat money is printed, government obligations that are not denominated in money increase in cost by more than the value of the money created.

From this, it might be wondered why any rational government would engage in actions that cause or continue hyperinflation. One reason for such actions is that often the alternative to hyperinflation is either depression or military defeat. In late 2001, the Argentine peso collapsed in value. Rather than printing sufficient cash for the public to carry, which they feared would start a run on the banks, the government took the peso off its dollar peg. Many international economists predicted that they would have to get a new loan from the IMF and impose shock therapy in order to avoid hyperinflation. Currency controls were imposed, tariffs were instituted, and the economy was allowed to fall into a severe recession during which unemployment hit 25%, homelessness and crime spiralled upwards, and the poverty rate peaked at over 50%.

The root cause is a matter of more dispute. In both classical economics and monetarism, it is always the result of the monetary authority irresponsibly borrowing money to pay all its expenses. These models focus on the unrestrained seigniorage of the monetary authority, and the gains from the inflation tax. In Neoliberalism, hyperinflation is considered to be the result of a crisis of confidence. The monetary base of the country flees, producing widespread fear that individuals will not be able to convert local currency to some more transportable form, such as gold or an internationally recognized hard currency. This is a quantity theory of hyperinflation.

In neo-classical economic theory, hyperinflation is rooted in a deterioration of the monetary base, that is the confidence that there is a store of value which the currency will be able to command later. In this model, the perceived risk of holding currency rises dramatically, and sellers demand increasingly high premiums to accept the currency. This in turn leads to a greater fear that the currency will collapse, causing even higher premiums. One example of this is during periods of warfare, civil war, or intense internal conflict of other kinds: governments need to do whatever is necessary to continue fighting, since the alternative is defeat. Expenses cannot be cut significantly since the main outlay is armaments. Further, a civil war may make it difficult to raise taxes or to collect existing taxes. While in peacetime the deficit is financed by selling bonds, during a war it is typically difficult and expensive to borrow, especially if the war is going poorly for the government in question. The banking authorities, whether central or not, “monetize” the deficit, printing money to pay for the government’s efforts to survive. The hyperinflation under the Chinese Nationalists from 1939-1945 is a classic example of a government printing money to pay civil war costs. By the end, currency was flown in over the Himalaya, and then old currency was flown out to be destroyed.

Hyperinflation is regarded as a complex phenomenon and one explanation may not be applicable to all cases. However, in both of these models, whether loss of confidence comes first, or central bank seigniorage, the other phase is ignited. In the case of rapid expansion of the money supply, prices rise rapidly in response to the increased supply of money relative to the supply of goods and services, and in the case of loss of confidence, the monetary authority responds to the risk premiums it has to pay by “running the printing presses.”

In the United States of America, hyperinflation was seen during the Revolutionary War and during the Civil War, especially on the Confederate side. Many other cases of extreme social conflict encouraging hyperinflation can be seen, as in Germany after World War I, Hungary at the end of World War II and in Yugoslavia in the late 1980s just before break up of the country.

Less commonly, inflation may occur when there is debasement of the coinage — wherein coins are consistently shaved of some of their silver and gold, increasing the circulating medium and reducing the value of the currency. The “shaved” specie is then often restruck into coins with lower weight of gold or silver. Historical examples include Ancient Rome, China during the Song Dynasty, and the United States beginning in 1933. When “token” coins begin circulating, it is possible for the minting authority to engage in fiat creation of currency.

As noted, in countries experiencing hyperinflation, the central bank often prints money in larger and larger denominations as the smaller denomination notes become worthless. This can result in the production of some interesting banknotes, including those denominated in amounts of 1,000,000,000 or more.

* By late 1923, the Weimar Republic of Germany was issuing fifty-million Mark banknotes and postage stamps with a face value of fifty billion Mark. The highest value banknote issued by the Weimar government’s Reichsbank had a face value of 100 trillion Mark (100,000,000,000,000; 100 billion on the long scale).One of the firms printing these notes submitted an invoice for the work to the Reichsbank for 32,776,899,763,734,490,417.05 (3.28×1019, or 33 quintillion) Marks.

* The largest denomination banknote ever officially issued for circulation was in 1946 by the Hungarian National Bank for the amount of 100 quintillion pengő (100,000,000,000,000,000,000, or 1020; 100 trillion on the long scale). image (There was even a banknote worth 10 times more, i.e. 1021 pengő, printed, but not issued image.) The banknotes however didn’t depict the number, making the 500,000,000,000 Yugoslav dinar banknote the world’s leader when it comes to depicted zeros on banknotes.

* The Z$100 billion agro cheque, issued in Zimbabwe on July 21, 2008, shares the record for depicted zeroes (11) with the 500 billion Yugoslav dinar banknote.

* The Post-WWII hyperinflation of Hungary holds the record for the most extreme monthly inflation rate ever — 41,900,000,000,000,000% (4.19 × 1016%) for July, 1946, amounting to prices doubling every fifteen hours.

One way to avoid the use of large numbers is by declaring a new unit of currency (an example being, instead of 10,000,000,000 Dollars, a bank might set 1 new dollar = 1,000,000,000 old dollars, so the new note would read “10 new dollars”.) An example of this would be Turkey’s revaluation of the Lira on January 1, 2005, when the old Turkish lira (TRL) was converted to the New Turkish lira (YTL) at a rate of 1,000,000 old to 1 new Turkish Lira. While this does not lessen the actual value of a currency, it is called redenomination or revaluation and also happens over time in countries with standard inflation levels. During hyperinflation, currency inflation happens so quickly that bills reach large numbers before revaluation.

Some banknotes were stamped to indicate changes of denomination. This is because it would take too long to print new notes. By time the new notes would be printed, they would be obsolete (that is, they would be of too low a denomination to be useful).

Metallic coins were rapid casualties of hyperinflation, as the scrap value of metal enormously exceeded the face value. Massive amounts of coinage were melted down, usually illicitly, and exported for hard currency.

Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

None of these actions address the root causes of inflation, and in fact, if discovered, tend to further undermine trust in the currency, causing further increases in inflation. Price controls will generally result in hoarding and extremely high demand for the controlled goods, resulting in shortages and disruptions of the supply chain. Products available to consumers may diminish or disappear as businesses no longer find it sufficiently profitable (or may be operating at a loss) to continue producing and/or distributing such goods, further exacerbating the problem.

References:

http://econlib.org/library/Enc/Hyperinflation.html

http://en.wikipedia.org/wiki/Hyperinflation

http://shadowstats.com/article/292

Cool Connections

One of my favourite things about this business is the connections I make with customers and fellow vendors.  Just this past weekend, I heard about some amazing partnerships with artisans in developing nations through Faces of Fair Trade.  I’ve added a couple links to my blogroll, so be sure to check out these Fair Trade entrepreneurs.

At the KBS Holiday Event, I met an inspired Grade 11 student of St. Joan of Arc High School here in Barrie.  Luke McLeod is preparing to go to Kenya in the spring with his classmates to help build a schoolhouse, supply the school with resources like paper and pencils, and implement a clean water program.

Luke is raising funds for his trip and Big Village is honoured to play a small part.  We will be donating jewellery to be given as raffle prizes at two fundraising dinners at Oscars Restaurant, January 19 and 20, 2009.

If you’d like to know more about Luke’s trip, read on… and prepare to be inspired!

November 25, 2008 Daily Highlights

MARKET REVIEW

MEDIA HIGHLIGHTS

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WALL ST STAYS NEAR LOWS ON BERNANKE COMMENTS

ETF/CEF Discussion: A horrible day in the markets whipped out all the gains from last week. The market action prompted RSI to pick five short ETFs plus again the J-Yen fund. Defensive is the word of the day. I have a defensive portfolio, without short funds, and it was up over one percent today while the market was flirting with its previous lows. I certainly don’t want to rub it in but the flight to safety buoyed the Treasury Bond securities and I took advantage of that with my current holdings.

2 December 2008 Newz Bits

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No Skin in the Game Created the Perfect Storm

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Pundits have incorrectly been tying the Community Reinvestment Act, or more simply known as CRA, to subprime. First off, the CRA was passed into law back during Jimmy Carter’s era in 1977. So before even delving into what CRA is, people have to understand that CRA was in full swing during Reagan, Bush Senior, Clinton and Bush Junior Presidencies and not to mention different majority congresses. Also, in George H. W. Bush signed into law FIRREA which increased oversight of the CRA program. So if it was so bad, why wasn’t it terminated? Conservatives certainly had enough time to try to change the law.

Riding The Islamic Banking Tide

Watch out for news alert!

From Tham Choy Lin

HONG KONG, Dec 2 (Bernama) — Last October, Hong Kong Chief Executive, Donald Tsang, announced the island’s financial hub would establish itself as an Islamic finance centre.

Last week, the Hong Kong Monetary Authority (HKMA) underlined that, despite the global financial crisis, the plan was still much on track and “considerable resources” would be devoted.

“Our priority is to push ahead with the development of an Islamic bond market. There should be no doubt about our determination to establish a platform for Islamic finance in Hong Kong,” HKMA deputy chief, Eddie Yue, told an Islamic finance forum.

Hong Kong is looking beyond the current crisis which has reduced sukuk, or Islamic bond issuance, by 40 per cent in the first three quarters of the year, a development Yue called “a temporary setback.”

What beckons not only Hong Kong but also conventional finance hubs like Singapore and London is the estimated Islamic assets of US$1 trillion (US$1=RM3.60) by 2010 and growing annually between 15 and 20 per cent.

Standard & Poor said in September that sukuk issuance was still expected to exceed US$20 billion this year.

“Although there is an economic crisis, it is comforting to know that prospects of the Gulf economies remain positive, given the surplus liquidity created by the huge oil earnings in the past,” Datuk Salman Younis, managing director of Kuwait Finance House (M) Bhd, said.

Malaysia’s CIMB Islamic chief executive officer, Badlisyah Abdul Ghani, brushed aside suggestions of competition, saying that it was overly-emphasised.

“The pie is big enough for more players and it will get even bigger with the Islamic economy demanding huge Islamic financing and a global Muslim population of 1.8 billion.

“You might want to look from a different perspective on how each centre will complement each other in developing this greater Islamic market across the globe, rather than concentrate on competition,” he said.

Without Hong Kong, the Islamic financial jigsaw would not be complete, Badlisyah added.

KFH’s Salman said it would be “very difficult” for any country to follow Malaysia which set up its first Islamic bank in 1983 and now has a full range of financial products for its Islamic populace.

Hong Kong could leverage on forming strategic alliances with Malaysia, he added.

Sani Hamid, director for wealth management of Financial Allianc Pte Ltd in Singapore, also sees plenty of room.

“Hong Kong will be the gateway for Chinese companies to access Middle East funds, Malaysia is very strong in corporate sukuk, Singapore’s venture into Islamic finance is more towards wealth management and as for Indonesia, it is more for the domestic market,” he said.

Hong Kong has made no secret that just across its borders, China, which would still grow albeit slower amid the global crisis, would be the hinge factor.

Hong Kong has also cast its sights on the Gulf region where the International Monetary Fund estimated some US$800 billion worth of projects were under way or in the pipeline.

“There are opportunities for us to extend our reach to potential Islamic investors and financiers in the Middle East and Asia. The addition of Islamic finance as a new asset class in our financial system will add value to Hong Kong as a thriving financial centre,” Yue said.

CIMB Islamic and another Malaysian bank, Hong Leong, are getting the headstart to stick a foot into the doorway.

The two are the first institutions in Hong Kong to set up Islamic banking operations this year, via their local branches, and have signed a memorandum of understanding for an inter-bank facility known as the Commodity Murabahah Deposit.

Badlisyah said: “We believe we can contribute our knowledge and skills as a leading global Islamic finance expert to Hong Kong. We must remember Islamic finance is not just about the sukuk market, there are many other industry activities.”

KFH too had moved to build a presence in China. It recently signed a US$275 million real estate contract with Hong Kong-listed Nan Hai Ltd for a project in the southern Shekou and Shenken areas in China.

Yue said HKMA was paying attention to four major areas, namely, to raise its profile in the Middle East, to establish infrastructure and conducive policies, build human capital and encourage the development and launch of Islamic finance products.

A key priority is to level the tax playing field for Islamic money transactions.

“The authorities have made a big effort and come on strongly with the message to tell players that we are going to put in the mechanism to facilitate you,” said Badlisyah, whose bank is the largest sukuk issuer in the world with a 20 per cent share.

The past year has seen the launch of a Dow Jones Islamic Market Index to track China-linked equities listed on the Hong Kong bourse and an exchangeable sukuk for a 9.9 per cent stake belonging to Khazanah Nasional Bhd in Hong Kong-listed Parkson that was 10 times oversubscribed.

Khazanah, the sovereign investment arm of the Malaysian government, generated US$647 million from the combined issuance of the sukuk, with more than half snapped up by Middle East investors, and a placement of shares.

Source: BERNAMA

December 2, 2008 at 4:19 pm

DanNorcini: Why was Comex Gold Taken Down Sharply Today?

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The Last Thirty Months Of My First Thirty Years In Real Estate

WOW!!

This is the last month of my first 30 years in the business. Let’s take a look at what has happenened in the last 30 months.

May 6, 2006: Merit Financial is the first sub-prime mortgage recorded on Implode list to shut their doors.

December 6, 2006: Sebring (#5 on the Implode list) is the first major sub-prime lender to announce their dismiss….. most experts feel that this was the company that signaled the “beginning of the end” of subprime. There were a total of 9 lenders on the implode list in 2006.

March 16, 2007: National lender with a local name falls…. Ameriquest is #41 on the Implode list.

May 17, 2007: Federal Reserve Chairman Ben Bernanke said growing number of mortgage defaults will not seriously harm the U.S. economy.

June 29, 2007: Banking regulators complete new guidelines calling on lenders to strictly evaluate borrowers’ ability to repay home loans. Prime Rate is cut to 5.25%.

Aug. 22, 2007: American Home Mortgage shuts down overnight. Most experts agree that this company was the company that started the down ward spiral of “Niche” or “Alt-A” mortgages. AHM was #109 on the Implode list.

Aug. 7, 2007: Fed leaves key federal funds rate unchanged, says credit problems and housing slump pose increasing risks to U.S. economy.

Aug. 9, 2007: Fed pumps $24 billion into U.S. banking system through large purchases of securities, while European Central Bank makes record cash injection of $130 billion into its markets to shake off credit fears. Wall Street suffers its second-worst decline of the year as Dow Jones industrials drop by nearly 400 points.

Aug. 10, 2007: Fed pumps another $38 billion in temporary reserves into the U.S. financial system; government rejects request for mortgage finance giants Fannie Mae and Freddie Mac to take on more debt.

Aug. 17, 2007: Fed tries to stabilize financial markets by approving 0.5 percentage point cut in its discount rate on direct loans to banks.

Aug. 31, 2007: President Bush announces plan to use Federal Housing Administration, which insures loans for low-income borrowers, to offer government-guaranteed loans to around 80,000 homeowners in default.

Sept. 18, 2007: Fed cuts key federal funds rate by a half point to 4.75 percent.

Sept. 19, 2007: Government raises debt portfolio limits for Fannie and Freddie by more than 2 percent annually.

Sept. 20, 2007: Bush acknowledges “some unsettling times” in the housing and credit markets, while Treasury Secretary Henry Paulson signals the administration would consider allowing Fannie and Freddie to temporarily buy loans bigger than the current cap of $417,000.

Oct. 4, 2007: House approves tax break for homeowners who have mortgage debt forgiven as part of a foreclosure or loan renegotiation.

Oct 2, 2007: Large sub-prime lender, WMC shuts down (#161 on the implode list). Between 1/107-12/31/07, there were 201 lenders added to the implode list.

Oct. 10, 2007: Paulson announces a new mortgage industry coalition aimed at helping homeowners avoid foreclosure.

Oct. 11, 2007: House and Senate Democrats reach a compromise on legislation permitting Fannie and Freddie to increase mortgage holdings by 10 percent from current limit; Bush administration rejects that idea.

Oct. 15, 2007: Three largest banks - Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co. - announce a plan organized by Treasury Department to buy securities hurt during the summer’s mortgage turmoil.

Dec. 5, 2007: Congressional aides say the Bush administration has hammered out an industry agreement to freeze interest rates for certain subprime mortgages for five years.

Dec. 6, 2007: The Mortgage Bankers Association reports that home foreclosures hit an all time high in the third quarter.

Dec. 11, 2007: The U.S. Federal Reserve cuts its key interest rate by a quarter-point to 4.25 per cent, the third rate reduction in three months as the central bank tries to keep the country out of a recession. The reduction came as Fed officials signaled that further cuts are possible if a severe downturn in housing and a crisis in mortgage lending get worse.

Jan. 10, 2008: Federal Reserve Chairman Ben Bernanke pledges to slash interest rates yet again to prevent housing and credit problems from plunging the country into a recession.

Jan. 11, 2008: Bank of America Corporation soon will be the nation’s biggest mortgage lender and loan servicer. The Charlotte, N.C.-based company announced that will buy Countrywide Financial for just over $4 billion in stock. The deal rescues the country’s biggest mortgage lender and expands the financial services empire of the nation’s largest consumer bank.

Jan. 15, 2008: The Federal Reserve, working to combat the effects of a serious credit crisis, says it auctioned $30 billion in money to commercial banks at an interest rate of 3.95 percent. It marked the third in a series of innovative auctions the Fed began last month as a way to provide cash-strapped banks with the reserves they need. The hope is that the increase in resources will keep banks lending to consumers and businesses and prevent the credit turmoil that hit in August from pushing the country into a recession.

Jan. 22, 2008: The Federal Reserve’s unexpected slashing of a key interest rate by a bold three-quarters of a point appears to be having the desired effect on world markets. The move has sent Asian stocks up after two days of steep losses. Fears of a U.S. recession have battered the region’s markets since the start of the year.

Jan. 24, 2008: Democratic and Republican congressional leaders reach a tentative deal on tax rebates of $300 to $1,200 per household and business tax cuts to jolt the slumping economy.

Jan. 29, 2008: The House overwhelmingly passes a $146 billion aid package that would speed rebates to most taxpayers. But the Senate could slow things, with lawmakers there backing a larger package that adds billions of dollars for senior citizens and the unemployed.

Jan. 30, 2008: The Fed cuts a key interest rate (to 3.00%) for the second time in just over a week, reducing the federal funds rate by a half point. The rate cut marked the fifth time that the Fed has cut the funds rate since Sept. 18 in response to the severe credit crisis which hit global markets in August. The action was expected to be quickly followed by cuts in banks’ prime lending rate, the benchmark rate for millions of consumer and business loans.

Feb. 7, 2008: Congress passes an economic stimulus bill and the White House says President Bush will sign it. Rebate checks could start arriving in the homes of Americans in May, averaging $600 to $1,200 for most taxpayers. Disabled veterans, the elderly and other low-income people will get around $300.

Feb. 12, 2008: Homeowners threatened with foreclosure could get a 30-day reprieve under a plan announced by the Bush administration. “Project Lifeline” is meant to cover people with all types of mortgages, not just subprime loans that were the focus of previous relief efforts.

The Federal Reserve has auctioned another $30 billion in funds to commercial banks, meant to alleviate the credit crunch. It is the fifth in a series of auctions that have pumped $130 billion into the nation’s banking system.

March 3, 2008: Federal Reserve Chairman Ben Bernanke calls for additional relief and urges lenders to help distressed homeowners by lowering the amount of their loans. He says foreclosures are likely to keep rising even as the government and the housing industry begin relief efforts.

March 6, 2008: The Mortgage Bankers Association reports that home foreclosures hit an all-time high in the final quarter of 2007. Meantime, the Federal Reserve says the percent of equity homeowners have in their houses has fallen below 50 percent for the first time since 1945.

March 15, 2008: The Federal Reserve, in an extraordinarily rare weekend move, took bold action Sunday evening to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the U.S. economy.

April 10, 2008: The Senate passes a bipartisan measure aimed at boosting the housing market and easing the threat of foreclosures. The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes. The White House opposes the plan, saying parts of it would actually make the problem worse by depressing some home values.

April 30, 2008: Scrambling to shore up the faltering economy, the Federal Reserve cut interest rates to the lowest point (2.00%) in nearly four years Wednesday as the nation teetered on the edge of recession. Wall Street rallied at first but then pulled back, concerned that the reduction might be the last for a while.

May 2, 2008: The Federal Reserve and other regulators have begun steps to end “unfair and deceptive” credit card industry practices assailing consumers who are already struggling to cope in a bad economy. The proposed rules would be the biggest clampdown on the industry in decades.

June 17, 2008: The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems. The auction is the 14th since the program began in December.

July 11, 2008: A mortgage rescue to help struggling homeowners avoid foreclosure and get more affordable, safer loans has passed the Senate. The measure faces a bumpy road in the House. It includes a modernization of the Federal Housing Administration and would create tighter controls on mortgage giants Fannie Mae and Freddie Mac.

July 13, 2008: Scrambling to bolster eroding investor confidence, the Federal Reserve and the Treasury Department announce steps to brace slumping mortgage giants Fannie Mae and Freddie Mac. The plan is intended to signal the government is prepared to take all necessary steps to prevent the credit market troubles that erupted in 2007 with losses from subprime mortgages from engulfing financial markets.

July 14, 2008: The Federal Reserve adopts rules to give homebuyers more protection from shady lending practices. The board approves a plan that would crack down on the type of practices that have hurt many of the riskiest borrowers. Lenders wouldn’t be able to make loans without proof of a borrower’s income.

July 23, 2008: The House approves legislation to give the ailing housing market a boost. It targets help for 400,000 homeowners facing foreclosure while giving support to mortgage giants Fannie Mae and Freddie Mac. The highlights of the bill include: $300 billion to provide more affordable mortgages to troubled homeowners, nearly $4 billion in grants to help communities fix up foreclosed properties and a $7,500 tax credit for first-time homebuyers.

July 30, 2008: The Federal Reserve announces that it is extending emergency borrowing to Wall Street, and is also making other moves to ease the crippling credit crunch. The program will now be available through January 2009, rather than ending in mid-September as was originally planned.

July 30, 2008: President Bush signs a housing bill seen as the most significant in decades (H.R. 3221). The measure lets homeowners who can’t afford their payments refinance into more affordable government-backed loans rather than lose their homes. As many as 400,000 struggling homeowners could stand to benefit.

Aug. 12, 2008: The Fed has auctioned another $25 billion in loans to U.S. banks, at a rate of 2.754 percent. In the latest auction, the Fed says it offered the loans for an extended period of 84 days, rather than the 28-day period for the previous loans.

Sept. 7, 2008: The Bush administration announced it was seizing the troubled mortgage giants Fannie Mae and Freddie Mac in a bid to help reverse a prolonged housing and credit crisis. Both Fannie Mae and Freddie Mac were being placed in a government conservatorship, a move that could end up costing taxpayers billions of dollars.

Sept, 14, 2008: Lehman Brothers, burdened by $60 billion in soured real-estate holdings, filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court after attempts to rescue the 158-year-old firm failed.

Sept. 15, 2008: Bank of America Corp. announces it would acquire Merrill Lynch in an all-stock transaction that should lift the uncertainty shrouding the investment bank since the start of the credit crisis over a year ago. The $50 billion deal would create a bank that offers everything from fixed-income trading to credit card lending and will rival Citigroup Inc., the biggest U.S. bank in terms of assets.

Sept. 15, 2008: A stunning makeover of the Wall Street landscape sent stocks falling precipitously, with the Dow Jones industrials sliding 504.48 points in their worst point drop since the September 2001 terrorist attacks. Investors reacted badly to a shakeup of the financial industry that took out two storied names: Lehman Brothers and Merrill Lynch Co. Stocks also posted big losses in markets across much of the globe.

Sept. 16, 2008: The U.S. government announces an $85 billion emergency loan to rescue AIG, saying a disorderly failure of the company could hurt the already delicate financial markets and the economy.

Sept. 17, 2008: The Dow Jones industrial average lost about 450 points, giving it a shortfall of more than 800 so far for the week. Markets around the world shared in the confidence crisis, and Russia shut down its market for a third day following its worst plunge in share prices since 1998.

Sept. 18, 2008: The U.S. Federal Reserve, working with central banks in Europe, Canada and Asia, pumped as much as $180 billion into money markets to combat a seizing up of lending between banks.

Sept. 19, 2008: Following a series of ad hoc measures, the U.S. government announces a broad rescue plan for the financial system, including a program to buy hundreds of billions of dollars of bad mortgages and other forms of toxic debt that have been weighing down U.S. financial companies. The Fed and Treasury Dept. shore up money market funds, which had also come under siege during the crisis, and the SEC temporarily bans short-selling - a way of betting that a stock will fall - against shares in 799 financial stocks.

Sept. 24, 2008: Warren Buffett’s Berkshire Hathaway Inc. announces plans to invest at least $5 billion in Goldman Sachs, a move seen as a huge vote of confidence for one of the credit crisis survivors.

Sept. 25, 2008: Washington Mutual Inc., one of the nation’s largest banks, collapses under the weight of its enormous bad bets on the mortgage market. The Federal Deposit Insurance Corp. seizes WaMu and then sells the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion. With $307 billion in assets, Seattle-based WaMu, which was founded in 1889, is the largest bank in American history to fail.

Meanwhile in Washington D.C., key members of Congress claimed agreement on an outline and crucial details of an urgent multibillion-dollar plan to stave off the crisis, but Republican members of the house balk at the plan and suggest an alternative plan. Presidential candidates Barack Obama and John McCain join negotiations, and late in the day, McCain sides with the House GOP alternative plan.

Sept. 29, 2008: In a surprise break from party leaders, House legislators defeat the $700 billion emergency rescue plan backed by the Senate and the White House for helping the nation’s financial system. In reaction to the move, the Dow Jones industrials plunge nearly 780 points, the most ever point drop for a single day.

Oct. 1, 2008: After senators loaded the economic rescue bill with tax breaks and other sweeteners, the $700 billion financial industry bailout passed on a 74-25 vote and moved on to the House.

Oct. 3, 2008: On a final vote of 263-171, the House of Representatives approved the revised $700 billion government bailout plan and sent it to President Bush for his certain signature.

Meanwhile, Wachovia announced it had agreed to be acquired by San Francisco-based Wells Fargo & Co rather than by Citigroup.

Oct. 6, 2008: In a rare coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates to prevent a mushrooming financial crisis from becoming a global economic meltdown. The Dow Jones industrials average posts its biggest loss ever during a trading day, closing below 10,000 for the first time since 2004.

Oct. 8, 2008: The Federal Reserve agrees to provide American International Group with a second loan of up to $37.8 billion, coming on top of a $85 billion loan made to the troubled insurance company in September. The move comes as lawmakers investigating the meltdown of AIG questioned the decision by AIG executives to spend $440,000 on a recent company retreat, complete with spa treatments, banquets and golf outings.

Overseas, the British government announced a $87.5 billion plan on Wednesday to partly nationalize major banks, with taxpayers taking stakes in a bid to shore up a financial sector hard hit by the world financial crisis.

Oct. 13, 2008: Wall Street stormed back after its worst week ever and staged the biggest single-day stock rally since the Great Depression, catapulting the Dow Jones industrials to a 936-point gain.

Oct. 14, 2008: The 2008 federal budget deficit soars to $454.8 billion, the highest level in history and more than double the $161.5 billion recorded in 2007.

Oct. 17, 2008: President George W. Bush addresses the country about financial crisis by saying the economy didn’t falter overnight, “and it’s going to take a while for the credit system to thaw.” U.S. and world markets continue to endure a volatile period of record daily gains and daily losses.

Oct 22, 2008: Internet lender E loan shuts down their computers. They were #293 on the implode list.

Oct. 23, 2008: Former Federal Reserve Chairman Alan Greenspan appears before the House Oversight Committee and says the financial meltdown — a “once-in-a-century credit tsunami” — has revealed a flaw in a lifetime of economic thinking, leaving him in a “state of shocked disbelief.”

Reported on this same day, the number of homeowners ensnared in the foreclosure crisis grew by more than 70 percent in the third quarter of this year compared with the same period in 2007, while new claims for jobless benefits increased by more than expected.

Oct. 28, 2008: The Conference Board reports the U.S. consumer confidence index fell to 38, down from a revised 61.4 in September and significantly below analysts’ expectations of 52. That’s the lowest level for the index since the Conference Board began tracking consumer sentiment in 1967, and the third-steepest drop.

October 29, 2008: Prime Rate is reduced to 1.00- it is to be noted that prime rate has only been this low four times in 20 years.

Oct. 30, 2008: The U.S. Commerce Department reports gross domestic product fell at an annual rate of 0.3 percent in the July-September period, a sign the country could be facing a worse recession. The GDP is widely seen as the broadest measure of America’s economic health. Consumer spending, which accounts for two-thirds of the economy, dropped by the largest amount in 28 years in the third quarter.

Oct. 31, 2008: Last day for the retail side of CTX (#298 on the Implode list).

Nov. 6, 2008: California government proposes a 90 day moratorium on foreclosures. Other governors have followed suit.

Nov 3, 2008: Announcement made that one out of five mortgages were currently behind or in foreclosure.

Nov 12, 2008: FHA sets 2009 limits (D/FW stays at $271,050).

Nov. 24, 2008: Latest victim on the mortgage industry- #305 on the Implode List- Fortes Financial.

Nov 25, 2008: FDIC adds 54 more banks to its “problem list”.

Nov 26, 2008: Cost of Bailout hits 8.5 Trillion dollars.

My head is spinning!!

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ETFs, Funds And Shares: What Are They And What Are Their Benefits?

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Exchange Traded Funds, better known by many investors as iShares, the brand owned by Barclays Global Investors (’BGI’) have been around in the UK since April 2000, with the launch of the iFTSE100 on the London Stock Exchange. From a slow start, by the end of 2005 (the latest figures available), some 125 billion was held in assets under management. Generally, when you look for your share price information, you’ll find them grouped in the extra MARK section, where you’ll now find some 45 different ETFs on offer. Although they have been around for sometime, let’s just remind ourselves how ETFs work. They are listed on the stock exchange, providing the flexibility and trade ability of a share, including the fact that the price is continuously quoted, but that one share can provide instant exposure to an entire Index, giving you the diversification benefits of a fund. ETFs are also a flexible way of achieving cost-effective market exposure. Because the funds are registered in Ireland, there is no stamp duty to be paid on purchases. Management costs are taken from dividends that are accrued by the fund, and any excess income is then distributed to shareholders: unlike unit trusts, there are no initial fees to pay on the original purchase. The price of the fund is always close to the ‘Net Asset Value’ (NAV) of the underlying investments and will usually have tight spreads, unlike some unit trusts and some investment trusts. Also ETFs will disclose their holdings everyday, whereas traditional funds usually disclose their holdings twice a year.

1 December 2008 Newz Bits

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Barclays Begins Trading 3 Brazil ETFs to Tap Investor Demand

Barclays Plc began trading of three new Brazilian Exchange Traded Funds in Sao Paulo to respond to investor demand for diverse and more easily tradable funds at a time of market volatility.

The ETFs, the first developed by Barclays in Brazil, replicate the Bovespa Index of the 66 most-traded stocks, the BM&FBovespa MidLarge Cap index and the BM&FBovespa Small Cap index. The first Brazilian ETF, the PIBB Fundo de Indice Brasil- 50 Brasil Tracker, was created in 2004.

“The type of product that we have here brings benefits for the times we’re living in,” Banco Barclays Director Marcelo Allain told reporters in Sao Paulo today. “The fund has the benefit that investors can enter and exit at any time and can better control their investment risk.”

Demand for ETFs in Brazil may follow the trend in Mexico and grow to as much as 20 percent of daily traded volume in five years, said Daniel Gamba, Barclays Global Investors’ chief executive for Latin America. The Bovespa had an average daily volume of about $3 billion during the past three months, more than six times the $440 million average volume of Mexico’s Bolsa.

The iShares MSCI Brazil Index Fund, managed by Barclays, is among the 10 most-traded ETFs in New York, with daily volume of about $1 billion, Gamba said. The MSCI Brazil fund has a market cap of $3.15 billion, according to Bloomberg data.

The three ETFs that began trading today have an original investment of 100 million reais ($42 million) from strategic investors, Allain said.

The Bovespa index gained 1.7 percent to 35,329.87 at 10:14 a.m. New York time. The iShares Ibovespa fund rose 0.7 percent to 35.34 reais after opening at 35.11 reais.

Investor demand for the funds will likely lead to the creation of additional indexes and funds, including two new indexes by the end of this year, said Murilo Robotton, executive director of products at BM&FBovespa, Latin America’s biggest exchange.

“We want to have new indexes so investors can have diverse means to invest” in Brazil, Robotton told reporters. The exchange is currently creating a homebuilders index. Robotton declined to give details about the second index.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.

Source: Bloomberg, 2.11.2008

King Sturge Real Estate Economy Index: The Downturn has yet to Hit Rock Bottom

The deterioration of the mood on the German real estate market continues unchecked. Admittedly, the November survey of the King Sturge Real Estate Economy index – being based on a monthly poll – suggests that the downward trend has slowed. Thus, the equally poll-based Real Estate Climate dropped from 55.4 index points the previous month down to the current low of 48.2 points.

However, what is surprising when taking the annual development into account is the breakneck pace of the downturn. In just five months, the mood among the 1000 industry players regularly interviewed by the independent market research company BulwienGesa AG dropped by 50 index points. The most pessimistic market assessment reflects the downturn of the Real Estate Economy that is based on macroeconomic data, and that stood at 136.7 points in November (compared to 150.7 points the previous month).

“You hardly need a crystal ball to divine that the year 2008 is over, as far as business goes. Major deals are probably not to be expected anymore, to say nothing of large-scale transactions. What is more, many real estate projects have been put on the back burner or shelved altogether,“ observed Sascha Hettrich, Managing Partner of King Sturge Deutschland.

The all-time low of the Real Estate Climate, which dropped from 55.4 down to 48.2 index points in November, reflects the present state of paralysis the German real estate industry is in. The sombre mood can be traced back to the low Invest Climate most of all. The indicator for investment and purchase decisions hit a new record low at 35.7 points (compared to 41.3 the month before). This means that no major transactions are conducted these days. The Rental Climate, the second sub-indicator of the Real Estate Climate, remained relatively stable at 61.4 index points, down from 70.4 points in October. Then again, market players are expecting the rent and income development to deteriorate even in this area.

As in the month before, a steady cash flow and favourable refinancing options caused the residential real estate to remain the most stable segment even in November. Rising vacancy rates precipitated by the present economic development and the regressive consumer spending are reflected in a reticent ratings of the commercial, office, and retail sectors.

The Real Estate Economy, which is based on statistical ratios such as DAX, ifo, DIMAX, and interest rates, experienced a drastic downturn in November. It plummeted down to 136.7 points, which translates into a 9.3 percent decrease. In face of so serious a decline, business in 2009 is expected to start out slow.

“At the same time, there are indeed some bright prospects,” argued Hettrich. “For instance, the economic aid program launched in early November has earmarked funds for additional investments in infrastructure and building redevelopments. It is definitely a positive signal for the construction and real estate industry,” Hettrich added. “Naturally, there is always the chance that the program’s impact may turn out to be just a drop in a bucket.”

A Sense of Optimism in the Air

Jack Bogle, Founder of Vanguard and creator of the first S&P 500 index fund has lived through 10 bear markets.  He talked to the Associated Press about his thoughts.

Bogle says now is the time to bet on a long term market recovery and now individual stocks.  He thinks it will take 1 to 2 and 1/2 years before the economy recovers. 

He’s a quote of some advice Bogle gives that needs to be quoted,

I think investments you continue to hold through this decline will give you a return better than you can find in other places. And that is a crucial part of this analysis. We know what bond returns will be in the next 10 years - roughly 5 percent for long-term government bonds or about 4 percent for short- to intermediate-term bonds. So if stocks produce 6 percent, while you endured the volatility, you increased your total return.

Money-market funds are now yielding less than 2 percent - call it about 1.5 percent. That doesn’t look anything like 6 to 9 percent for stocks, especially when you compound them over a decade. I would not flee the market now.

Bogle is still very positive about the stock market, at the age of 79, bogle says he is 80% allocated into bonds and advices to allocate to bonds the age you are currently at. 

Read the full article Here.

Keeping it Real

Hanging out at the apartment today. Hanging out with the crew that we met at the club last week. Playing a couple of mind games that you’d never be able to figure out. Thinking about those spiders up in the corner. How did they get there? index fund stuff - check it out.

2009 Housing Predictions Newton and Beyond

Meanwhile, while unemployment rises, the downward spiral in housing prices is gaining momentum.

“The No.1 thing that drives housing values is incomes,” said Todd Sinai, an associate professor of real estate at the Wharton School at the University of Pennsylvania. “When incomes fall, demand for housing falls.”

The S&P/Case-Shiller Index of home prices plunged 16.6% in August from the year before, following a 16.3% drop in July. The index has fallen every month since January 2007 (See accompanying chart, “Plummeting Prices.”).

Prices were lower in all 20 of the major cities the index covers, with Phoenix and Las Vegas down nearly 31% from last year.

Nationwide home prices have fallen 20.3% since peaking in June 2006.

And the skid isn’t over.

And still one other reliable indicator of housing prices seems to confirm that, in many cities, home prices still have further to fall.

No matter what happens in the U.S. housing market, until a large inventory reduction takes place, housing prices will not stabilize.

In a recent Forbes magazine column, A. Gary Shilling, president of an economic consulting firm of the same name, said the worst is yet to come. Says Schilling: “Excess inventory, the mortal enemy of prices, now amounts to 1.8 million homes, which is a huge number relative to the net demand (new families minus departures due to deaths and moves to nursing homes) which is only 1.5 million a year.”

The question that needs to be answered, then, is this: In the current atmosphere, does anyone believe we actually need homebuilders to add even one new home to the market?

Some pundits claim this may be a golden opportunity to short U.S. homebuilders. Even though they’re already down 80% from their highs, the deadly combination of skyrocketing unemployment, deflating prices and tight credit continue to spell further pain for the industry.

The reason: All bets are off if the new Barack Obama Administration implements a moratorium on mortgage foreclosures. There’s also the possibility that Obama will be able to shepherd through any one or more of the proposed mortgage guarantee programs now on the table. 

Those kinds of moves could provide a boost to homebuilders and leave short sellers in the grips of an uncomfortable squeeze – just like the millions of homeowners saddled with mortgages they can no longer pay.

The Indian Government should reveal why Indian public should fall prey to terror

By  Shenali Waduge

Iraq Mortality

id="blog-title">MEDIA SCHOLAR

id="tagline">The Blog of Media Criticism

This study by the Lancet was completely misunderstood and unfairly marginalized by the MSM. It is copied in its entirety here from the Lancet. 

#1 Investment Weekly - Empathy and sympathy

I have some empathy and sympathy for the author of Liar’s Poker, Michael Lewis. Empathy, because I joined the investment banking industry as an analyst in 1988 knowing little or nothing about financial markets (other than a two year stint as the editor of a banking magazine). I left the industry, disillusioned, 10 years later. Sympathy because of the poor state he’s in.

I was introduced to investment banking by the head of research at a UK bank. He was also the publisher of the magazine I was editing. The bank’s previous bank analyst had returned to Canada, and they needed a replacement. As I had been editing the bank magazine, I had some idea about what banks do, but the stock market was something that was only mentioned as an afterthought (banking and equity markets were fairly well separated at the time. Although banks in Hong Kong all had established brokerage subsidiaries, investment banking was left to foreign banks). Anyway, after arriving fresh and innocent, and after having being shouted at and threatened by aggressive sales people, I finally found my feet, and realized that equity analysts in Hong Kong were put on some sort of pedestal and adored by the general public. It was a great way to generate self publicity, even if you had no idea what you were talking about. Turning a catchy one liner was all that was necessary. I still find it amazing that I was actually asked to write articles for glossy high net worth magazines about which way the stock market was heading, without anyone ever asking whether I knew what the hell I was talking about. The name card was enough (it didn’t matter that I hadn’t even been to school).

Talking was about as good I could manage, with constant conversations to newspaper reporters, radio stations and even a spot on local television. However, there were downsides to the exposure. If you said something too negative, the subject of your scorn would send the boys around. It got so bad, that at one point I was dragged in front of the board of directors of a local hotelier because I had put a sell recommendation on the stock. At the time, the bank was renting floors in a building owned by the family-owners of the hotel. There were two meetings that I remember, one with the finance director at the time (he was away on his honeymoon in Scotland when I wrote the report, so he was unable to respond to any of my concerns), and the other was lunch with the board, at which I was told to apologize and retract my rating. I did, but I stuck with my views privately, and was proven correct. The stock has underperformed consistently since my sell call. That incident and the time the bank’s UK analyst for HongkongBank walked out of a meeting with the Bank’s corporate affairs people, leaving me to continue the meeting, because the po-faced spin doctors refused to answer his questions about the Bank’s non-performing loans. Both these and other instances sowed seeds in my mind that investment banking is just an illusion (write what I tell you or else), with the business run by a bunch of spoilt brats (who spit their dummies out if they don’t get what they want).

In fact, no one can predict the future (whether it’s the corporate people at HSBC, analysts or short sellers), which means that one person’s view is as good as the other. It’s just that I could somehow write about the future in a style that was easy to read (or alternatively too difficult to understand, therefore making myself sound mystifyingly certain). This is still true today. No one can predict the future, so, as long as you have a reasonable argument (or even better loads of different arguments, therefore increasing the chance of success), anyone can write investment newsletters every week.

Equity research is all about being in the right place at the right time. Lewis points out in his recent piece appropriately called “The end” (catchy, sure to get lots of eyebrows raised etc) that Meredith Whitney’s call on Citigroup in October last year was as much about luck and timing (and self publicity, she’s married to a wrestler) than anything else. She almost immediately left CIBC, probably because they refused to match the pay offer of her current employer. Lewis and Whitney empathized because they were both responsible for bringing down big Wall Street names (Gutfreund at Salomon and Prince at Citi). Unfortunately, I can empathize with Lewis, rather tenuously, again, because I was involved in the demise of the entirety of Salomon Brothers. County Natwest decided to close down its Hong Kong office as early 1990s recession had forced cost cuts. I was immediately asked to join a new Swiss research team, but I only managed a year there, before getting a big phone call to set up Nikko Research Center’s Hong Kong office. After five years of goofing about pretending to be serious investment bankers, Salomon Brothers could resist the temptation no longer, and in 1998, offered to buy a stake in Nikko, and merge its overseas offices with Nikko’s (obviously attractive) branches. It was at that point I realized that investment banking is doomed. If Salomons saw any sort of value in Nikko’s franchise, then Wall Street was being led by blind people with too much ambition and money. As we now know, Salomons is no longer with us, and Citi (which absorbed it) was almost driven to collapse by the likes of Whitney and Lewis (and by a bunch of unpopular sour pusses).

My sympathy for Lewis extends from his long and patient wait for the “destruction of Wall Street”. He wrote Liar’s Poker in 1989. Since then, the Hang Seng Index has swung from the low of 7,000 in August 1989, to the 32,000 of last October. That was an annualized compound average growth rate of 17.6%. Being a permabear over the last 20 years would have left you very poor, with not much of a social life. Hong Kong’s most famous bear is “Dr Doom and Gloom” Marc Faber, who would be constantly wheeled out by Bloomberg or CNN when the markets were racing upwards – just so there was some semblance of balance to their reporting, and also, just for the entertainment of watching a middle aged Swiss with a doctorate squirm at being so wrong. He now spends most of his time hanging around his place in Thailand. When he’s introduced on CNBC, there are no “Dr Doom” monikers in his introduction (that mantle is now reserved for a mad cap professor who goes by the name of Nouriel Roubini). I read recently that Kynikos Associates’ Ursus Fund is up 58% so far this year. Ursus, of course, is Latin for bear (although a Wiki search reveals that Ursus is also the name of a district of Warsaw, an Icelandic Vodka and the name of several Christian saints). Have you ever seen James Chronos, the Greek owner of Kynikos (Greek for doglike), on TV testifying before some committee, trying to justify his existence? He looks completely dopey and spaced out. That is what permabears look and act like. They have taken so many knocks that when the good times come around for them they are too beaten up to enjoy it. Lewis describes Steve Eisman and his associate bears in “The end” as a complete bunch of unsociable misfits from Queens or somewhere. They are on a winning run, but for how much longer (Chronos says he’s reduced his short positions on US financials and only has a large short position in Macquarie) and at what price?

The Hang Seng Index hasn’t managed a winning run of more than three consecutive days since July, so Friday was something to cheer about. The lack of sustainability of past rallies has been due to the discounting of economic/corporate news flow since the collapse of Lehmans. As the market reacts less and less to news-flow (which will continue to be bad because the press only reports negative news), so the market will move closer and closer to forming a bottom. The closing level of the Hang Seng Index on Friday was tantalizing, as it was trading above its 20 day moving average for the first time since the one-off events of 5 and 10 November, it was also poking at the bottom of a falling Ichimoko Cloud. Teasingly, the Parabolic could also reverse to an uptrend if the break into the cloud can be sustained this week. If the Central Economic Policy Committee, meeting this week, can clarify its spending objectives, then skepticism about China’s stimulus packages can be dispelled, allowing any breaks in resistance to be sustained. Here’s the technical situation as it stood on Friday in graph form.

Now is the time for Ghiz

By Stephen Pate

Ghiz said double dipping by MLAs into the PNP funds was optics. Yes it looks real bad. Compare his $3,300 raise with the 1% or $100 annual increase given to people receiving social assistance.

Add to that, Baby-Ghiz and his Merry Boys and Girls got a $20,000 increase July 2007. Bad optics. No bad smell.

Now is the time for Ghiz to show he has a hint of common sense by refusing the take even more money. He and his government should refuse to accept Barb Stevenson’s report. Since they are the government, they can pass a motion to pass on the raise.

Stevenson makes the statement PEI’s politicians are the lowest paid on Canada. That’s logical since we are the smallest province. We have more politicians per square mile than anywhere in Canada.

Other than the 1,000 Islanders Ghiz has bribed with PNP money, the sentiment about Ghiz is either a crook or inept. He needs a little positive public relations and it won’t come from handing our ribbons at a track meet.

P.E.I. politicians getting pay hike

In the midst of a global recession, P.E.I. MLAs are getting a pay raise.

12/3/08

New Overnight Developments Abroad: Kiwi and Sterling Weakened Ahead of Central Bank Meetings

The dollar is 1.0% higher against the New Zealand dollar and British pound. Central bank policy meetings Thursday in New Zealand and Britain are expected to result in interest rate cuts of over 100 basis points.

The dollar otherwise shows gains of 0.4% against the euro, 0.3% against the Aussie dollar, 0.2% against the Swissy and 0.1% versus the Canadian dollar, but the U.S. currency lost 0.3% against the yen amid another wave of risk aversion. Markets await the outcome of central bank meetings tomorrow in Sweden, New Zealand, Euroland, and Britain, as well as the U.S. labor market survey due Friday.

The Nikkei climbed 1.8%. Elsewhere in Asia, equities leaped 4.5% in China, aided by government share purchases, and also gained 1.4% in the Philippines and Hong Kong and 1.5% in Thailand where the central bank 1-day repo rate was slashed to 2.75% from 3.75%. Australian shares firmed 0.2%.

European stock markets are lower, in contrast, with drops of 1.7% in Germany, 1.4% in France, 0.9% in Sweden, 0.7% in Switzerland, and 0.5% in Britain.

The yield on 10-year JGB yields recovered 4 basis points to 1.39%. Sovereign bond yields are higher in North America and mixed in Europe.

Oil edged back up 0.6% after dipping under $47 per barrel. Gold prices slid 0.8% to $777.30/ounce.

Euribor rates again eased. The 3-month rate is at 3.74%.

Managers of a Chinese sovereign wealth fund said they will not invest in U.S. financials. Regulatory environment is too unsettled.

The Bank of Korea held a meeting to discuss more ways to ease liquidity strains. Japanese officials are considering a fiscal plan to support its labor market.

U.S. auto sales slumped over 36% y/y in November. German car sales dropped 17.6% on-year last month. New Zealand car sales plunged 27.2% y/y. Weak demand for motor vehicles is a global problem and has not responded to the $100 per barrel decline in oil prices since mid-July.

Euroland’s flash service-sector PMI reading of 43.3 in November was revised down to 42.5, a record low following 45.8 in October. Consequently, the Bloc’s composite PMI for both services and manufacturing was revised to 38.9 from a preliminary 39.7 and 43.6 in October. Germany posted PMI scores for November of 45.1 for services, lowest since May 2003, and 39.8 for the composite index. The French scores were 46.2 on services and 41.2 on its composite index. Italy’s service-sector PMI fell to 39.5 from 45.7 in October (a reading of 40 was expected). Spain’s service index was 28.2, also below expectations, following 32.2 in October and 50.7 a year earlier. Ireland’s service-sector PMI was merely 32.6, a series low and down from 36.1.

Retail sales in Euroland slumped 0.8% in October, twice as much as the consensus expectation, and by 2.1% from October 2007. The case for a bigger-than-50-basis point rate cut tomorrow by the ECB keeps mounting.

Australian real GDP barely grew last quarter, posting a non-annualized rise of 0.1% with weak personal consumption and a negative contribution from net exports. The result was weaker than the upwardly revised second-quarter growth of 0.4% and cut on-year economic growth to 1.9% from 2.9% in 2Q and 4.3% in the middle of 2007. Former Governor of the Reserve Bank of Australia MacFarlane said there is more scope to cut interest rates following cuts since early September of 300 basis points to 5.25%.

The British PMI services index slumped to a series low of 40.1 in November from 42.4. The sum of that score of 40.1 and an earlier reported manufacturing PMI of 34.4 is 74.5, down from 83.9 in October, 106.3 in November 2007, and a peak of 113.9 in August 2007 when the global financial market crisis began.

British on-year shop price inflation decelerated to 2.7% in November from 3.0%. The output price component of the PMI service index fell below 50 to 49.2, lowest in seven years. Euroland’s output price score of 47.1 was the lowest since July 2003.

PMI service readings fell by 1.9 points to 40.7 in Norway and by 10.2 points to 37.2 in Russia.

South Korean forex reserves fell another $11.7 billion last month to a 46-month low.

Wednesday links: scaling back

A neat look at how the market has performed (and evolved) relative to the 50 and 200 day moving averages.  (Quantifiable Edges also Daily Options Report)

Momentum investing worked…even in the Victorian age.  (SSRN.com)

A longer term look at the Arms Index.  (VIX and More)

Taking tax losses can force you to look at your portfolio with fresh eyes.  (WSJ.com)

Securities lending is the “lifeblood” of the hedge fund industry.  (All About Alpha)

Harvard’s endowment takes a hit.  (WSJ.com also Dealbreaker, Clusterstock)

Times are tough.  Google (GOOG) scales back.  (WSJ.com also GigaOM, The Big Money)

“Strange as it may sound, Apple may have an iPod problem.”  (BusinessWeek.com)

The gaming industry, with help from private equity, has experienced quite a comedown.  (TheDeal.com)

The auto downturn “is serious.”  (Econbrowser)

“Does the fact a company’s bonds are rated at low-junk levels, and trade at a small fraction of face value, prove the company is insolvent?”  (Floyd Norris)

The use of TIPS yields to estimate inflation expectations is more complex than at first blush.  (Mankiw Blog, Econbrowser)

The case for (and against) a 100 year Treasury bond.  (FT Alphaville, Market Movers)

“Counting on a quick rebound in the housing market to resurrect your net worth and save your retirement?”  Don’t.  (Clusterstock)

Financial engineering programs have gone way off track.  (The Spectrum via Economist’s View)

The risks to keeping financial industry salaries “artificially low.”  (Free exchange, Market Movers)

Although China may seem to have all the cards - high economic growth, large foreign currency reserves - it could yet turn out to be a major loser of the global economic crisis.”  (The Baseline Scenario also Free exchange)

Is it time to ditch the extra-point?  (Crossing Wall Street)

Want to make sure you don’t miss any Abnormal Returns posts?  Feel free to add our fan-friendly feed to your favorite feed reader.

Sensex below 10,000 points

MUMBAI: Banking stocks today tumbled by over five per cent in morning trade on the Bombay Stock Exchange amid weak investor sentiment whichpulled the benchmark Sensex below the 10k level.

The index of banking stocks, bankex, opened at 5,399.89 points, and dipped by 5.17 per cent to a low of 5,342.40. It was later quoted at 5,484.65 points.

HDFC Bank also slipped 5.44 per cent to Rs 1,035, while Yes Bank also plunged 9.36 per cent to Rs 74.10.

Marketmen said overnight fall in the US markets and negative Asian markets dampened investor sentiments here leading to a fall in the stock prices.

Other PSU lenders which bore the brunt of the weak global sentiments include Bank of India, which dipped 3.84 per cent, Canara Bank (2.17 per cent) and Federal Bank (3.96 per cent).

Bucking the trend, Punjab National Bank gained 0.89 per cent at Rs 496.20 on the BSE. Besides, Kotak Bank gained 1.91 per cent and Oriental Bank gained 0.59 per cent in the morning trade.

The benchmark Sensex tumbled by over 430 points and dipped below the 10,000 level in early trade today on heavy selling by foreign funds as well as retail investors.

US stocks plummeted on Wednesday, a day after Barack Obama’s historic victory in the US presidential election, as a fresh batch of dismal economic data underscored the massive challenges awaiting his administration.

The drop marked Wall Street’s biggest loss ever on the day after a presidential election, coming immediately on the heels of its biggest Election Day rally on record in the previous session.

The Dow Jones industrial average slid 486.01 points, or 5.05 per cent, to 9,139.27. The Standard & Poor’s 500 Index plunged 52.98 points, or 5.27 per cent, to close at 952.77. The Nasdaq Composite Index lost 98.48 points, or 5.53 percent, to 1,681.64.

Asian stocks also led losses sending the Nikkei down 5.25 per cent. The broader Topix sank 5.28 per cent, Hang Send dropped 6.72 per cent Straits fell 4.22 per cent.

Sensex below 10,000 points

MUMBAI: Banking stocks today tumbled by over five per cent in morning trade on the Bombay Stock Exchange amid weak investor sentiment whichpulled the benchmark Sensex below the 10k level.

The index of banking stocks, bankex, opened at 5,399.89 points, and dipped by 5.17 per cent to a low of 5,342.40. It was later quoted at 5,484.65 points.

HDFC Bank also slipped 5.44 per cent to Rs 1,035, while Yes Bank also plunged 9.36 per cent to Rs 74.10.

Marketmen said overnight fall in the US markets and negative Asian markets dampened investor sentiments here leading to a fall in the stock prices.

Other PSU lenders which bore the brunt of the weak global sentiments include Bank of India, which dipped 3.84 per cent, Canara Bank (2.17 per cent) and Federal Bank (3.96 per cent).

Bucking the trend, Punjab National Bank gained 0.89 per cent at Rs 496.20 on the BSE. Besides, Kotak Bank gained 1.91 per cent and Oriental Bank gained 0.59 per cent in the morning trade.

The benchmark Sensex tumbled by over 430 points and dipped below the 10,000 level in early trade today on heavy selling by foreign funds as well as retail investors.

US stocks plummeted on Wednesday, a day after Barack Obama’s historic victory in the US presidential election, as a fresh batch of dismal economic data underscored the massive challenges awaiting his administration.

The drop marked Wall Street’s biggest loss ever on the day after a presidential election, coming immediately on the heels of its biggest Election Day rally on record in the previous session.

The Dow Jones industrial average slid 486.01 points, or 5.05 per cent, to 9,139.27. The Standard & Poor’s 500 Index plunged 52.98 points, or 5.27 per cent, to close at 952.77. The Nasdaq Composite Index lost 98.48 points, or 5.53 percent, to 1,681.64.

Asian stocks also led losses sending the Nikkei down 5.25 per cent. The broader Topix sank 5.28 per cent, Hang Send dropped 6.72 per cent Straits fell 4.22 per cent.

Sensex below 10,000 points

MUMBAI: Banking stocks today tumbled by over five per cent in morning trade on the Bombay Stock Exchange amid weak investor sentiment whichpulled the benchmark Sensex below the 10k level.

The index of banking stocks, bankex, opened at 5,399.89 points, and dipped by 5.17 per cent to a low of 5,342.40. It was later quoted at 5,484.65 points.

HDFC Bank also slipped 5.44 per cent to Rs 1,035, while Yes Bank also plunged 9.36 per cent to Rs 74.10.

Marketmen said overnight fall in the US markets and negative Asian markets dampened investor sentiments here leading to a fall in the stock prices.

Other PSU lenders which bore the brunt of the weak global sentiments include Bank of India, which dipped 3.84 per cent, Canara Bank (2.17 per cent) and Federal Bank (3.96 per cent).

Bucking the trend, Punjab National Bank gained 0.89 per cent at Rs 496.20 on the BSE. Besides, Kotak Bank gained 1.91 per cent and Oriental Bank gained 0.59 per cent in the morning trade.

The benchmark Sensex tumbled by over 430 points and dipped below the 10,000 level in early trade today on heavy selling by foreign funds as well as retail investors.

US stocks plummeted on Wednesday, a day after Barack Obama’s historic victory in the US presidential election, as a fresh batch of dismal economic data underscored the massive challenges awaiting his administration.

The drop marked Wall Street’s biggest loss ever on the day after a presidential election, coming immediately on the heels of its biggest Election Day rally on record in the previous session.

The Dow Jones industrial average slid 486.01 points, or 5.05 per cent, to 9,139.27. The Standard & Poor’s 500 Index plunged 52.98 points, or 5.27 per cent, to close at 952.77. The Nasdaq Composite Index lost 98.48 points, or 5.53 percent, to 1,681.64.

Asian stocks also led losses sending the Nikkei down 5.25 per cent. The broader Topix sank 5.28 per cent, Hang Send dropped 6.72 per cent Straits fell 4.22 per cent.

Sensex below 10,000 points

MUMBAI: Banking stocks today tumbled by over five per cent in morning trade on the Bombay Stock Exchange amid weak investor sentiment whichpulled the benchmark Sensex below the 10k level.

The index of banking stocks, bankex, opened at 5,399.89 points, and dipped by 5.17 per cent to a low of 5,342.40. It was later quoted at 5,484.65 points.

HDFC Bank also slipped 5.44 per cent to Rs 1,035, while Yes Bank also plunged 9.36 per cent to Rs 74.10.

Marketmen said overnight fall in the US markets and negative Asian markets dampened investor sentiments here leading to a fall in the stock prices.

Other PSU lenders which bore the brunt of the weak global sentiments include Bank of India, which dipped 3.84 per cent, Canara Bank (2.17 per cent) and Federal Bank (3.96 per cent).

Bucking the trend, Punjab National Bank gained 0.89 per cent at Rs 496.20 on the BSE. Besides, Kotak Bank gained 1.91 per cent and Oriental Bank gained 0.59 per cent in the morning trade.

The benchmark Sensex tumbled by over 430 points and dipped below the 10,000 level in early trade today on heavy selling by foreign funds as well as retail investors.

US stocks plummeted on Wednesday, a day after Barack Obama’s historic victory in the US presidential election, as a fresh batch of dismal economic data underscored the massive challenges awaiting his administration.

The drop marked Wall Street’s biggest loss ever on the day after a presidential election, coming immediately on the heels of its biggest Election Day rally on record in the previous session.

The Dow Jones industrial average slid 486.01 points, or 5.05 per cent, to 9,139.27. The Standard & Poor’s 500 Index plunged 52.98 points, or 5.27 per cent, to close at 952.77. The Nasdaq Composite Index lost 98.48 points, or 5.53 percent, to 1,681.64.

Asian stocks also led losses sending the Nikkei down 5.25 per cent. The broader Topix sank 5.28 per cent, Hang Send dropped 6.72 per cent Straits fell 4.22 per cent.

Roger Biduk - Two in a Row for Wall Street

Roger Biduk writes:

The CNN Wire: Latest updates on top stories Blog Archive - Stocks advance in volatile session

The Dow Jones industrial average gained 172 points, a bit over 2 percent. The Standard & Poor’s 500 index rose 2.6 percent and the Nasdaq composite gained 2.9 percent.

A rash of poor economic news sent stocks lower in the morning, but the selling petered out by midday. Stocks remained volatile in the afternoon, turning higher in the last hour.

Around 2 p.m. ET, the Federal Reserve released its periodic “beige book” survey of the economy. The survey showed that economic conditions have deteriorated in all 12 of the Fed’s districts. However, the report was expected to show weakness, and stocks turned higher shortly after its release.

“We’re not expecting good news on the economy and we haven’t been getting any,” said Bill Flaig, chief investment officer at Arrow Funds. “The reports keep coming in a little weaker than expected, but not dramatically.”

The CNN Wire is a running log of the latest news from CNN World Headquarters, reported by CNN's correspondents and producers, and The CNN Wire editors. "Posted" times are Eastern Time.

For the Record: December 3, 2008 Obama-Biden Economic Plan

The Obama-Biden Plan

Our country faces its most serious economic crisis since the great depression. Working families, who saw their incomes decline by $2,000 in the economic “expansion” from 2000 to 2007, now face even deeper income losses. Retirement savings accounts have lost $2 trillion. Markets have fallen 40% in less than a year. Millions of homeowners who played by the rules can’t meet their mortgage payments and face foreclosure as the value of their homes have plummeted. With credit markets nearly frozen, businesses large and small cannot access the credit they need to meet payroll and create jobs.

Barack Obama and Joe Biden have a plan to revitalize the economy.

1. IMMEDIATE ACTION TO CREATE GOOD JOBS IN AMERICA

The economy has lost 760,000 jobs this year — and some forecasters expect the unemployment rate to exceed 8 percent by the end of next year. Addressing the financial crisis will help prevent the most severe loss of jobs from the crisis. But taking direct steps to create jobs will also strengthen the economy and help with the financial crisis. Barack Obama and Joe Biden’s overall economic agenda is pro-jobs, including their plans to eliminate America’s dependence on foreign oil and bring down healthcare costs. But Obama and Biden believe we must take additional aggressive steps to jump-start job creation right now:

* A New American Jobs Tax Credit: Obama and Biden will provide a new temporary tax credit to companies that add jobs here in the United States. During 2009 and 2010, existing businesses will receive a $3,000 refundable tax credit for each additional full-time employee hired. For example, if a company that currently has 10 U.S. employees increases its domestic full time employment to 20 employees, this company would get a $30,000 tax credit — enough to offset the entire added payroll tax costs to the company for the first $50,000 of income for the new employees. The tax credit will benefit all companies creating net new jobs, even those struggling to make a profit.

* Raise the small business investment expensing limit to $250,000 through the end of 2009: Obama and Biden will give small businesses an additional incentive to make investments and start creating jobs again by providing temporary business tax incentives through 2009. The February 2008 stimulus bill increased maximum Section 179 expenses to $250,000 but this expires in December 2008. This provision will encourage all firms to pursue investment in the coming months, but will particularly benefit small firms which generally have smaller amounts of annual property purchases and so choose to expense the cost of their acquired property.

* Zero capital gains rate for investment in small businesses: Barack Obama and Joe Biden believe that we need to encourage investment in small businesses to help create jobs and turn our economy around. That’s why they will eliminate all capital gains taxes on investments made in small and start-up businesses. They also want to cut taxes for the small businesses that create jobs but are struggling with restricted access to credit on top of skyrocketing health care and energy costs.

* Save one million jobs through immediate investments to rebuild America’s roads and bridges and repair our schools: The Obama-Biden emergency plan would make $25 billion immediately available in a Jobs and Growth Fund to help ensure that in-progress and fast-tracked infrastructure projects are not sidelined, and to ensure that schools can meet their energy costs and undertake key repairs starting this fall. This increased investment is necessary to stem growing budget pressures on infrastructure projects. In addition, in an environment where we may face elevated unemployment levels well into 2009, making an aggressive investment in urgent, high-priority infrastructure will serve as a triple win: generating capital deployment and job creation to boost our economy in the near-term, enhancing U.S. competitiveness in the longer term, and improving the environment by adopting energy efficient school and infrastructure repairs. In total, Obama and Biden’s $25 billion investment will result in 1 million jobs created or saved, while helping to turn our economy around.

* Partner with America’s automakers to help save jobs and ensure that the next generation of clean vehicles is built in the United States: Senator Obama pushed for $50 billion in loan guarantees to help the auto industry retool, develop new battery technologies and produce the next generation of fuel efficient cars here in America. Congress passed only half of this amount — it is critical that the administration speeds up the implementation of the first half and that Congress move quickly to enact the second half. In addition, Obama and Biden believe that with the tremendous uncertainty facing the auto industry, and the small and medium business suppliers who depend on them, it is critical that we keep all options on the table for helping them weather the financial crisis.

2. IMMEDIATE RELIEF FOR STRUGGLING FAMILIES

Even when the overall economy was growing, most American families were not sharing in this growth. The typical non-elderly household saw its income decline by more than $2,000 from 2000 to 2007 as expenses skyrocketed. Weekly wages, adjusted for inflation, are now lower than they were a decade ago. Barack Obama and Joe Biden’s overall economic plan will relieve the squeeze on families and foster bottom-up growth. But they are proposing that we implement several measures immediately:

* A tax cut for 95 percent of workers and their families — plus seniors: Barack Obama and Joe Biden propose a permanent tax cut of $500 for workers and $1,000 for families. A first round of these tax credits could be mailed out quickly by the IRS based on tax returns already filed for tax year 2007. In addition, Obama and Biden would extend these expedited tax credits to senior citizens who are retired as a down payment on his plan to eliminate taxes for all seniors making up to $50,000.

* Extend unemployment insurance benefits and temporarily suspend taxes on these benefits: Millions of Americans are looking for work but unable to find it in the weak economy. Today, more than one in five unemployed workers has been out of work for more than half a year — the highest level since early 2005. Obama supported extending unemployment insurance this summer, but already 800,000 jobless workers have exhausted those benefits and are being left without any unemployment compensation. Obama and Biden believe Congress should immediately extend unemployment insurance for an additional 13 weeks to help families that are being hit hardest by this downturn. In addition, they believe we should temporarily suspend taxes on unemployment insurance benefits as a way of giving more relief to families.

* Penalty-free hardship withdrawals from IRAs and 401(k)s in 2008 and 2009: Many families are going to be facing unique economic hardship over the coming year. To help these families pay their bills and their mortgages and make it through these tough times, Obama and Biden are calling for legislation that would allow withdrawals of 15% up to $10,000 from retirement accounts without penalty (although subject to the normal taxes). This would apply to withdrawals in 2008 (including retroactively) and 2009.

* Instruct the Treasury to allow seniors to delay required withdrawals from 401(k)s and IRAs: Currently seniors are required to start withdrawing from their 401(k)s and IRAs at age 70 1/2 and every year thereafter over their lifetime. But the explicit requirement that withdrawals continue on an annual basis — and the related requirement that the amount withdrawn be based on currently much higher year-end 2007 asset values — is based on Treasury regulations, not the statute, which has a less specific mandate. That means the Secretary of the Treasury has authority to change its regulations to protect seniors from being forced, at this critical time, to sell their investments and “lock in” their losses just after market values have plummeted in an almost unprecedented fashion. Obama and Biden are calling on Treasury to temporarily suspend the required withdrawals for retirees over age 70 1/2. Because retirees often make these required withdrawals late in the year, there is still time to help millions of affected seniors — but only if done promptly. In addition, because lower-income seniors may have no choice but to take withdrawals this year and in 2008, Obama and Biden will exempt any withdrawals made up to the required minimum amount from taxation. This will give seniors the flexibility they deserve — to forgo withdrawals if they choose or to take those withdrawals tax free if they need those resources to pay their bills.

* Funds to counteract high heating costs this winter: Obama and Biden are calling for supplementing the recently passed LIHEAP funding to ensure that cold-weather states can cushion the impact of high energy prices for their residents this winter. The Energy Information Administration said that consumers will pay a projected $1,137 to heat their homes from Oct. 1 to March 31 — 15 percent more than last year’s heating outlay during this time. Homeowners that use heating oil rather than natural gas could see increases of 23 percent compared to last year. As part of his $25 billion state fiscal relief package, Obama’s plan will supplement existing LIHEAP funding to help state programs expand to cover more residents while continuing to provide a meaningful benefit.

3. DIRECT, IMMEDIATE ASSISTANCE FOR HOMEOWNERS, NOT A BAILOUT FOR IRRESPONSIBLE MORTGAGE LENDERS

Over the past two years, Americans have lost 20 percent of the value of their homes. In some parts of the country home values have fallen by twice that amount. In combination with a rapidly deteriorating economy, that means more and more families are having a hard time meeting their monthly mortgage payments. At the same time, many states are considering property tax hikes that will burden homeowners still further. And millions of families who have seen the value of their homes fall below the cost of their mortgages need assistance in restructuring their mortgages to stay in their homes.

Barack Obama and Joe Biden’s plan provides direct relief to help America’s homeowners pay their mortgages, stay in their homes, and avoid painful tax increases while protecting taxpayers and not rewarding the bad behavior and bad actors who got us into this mess:

* Instruct the Secretaries of the Treasury and Housing and Urban Development (HUD) to use their existing authority to more aggressively modify the terms of mortgages: Barack Obama was an early champion of the HOPE for Homeowners Act that passed over the summer. In addition, Obama insisted that the financial rescue plan Congress recently passed include authority for the Secretary to work with servicers to modify the terms of mortgages for homeowners who played by the rules. Obama and Biden believe that both of these plans should be implemented aggressively and comprehensively. In addition, Obama and Biden are calling on Treasury and HUD to develop a plan to work with state housing agencies to coordinate broad mortgage restructurings. The Dodd-Frank legislation gives states broader authority to help struggling homeowners, and coordination is essential to ensure that state and national efforts are working in concert to help as many homeowners as possible at the minimum cost to taxpayers.

* Reform the bankruptcy code to assist homeowners and remove legal impediments to encouraging broader mortgage restructuring: Obama and Biden are also calling for legislation to close the loophole in our bankruptcy code that allows bankruptcy judges to modify the terms of mortgages on investment properties and vacation homes but not on primary residences. He also believes we should clarify the legal liability of mortgage servicers so that servicers who work with struggling homeowners to modify their mortgages will receive legal protections. And we should remove any tax- or legal-related impediments to encouraging shared-equity mortgages within the HOPE for Homeownership process.

* Enact a 90-day foreclosure moratorium for homeowners who are acting in good faith: Financial institutions that participate in the financial rescue plan should be required to adhere to a homeowner’s code of conduct, including a 90-day foreclosure moratorium for any homeowners living in their homes who are making good faith efforts to pay their mortgages. This will help create stability until the more far-reaching solutions are implemented and give both sides a chance to work out an agreement.

* Provide $25 Billion in state fiscal relief to help avoid painful property tax increases: Budget crunches across the nation are putting our local governments in the untenable position of having to choose between raising property taxes and cutting vital services. Obama has proposed $25 billion in state fiscal relief that, coupled with the new emergency facility to address the state credit crunch, will help states and localities continue to provide essential services like health care, police, fire and education without raising taxes or fees.

* Create a universal mortgage tax credit for homeowners: Barack Obama believes we should immediately enact a 10 percent refundable tax credit on the mortgage interest paid by hardworking American families who do not itemize their taxes. This credit will help offset the cost of mortgage payments for at least 10 million middle-class homeowners.

4. A RAPID, AGGRESSIVE RESPONSE TO THE FINANCIAL CRISIS — USING ALL THE TOOLS WE HAVE

Barack Obama and Joe Biden believe that our deep systemic financial market crisis requires a systemic response. They fought to ensure that the recently-passed financial rescue package gave the Treasury the tools to stabilize the financial system, while protecting taxpayers and ensuring CEOs would not get rich in the process. However, this stabilization will only occur if the Treasury, Federal Reserve, FDIC, and other government entities use their authority and move quickly and aggressively to address the financial crisis.

It is now clear that our financial markets will not restart until financial institutions are lending again. Because of the extensive losses many of these institutions have suffered, they need more capital so that they will have the money to lend to families and businesses. Obama and Biden recognized this early, and were heartened by the Treasury’s stated intention to use its recently granted authority to inject capital into our financial institutions. However, Secretary Paulson must turn this intention into action quickly and aggressively, in a manner that strengthens confidence in our banks, protects taxpayers, does not reward CEOs, and is strictly temporary.

In addition, our financial authorities must stand ready to take additional, complementary actions — consistent with the systemic nature of this crisis — to ensure this Treasury initiative is successful:

* Be prepared, if necessary, for broader assurances for credit to banks: First, we must be prepared to provide additional, temporary assurances to achieve the effective functioning of financial markets. Depending on developing circumstances, these steps could include additional measures by the Federal Reserve, extending insurance to all deposits, or guaranteeing a broader range of liabilities of the banking system including overnight loans. Any such steps should be coordinated internationally where appropriate and feasible. They should be accompanied by additional oversight to ensure appropriate use of guaranteed funds and by the expectation that financial institutions taking advantage of these guarantees will raise more capital.

* Extend asset purchases to unfreeze other critical sectors: Second, the Treasury should not limit itself to purchasing mortgage-backed securities under the financial rescue plan recently passed by Congress. The Treasury should use the authority it has under the new law to help unfreeze markets for individual mortgages, student loans, car loans, loans for multi-family dwellings, and credit card loans.

* Make credit available to small businesses and state or local governments: Third, we should take immediate steps to support non-financial institutions including small businesses and states and municipalities. The Federal Reserve and Treasury have acted to preserve the availability of liquidity for financial institutions and, more recently, have created a program to purchase commercial paper directly from the large corporate issuers. Small businesses and state and local governments, however, are having serious difficulty obtaining necessary financing from debt markets.

o Address the credit crisis facing our states and localities: Barack Obama and Joe Biden propose that the Federal Reserve and the Treasury work together to design a facility to provide a funding backstop to the state and municipal government debt market similar to the recently announced program for the commercial paper market. The Federal Reserve should determine whether it has sufficient legal authority to establish such a facility on its own — if not, it should work with Treasury and the Congress to achieve this goal. This new facility should be designed to protect taxpayer resources while ensuring that state and local governments can continue to provide vital services to their residents.

o Address the credit crisis facing our small businesses: To address the massive credit crunch that is threatening America’s small businesses, Barack Obama and Joe Biden are proposing two immediate steps: (1) a nationwide emergency lending facility for small businesses that could be run through the SBA’s Disaster Loan Program, which helped thousands of businesses in the wake of 9/11; and (2) temporarily eliminating fees on the SBA’s 7(a) and 504 loan guarantee programs for small businesses, to help increase private lending for small businesses.

Trade

Barack Obama and Joe Biden believe that trade with foreign nations should strengthen the American economy and create more American jobs. They will stand firm against agreements that undermine our economic security.

* Fight for Fair Trade: Obama and Biden will fight for a trade policy that opens up foreign markets to support good American jobs. They will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks. Obama and Biden will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.

* Amend the North American Free Trade Agreement: Obama and Biden believe that NAFTA and its potential were oversold to the American people. They will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.

* Improve transition assistance: To help all workers adapt to a rapidly changing economy, Obama and Biden will update the existing system of Trade Adjustment Assistance by extending it to service industries, creating flexible education accounts to help workers retrain, and providing retraining assistance for workers in sectors of the economy vulnerable to dislocation before they lose their jobs.

* End tax breaks for companies that send jobs overseas: Barack Obama and Joe Biden believe that companies should not get billions of dollars in tax deductions for moving their operations overseas. They will fight to ensure that public contracts are awarded to companies that are committed to American workers.

* Reward companies that support American workers: Barack Obama introduced the Patriot Employer Act of 2007 with Senators Richard Durbin (D-Ill) and Sherrod Brown (D-Oh) to reward companies that create good jobs with good benefits for American workers. The legislation would provide a tax credit to companies that maintain or increase the number of full-time workers in America relative to those outside the U.S.; maintain their corporate headquarters in America if it has ever been in America; pay decent wages; prepare workers for retirement; provide health insurance; and support employees who serve in the military.

Manufacturing and Green Jobs

* Invest in our next generation innovators and job creators: Obama and Biden will create an Advanced Manufacturing Fund to identify and invest in the most compelling advanced manufacturing strategies. The Fund will have a peer-review selection and award process based on the Michigan 21st Century Jobs Fund, a state-level initiative that has awarded over $125 million to Michigan businesses with the most innovative proposals to create new products and new jobs in the state.

* Double funding for the manufacturing extension partnership: The Manufacturing Extension Partnership (MEP) works with manufacturers across the country to improve efficiency, implement new technology and strengthen company growth. This highly-successful program has engaged in more than 350,000 projects across the country and in 2006 alone, helped create and protect over 50,000 jobs. But despite this success, funding for MEP has been slashed by the Bush administration. Barack Obama and Joe Biden will double funding for the MEP so its training centers can continue to bolster the competitiveness of U.S. manufacturers.

* Invest in a clean energy economy and create 5 million new green jobs: Obama and Biden will invest $150 billion over 10 years to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids, promote development of commercial scale renewable energy, invest in low emissions coal plants, and begin transition to a new digital electricity grid. The plan will also invest in America’s highly-skilled manufacturing workforce and manufacturing centers to ensure that American workers have the skills and tools they need to pioneer the first wave of green technologies that will be in high demand throughout the world.

* Create new job training programs for clean technologies: The Obama-Biden plan will increase funding for federal workforce training programs and direct these programs to incorporate green technologies training, such as advanced manufacturing and weatherization training, into their efforts to help Americans find and retain stable, high-paying jobs. Obama and Biden will also create an energy-focused youth jobs program to invest in disconnected and disadvantaged youth.

* Boost the renewable energy sector and create new jobs: The Obama-Biden plan will create new federal policies, and expand existing ones, that have been proven to create new American jobs. Obama and Biden will create a federal Renewable Portfolio Standard (RPS) that will require 25 percent of American electricity be derived from renewable sources by 2025, which has the potential to create hundreds of thousands of new jobs. They will also extend the Production Tax Credit, a credit used successfully by American farmers and investors to increase renewable energy production and create new local jobs.

National Infrastructure Investment

Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation infrastructure — its highways, bridges, roads, ports, air, and train systems — to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.

* Create a National Infrastructure Reinvestment Bank: Barack Obama and Joe Biden will address the infrastructure challenge by creating a National Infrastructure Reinvestment Bank to expand and enhance, not supplant, existing federal transportation investments. This independent entity will be directed to invest in our nation’s most challenging transportation infrastructure needs. The Bank will receive an infusion of federal money, $60 billion over 10 years, to provide financing to transportation infrastructure projects across the nation. These projects will directly and indirectly create up to two million new jobs and stimulate approximately $35 billion per year in new economic activity.

Technology, Innovation and Creating Jobs

Barack Obama and Joe Biden will increase federal support for research, technology and innovation for companies and universities so that American families can lead the world in creating new advanced jobs and products.

* Invest in the sciences: Obama and Biden support doubling federal funding for basic research and changing the posture of our federal government from being one of the most anti-science administrations in American history to one that embraces science and technology. This will foster home-grown innovation, help ensure the competitiveness of U.S. technology-based businesses, and ensure that 21st century jobs can and will grow in America.

* Make the Research and Development Tax Credit permanent: Barack Obama and Joe Biden want investments in a skilled research and development workforce and technology infrastructure to be supported here in America so that American workers and communities will benefit. Obama and Biden want to make the Research and Development tax credit permanent so that firms can rely on it when making decisions to invest in domestic R&D over multi-year timeframes.

* Deploy next-generation broadband: Barack Obama and Joe Biden believe we can get broadband to every community in America through a combination of reform of the Universal Service Fund, better use of the nation’s wireless spectrum, promotion of next-generation facilities, technologies and applications, and new tax and loan incentives.

Small Business

* Provide tax relief for small businesses and start-up companies: Obama and Biden will eliminate all capital gains taxes on start-up and small businesses to encourage innovation and job creation. Obama and Biden will also support small business owners by providing a $500 “Making Work Pay” tax credit to almost every worker in America. Self-employed small business owners pay both the employee and the employer side of the payroll tax, and this measure will reduce the burdens of this double taxation.

* Create a national network of public-private business incubators: Obama and Biden will support entrepreneurship and spur job growth by creating a national network of public-private business incubators. Business incubators facilitate the critical work of entrepreneurs in creating start-up companies. Obama and Biden will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country.

Labor

Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act. Obama and Biden will ensure that his labor appointees support workers’ rights and will work to ban the permanent replacement of striking workers. Obama and Biden will also increase the minimum wage and index it to inflation to ensure it rises every year.

* Ensure freedom to unionize: Obama and Biden believe that workers should have the freedom to choose whether to join a union without harassment or intimidation from their employers. Obama cosponsored and is a strong advocate for the Employee Free Choice Act (EFCA), a bipartisan effort that makes sure workers can exercise their right to organize. They will continue to fight for EFCA’s passage and Obama will sign it into law.

* Fight attacks on workers’ right to organize: Obama has fought the Bush National Labor Relations Board (NLRB) efforts to strip workers of their right to organize. He is a cosponsor of legislation to overturn the NLRB’s “Kentucky River” decisions classifying hundreds of thousands of nurses, construction workers, and professional workers as “supervisors” who are not protected by federal labor laws.

* Protect striking workers: Obama and Biden support the right of workers to bargain collectively and strike if necessary. They will work to ban the permanent replacement of striking workers, so workers can stand up for themselves without worrying about losing their livelihoods.

* Raise the minimum wage: Barack Obama and Joe Biden will raise the minimum wage, index it to inflation and increase the Earned Income Tax Credit to make sure that full-time workers earn a living wage that allows them to raise their families and pay for basic needs.

Mortgages, Homeownership, and Bankruptcy

Obama and Biden will crack down on fraudulent brokers and lenders. They will also make sure homebuyers have honest and complete information about their mortgage options, they’ll give a tax credit to all middle-class homeowners, and they’ll reform our bankruptcy laws to protect working people.

* Create a universal mortgage credit: Obama and Biden will create a 10 percent universal mortgage credit to provide tax relief to homeowners who do not itemize. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.

* Ensure more accountability in the subprime mortgage industry: Obama has been closely monitoring the subprime mortgage situation for years, and introduced comprehensive legislation over a year ago to fight mortgage fraud and protect consumers against abusive lending practices. Obama’s STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity.

* Mandate accurate loan disclosure: Obama and Biden will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.

* Close bankruptcy loophole for mortgage companies: Obama and Biden will work to eliminate the provision that prevents bankruptcy courts from modifying an individual’s mortgage payments. They believe that the subprime mortgage industry, which has engaged in dangerous and sometimes unscrupulous business practices, should not be shielded by outdated federal law.

Credit Cards and Lending

Obama and Biden will establish a five-star rating system so that every consumer knows the risk involved in every credit card. They also will establish a Credit Card Bill of Rights to stop credit card companies from exploiting consumers with unfair practices.

* Create a credit card rating system to improve disclosure: Obama and Biden will create a credit card rating system, modeled on five-star systems used for other consumer products, to provide consumers an easily identifiable ranking of credit cards, based on the card’s features. Credit card companies will be required to display the rating on all application and contract materials, enabling consumers to quickly understand all of the major provisions of a credit card without having to rely exclusively on fine print in lengthy documents.

* Establish a Credit Card Bill of Rights to protect consumers: Obama and Biden will create a Credit Card Bill of Rights to protect consumers. The Obama-Biden plan will:

* Cap outlandish interest rates on payday loans and improve disclosure: Obama and Biden will extend a 36 percent interest cap to all Americans. They will require lenders to provide clear and simplified information about loan fees, payments and penalties, which is why they’ll require lenders to provide this information during the application process.

* Encourage responsible lending institutions to make small consumer loans: Obama and Biden will encourage banks, credit unions and Community Development Financial Institutions to provide affordable short-term and small-dollar loans and to drive unscrupulous lenders out of business.

* Reform bankruptcy laws to protect families facing a medical crisis: Obama and Biden will create an exemption in bankruptcy law for individuals who can prove they filed for bankruptcy because of medical expenses. This exemption will create a process that forgives the debt and lets the individuals get back on their feet.

Work-Family Balance

Obama and Biden will double funding for after-school programs, expand the Family Medical Leave Act, provide low-income families with a refundable tax credit to help with their child-care expenses, and encourage flexible work schedules.

* Expand the Family and Medical Leave Act: The FMLA covers only certain employees of employers with 50 or more employees. Obama and Biden will expand it to cover businesses with 25 or more employees. They will expand the FMLA to cover more purposes as well, including allowing workers to take leave for elder care needs; allowing parents up to 24 hours of leave each year to participate in their children’s academic activities; and expanding FMLA to cover leave for employees to address domestic violence.

* Encourage states to adopt paid leave: As president, Obama will initiate a strategy to encourage all 50 states to adopt paid-leave systems. Obama and Biden will provide a $1.5 billion fund to assist states with start-up costs and to help states offset the costs for employees and employers.

* Expand high-quality afterschool opportunities: Obama and Biden will double funding for the main federal support for afterschool programs, the 21st Century Learning Centers program, to serve a million more children. Obama and Biden will include measures to maximize performance and effectiveness across grantees nationwide.

* Expand the child and dependent care tax credit: The Child and Dependent Care Tax Credit provides too little relief to families that struggle to afford child care expenses. Obama and Biden will reform the Child and Dependent Care Tax Credit by making it refundable and allowing low-income families to receive up to a 50 percent credit for their child care expenses.

* Protect against caregiver discrimination: Workers with family obligations often are discriminated against in the workplace. Obama and Biden will enforce the recently-enacted Equal Employment Opportunity Commission guidelines on caregiver discrimination.

* Expand flexible work arrangements: Obama and Biden will create a program to inform businesses about the benefits of flexible work schedules; help businesses create flexible work opportunities; and increase federal incentives for telecommuting. Obama and Biden will also make the federal government a model employer in terms of adopting flexible work schedules and permitting employees to request flexible arrangements.

Change is coming

Wages are Stagnant as Prices Rise: While wages remain flat, the costs of basic necessities are increasing. The cost of in-state college tuition has grown 35 percent over the past five years. Health care costs have risen four times faster than wages over the past six years. And the personal savings rate is now the lowest it’s been since the Great Depression.

Tax Cuts for Wealthy Instead of Middle Class: The Bush tax cuts give those who earn over $1 million dollars a tax cut nearly 160 times greater than that received by middle-income Americans. At the same time, this administration has refused to tackle health care, education and housing in a manner that benefits the middle class.

Obama and Biden will cut income taxes by $1,000 for working families to offset the payroll tax they pay.

Obama and Biden believe that trade with foreign nations should strengthen the American economy and create more American jobs. He will stand firm against agreements that undermine our economic security.

Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation infrastructure – its highways, bridges, roads, ports, air, and train systems – to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.

Barack Obama and Joe Biden will increase federal support for research, technology and innovation for companies and universities so that American families can lead the world in creating new advanced jobs and products.

Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act. Obama and Biden will ensure that his labor appointees support workers’ rights and will work to ban the permanent replacement of striking workers. Obama and Biden will also increase the minimum wage and index it to inflation to ensure it rises every year.

Obama and Biden will crack down on fraudulent brokers and lenders. They will also make sure homebuyers have honest and complete information about their mortgage options, and they will give a tax credit to all middle-class homeowners.

Obama and Biden will establish a five-star rating system so that every consumer knows the risk involved in every credit card. They also will establish a Credit Card Bill of Rights to stop credit card companies from exploiting consumers with unfair practices.

Obama and Biden will reform our bankruptcy laws to protect working people, ban executive bonuses for bankrupt companies, and require disclosure of all pension investments.

Obama and Biden will double funding for after-school programs, expand the Family Medical Leave Act, provide low-income families with a refundable tax credit to help with their child-care expenses, and encourage flexible work schedules.

Russell Index Weekly Ending Wednesday

12/03/08 Close 453.80 midpoint 444(POSITIVE). The last two weeks the  market has been positive, prior the Russell index was (NEGATIVE) for seven weeks. The ETF funds short term have turned positive in all the major  indexs.  It is important to use  stop loss, any close below 442 would be considered another failure. Monday’s high 472 has not been tested,we need to close above the high. The daily channel sloping downward has resistance at 500, close above 500 would be explosive to the upside. The 240 minute chart has a triangle resistance of 471, any close above 471 would be explosive to the upside. So resistance 472 & 500 support 442 & 415. Pivot Indicator are pivot point 448, 1st Resistance 480, 2nd resistance 509, 1st support 423, 2nd support 397 Good Luck !!

The Indian Government should reveal why the Indian public should fall prey to terror

By Shenali Waduge

Now described as India’s 9/11, the Mumbai 60 hour siege will go down in history leaving many still baffled at how a handful of men under 30 years of age, were able to take over 10 sites in India’s busiest city in four straight days of carnage. With possibly 300 dead including 3 of Mumbai’s top anti-terrorist officers the gruesome takeover of Mumbai by extremist gunmen only revealed India’s ill-preparedness & institutional incapability despite warnings that should have prompted timely action.

Thus, do not the 18million Mumbai citizens as well as the Indian public not have the right to question the Indian Government – demand why there were no helicopters available to transport the elite commandos to the besieged sites and why it took over 10 hours for them to finally reach Mumbai’s terror sites but more importantly remains the question why such gunmen should hate the Indian public so much? The Indian public needs to know from the Indian Government why terror should take place in India.

The meticulous planning involved goes without saying and it will provide analysts plenty of research material. We can but guess the number of terrorists who entered Mumbai via the trawler, how many entered by land, how long they stayed in Mumbai, how they booked into the hotels, how they were able to store the weapons - were not the rooms cleaned each morning by hotel staff as is customary, who visited them, how many terrorists actually escaped and are they still in India, how they could remain awake through the night firing indiscriminately and what were their actual plan.

India’s intelligence says it was to blow up the Taj and kill 5000 people, the 1st could have been done easily on the first day, 5000 people is somewhat questionable which next raises the question of how much weapons remain unused in the rooms booked by them – India’s public must be having plenty of questions. The gunmen knew each of their targets thoroughly, they knew all the hotel layouts even secret entrances, they had Blackberry’s and GPS devices, including night-vision goggles which the police lacked, even the elite Black Cats had not been provided with thermal imaging equipment to distinguish terrorists from hotel guests to facilitate their operation and eventually all the hostages at Nariman House ended up dead. The 26/11 Mumbai siege can be equated to 21st century terrorism outsmarting India’s 20th century weapons & equipment.

The 26/11 attack on Mumbai has certainly shaken up the Indian establishment. Realizing that promises to beef up security alone is unlikely to decrease the anger amongst India’s public the Home Minister has been replaced with P. Chiddambaran who incidentally was the Minister of State for Internal Security in Rajiv Gandhi’s government. Even the infamous National Security Advisor – M K Narayan is also likely to be replaced. He being one of the architects of regional terrorism during the days he was part of the institutional establishment created to destabilize friendly nations.

Whether it was “elements in Pakistan” that were responsible for the attacks the critical question is why would India at all be prone to terror attacks unless India’s Governments have not infringed upon nations, used similar tactics to disturb amd disrupt another country. If this be the case, then the 26/11 is likely to be ghosts of ones past misdemeanors returning to remind India that there is a thing called nemesis. It then gives India’s citizens every right to demand of its Governments what follies they have committed for obviously India’s public is not party to any of these malpractices that successive Indian Governments have adopted to reign supreme. Indians are proud to be Indian but surely not if it means that India has cheated its way to supremacy through covert and overt tactics used by Indian Governments.

Having managed to capture one of the gunman the Indian authorities interrogating him has revealed that he belongs to the militant Islamic group Lashkar-e-Taiba which obviously meant to insinuate Pakistan’s involvement & stir anti-Pakistan Muslim sentiments though all the time aware that there is a large Muslim vote base that none of the politicos wish to disturb too much. The Pakistan Government has denied any links to the Mumbai attacks and has even asked India to investigate the possibilities of the men being from South India and having ties to the LTTE terrorists.

With elections in India drawing near the anti-terrorism drives will usher similar sentiments of the US 9/11 which took place at a time when George Bush’s popularity was at an all time low. The 9/11 incident created a rebound and Bush ended up the Messiah for the US public with his “war on terror” slogan. Now evidence keeps surfacing that the Bush administration was well aware of an attack in 2001 some even claiming US staged 9/11 to strategically base itself in the Middle East & take over its oil reserves & build up a pro-western culture base. Similarly, India is now seeing to follow a similar path though the Indian publics have elevated themselves and refuse to be befooled again. They are now demanding more accountability from their politicians.

More than “who” actually attacked Mumbai the critical question any Indian should ask is “why”? Politicians will eagerly attempt to run after the “who” ignoring the “why” for answering the “why” would lead to many skeletons being revealed in their closets which have been hidden from the public.

We all understand the power of the Indian media – apart from their desire to “be the first to report” they do a very commendable job. The manner in which they covered the Mumbai siege needs commendation for they kept most of the footage disclosed not wishing to jeopardize the NSG operation. They voiced the sentiments of the public but did not overdo nor attempted to take any political side – this is a far cry from the journalistic or media coverage happening in Sri Lanka. The open praise and salutes of gratitude to the men in uniform repeatedly over media gave Indians a sense of pride in them and was important to hold sentiments of unification. In Sri Lanka we often find the media those opposing the Government ever ready to sensationalize stories even fabricate and very few channels actually have a good word to say about the agonies that the Sri Lankan men in uniform go through in their bid to rid terrorism from Sri Lanka.

The moment the news of the gunmen signaling out US and British passport holders broke out it guaranteed US and British media attention, the takeover of the Nariman House gave the message that the gunmen were anti-Israeli – this was obviously what the gunmen wanted. We are well aware that terrorists enjoy media coverage just as much as the media gains from such coverage.

What we need to remember is that it is not important whether the gunmen were Al Qaeda or a franchise – what can be deduced by the deaths is that age, religion, caste or creed did not matter when the gunmen began their shooting spree. They were purely trained to kill indiscriminately – that is why we call them terrorists. What is the point in referring to them as “suspected” – if they hold a gun and they shoot randomly they are nothing but terrorists. It is timely to go back 10 months when more than 200 people were killed throughout India, but Mumbai’s attack was by far different and more dramatic – it lasted almost 4 days and must surely provide inspiration for even homegrown terrorists to try similar soft targets.

It is for India to pick the forest from the trees. Whether it is the Deccan Mujahideen, the ISI, the Al Qaeda or the Lashkar-e-Taiba or even a complete outsider is secondary what is important to know is that the arms industries, the men who build up hatred amongst youth enough to maim & kill belong to transnational networks. No one in the end is a member of any entity – India must not look for the symptoms but the cause.

There are essentially two threats to global security (national and international) transnational crime & terrorist activity both are not to be taken separately but having close links and ties to one another though transnational criminals are only interested in making money while terrorists desire to make money to support their political and ideological objectives. It is easy to comprehend how terrorists involve themselves in organized crime to financially bolster their appearance and visibility. Both entities operate in areas with weak enforcement of laws, use sophisticated technology and launder money. Southern Philippines, Parts of Indonesia, Russian Far East, and Golden Triangle & Sri Lanka become some of these networks for transnational crime & terrorist activity.

We are all aware that an increasing share of the world economy is attributed to illicit activity such as drugs, human trafficking, small arms sales, illicit transport of natural resource and piracy. Terrorism and narcotics become linked when we consider Colombia’s FARC, the KLA in Kosovo, Taliban & Al Qaeda in Afghanistan and the LTTE in Sri Lanka. These illegitimate dealings however are artfully combined with legitimate fund making drives in the form of charity organizations which are used in large measures to deposit funds.

These groups operate on a network structure that becomes impossible to locate or identify the leaders. Thus the transnational scope with which they function enables them to unite individuals from across the globe at any given time. Such criminal activity is likely to provide a defining problem as the 21st century progresses leaving economic discrepancies between developing & developed countries, weak states that terrorist groups operate to make good of these discrepancies & transform issues into political uprisings.

Countries that join the war on terrorism cannot set aside the links to transnational crime and a cohesive operation across borders and nations is called for leaving aside petty differences between leaderships. India being the larger of the South Asian nations need to assess how it functions within the SAARC region, accept its follies vis a vis destabling operations carried out in practically all of the nations that make up the SAARC.

India need not be reminded of its illicit maneuverings in Sri Lanka amd training supporting LTTE terrorism through Tamil Nadu and other regional terrorist groups though one of India’s leaders eventually became assassinated by the LTTE terrorism which turned the tables on its master. India’s public many of whom must be clueless about how far the Indian Governments have assisted terrorism in Sri Lanka may be shocked to learn the truth. Furthermore, despite the 2008 Global Hunger Index revealing that 200million Indians suffer from hunger, India sends tons of food to Sri Lanka’s North even though the Sri Lankan Government repeatedly insists it has sufficient quantities in stock for 3 months to look after the IDPs.

What right does the Tamil Nadu politicos have to demand that India’s Central Government should force the sovereign Government of Sri Lanka to stop its army from eliminating LTTE terrorism?

Does the Indian public not know how much pressure India’s Central Government exerts upon Sri Lanka’s Government even to force a sovereign nation to buy weapons only from India? Does the Indian public not wonder why India’s Central Government is indirectly supporting the LTTE by allowing the Tamil Nadu politicos to unite with the LTTE which wants to secure a separate state for the Tamil people not realizing that this bid is a larger ploy to annexing the Eelam with Tamil Nadu and eventually creating a bigger Tamil State – is the Indian people party to all of this manipulation. The Indian Central Government wishes to have its public focused on terrorism linking it to traditional arch rival Pakistan – this self-serving approach will only create more misery for the Indian public who will bear the brunt of terror strikes since politicos are guarded to the teeth with security.

Obviously the Indian public is clueless of what the Indian Government does in the region – it is such insincere operations, manipulations, covert operations, intelligence faux pax that has today backfired to create a nemesis upon the Indian public.

The Indian public is today going to pay for the sins of their successive Governments and pinning the blame on “elements” is unlikely to solve whats likely to be in store for India. The 26/11 Mumbai terror ended in 4 days, India may have to face more sieges unless the Indian people who have shown great courage in not allowing communalism to brew but have rightly diverted their anger towards the real culprits – the politicians. Their guilt is evident by the manner in which none have entered Mumbai. It is time for the Indian public to take democracy into their own hands & demand that manipulative politics in a region that should remain united largely on account of the historical & cultural ties that exist between the neighbors should be fostered & not festered. Enough is Enough.

Indian public – we urge you not to allow your Governments to bring down our region and create the anarchy that exists in Africa and parts of the Middle East.

- Asian Tribune -

http://www.asiantribune.com/?q=node/14521

ECB cuts the refi rate to 2,5 percent. US jobless benefit rolls reach four million, oil falls to $44.

id="desc">Forex, Stocks, Bonds, Credit Crisis…

For those who still have some money

Is there anything in your pockets beyond the air?

 

Brazilian Stock Exchange has just created three new products for investors. They are the so-called the “Exchange Traded Funds” (ETF). Four years ago, they had lauched the first one, the PIBB (ticker PIBB11), a bond which replies the composition of the IBX Index (55 most traded paper). It is a simple way of diversiying investments in the stock exchange. I had some of them (before my mortgage, naturally). And it made me very happy - I earned 70% in one year. Naturally, it was anooooother time… Now the new indexes are iShare Ibovespa (BOVA11, replying Ibovespa), iShare Small Caps (SMAL11, which replies a small caps index) and iShareBM&FIbovespa MidLarge Cap (MILA11, which joins an index that reaches companies which represent 85% of the stock exchange’s marketcap).

Now look how products like that mitigates the risk of the stock markets. Today, when Petrobras and Vale lost almost 3%, their performance were:

PIBB11 - -0.39%

SMAL11 - +.22%

MILA11 - 0

BOVA11 - +1.1%

Main Index (Ibovespa) - -0.48%

Not so bad….

Roger Biduk - Lower Prices on Wall Street

Roger Biduk writes:

   U.S. stocks swung lower Thursday afternoon as auto executives pled for federal aid and in the aftermath of mostly dismal retail sales results and layoffs from corporate giants including AT&T Inc. and DuPont Co. Friday’s looming employment report for November also helped keep a lid on an earlier detour into positive terrain.

“The market is likely to get a little skittish today ahead of tomorrow’s employment report,” said Marc Pado, U.S. equity strategist at Cantor Fitzgerald.

12/4/08

 

India shares up 5.5 pct on rate cut, stimulus hopes - Reuters

India shares up 5.5 pct on rate cut, stimulus hopes - Reuters
MUMBAI, Dec 4 (Reuters) - India’s main stock index rose 5.5 percent on Thursday to its highest close in more than two weeks as expectations for an interest rate cut received a boost from slower-than-expected rise in inflation. Banks, automobiles and

Islands’ Top Tables: Take Two - San Francisco Gate
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On World AIDS Day, Russell Simmons and Special Guests Attended - Yahoo Finance
NEW YORK, Dec. 4 /PRNewswire/ — The Diamond Empowerment Fund (D.E.F.), Hearst Magazines, and A Diamond is Forever banded together to host the exclusive “Empowerment for Africa” dinner held at Hearst Tower in Manhattan Monday evening in recognition

OBAMA BITS: Bill Richardson chosen as commerce secretary; no pricey - EURweb
*President-elect Barack Obama officially announced New Mexico Gov. Bill Richardson as his commerce secretary Wednesday, naming a prominent Hispanic to his new Cabinet and calling him a leading “economic diplomat for America” in troubled times. At a

Kerr jewellery beats sale estimates - yorkshirepost
Jewellery once belonging to the late Hollywood actress Deborah Kerr has fetched far higher prices than expected at a sale. The biggest surprise at the Bonhams auction was her three-stone diamond engagement ring from her first marriage which fetched

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Afghanistan: A Profile of the Army and Police

Before the 2001 US invasion, while the Taliban still controlled most of the country, Afghans were the world’s largest refugee population with 3.6 million living outside the country and a further 800,000 internally displaced (1). During the latest war, United Nations agencies expected an additional 1.5 million refugees to flee the country once the US attack began. At the time, some 3 million people were already dependent on the UN’s World Food Programme for food (2). The UN estimates that the current national population is about 24 million, including some 4 million refugees that have returned between 2002-2008 (3). The country remains volatile, with mass migration of millions of people outside and inside of its borders.

The disintegration of an economy that could sustain healthy life, in great part caused by the decades-long insecurity and mass violence stalking Afghanistan, is evident in the fact that a quarter of all children in 2004 died before they reached the age of five (4).

Foreign armies, national armies, private armies, and militias have struggled to bring order to their region of Afghanistan or the country as whole. The ongoing conflict between these groups has left a wake of destruction that has thrown the country into extreme poverty. Afghanistan ranks 172 out of 178 countries in the UN Development Programme’s Human Development Index. (5)

Disease, extreme malnutrition, poverty, and destitution gnaw at the country’s bones.

It’s not surprising then that security from conflict should be a cornerstone of any plan to develop a stable society that can sustain at least an adequate level of human security. The new Afghan National Army and the Afghan National Police are therefore in the spotlight as key actors in the outcome of the country’s future.

Afghan National Army

The Afghan National Army (ANA) was created in 1 December, 2002, by presidential decree under Hamid Karzai. It became active in 2003 and was guided by the Bonn agreement’s Security Sector Reform.

The army is intended to be composed of mainly active soldiers at 50%, 25% logistical support, and 25% trainers, recruiters and others. The goal was to achieve a 70,000 strong troop size by the end of 2008. In October of 2007 the ANA had reached 55,000 (7) personnel, and 66,000 by mid 2008 (8). The army recruits an average of 2,000 new members per month.

The ANA battalions are composed of 700-800 soldiers, with supporting commissioned and non-commissioned officers. It is mainly composed of light infantry, one mechanized brigade, a commando brigade and an air corps. The light infantry brigades are also equipped with mortars and tow artillery. The air corps has access to Soviet-era airplanes and are trained mainly for “presidential airlift, medical and casualty evacuation, reconnaissance and airborne command and control, and light air attack.” (9)

The ANA falls under the auspice of the Ministry of Defence and is divided under five regional commands: Kabul, Kandahar, Gardez, Herat, and Mazar-i-Sharif.

The ANA personnel are trained by US-led Coalition Forces (CF) and the mainly NATO based International Security Assistance Force (ISAF), with Afghan leads and translators. These trainers and advisers are embedded throughout the command structure of the ANA: in the headquarters, regional commands, and within each battalion.

New recruits undergo 12 weeks of courses at the Kabul Military Training Centre, while commandos must train for a total of 16 weeks. Following this there is 3 weeks of field training in the region that new recruits will be see action. Field training is provided by foreign forces. ANA recruits sign onto a 3 year contract, which can be renewed to a maximum of 20 years.

Under agreement, the US has lead in training and equipping the ANA.

The ANA, as a volunteers army, was designed to replace the ad-hoc Afghan Military Forces (AMF) that was composed of a loose coalition of militias fighting the Taliban, mainly consisting of the Northern Alliance. The AMF was officially disbanded under the Disarmament, Demobilisation, and Reintegration process (DDR). Only 2.3% of the AMF joined the ANA. (10)

On 10 September, 2008, The US Department of State officially supported the Joint Coordination Monitoring Board and the Afghan government’s plan to expand the ANA to 134,000 personnel (11). This follows US Secretary of Defense Robert Gates’ August proposition to increase the size of the ANA to 122,000 plus 13,000 support staff. (12, 13)

Barnett R. Rubin, and Ahmed Rashid, two experts on contemporary Afghanistan, have co-authored an article on the current situation stating that:

Current estimates of the annual cost are around $2.5 billion for the army and $1 billion for the police. Last year, the Afghan government collected about 7 percent of a licit GDP estimated at $9.6 billion in revenue — about $670 million. Thus, even if Afghanistan’s economy experienced uninterrupted real growth of 9 percent per year, and if revenue extraction nearly doubled, to 12 percent (both unrealistic forecasts), in ten years the total domestic revenue of the Afghan government would be about $2.5 billion a year. Projected pipelines and mines might add $500 million toward the end of this period. In short, the army and the police alone would cost significantly more than Afghanistan’s total revenue.

…Sustaining a national army or national police force requires multiyear planning, impossible without a recurrent appropriation — which would mean integrating ANSF planning into that of the United States’ and other NATO members’ budgets.

…And an ANSF [Afghan National Security Forces, composing the army and national police] funded from those budgets would have to meet international or other national, rather than Afghan, legal requirements. Decisions on funding would be taken by the U.S. Congress and other foreign bodies, not the Afghan National Assembly. The ANSF would take actions that foreign taxpayers might be reluctant to fund. Such long-term international involvement is simply not tenable. (14)

Currently, not a single battalion of the ANA operates independently of foreign supervision. Foreign advisers and trainers were supposed to be embedded in the battalions for only 2 years. Antonio Giustozzi claims that “the ANA has grown dependent on close air support, administered through the embedded training teams.”

He also writes that:

The fighting tactics that ANA officers have been learning from their trainers are largely based on American tactics; the infantry’s main task is to force the enemy to reveal itself, allowing the air force to wipe it out with air strikes. There is little evidence that ANA units would be able to control the battlefield without such air support, or that they are learning the necessary skills.

…Another dubious aspect of Afghanization is the limited logistical capabilities of the ANA. Although its logistical units are now being developed, the ANA’s difficulties in recruiting skilled staff casts some doubts about the future efficiency of its logistics once the foreign contingents hand over these responsibilities to the ANA.

… Tajiks are still overrepresented, particularly in the officer corps. According to one estimate, 70% of the battalion commanders are Tajiks. (15)

At some point, Afghanistan’s government will have to downsize the ANA since it cannot independently afford to maintain such a large force. If not handled carefully, it could result in a large number of battle veterans suddenly thrown into unemployment, disgruntled, and possibly still living in a situation where economic hardship limits employment options while the country may well still be facing conflict in the face of Taliban and other militant groups.

Afghanistan National Police

The ANP’s authorized personnel was increased to 82,000 by the Joint Coordinating and Monitoring Board in April 2007. Prior to this it was set at 62,000 under the 2006 Afghanistan Compact.

In January of 2007, the Ministry of Interior tallied the total ANP size at 59,658, with fewer than 200 women employed. The ANP is governed under the 2005 Police Law and the 2005 Interim Criminal Procedure Code, mainly based on Article 56, 75(3), and 134 of the constitution. (17)

The ANP regional command structure mirrors that of the ANP and is composed of the following: Kabul, Kandahar, Gardez, Herat, and Mazar-i-Sharif.

The ANP is supported by 25 donors. Germany was the key country in charge of managing training and equipping of the force, until leadership was handed over to the European Union. The United Nations Development Programme (UNDP) managed Law and Order Trust Fund for Afghanistan has been primarily responsible for coordinating donor support for ANP salaries.

There are reports of disunity among donors in how to approach police reform and they have often pursued independent plans. Coordination has been slow in coming.

Afghan National Auxiliary Police

In 2006 the Afghan National Auxiliary Police (ANAP) was set up to support counter-insurgency in certain parts of the country. Distinct from ANP, the auxiliary police is slated as a temporary measure to face the increasing militant resistance throughout Afghanistan, especially in the south and east due to neo-Taliban uprisings.

The ANAP is a static force, with personnel assigned to a given region in order to support ANP activity there. It was created to cover 24 provinces and 124 districts. It has an authorized strength of 11,271. Recruits receive minimal training, serve for a year then can join the ANP if they qualify. By April 2007, 5,461 ANAP personnel were active in Afghanistan’s 6 priority provinces, where insecurity was worse and Taliban activity highest. No women have been recruited.

ANAP recruits receive only 5 days of classroom training, 5 days of range firing, and one week of additional training for each quarter in their year of service. They may serve for a second year with the approval of a district or provincial police chief.

ANAP police receive the same salary as ANP uniformed police and are issued an assault rifle. They also receive a standard ANP uniform with an ANAP patch.

If accepted into the ANP, they would need to through standard ANP training for 8 weeks.

Some critics accuse the regular and auxiliary police of turning into a paramilitary force focused on counter-insurgency, to the detriment of regular police work. Additionally the hasty recruiting practices for ANAP may have resulted in their being infiltrated by militants.

Afghanistan New Beginnings Program

This UNDP sponsored program was intended to eliminate or at least greatly reduce independent and illegal militant forces in order to give the ANA and ANP a monopoly on military and police force as a measure to reduce destabilizing forces on the central government.

The Afghanistan New Beginnings Program (ANBP) was established in April 2003. Its first priority was to implement the Disarmament, Demobilisation, and Reintegration (DDR) project. Under this project the Afghanistan Military Forces (AMF), composed mainly of Northern Alliance militants, was to surrender their weapons and disband. In return they would receive a medal, a certificate, and reintegration packages.

The packages include vocational training, agricultural training, and small business opportunities. (19)

The DDR was concluded in June 2006. The original goal was to reintegrate 100,000 men. In June 2006, 63,380 AMF officers and soldiers were counted as disarmed. Of these, 2.3% joined the Afghan National Army.

The second priority of the ANBP was the Disbandment of Illegal Armed Groups (DIAG). DIAG’s aim was to demobilize an estimated 100,000 illegal militia fighters that were not included in the AMF. While the DDR was a voluntary process, DIAG was compulsory. This program was slated to conclude in March 2008. The spread of Taliban influence and the rise in violence do not bode well for the success of the DIAG project.

Related: Maps of Afghanistan: Demographics, Violence, and Economics

Sources

Tax indecision worries investors

– Investors have become cautions with trading, as the income tax on securities trading is still up in the air.

This caution showed up in trading volume figures on Dec. 3, which stood at moderate 8.19 million shares, generating a turnover of 228.26 billion VND (13.58 million USD).

Only STB of Sacombank saw 1.4 million shares change hands, topping the market in trade volume. Other heavily-trade codes including SJS of Song Da Urban-IZ Investment and Development, SSI of Saigon Securities Inc, or VFMVF1 of Vietnam Investment Fund saw under 500,000 shares each.

“ There has been no final decision from the Assembly on delaying the personal income tax, including the tax on securities investment. It’s natural that we would be cautious with securities trading,” said veteran investor Dao Kieu Anh in Hanoi who has been trading since 2004.

This caution also restrained the purchase of blue chips, helping some big stocks rebound slightly on Dec. 3. Although this did not help keep the VN-Index from falling, it did soften the blow.

At closing, VN-Index was down just 0.40 percent to 306.22 points.

“ Helping the slight reduction of the VN-Index was the slight rebound of some blue chips, , including VNM of dairy producer Vinamilk, PVF of the financial institution PetroVietnam Finance, and HPG of plastic producer Hoa Phat Group.

Overseas clients also reduced their trading on the local exchange, buying just 901,925 million shares and selling 1.56 million.

According to recent data from the Vietnam Securities Depository Centre, the local exchange in November welcomed 90 new foreigners, which meant it was somewhat promising for overseas clients in the context of the global crisis.

Looking north to the Hanoi Securities Trading Centre, the HASSTC-Index rebounded on Dec. 3 to 104.16, a slight increase of 0.66 percent. The market’s trading volume rose to 6.27 million shares worth 158.73 billion VND (9.45 million USD) from 5.05 million on Dec. 2. According to brokers at An Binh Securities, the wider trading band of 7 percent helped the index gain slightly as investors attempted to bring it above the 100-point mark.-

Indian Stock Recommendation Foreign currency trading courses

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Read the Full Denunciate Nikkei plunges 3.6% morning Tokyo Nikkei index fell 3.6 percent to a four-year low, on doubts about the health of the global economy will slip into recession has persuaded yen into Tokyo money market for the connecticut department banking 14th business currency day of emergency operations in a further effort to facilitate interbank borrowing amid the financial market meltdown. Gardy the Full Article BOJ injects 1 tri. Richy the Full Article Iceland moves to shore up economy Iceland trade unions are being asked division banking to restore their foreign-invested pension funds, in the wake of a financial crisis that has seen the country third-largest bank nationalised, the firearm companies that finance country credit rating downgraded, and the country currency the Krona losing a fifth of its value against the dollar by Friday. Financial Crises Spread in Europe European nations scrambled on night to prevent a growing credit crisis from bringing down major banks as troubles in financial markets spread around the world, accelerating economic downturns on three continents.

The Noble Ostrich and Other Investment Myths

While sophisticated bankers and their wealthiest clients continue to take a pass on investments with even the slightest hint of risk, it seems strange that many investment advisers continue to sing the same soothing lullaby to individual investors:  “No need to panic, remember, you’re investing for the long run.  And that is what stocks are for!  If you get out now, you will miss the ups as well as the downs.”

Now I am certainly not advising you to panic (in fact, I am not advising you at all, because I am a mere finance professor, not a certified investment advisor).  But it does seem like a good time to revisit what we know (and don’t know) about personal investments and asset allocation, and to try to reassure you that there is no dishonor in prudence.

There is no formula that can tell you the right way to allocate your savings. There is a risk-return tradeoff.  Investing in risky securities, like stocks, increases your expected returns, but at the cost of higher risk exposure.  Advice like, “put a percentage of your savings equal to 100 minus your age into the stock market” are marketing prescriptions that are absent from the pages of reputable finance texts.

Where you draw the line on risk and return is a personal choice.  And you can change your mind.  It is not your patriotic duty to invest in the stock market, and it does not make you a fool not to. I cringed the other day listening to Terry Savage, a well-respected investment adviser and national commentator, talking about how everyone needs some “chicken money.” While acknowledging that safe investments help investors sleep better at night and might even be useful beyond that, she not so subtly uses this pejorative to generically mock conservative investment strategies.  Well, all I can say is “pluck.”

Market volatility varies over time. Right now it is extraordinarily high.  Presumably prices have adjusted to reward investors for bearing this volatility.  In other words, part of the fall in stock prices can be seen as compensation for the increased risk, and a sign of higher expected returns going forward.  But we all have to decide whether the collective view of risk and return that is reflected in current prices makes personal sense.  If you have a stomach for volatility, this may look like an attractive buying opportunity and it may be a good time to increase your allocation to stocks.  If roller coasters are not your thing, a move to a more conservative asset allocation may be in order.

Stock prices are not mean-reverting. The catch-phrase “stocks are for the long run” unfortunately seems to suggest that if stock prices drop, it doesn’t really matter because they will catch back up.  That is not what the statistics of stock returns imply. As a first approximation, stock prices are best described as a random walk with positive drift.  When a stock’s price falls, that is its new and permanently lower starting point.  Over time returns will be positive on average, but there is no force that erases past loses.

Also, the long-run can be very long indeed.  Today the Dow Jones is back to where it was almost a decade ago, in the spring of 1999.  Had you put $100 in stocks, you’d have $100 today.  Had you put it in a “chicken money” bank account earning 2% after inflation, you’d have about $120.  And I have been wondering, when did commentators start confusing bank accounts with mattresses?

Asset allocation is reversible. It is true that if you pull back from the market you lose the opportunity for gains as well as losses.  Moving to a more conservative asset allocation is a way to avoid risk, and there is no telling if by so doing you also avoid the next big run-up.  If you do decide to back off, it is better to think of it as a time out than as a permanent retreat.  Remember that if you exchange $1 of stocks for $1 of bonds, what you have in either case is a dollar of value today.

Diversification is critical for reducing risk, but it does not eliminate it. You can avoid a lot of risk by holding a diversified portfolio of risky assets, rather than individual stocks.  Investing in funds like Vanguard’s 500 Index allow you to get broad stock market exposure while incurring low transaction costs, even with a relatively small investment.

Once you get rid of the risk of individual stocks, lots of risk remains.  Unfortunately, a quick glance at the markets in the last few months confirms this fact.

A final thought on investing and the greater good. I expect to get some major pushback for having written this, if for no other reason than that if everyone sits on their money and reduces their investments in stocks, a decline in market prices becomes a self-fulfilling prophecy.  While I agree that the world would be a happier place if everyone settled down and resumed investing as usual, I don’t think the common investor should have to bear the burden of being the first to make it happen.

The Perfect Storm

Give me a break

Daniel Solin over at BloggingStocks posted this. When I read it I had to check the date. I was sure it must have been a blog post from a year ago. Nope. Yesterday. Broadly Daniel’s message is the old ‘efficient markets hypothesis’ yarn:

All information about listed companies is public. It is widely and instantly disseminated. This information is studied by millions of investors, who establish the price of a given stock based on this data. Many of those looking at this data are professional analysts. They are well trained in finance and have access to powerful computer programs that assist them in crunching the numbers.

I’m not sure where to start with this, but here goes. 

a. “All information about listed companies is public”. The last statement I heard from the Lehman Brothers chairman was along the lines of “this company does not have a liquidity issue”. Three days later the company was history. As Andrew Horowitz noted in his recent podcast - Citibank CEO Vikrim Pandit “told us there was a $50bn problem, and we woke up to a $300bn problem”. Clearly not all information about listed companies in public. Therefore the foundation upon which the efficient markets hypothesis rests is far from solid. 

b. Don’t even get me started on the “they are professional analysts, they are well trained in finance, they have access to powerful computer programs”. As Mr Buffett put it in his own straightforward manner - “beware of geeks with spreadsheets”. The trading chick is “of the city”. The trading chicks knows the “professional analysts, well trained in finance, with their fancy computer programs.” Many of them are totally clueless. Ladies and gentlemen I give you mortgage securitisation. I give you the rating agency analysts. I give you the monolines. Give me a break. 

c. They use all this “insight” to apparently “establish the price”. The trading chick feels like Mr Solin is telling her not to “worry her pretty little head”. 

Mr Solin goes on to explain how to get rich in America:

Rich people go for the sure thing. They try to minimize risk and capture market returns using diversified portfolios or, better yet, broad-based, low-cost index funds. Over $4 trillion of the most sophisticated pension and trust money is invested this way.

Over $4 trillion of very pissed off money is invested in this way. Money that has been fed a yarn for too long that they should ‘buy and hold’. That equities will ‘outperform in the long run’. Try telling that to somebody who has worked hard all their life, believed the story, saved and invested, bought and held, and is now sucking wind and staring down a retirement that looks a lot different than they imagined. 

When you dig a little into Mr Solin’s background you learn that he is Senior Vice President of Index Funds Advisors. He is, therefore, paid to believe this stuff and has clearly built a career around this story. But like many financial advisors out there, he seems to be somewhat of a one trick pony. And all I hear is the sound of barn doors flapping in the wind. Mr Solin and his brothers in arms need to wake up to what’s going on right now. Like Finbar Taggit has.

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Vladimir Putin blames America for world economic crisis

Vladimir Putin, the Russian Prime Minister, said yesterday that the irresponsibility of America’s financial system was to blame for the global economic crisis, in what marks the latest episode in increasingly hostile relations between the two superpowers.

Russia has been one of the biggest victims of this summer’s global banking crisis. Since May, the RTS, Moscow’s main index of shares, has lost 50 per cent of its value and in September the Kremlin was forced to pump $60 billion into its financial system as credit markets froze.

Mr Putin said: “Everything happening now in the economic and financial sphere began in the United States. This is not the irresponsibility of specific individuals but the irresponsibility of the system that claims leadership.”

Hinting at this week’s rejection of Washington’s $700 billion bailout package to rescue Wall Street, Mr Putin added: “The saddest thing is that we are seeing an inability to take an adequate decision.”

Wild swings across Moscow’s stock market and increasing evidence of stress in the Russian banking system led Mr Putin yesterday to call on ministers to find ways of strengthening the country’s money markets, which are used by banks to fund their short-term lending positions.

Mr Putin also urged ministers to create a “modern credit-finance system” that depends more on Russia’s own resources and has “a strong immunity to global financial viruses”.

Mr Putin also gave warning that the country’s substantial cash pile built up during the past two years of soaring oil prices would not be a fat enough cushion to protect the Russian economy from the global financial crisis.

His comments came as capital markets across the world waited for the US Congress to vote on a new bailout scheme for Wall Street. It is hoped that the rescue scheme will draw to a close a period of unprecedented uncertainty about the future of America’s financial institutions.

Henry Paulson, the US Treasury Secretary, has already given warning that failure to force through a rescue programme would trigger a financial meltdown in America, the world’s largest economy.

However, while Moscow blamed America for the global banking crisis, some analysts have pointed out that this summer’s invasion of Georgia by Russia exacerbated anxieties across international capital markets.

They have argued that investors pulling their money out of Russia added to instability in the financial world. The Russian economy has also been hit by the slide in commodity prices. Before the vote in Washington, the Russian stock market closed down almost 2 per cent.

Central Banking: December 5, 2008 Masaaki Shirakawa, Governor of the Bank of Japan Remarks, at a special meeting hosted by the Kyushu Association of Corporate Executives, Fukuoka, December 1, 2008

Release here.

Introduction

I am honored to be invited to speak at the special meeting hosted by the Kyushu Association of Corporate Executives. I have a close relationship with the Kyushu region because I lived in Kokura, my home town, until I graduated from high school, and also worked as the General Manager at the Oita Branch of the Bank of Japan for one and a half years, from 1994 through 1995. Currently, 7 of the 32 branches are in the Kyushu region. I would like to express my deep gratitude for your cooperation with these branches. Today happens to be the 67th anniversary of the establishment of the Fukuoka Branch, and I am doubly delighted to have the opportunity to speak today before business leaders in the region on such a memorable day.

At present, the world economy, including Japan’s economy, faces a very difficult situation as the effects of the financial turmoil stemming from market developments in the United States and Europe have been spreading worldwide. I would first like to talk about the current situation of both of the domestic economy and overseas economies, and also the ongoing global financial crisis, and then explain the Bank’s thinking regarding the conduct of monetary policy.

I. The current situation of and outlook for Japan’s economy

Today I will speak about developments in Japan’s economy mainly from a macroeconomic perspective. Anticipating that some of you may be concerned that the Bank does not fully understand the circumstances specific to each region and each firm, I will stress that the Bank is fully aware of different circumstances by region, industry, and firm size that cannot be perceived only from a macroeconomic perspective. Such differences are reported regularly by General Managers of the Bank’s branches. In addition, I have had far more opportunities to discuss with business leaders in various regions since being appointed as the Governor of the Bank of Japan, and on these occasions I have been reminded of the differences.

In today’s speech, I will focus on the major trends in the world economy and Japan’s economy, but I would like to stress again that, when assessing economic developments, the Bank always takes into account microeconomic information such as economic developments in each region and business performance of firms.

Let me first discuss the current situation of Japan’s economy. Looking back, since the beginning of 2002 Japan’s economy has enjoyed a moderate but prolonged economic expansion. Since the middle of 2007, however, the economy has experienced a series of negative shocks, and now faces a difficult situation. The first shock came from a sharp decline in housing investment since the middle of 2007, due to the coming into force of the revised Building Standard Law. Growth in corporate profits and wages has been subdued, due to the deterioration in the terms of trade reflecting increases in energy and materials prices, and as a result growth in business fixed investment and private consumption has been slowing since around the end of 2007. The slowdown in overseas economies has become pronounced as strains in global financial markets and in the U.S. and European financial systems have intensified since this summer, and reflecting this, growth in Japan’s exports turned negative. Given these developments, economic activity in Japan has become increasingly sluggish recently. Economic data, including the index of industrial production, released at the end of last week showed severe economic circumstances.

The pace of the recent increase in the sluggishness of Japan’s economy has been rapid, and overseas economies are also undergoing a similar drastic change. The U.S. economy has deteriorated reflecting the emergence of a negative feedback loop operating between financial and economic activities as the financial crisis stemming from the subprime mortgage problem increased in severity. European economies are also deteriorating, with increased downward pressure on economic activity from the financial side. Moreover, the effects of the weakness in the U.S. and European economies have been spreading to Asian economies. China has continued to show relatively high growth, but the country’s growth in exports has recently slowed somewhat and investment related to real estate has been relatively weak against the backdrop of a fall in real estate prices. In the NIEs and the ASEAN economies, domestic demand has been weak while export growth has been decelerating, and these economies have been slowing. A slowdown in the world economy taken as a whole has become evident as the effects of the financial crises in the United States and Europe spread steadily to Asian economies.

According to the World Economic Outlook released at the beginning of last month by the International Monetary Fund (IMF), output of advanced economies is expected to contract for the first time in the post-war period; growth in emerging economies is also expected to decline from the past several years’ high growth of around 8 percent to 5-6 percent; and the growth of world output is projected to fall substantially to 2.2 percent. This is significantly lower than the world growth of around 5 percent registered for four years in the mid-2000s.

The timing of the recovery in overseas economies depends on several prerequisites for recovery, and with regard to the U.S. economy the key questions are how adjustments in the housing market will progress and when the financial system will regain stability. I must admit that the timing of the recovery in the growth rate of overseas economies as a whole is highly uncertain, but given the current severe situation it seems appropriate to assume that the growth rate of overseas economies taken as a whole is likely to show a clear recovery only after the middle of 2009.

Bearing in mind these developments in Japan’s economy, I will now move on to the factor that I regard as most important when discussing future developments in Japan’s economy and overseas economies – the impact of the ongoing financial crises in the United States and Europe on overseas economies and on Japanese financial conditions.

II. The financial crises in the United States and Europe and their impact

Delinquency rates of not only mortgage loans but commercial real estate loan and consumer loans have risen reflecting the weaker U.S. economy. Consequently, capital bases of financial institutions have been further impaired, and their lending attitudes have become even tighter. In addition, firms’ fund-raising conditions in the markets have deteriorated, as seen in the difficulty faced by firms in issuing CP and corporate bonds and the extreme rise in issuance rates. They have ultimately had an adverse impact on economic activity – the emergence of a negative feedback loop operating between financial and economic activities. Meanwhile, the Federal Reserve has lowered its target for the federal funds rate from 5.25 percent to 1.0 percent since last September. In spite of this monetary easing, the issuance rates of corporate bonds have risen compared with the level observed in the summer of 2007.

In addition, we can point out the worldwide propagation as one of the features of the current financial crises. There were some failures of major financial institutions in the United States following the bankruptcy filing of Lehman Brothers, and failures started to be seen also in Europe. Furthermore, the financial crises in the United States and Europe are starting to affect emerging economies, and the inflow of funds to these economies has decreased substantially. There are various transmission channels. For example, in recent years emerging economies in Central and Eastern Europe experienced active credit expansion by foreign financial institutions based in Western Europe but now see a decline in loans outstanding. Moreover, some emerging economies became incapable of raising funds from global financial markets and finally needed financial assistance from the IMF. Thus, unlike the past currency and financial crises in Latin America and East Asia, the ongoing financial crises in the United States and Europe propagated rapidly around the globe. The progress in the globalization of financial and economic activities since the 1990s has strengthened the financial and economic interaction between countries. And the current economic deceleration or deterioration in each country is the first global economic slowdown to take place in a period of such drastic changes in the environment. In addition, the economic growth rate has deteriorated with unusual speed. With these characteristics of worldwide propagation and unusually rapid deterioration, pessimistic views tend to propagate easily and themselves promote further deterioration in the economy.

Under these circumstances, it is necessary to understand the nature of the ongoing problem in order to consider policies necessary to address the situation. Let me first explain the swift and successive policy responses of governments and central banks. First is the provision of liquidity by central banks. Central banks have been making efforts to stabilize money markets by implementing U.S. dollar funds-supplying operations under a coordinated framework in addition to providing sufficient liquidity in their own currency. Second is placing troubled financial institutions under government control and injecting public funds. Third is the substantial expansion of the coverage of deposit insurance and the guaranteeing of financial institutions’ debts.

As a result of these measures, the situation in money markets in the United States and Europe has improved compared with the situation at the height of the tensions in those markets. However, the conditions in the money markets are far from normal, as seen in the fact that the 3-month dollar funding rate in the interbank market is around 2 percent higher than the yield on government bonds with the same maturity. Global financial markets remain under significant stress as seen in continued high credit spreads such as those on corporate bonds. Stock prices have plunged worldwide, and foreign exchange rates have continued to fluctuate widely.

Why haven’t conditions improved in spite of the swift actions taken by each country? As one of the reasons, we can point out that, given the various large excesses and imbalances accumulated in the several years up to the current global economic deceleration and deterioration, and financial crises, the process of adjustments will inevitably be deep. As I mentioned earlier, a prolonged period of worldwide high growth never witnessed before continued for several years in the mid-2000s. In addition, inflation rates declined due to an expansion of production capacity resulting from the participation of emerging economies in the global market economy, and low interest rates continued in the environment of high growth and low inflation. In the process, various excessive activities, both economic and financial, were undertaken and “excesses” were accumulated. Behind the rise of the U.S. subprime mortgage problem and the surge in crude oil and materials prices observed until this summer, there were global high growth and expansion in financial leverage. Of course, there were some voices warning about the situation. However, given that the economy was in a favorable condition, it was difficult to accept such warnings as is often the case given the nature of human beings and society.

The world economy is now undergoing a process of adjustment of various excesses that had been accumulated, to achieve more sustainable growth. Under these circumstances, it is necessary to implement appropriate macroeconomic policies while maintaining financial system stability by injecting public funds into financial institutions in order to prevent the economy from falling into a deep adjustment phase or turmoil. Although such policies have been implemented, losses incurred by financial institutions and their capital shortages tend to expand when a negative feedback loop between financial and economic activities is operating. Hence, uncertainty remains as to the final amount of losses that need to be covered and of public funds injection required. The large losses that arise from adjusting accumulated excesses can only be covered by flows of income generated by daily economic activities, and this will inevitably take time.

III. Financial conditions in Japan

Let me explain financial conditions in Japan as an extension to what I have said about the global financial system. Financial markets in Japan, which had remained stable relative to these in the United States and Europe, have also drastically changed since the bankruptcy filing of Lehman Brothers. Measured by the spreads between interbank funding rates and government bond yields, the situation in the Japanese money markets remains comparatively favorable to date, but it seems that careful analysis of the possibility that pressures acting to depress economic activity from the financial side may increase in Japan is becoming necessary.

In the conduct of monetary policy, it is extremely important but nonetheless difficult to judge how accommodative or how tight financial conditions are in a country. To make an accurate judgment of financial conditions, the Bank examines them from various angles, which may include evaluation of the level of interest rates and asset prices, quantitative monetary analysis making use of monetary aggregates and bank loans, interviews with financial institutions and non-financial firms, and various surveys. From the perspective of corporate financing, the Bank, in a manner similar to corporate management, examines the situation based on two criteria: first, at what interest rates funds can be raised; and second, how easily these funds can be raised, in other words, the availability of funds. Let me discuss the current financial conditions facing firms from those two perspectives.

First, with respect to funding rates, interest rates on bank loans remain at a low level. On the other hand, interest rates applied to funding in the market, such as issuing CP and corporate bonds, are rising reflecting growing risk aversion among investors such as investment trust companies and life insurance companies, under the influence of the turmoil in global financial markets. The issuing rates on corporate bonds have been rising especially for those with low credit ratings, and issuing rates on CP, which had been creeping up since the summer, have risen rapidly since September. Although the level of these interest rates is somewhat lower than in 1998 and 1999 when corporate financing experienced a period of increased pressures, the so-called credit crunch, the pace at which these rates are rising is comparable to that in 1998 and 1999.

In addition, when evaluating the level of funding rates, comparing them with corporate profitability becomes important. In Japan, the ratio of funding in the market to bank borrowings is approximately one to four, giving bank borrowings the dominant share. Because of this, even with the current sharp rise in issuing rates on CP, funding rates as a whole remain broadly unchanged and remain very low relative to firms’ profitability. On the other hand, in 1998 and 1999, funding rates were nearly at the same level as profitability due to the sharp decline in the latter. From these points, it is clear that the current level of funding rates itself is still accommodative. Nevertheless, corporate profits are under strong pressure due to the effects of earlier increases in energy and materials prices and the increased sluggishness in economic activity, which have led to a decline in profitability. This seems to indicate that the level of funding rates relative to profitability is becoming less accommodative.

Second, with respect to the quantitative side, the availability of funds is showing marked changes. With regard to funding in the market, the rate of increase in the amount outstanding of CP issued, which had been around 10 percent year on year since 2007 until the failure of Lehman Brothers, declined sharply thereafter owing to growing risk aversion among investors, and has recently fallen below the previous year’s level. Furthermore, the postponement of corporate bonds issuance, which had been limited to firms with low credit ratings, is spreading to firms with high credit ratings, which in the past had been able to issue bonds without difficulty.

Under these circumstances, it seems that firms’ attitudes are becoming increasingly defensive against the backdrop of the deceleration in global economic growth and the turmoil in financial markets as well as increased future uncertainty, and this is leading to a growing number of firms hoarding liquidity. Meanwhile, the rate of increase in the amount outstanding of bank loans is rising on the whole, particularly loans to large firms. However, the number of firms reporting tight lending attitudes of banks have been increasing, particularly among firms in the construction and real estate industries and small firms.

To sum up, financial conditions in Japan seem to have become less accommodative at an accelerating pace, particularly in terms of availability of funds, reflecting the turmoil in global financial markets.

Although future conditions for funding depend on various factors, among them the level of bank capital and conditions in global financial markets are important. Currently, the capital ratios of banks, in general, are considerably above the level required by regulation. However, banks, when actually making loans, consider not only their capital ratios at the time but also various other factors such as expected future credit costs. Recently, given the declines in stock prices, the market risk of stock holdings is having an impact on bank capital, in addition to increased credit costs incurred by banks due to the increase in bankruptcies. Although at present the rate of increase in the amount outstanding of bank loans is rising, banks’ lending attitudes will tend to become more cautious if they are not confident about the level of their capital bases. Furthermore, if the turmoil in global financial markets should intensify, there is a risk that funding in the market might become more difficult as a result of increased risk aversion among investors. Although the decrease in issuance of CP and corporate bonds, as a whole, is covered by the increase in bank loans as shown in the data up to the most recent figure for October, the Bank will monitor future developments carefully.

IV. The conduct of monetary policy

So far I have explained the present situation of and the outlook for the world economy and Japan’s economy. With regard to Japan’s economy, the increased sluggishness in economic activity is likely to persist for the next several quarters and, going forward, attention needs to be paid to the downside risks to economic activity arising from developments in the financial crises in the United States and Europe and their influence as well as financial conditions in Japan. Turning to prices, upside risks have decreased compared with the past, and there is a possibility that the inflation rate will decline further if downside risks to economic activity materialize or commodity prices fall further.

Based on these assessments, the Bank, at the Monetary Policy Meeting held on October 31, reduced the policy interest rate by 20 basis points to 0.3 percent. With regard to the conduct of monetary policy, the Bank, given the increased uncertainty, will carefully assess the future outlook for economic activity and prices, closely considering the likelihood of its projections as well as factors posing upside or downside risks, and will implement monetary policy appropriately. For the time being, it is particularly important to pay attention to the downside risks to economic activity that may arise from developments in the U.S. and European financial systems and in global financial markets as well as their influence.

To produce maximal monetary easing effects, it is a necessary precondition that markets function in a stable and smooth manner. When this condition is not met, as the recent situation in the United States shows, the actual funding rates may rise notwithstanding the substantial reduction in policy interest rates. From this standpoint, the Bank has undertaken various measures. The first aim of these measures is to ensure stability in money markets through provision of liquidity. The Bank has not only been providing sufficient funds in yen, but also been providing dollar funds, based on the internationally coordinated framework, with no limitation on the amount as long as they are within the value of collateral submitted.

The second aim is to facilitate corporate financing. As I mentioned earlier, financial conditions are currently becoming less accommodative mainly in terms of funds availability, and the risk that the effects of the current low interest rates may not permeate through the economy is increasing. The Bank has already been conducting purchases of CP under repurchase agreements, and to facilitate corporate financing, the Bank has started to increase such purchases since October, and further increased them since November. Furthermore, the Bank is currently working on practical ways to contribute as a central bank to facilitate corporate financing during the run-up to the calendar and fiscal year-ends. The Bank will decide what measures to employ and put into action as soon as this work is completed.

Various efforts by parties concerned are essential to address the current severe economic conditions, and the Bank will continue to do its utmost to facilitate the return of Japan’s economy to a sustainable growth path with price stability. Although what actual policies are desirable depends ultimately on the situation in terms of economic activity, prices, and financial conditions at the time, the Bank will take appropriate measures in light of its purpose stated in the Bank of Japan Act, that is, to ensure stability in prices and the financial system.

Closing remarks

In closing, I would like to touch upon economic developments in the Kyushu region and discuss Asian economies that have close relations with this region.

There have been dynamic changes in the structure of the economy in the Kyushu region, making the most of its geographical advantage of being the closest to Asian economies. Japan’s exports to Asian economies, for example, have increased around twofold during the last 10 years, whereas exports from the Kyushu region increased around threefold. Growth in exports of Japan’s major products, such as electrical machinery and automobiles, is substantially higher in the Kyushu region relative to Japan as a whole. As a result, the share of secondary industries, such as those producing electrical machinery and automobiles, in the Kyushu region is increasing – the region is sometimes referred to as “Car Island” or “Silicon Island” – and the region is becoming a hub for Asian trade.

The Kyushu region is now making the most of being the closest to Asia, which has the fastest growing economies in the world. Assessing the growth potential of Asian economies, therefore, is important, but there are differing views on this and, ever since the 1990s, there have been various arguments. For example, the World Bank, in a book titled “The Asian Miracle: Economic Growth and Public Policy” published in 1993, stated that Asian economies had entered an autonomous growth cycle induced by direct investment. On the other hand, Paul Krugman, this year’s Nobel laureate, stated in a 1994 article titled “The Myth of Asia’s Miracle” that Asian growth was merely driven by extraordinary growth in inputs of resources like labor and capital, and Asian “tigers” were more like “paper tigers” because their growth was not accompanied by gains in productivity. More recently, there has been discussion as to whether the so-called “decoupling,” whereby emerging economies will continue their high growth despite the slowdown in advanced economies, or “coupling,” where emerging economies will be influenced by the slowdown in advanced economies, applies to the current state of the world economy.

Recent developments indicate that Asian economies are decelerating due to the deterioration in the U.S. and European economies, as I mentioned earlier, and so any “decoupling” or “coupling” is clearly not perfect. In Asia, various countries and regions, one after another, have accomplished economic take-off starting with the NIEs, followed by the ASEAN economies and China, and then by India. And Asia taken as a whole has attained high growth through countries and areas at different stages of development influencing on each other. Developments in Asian economies have a strong bearing on the future of the economy in the Kyushu region together with developments in Japan’s economy and in the world economy as a whole. In discussing the future of Asian economies, although it may well depend on how long the economic weakening in the United States and Europe continues, the Bank will pay close attention to whether strong intraregional demand in Asia can be maintained through making the most of economic dynamism in Asian economies with the assistance of economic policy actions in countries such as China.

As I mentioned in the beginning, the Bank collects information on the regional economies through research conducted at its branches. As I have already said, I worked in the Oita branch of the Bank for a year and a half during the early 1990s, and one of the advantages that I enjoyed as General Manager was being able to hear candid views from the management of various firms in the region regardless of firm size. I had an experience of visiting a small convenience store at the time and hearing views on the business of convenience stores from a couple managing the store in their family room upstairs. The name, the Bank of Japan, may give you the impression that we are making policy judgments only from macroeconomic data or information collected in the metropolis, but this is not so. Since the interest rate policy affects areas throughout the country, we make efforts to collect a wide array of information to make our judgment. To this end, I would like to ask for your continued support.

I am looking forward to hearing your views on the current situation of and issues facing the Kyushu economy as well as your requests to the Bank.

Thank you very much for your kind attention.

WisdomTree Now Offers Growth

Nice ticker symbol.

WisdomTree on Thursday launched the LargeCap Growth Fund (ROI) on the NYSE Arca. ROI is usually the symbol for “return on investment.” Nice score on WisdomTree’s part.

The new ETF is designed to track the WisdomTree LargeCap Growth Index. This fundamentally-weighted index measures the performance of approximately 300 domestic large-cap growth companies. Each company’s weighting is set annually and based on the earnings generated during the prior four fiscal quarters. The ETF has an expense ratio of 0.38%.

WisdomTree, the market leader in fundamentally-weighted indexes, is best known for its family of ETFs based on dividends-weighted indexes. This isn’t the firm’s first earnings-based ETF, it launched a few others earlier in the year. But it is a radical departure for WisdomTree. It’s the first growth-oriented fund in this value-oriented firm. Not only is this WisdomTree’s first fund focused on growth stocks, but it’s the first growth-oriented ETF among all the Fundamentalists, those fund families with indexes based on fundamental metrics.

One big disadvantage of dividend-based ETFs is that they ignore strong companies that refuse to pay out dividends, such as technology companies. Earnings-based indexes, and especially growth funds, have the potential to expand WisdomTree’s customer base by offering an ETF with some of the fastest growing companies in the world, such as Google.

Jeremy Siegel, famed professor of the Wharton Business School and a senior advisor to WisdomTree, said in a written statement, “I devoted the first chapter of my book, The Future for Investors, to what I call the ‘Growth Trap,’ the long-standing problem of investors paying too much for the future prospects of growth companies.”

One assumes the new ETF digs itself out of the “Growth Trap”, but WisdomTree didn’t elaborate. The company did say, “growth’s historic underperformance may have more to do with how the major growth indexes are constructed, than with growth stocks themselves.”

Building a Better Bailout; A Must Read

It’s time to reward virtue.

by Lawrence B. Lindsey

12/01/2008, Volume 014, Issue 11 

The U.S. government’s efforts at containing the financial crisis have to date been aimed at shoring up institutions and households that are in trouble. Several hundred billion dollars have been injected into troubled financial institutions, with more on the way, and a whole array of negotiated schemes have been created to keep people in homes for which they cannot pay the mortgage. Yet the Democrats in Congress clamor for more relief, such as bankruptcy “cramdowns,” which unilaterally reduce the mortgage payments for people who can’t afford them. And still more institutions are lining up for bailouts, most notably the auto companies.

 

It is quite natural for politicians to seek to target benefits on those that they perceive to be in need. It is the normal political response to the wheel that is squeaking the loudest. Regardless of motive, the reality is that these programs and indeed the bailout’s whole approach is failing. Even Treasury Secretary Henry Paulson has now thrown in the towel on his original proposal to buy bad assets from the troubled financial firms: the Troubled Assets Relief Program (TARP). None of the $700 billion targeted for TARP will be used as originally intended. Instead most of it will prop up the capital position of the troubled financial institutions, allowing them to hold existing portfolios of questionable loans on their books. The rest will be spent on other distressed firms and troubled markets.

Recall that it was the efforts to sell TARP and the bailout that caused so much political and economic angst a few months ago. The president went on television to tell the American people that the economy, which had been holding in the relatively flat position for most of the summer, was about to collapse. Retail sales began plunging immediately after the president’s speech. A majority of the Republican members of the House voted against their own leadership and the president on the plan and were blamed by the media for the 778 point drop in the Dow that day. As this went to press, the Dow Jones Industrial index stood 2,750 points below where it was the moment the bill finally passed, suggesting that Wall Street didn’t think it was a panacea either.

 

The failure of the original plan was predictable. It contained unworkable logistical hurdles. TARP could only be run through some market mechanism, in which those who needed the relief the least would get the largest share leaving the most desperate institutions adrift, or through direct governmental targeting of those institutions most in need, which would have made a mockery of the market mechanism. The plan was rushed out to meet a perceived need to “build confidence,” but the self-imposed political deadline and the need to survive the political log rolling with congressional Democrats meant that the time needed to think it through was not taken.

 

Hundreds of billions of dollars later, we are left with the same three underlying economic problems the economy faced when the bailout was proposed. First, the troubled housing-related financial assets that TARP was supposed to move onto the government’s books are still in the private sector, while the nation’s banks rush to pare down their balance sheets in the only way they can–by recouping existing loans and not making any new ones. Second, the housing market continues to fall–prices are down 22 percent from their peak and dropping roughly 1 percent per month. Housing starts are at a 17-year low, and homebuilder confidence is the lowest ever recorded. Third, with unemployment rising and consumer credit tight, household cash flow is in desperate shape. If it doesn’t stabilize, the odds are high that the current recession will wind up being as bad as, or possibly even worse than, the deep recessions of 1974-75 and 1980-82.

 

The country faces three major economic problems: (1) making liquid the troubled housing debt that is clogging up the books; (2) stabilizing home prices; and (3) improving household cash flow. Each can be more easily achieved by rewarding virtue than by continuing down the current path.

The government should offer the option of a new mortgage to everyone now holding one, be it from a Government Sponsored Enterprise like Fannie Mae and Freddie Mac, a bank, or a mortgage broker. The principal amount would be the same as the existing mortgage. If the home-owner had two mortgages or a home equity line, they could all be rolled together into one new 30-year fixed rate mortgage. The new mortgages should have a substantially lower interest rate than existing mortgages. I suggest 4 percent, but the rate could be slightly higher without affecting the program.

The new mortgage would have one very significant difference: It would be a full recourse loan. That is, if the borrower fell behind in the payments, the government could use any means necessary to get repaid. That means not only foreclosing on the house (as under current mortgages) but also collecting any remaining unpaid sums after the house was foreclosed on by garnishing the wages, bank accounts, and other assets of the borrower. Think of it as the IRS providing the loan on the same collection terms as it does on taxes, or perhaps using the powers the government now has to collect on student loans.

The homeowner would not have to get a credit check, or have the house appraised, or go through the titling process again. There would be no debt-to-income or loan-to-value thresholds to qualify for the new loan. Refinancing on the new terms would be entirely at the discretion of the borrower.

Homeowners would have to think very carefully about taking the new loan. If they went for the lower rate, the obligation to repay would become very real. Individuals whose homes had market values way below the amount of the mortgage would have to be particularly careful. If they planned to live there for many years, there would be no problem. If they did not plan to live there or bought houses as a speculation, they definitely should not take the new financing terms. If they sell the house for less than the mortgage, they would have to come up with the difference from other sources.

Homeowners facing some economic distress but who otherwise would like to stay in their homes, even though the price was below the mortgage, might still find it attractive to take the new financing deal. For example, anyone with a 6 percent mortgage would see a 200 basis point drop in the cost of carrying a home. On a $200,000 mortgage, that would be a saving in principal and interest of $244 per month. (The monthly income of that homeowner is usually in the $3,000 to $4,000 range, so this is a significant saving.) In addition, the monthly payment would likely go down even more on loans that have been in place several years since the principal repayment period would once again become 30 years. If the homeowner is about to face a balloon repayment on a home equity line or an interest-rate readjustment under a variable rate mortgage, the new mortgage terms might make the difference between being able to stay in the home and facing foreclosure.

The key is that homeowners would have to make the choice. Only the homeowner knows whether he or she will be likely to stay in the house and repay the mortgage or be forced to give it up. Under the current arrangements, the homeowner has no incentive or need to signal his or her intentions. Instead, computer-driven models make a probabilistic estimate of how many home-owners in a given mortgage pool will choose foreclosure and what the loss rate will be on the foreclosed house. All of this then gets built into the price of a given mortgage-backed financial asset. Given the risk-averse nature of current markets and the lack of any real information, it is likely that the market price of the mortgage pool is well below the actual likely outcome. But no one knows for sure. As a consequence, Mortgage Backed Securities (MBS) and Collateralized Debt Obligations (CDOs) are clogging up the financial system.

Under the refinancing option, this problem goes away. The world is divided into two sets of homeowners: those who think they will repay and those who don’t. Those who think they will repay take the new government mortgage. The old mortgage is repaid. All of the MBS and CDOs in the system therefore face immediate full-dollar repayment of all the “good” loans in the mortgage pool. Everything that is left can pretty much be written down to pennies on the dollar. The uncertainty regarding securities pricing is gone. Banks and the financial markets know with a good deal of precision what each security is worth. In fact, they are handed a series of checks for the bulk of the true value of the security as the wave of refinancing works its way through the system. Thus, not only is the uncertainty removed, but the entire financial system is liquefied.

This in turn will unfreeze the banking system. There is right now no market for the CDOs, and they remain on the bank’s books. This consumes capital. Because of the distress in the market, the value of the CDOs keeps falling, and, as banks must report the value of assets over time, the banks must take a loss. This loss lowers the amount of capital the bank has. Less capital means that banks must shrink the size of their portfolio. But, the bad stuff can’t be sold. So instead banks must shed good investments, and they

 

are now doing so with a vengeance by refusing to make new loans and resisting the rolling over of existing loans. This starves the economy of credit.

Under my 4 percent mortgage plan, any bank that had to shrink its balance sheet would have a very easy way of doing so as loads of loan repayments would make the bank cash rich. It would no longer have to sell good assets and shrink its loan portfolio. If the amount of repayment exceeded the amount that the bank had marked down its mortgage portfolio, moreover, bank capital would expand rather than contract. The bank could then expand its portfolio and make even more loans if it chose to do so. TARP was supposed to do just this, but it didn’t as the only information on pricing securities came from those same computer-generated models that misestimated the size of the mortgage problem from the start. Under this plan, virtuous homeowners who actually know they will stay in their home determine the price, and determine it with certainty, rather than relying on some computer model that, frankly, has no idea.

As noted in an earlier article in THE WEEKLY STANDARD (”High Anxiety,” September 29, 2008), the underlying problem in the mortgage market is that the credit terms for home mortgages shifted abruptly from the most generous in history to more-restrictive-than-normal between mid-2006 and late 2007. The result was a drop of more than half in the demand for new mortgages (including refinancing) as measured by the dollar volume of mortgages at a time when there was an excess supply of roughly 3 million homes. In such a situation, prices drop.

The effects of the 4 percent mortgage plan on the housing market would be indirect, but quite real. The first effect would be to leave more people in their homes than would otherwise be the case. With an estimated 18 percent of all mortgage holders now in homes with mortgages that are higher than current market values, providing incentives for people to stay in their current homes is the best way of stopping still more excess supply from coming on the market.

But the government could easily magnify this effect by adding one more change in the mortgage terms: Allow the new mortgage on the house to be assumable. Under this plan, a buyer of a home with a new 4 percent mortgage gets to take over that mortgage as a part of the purchase. This substantially lowers the cost of acquisition and makes the house a far more liquid asset than it other-wise would be. Making a new 4 percent mortgage on an 80 percent loan-to-value mortgage assumable is equivalent to lowering the lifetime carrying cost of buying a home by 20 percent–compared to a mortgage rate of 6 percent. Alternatively, in a market in which all houses now have newly created assumable mortgages, the equilibrium price of homes would rise by 26 percent.

On the positive side, this onetime refinancing will not create a new bubble. New mortgages will not get the new terms, only existing mortgages. So while the plan will stabilize and possibly even increase the price of existing homes with mortgages, the

 

effect is finite. It would take a sustained reduction in rates that applied to new mortgages to produce the financial fuel for another housing bubble.

The flip side is that a refinancing of existing mortgages is unlikely to revive the home construction industry. Homes yet to be built do not have mortgages, and so there is no existing mortgage to roll over under the new terms. This is unlikely to make the plan popular at the National Association of Homebuilders, but we still have a hangover of at least 3 million empty homes. Encouraging the building of new ones at this point would only delay the recovery of the housing market and the relief that is needed for the financial system. Stabilizing existing home prices and providing for financial recovery are, of course, the preconditions for a return to a vibrant home construction industry. So the help for homebuilders in this plan is still there; it is just a matter of timing and prioritization.

The American economy is in the midst of the fastest decline in consumer spending since 1980. The reasons are clear. Households are greatly overextended, having taken advantage of many years of very easy consumer credit conditions. The typical American household, for example, has 1.9 vehicles and 1.75 drivers. Credit is now being cut back drastically. In addition, rising unemployment is putting a crimp on incomes and creating caution among those with jobs.

Much of this is the inevitable reaction to excess. But it is also widely accepted that government has a role in making sure the adjustment process does not happen too fast or the cuts become too deep. Hence we hear proposals for more stimulus packages to put money into the pockets of consumers. During the campaign, President-elect Obama called for giving an average of $700 to middle-income families, making up the cost by raising taxes on upper income households.

A refinancing of home mortgages along the lines I am describing would be a much more dramatic stimulus. First, a family with a $200,000 mortgage at 6 percent (typically a family with an income in the $40,000 to $50,000 range) would receive an improvement in their annual cash flow of $3,000, four times as much as the proposed Obama stimulus payment. It is true that the Obama tax cut would also go to people without mortgages. But it is those with mortgages that are the most impacted by current credit conditions. Indeed, a refinancing on this magnitude is far better targeted at those most likely to respond to improved cash flow than are the proposed tax rebates.

The refinancing would also mean a permanent improvement in household financial conditions while a typical onetime stimulus package would not. The lesson from the 2008 stimulus package, and indeed from all other temporary tax cuts, is that the great majority does not enter the spending stream. Refinancing is likely to provide a permanent economic boost.

 

 

The refinancing is designed to be roughly budget neutral for the government. Currently the government can borrow for 10 years at about 3.25 percent and under 4 percent for 30 years. Mortgages are typically priced off the 10-year bond. In essence, the government would be borrowing and lending at the same rate. Those especially concerned with budgetary cash flow might prefer a fixed rate loan of 4.25 percent or might also consider putting “points” on the mortgage. As long as the rate remained substantially below current mortgage rates and homeowners were able to roll any points into the principal of their new mortgage, the impact on the incentives to take up the new program would be minimal.

Government would receive one further benefit. As mortgage payments dropped, so would the revenue loss from the mortgage-interest deduction. I estimate the extra revenue from this feature at between $15 billion and $20 billion. As lower income homeowners tend not to itemize and higher income homeowners face an increased tax rate, the distributional consequences of this feature would mean that most of the extra revenue would be collected from higher income homeowners. On the other hand, the prepayment wave would reduce the interest income on the mortgage portfolio held by the GSEs.

The big lesson of the bubbles of the last 20 years is that there is no free lunch. We are now paying the price of both the dot-com bubble and the housing bubble. But there are no free bailouts, either. A wave of refinancing on this magnitude carries a price tag. Done the way it is described here, roughly $9 trillion of mortgages would be refinanced. That is roughly 15 percent of total personal wealth in the country, clearly a huge undertaking.

But it is also worth bearing in mind that this figure exaggerates the true scale of what is happening. This is not a $9 trillion increase in the nation’s indebtedness. It is the swapping of $9 trillion of one type of mortgage for $9 trillion of another type of mortgage. There is no net increase in the nation’s debt.

There is an increase in government debt. But this is offset by an equal increase in government assets. To begin with, roughly $5 trillion of the mortgages to be refinanced are already on the government’s books because of Fannie Mae and Freddie Mac. Funds have to be raised to issue the new mortgages, but each time a new mortgage is issued an existing mortgage of an equal amount is redeemed. The holder of the mortgage, i.e., the lender, bought that mortgage in search of long-term dollar denominated debt. When they are repaid, they will have to do something with the money. The vast bulk of the funds are also likely to be reinvested in long-term dollar denominated debt–particularly long-dated U.S. treasuries. Therefore, the net pressure on the financial markets will be fairly small even though the volume of transactions will be quite large.

There is a reason that government efforts have so far been focused on helping out those who have failed rather than those who have behaved virtuously. The left professes a belief in helping the needy. The right seeks to minimize government involvement and therefore compromises, agreeing to help only the needy. During the present crisis, the

 

term “needy” has taken on new dimensions as some of the largest financial institutions in the country are at risk.

It is also far from clear that those who were over-extended on their homes, needy by one definition, are also worthy of aid. With regard to real estate, hard-working families can behave prudently while trust fund babies can behave frivolously, and vice versa. The problem is sorting out the prudent from the frivolous. Targeting relief on the frivolous induces people on the margin to behave frivolously. By contrast, targeting relief on those willing to assume full responsibility for their debts in return for a lower interest rate induces people to behave virtuously. A shift toward rewarding virtue would be the quickest way out of the debt morass we now find ourselves in.

 

 

Green Building Poised For More Growth In 2009

Economic turmoil is not thought of as a good thing for any business sector, but as markets have steadily worsened this year, the outlook for green appears to be trending the opposite direction.

This is especially important if you are a property stakeholder attempting to measure how the credit crisis and a full year of recession have affected green building.

The following studies indicate another good year for Green Building in 2009.

“Green Building Impact Report 2008”

McGraw Hill’s “2009 Green Outlook”

2008 Green Building Market Barometer

Ernst & Young roundtable

2008 Autodesk/AIA Green Index

“Greening Buildings and Communities: Costs and Benefits”

CoStar study

Building Owners and Management Association (BOMA) Study

Jones Lang LaSalle/CoreNet Global Survey

Panel Intelligence Report

Click here for more information on the Commercial Building Tax Deduction.

KSE trading activities this week remained limited

NewsPapers - Jung, Ummat, Dawn, Jazba, Nawa e Waqt, Jasarat – Urdu Newspapers

Is all well with Dell?

NEW YORK (CNNMoney.com) — Dell announced Thursday afternoon that a year-long investigation into its accounting practices has ended and the company plans to restate earnings back to 2003.

And for investors, a big cloud hanging over the personal computer maker has been lifted. It is now time to regroup and focus on whether Dell can reclaim the top spot in the personal computer industry.

Last year, the company gave up the PC market share lead to Hewlett-Packard, and watched foreign competitors such as Lenovo and Acer gain steam as well. Dell was the only top computer company to lose worldwide PC market share.

Investors watched Dell’s shares drop nearly 30 percent in the past two years while HP shares gained more than 70 percent in that period.

But Michael Dell took back the reins of the computer giant early this year following the departure of Kevin Rollins and investors have embraced the stock since then. Shares are up 7 percent since Dell took over as CEO on Jan. 31.

The launch of notebooks in colors like flamingo pink and sunshine yellow in June are an indication that Dell (Charts, Fortune 500) may be taking note of Apple’s multi-hued iPods. It also shows that Dell can’t rely solely on low price to lure customers.

So can Dell return to glory on Main Street and Wall Street?

In addition to taking fashion cues from Apple (up $4.15 to $121.20, Charts, Fortune 500), Dell has made a number of moves to expand its consumer business that has been a “second class citizen” compared with its corporate accounts, said Dr. Gautam Dhingra, chief executive officer and portfolio manager at High Pointe Capital Management, which owns 1.1 million shares of Dell.

In January, Dell started selling a rugged “All-Terrain” notebook with a shock-resistant hard drive and spill-resistant keyboard, similar to Panasonic’s Toughbook. And in May, Dell launched its XPS gaming desktops souped up with NVIDIA (up $1.35 to $43.92, Charts) GeForce graphics cards.

Late last year, Dell introduced a Blu-Ray-enabled multimedia notebook for watching high definition films, and just this month, Dell announced plans to acquire audio- and entertainment-focused tech company ZING Systems.

“Dell is trying to do a bunch of things to get incremental improvement,” says Bill Fearnley, Jr., an analyst with FTN Midwest. “They don’t have a billion-dollar product like the iPod up their sleeve.”

The same can be said for software and services, two other markets Dell is trying to tap.

Earlier this month, possibly in a move to enhance its software presence in the corporate market ala IBM (up $0.70 to $110.39, Charts, Fortune 500) and HP, Dell agreed to acquire corporate software developer ASAP.

And last month, Dell announced plans to acquire SilverBack Technologies, which would allow companies using Dell computers to remotely monitor and manage IT systems.

“Dell’s historical strength has been on the business side,” says David Fleer, portfolio manager at Bristlecone Value Partners, a Los Angeles-based fund holding nearly a million shares of Dell’s stock.

Dell’s quarterly rating among PC makers has declined, after an improvement in the year-ago period, while Hewlett-Packard’s (up $0.84 to $46.89, Charts, Fortune 500) customer service ranking improved, according to the American Customer Satisfaction Index, an economic indicator from the University of Michigan.

And Dell is taking note. After building up its business with online sales, Dell is reaching out to customers with a partnership to sell desktop computers at Wal-Mart stores nationwide.

While the consumer experience at Wal-Mart probably won’t come close to what it’s like to buy a Mac at an Apple store, partnering with the retail giant gives the company “quick, big exposure to the retail markets, which they identified as a hole in their distribution,” Fleer said.

But Dhingra isn’t that impressed. Although Wal-Mart (down $0.03 to $43.47, Charts, Fortune 500) is the world’s largest retailer, it will only be selling a lower-end computer, and only in the U.S., Dhingra says. “The volume is going to be tiny compared to what their corporate revenues are.”

Yet, “whether Dell is number one or number two is not of critical importance to us,” said portfolio manager Fleer, who notes that a turnaround will take more than a few quarters to take effect.

A.G. Edwards analyst David Wong agrees. In a recent research report, he wrote that he thinks Dell will continue to lose share for the foreseeable future. But he thinks this might actually be a positive.

“This is not necessarily a bad thing. We think that the company has made a decision to focus on profitability at the expense of near term market-share considerations in the lower profitability segments,” he wrote.

But while Wong’s price target of $35 implies the stock is worth much more than its current price of about $26, Fearnley of FTN Midwest rates the stock neutral, saying shares are fairly valued.

To that end, Dell’s shares are currently trading at about 16 times next year’s earnings estimates, a slight premium to Hewlett-Packard’s P/E of 15.

Wong notes though that Dell’s plans to cut jobs by 10 percent over the next 12 months, among other cost-savings methods, could help boost the company’s profit margins.

So Dell may have a long day to go before it regains its status as a Wall Street darling. But it appears to be on the right track.

FTN Midwest makes a market in Dell’s stock but doesn’t own shares. A.G. Edwards makes a market in the company’s stock, and the firm or an officer at the firm owns a long position in Dell’s shares.

Michael Dell tries to reboot Dell Computer

Dell to pay ousted ex-CEO $48.5M in cash

Source & Pictures:CNN

Poznan 2008: Policy Briefing #2

Covering December 5th (Friday)

 

 

 

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Forex Market Mexican currency pictures

The US Dow Jones Industrials Average lost over 7 percent through the money markets oregon day close, leading free charting software the Japanese Yen would appreciate in such an environment the correlation between the Yen and the Dow Jones Industrials Average lost over 7 percent through the day close, leading the Japanese Yen substantially higher For more information and guides on using our Buy/Sell Signals, top money market funds see our Weekly Forex Trading Strategy Outlook report. With an overall accuracy percentage of 81% and average per trade earnings of 58.31 remington firearms finance pips, the Range2 system continues to be one of the top two best performing systems in our arsenal.See more Forex Buy/Sell Signals finance and puble housing on + and be sure to monitor any updates on these specific signals, as our automated forex free charting software signals can and do change on a daily and intraday basis. Furthermore, the Range2 system continues to be in the red by about 94 pips. By looking at the image below, one might expect the signal to buy the pair as the trending mexican currency pictures arrow appears to suggest bullish strength. We are currently awaiting an oncoming EURAUD Breakout trade. UpdateAfter having shown signs of bullish forex software momentum, our forex Forex Automated Trading Signals.

Euro-area economic confidence dropped this twelvemonth to the lowest since the aftermath of the stock-index futures fell today. European equities and U.S. In Europe, governments have been forced to rescue Belgium’s Fortis, Iceland’s Glitnir Bank hf, the becu banking island nation’s third-largest bank by market value, forex trading for 600 million euros. Stocks tumbled around the world forex broker after the worsening credit crisis threatened to topple more forex account banks. Imparting the Treasury “This has a reasonable chance of pulling back from the brink and having some success, but it’s far from certain that will be the trueman,” said former Fed Governor Oren Shannan, now vice stage director of consultant Macroeconomic Advisers LLC in regions internet banking Filmore. The House and Senate currency trading forex signals are scheduled to vote on the bill early this week, although it wasn’t clear last night forex signals that it has sufficient currency today votes to pass the House. Lawmakers reached agreement as House Republican leaders incrusted away from opposition to the proposal after it included plans to pros and cons banking with union create insurance for mortgage-backed securities. There isn’t consensus on forex trading whether it would work. By Kelby Lanman and Jedd Erasmus — Treasury Secretary Bruce Paulson and congressional Democrats hammered out a consensus on spending up to $700 billion to rescue the financial plodding.

The House Always Wins

The Money and the Power   The Making of Las Vegas and Its Hold on America 1947-2000, Sally Denton and Roger Morris, Alfred A. Knopf, 2001.  479 pages, index, end notes.

“Don’t run for public office.  We own the politicians.”  Benjamin “Bugsy” Siegel to one of his men.  This is really the story of Las Vegas.  Politicians owned by the casino operators.  This fact enabled the little dusty town on the road from Los Angeles to Salt Lake City to become the center of much of America.  Known for its gambling, Las Vegas’ influence is felt through the country.  Little stands in the way of Las Vegas;  whatever Vegas wants, Vegas gets.

The book is a history of the city, but it is really a collection of portraits of its operators, the men who founded the now massive gambling empires and the politicians that were paid to help and protect them.  It is an amazing collection:  immigrant eastern European Jews, Italians, Irishmen, an eccentric millionaire industrialist, and a French Basque.  The CIA would also use the city and its casinos for its own purposes.

The authors cut through much of the mystique of the city.  It was not all Italian Mafioso in flashy suits and gaudy jewellery that started the empires.  It was a couple of Jewish thugs.  It all began with the Bugs and Meyer gang.  The first hotel/casino was built by Siegel and Lansky.  It eventually cost Siegel his life once it was found out that Siegel was skimming money from the construction funds, but the hotel and casino were a success, if not initially, that inspired many to follow.  It seemed that it is impossible to loose money in Las Vegas unless you make a bet.

Siegel’s murder was an aberration, at least in the early days.  The Syndicate  (the authors’ preferred term, and probably a better one considering the multi-ethnic character of the hoodlums in control) declared that Las Vegas would be an open city to all comers.  There would be no turf battles.  This caused the rapid growth of the “gaming industry.”  Murders would come soon.

Initially the funding for the casinos came mostly from drug and prohibition alcohol sales.  Later more legitimate funding would come from such diverse places as the Mormon Church and the the Teamsters’ pension fund.  The diversity of funding ensured the appearance of legitimacy.  It also ensured that a lot of people would be well paid for their services.

The casinos were very successful.  They ensured their continued success by copious contributions to elected officials.  This is the most amazing thing revealed in the book.  Political corruption is not new, but the extent of the corruption spawned by the success of the casinos is enormous.  It is to be expected that the casinos would pay off those directly affecting the casinos, but the money also went to presidential candidates and congressmen.  This effort was repaid in the stymieing of congressional and Justice Department investigations into Las Vegas gambling.  The house always wins.

Climate-hit Countries: UN summit talks debt relief

Bangladesh has demanded cancellation of overseas development assistance (ODA) debts of the least developed countries (LDCs) when they are affected by the adverse impacts of global climate change.

The country that uses no less than 18 percent of its total annual budget to pay off foreign debts, also demanded debt cancellation facilities for sectoral investments in countries affected by climate change.

The chief of a Bangladesh delegation raised the demands on behalf of LDCs in the ‘workshop on risk management and insurance’ at the 14th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 14) in Poznan, Poland.

Over a billion people of 100 countries face a bleak future due to the climate change, although those countries contributed the least to the causes of the change, a fact that provide them with the moral right to get compensations for the risks they are facing, the delegation argued.

In the workshop, delegates discussed mechanisms for risk management insurance. The delegates of LDCs demanded that developed countries pay the premium of the climate change insurance.

Focusing on relief and recovery, the current disaster risk management is based on post disaster assistance that varies depending on how much media coverage the disasters get and the locations of the victims, they said.

Mandated under the United Nations Framework Convention on Climate Change (UNFCC), the risk management insurance will be a kind of certainty for the vulnerable communities that they will be compensated.

The workshop discussed some existing insurance models like area based or individual farm based crop insurance, index based insurance for droughts and floods, Turkish Catastrophe Insurance Pool, and Mexico’s Natural Disaster Fund.

Bangladesh demanded start of a few pilot micro insurance projects and disaster index based insurance in each LDC with their premiums subsidised by international and national private sector sources.

“I raised at the workshop that insurance is not enough, there must be some link between ODA debt repayment and climate change insurance,” said AKM Rezaul Kabir, secretary to the Ministry of Forest and Environment also the leader of Bangladesh delegation.

The delegation argued, since the agriculture of LDCs is dominated by small holders, the coverage of the insurance will be like that of micro insurance involving small sums of money.

When asked about the concept of insurance, Md Reazuddin, director of the department of environment also a member of the Bangladesh delegation said, the concept is pretty new.

“A process is on to develop a mechanism for going forward with it,” he told The Daily Star yesterday.

No comments yet.

Banking Currency trading

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recession

In macroeconomics, a recession is a decline in a country’s gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.

Since 2007, there had been speculation of a possible recession starting in late 2007 or early 2008 in some countries.

 

JASPER JOTTINGS Week 49 - 2008 Dec 06

JASPER JOTTINGS Week 49 - 2008 Dec 06

Jasper Jottings - The achievement journal of my fellow Jaspers, the alumni of the Manhattan College

http://www.jasperjottings.com/2008/jasperjottings2008WEEK49.html

INDEX

   o POSITRACTION: A true hero

   o JFound: Dandola, John (MC1970)

   o JFound: Krause, Peter C. [MC1970]

   o JEmail: Fabinski, Bob (MC1984) is the designated proofreader

   o JEmail: McEneney, Mike (MC1953) updates class years

   o JFound: Sweeney, Bill [MC????]

   o JFound: Belmont, Nicole [MC????]

   o MFound: Jasper Mom

   o JFound: Stoecker, Roy R. [MC????] Substratum Intake System: Once-Through Cooling Hybrid

   o JFound: Brennan, Bob [MC????]

   o JUpdate: Quick updates

   o JHQ: Declaring College’s Efforts To Increase Its Sustainability

   o JHQ: Manhattan Monthly December 2008 NEWSLETTER

   o JFound: “idealist”, Rachel [MC2008]

   o JEmail: Bennett, Lainie (MC1990) is offering a 10% discount on resumes to all Jasper!

   o Comment on JOY: Mahoney,Lisa [MC????] weds Villetto, Matthew [MC????] by Lou J.

   o ENDNOTE: Friends with benefits

# # # # #

POSITRACTION: A true hero

http://townhall.com/news/world/2008/11/06/chinese_diplomat_honored_for_saving_jews

Thursday, November 06, 2008

Chinese diplomat honored for saving Jews

*** begin quote ***

A Chinese diplomat who saved thousands of Jews from the Holocaust has been posthumously honored in the Austrian capital.

Feng Shan Ho was Chinese consul-general in Vienna from 1938-1940 and issued visas to Austrian Jews, enabling them to escape the Nazis. He died in San Francisco in 1997 at the age of 96, before his deeds were recognized.

*** end quote ***

[JR: Shame that we can't recognize these people during their lifetimes. Shame we can all know these courageous people as "celebrities". Shame we can't know all the unknown heros.]

# # # # #

   * Posted on: Sun, Nov 30 2008 12:37 PM

JFound: Dandola, John (MC1970)

http://jxymxu7sn5ho9d.files.wordpress.com/2008/11/dscn1128.jpg?w=480&h=360

DSCN1128.JPG

Matthew, John (MC1970), Amy, Micky (long suffering wife), John William

[JR: Wish I could share all the laughs we've had over the years.]

# # # # #

   * Posted on: Sun, Nov 30 2008 5:23 PM

JFound: Krause, Peter C. [MC1970]

Krause, Peter C. [MC1970]

http://www.argyleforum.com/events/eventimages/04.25.07/mainSpeakers.html

Peter C. Krause

Chairman

Barrow Street Real Estate Funds

Peter joined Greenhill as Founding Member and Managing Director in 1996. He serves as Chairman of its Barrow Street Real Estate Funds, a real estate value-added private equity firm which invests in the U.S. with local partners in development and redevelopment projects across all property types. Prior to co-founding Barrow Street, he was Managing Director in the Real Estate Department of the Investment Banking Division of Morgan Stanley & Co. He was a member of the Investment Committee of the Morgan Stanley Real Estate Funds and in that capacity served as Chairman of the Board of Red Roof Inns, a New York Stock Exchange corporation. Before joining Morgan Stanley, Peter had practiced real estate law at Cleary, Gottlieb, Steen & Hamilton and Schulte, Roth & Zabel. Peter has 32 years of experience in the real estate and financial services fields and has closed over 250 transactions during that period.

Peter graduated first in his class (out of 1,100 students) with a B.A. with Highest Honors from Manhattan College in 1970, served in the United States Army in 1970-1971 and received his J.D. from Harvard Law School in 1974. Peter is a member of The Urban Land Institute, the American Society of Real Estate Counselors, the Real Estate Board of New York and the American Hotel and Lodging Association. He has served as Co-Chairman of the Industry Real Estate Financing Advisory Council. Peter was a Lecturer at Cornell University for many years, teaching real estate accounting, finance and valuation. Peter is Chairman of the Harvard Law School Fund, Co-Chair of the Harvard College Parents Fund, a Knight (and NYC Area Chair) of the Sovereign Military Order of Malta and Vice President of the Honorary Ushers of St. Patrick’s Cathedral. He is a prior trustee of The Convent of the Sacred Heart School. Peter and his wife, Alice, have three children and live in New York, New York.

# # # # #

   * Posted on: Sun, Nov 30 2008 6:37 PM

JEmail: Fabinski, Bob (MC1984) is the designated proofreader

From: Fabinski, Bob (MC1984)

Date: November 30, 2008 9:37:02 PM EST

To: Distribute_Jasper_Jottings-owner

Subject: Re: [Distribute_Jasper_Jottings] JASPER JOTTINGS Week 48 - 2008 Nov 30

John,

You missed two double consonants in that last missive:

hor_R_endous

ag_G_ravates

I too remember the “Noooo Partial Credit, Bridge Fall Down.”

Bob Fabinski

‘84

[JR: Thanks. My excuse is "i r an injineer". We don't need no redundant letters. Double consonants use up all that extra electron space. Global warming. We can't keep pinning bigger disks with all those double consonants. You're now the official proof reader! (That's one way to ensure at least ONE reader. LOL!]

# # # # #

   * Posted on: Sun, Nov 30 2008 10:46 PM

JEmail: McEneney, Mike (MC1953) updates class years

REPORTING LIVE FROM THE RESEARCH DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

Sunday November 30, 2008 @ 1130 EST

Dear John,

>JNews: Desposito, Joseph (MC????) remembers “Get wrong answer, bridge fall down!”

I believe that Joe is member of the Class of 1969.

>JNews: Pfaff, Mark [MC????] promoted at New York Life Insurance Company

I believe that Mark is a member of the Class of 1980.

>JFound: Sposito, Peter J. [MC????] is a banker’s banker

I believe that Peter is a member of the Class of 1967.

>JFound: Eskridge, Honora Nerz [MC????] at NCSU Libraries

I believe thar Honora is a member of the Class of 1989

>JFound: Schermer, Dolores [MC????]

I believe that Dolores is a member of the Class of 1982.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

   * Posted on: Sun, Nov 30 2008 11:30 PM

JFound: Sweeney, Bill [MC????]

Sweeney, Bill [MC????]

http://www.sas.com/events/execconf/invite/exec07/tracks/fs.html#Sweeney

Bill Sweeney

Managing Director, Global Risk, Compliance and Technology

Citigroup

Bill Sweeney joined Citigroup in June 2000 to manage the Global Risk IT Department. In 2004, Sweeney was promoted to Managing Director, and in 2005 he assumed responsibility for Global Compliance and Legal Technology for Corporate and Investment Banking.

Sweeney introduced a number of cutting-edge technologies to Global Corporate and Investment Banking, such as GRID computing and the introduction of middleware, which streamlined intraday feeds of data. He also recently put forth the first Linux in Intel application live. Sweeney has worked with engineering and IT to ensure the technologies’ adaptability as well as a simultaneous improvement in services and reduction in costs.

He has a bachelor’s degree in mathematics from Manhattan College and a master’s degree in computer science from the University of Southern California.

# # # # #

   * Posted on: Mon, Dec 1 2008 6:37 PM

JFound: Belmont, Nicole [MC????]

Belmont, Nicole [MC????]

http://www.farhills.com/index.cfm/fuseaction/biographies.viewbiographies/csid/7

Nicole Belmont Vice President - Director of Research Nicole Belmont joined the Far Hills Group in 2001 to expand the firm’s product development and research activities. Nicole Belmont joined the Far Hills Group in 2001 to expand the firm’s product development and research activities. Her responsibilities include analyzing and sourcing new managers and strategies, conducting due diligence, and spearheading the firm’s interaction with the consultant community.

# # # # #

   * Posted on: Tue, Dec 2 2008 6:37 PM

MFound: Jasper Mom

http://talk.collegeconfidential.com/manhattan-college/608150-great-engineering-school.html

“rigolinr”

Great engineering school

Just an update - - my son is graduating in 2009 and has just been offered a wonderful Civil Engineering job, beating out other candidates from schools such as Virginia Tech and Georgia Tech.

If you want a chance to shine in Engineering - - and not get lost as a “number” - - go here.

Proud Manhattan Mom

# - # - #

[JR: I agree. LOL!]

# # # # #

   * Posted on: Wed, Dec 3 2008 5:21 PM

JFound: Stoecker, Roy R. [MC????] Substratum Intake System: Once-Through Cooling Hybrid

http://pepei.pennnet.com/Articles/Article_Display.cfm?

Section=Articles&PUBLICATION_ID=6&

ARTICLE_ID=346402&pc=gls&dcmp=rss

Substratum Intake System: Once-Through Cooling Hybrid

By Roy R. Stoecker, Ph.D., Principal Scientist, EEA, Inc.

James E. McAleer, M.B.A., Director, Strategic Planning, EEA, Inc.

*** begin quote ***

Rising fuel cost, demand for carbon footprint reduction and closed-cycle cooling is simply incongruent. Thus the development and evolution of a once-through cooling hybrid, the substratum intake system. This new system (presently in pilot) allows steam electric stations to maintain their existing once-through systems while eliminating virtually all environmental impacts. In addition, it promises to increase overall plant efficiency while reducing condenser operations and maintenance costs.

It’s axiomatic that steam electric power stations with once-through cooling systems (OTC) use enormous amounts of water to cool their condensers. A 400 MW unit typically requires 175,000 gpm when operating at full load. The environmental problem with OTC is that planktonic organisms, such as fish eggs and larvae, suffer high mortalities in passing through the plant. The damage is caused by mechanical strains of pumping, rapid temperature rise and addition of biocides. The process is called entrainment.

{Extraneous Deleted}

Authors:

Roy R. Stoecker, Ph.D., is co-founder and vice president of EEA, Inc. and has more than 30 years of experience in energy and environmental programs. He holds a B.S. in biology from Manhattan College and a Ph.D. in botany from the University of Hawaii. He is extensively published and the author of “Aquatic Studies at the Hudson River Center Site In: Estuarine Research in the 1980s: The Hudson River Environmental Society Seventh Symposium on Hudson River Ecology (1992).”

{Extraneous Deleted}

# - # - #

Stoecker, Roy R. [MC????]

# # # # #

   * Posted on: Wed, Dec 3 2008 5:31 PM

JFound: Brennan, Bob [MC????]

Brennan, Bob [MC????]

http://www.ironmountain.com/news/presskit/leadership.asp

Bob Brennan

President and Chief Operating Officer

Bob Brennan was named president and chief operating officer of Iron Mountain in November 2005. As COO, Mr. Brennan is responsible for developing and implementing operating strategies designed to drive growth and enhance customer service on a global basis and to ensure consistency and efficiency throughout the organization. He manages the day-to-day operations of the Company’s North American, European and Latin American business units as well as the enterprise support functions of human resources and information technology. Brennan had served as president of North America since joining the Company in November 2004. He joined Iron Mountain through the acquisition of Connected Corporation, where he served as Chief Executive Officer. Before Connected Corporation, Brennan was a general manager with Cisco Systems; he also served as CEO of American Internet prior to its acquisition by Cisco, and was vice president, general manager for Merisel, a distributor of software and microcomputer products. Brennan holds a Bachelor of Arts degree in psychology from Manhattan College.

# # # # #

   * Posted on: Wed, Dec 3 2008 6:37 PM

JUpdate: Quick updates

Docteroff, Michael (MC1987)

# - # - #

Duffy, Ms Patricia A. (MC????)

Chief Housing Accountant

The Municipal Housing Authority for the City of Yonkers

# - # - #

Hallet, Sarah (MC2004)

# # # # #

   * Posted on: Thu, Dec 4 2008 9:36 AM

JHQ: Declaring College’s Efforts To Increase Its Sustainability

http://www.manhattan.edu/news/news_releases/120508_1.shtml

December 5, 2008

Manhattan College Announces Presidential Proclamation Declaring College’s Efforts To Increase Its Sustainability

RIVERDALE, N.Y. – Manhattan College has announced a presidential proclamation declaring the College’s intent to take all feasible steps to increase its sustainability while ensuring that “going green” issues are a factor in all future major decisions, policies and contracts. The proclamation has the concurrence of Manhattan’s council of vice presidents and the executive committee of the board of trustees.

To further this mission, the College has signed on to New York City’s 30-in-10 initiative and has become a member of the Association for the Advancement of Sustainability in Higher Education (AASHE), an association of colleges and universities in the United States and Canada working to create a sustainable future.

“I hereby declare that Manhattan College shall strive to take all feasible steps to increase its sustainability and to decrease its eco-footprint,” declares Brother Thomas Scanlan, president of the College. “Further, I request every member of our College community to review his/her own eco-habits and make appropriate improvements. And lastly, I request that environmental stewardship be an important component of each student’s education. Striving to be a green campus is our common goal.

“For the College, this proclamation requires that sustainability will be a criterion in the formulation of all major decisions, policies and contracts; as well as in the College’s strategic planning and construction projects. Furthermore, this shall be done to the maximum extent feasible, that is, determination of the projected impact both on the College’s own eco-footprint and on the global environment; affordability, including initial investment versus rate of savings; real versus redistributed reductions (e.g., offsets) etc., shall be incorporated into the overall cost/benefit analysis.”

Manhattan College has already implemented numerous “going green” measures, including:

   * For more than 40 years, the College has conducted a nationally recognized Master’s program in Environmental Engineering and has offered an environmental concentration option in the undergraduate civil engineering major since 1939. The faculty’s advanced research, especially in water quality, has contributed to improvements in the Hudson River, New York Harbor, Long Island Sound and elsewhere.

   * Planted a significant number of new trees.

   * Increased energy efficiency of College vehicles.

   * Promotes transportation alternatives, such as carpooling, biking and public transit.

   * Conducts extensive recycling.

   * Installed motion sensors to turn on/off classroom and public space lighting.

   * Thermostat controls are reset higher in summer during unoccupied periods.

   * Have replaced light fixtures/bulbs with more energy efficient ones.

   * Installed an energy management computer control system.

   * East Hill Residence Hall’s air conditioning units utilize nonozone depleting refrigerants.

For a complete list of “green” measures implemented by the College, please contact Scott Silversten, assistant director of college relations for communications, at (718) 862-7232 or e-mail scott.silversten@manhattan.edu. Dr. Kevin Farley, associate professor of environmental engineering, is available to answer questions about the College’s “green” initiatives and can be reached at (718) 862-7383 or kevin.farley@manhattan.edu.

Mayor Michael Bloomberg’s 30-in-10 challenge comes under PlaNYC, a sustainability plan launched on Earth Day 2007 aimed at reducing greenhouse gas emissions citywide by 30 percent by 2030. Leading New York universities have joined the more aggressive 30-in-10 commitment to reduce greenhouse gases by 30 percent by 2017.

The city’s first-ever carbon emissions inventory found that energy use in buildings accounts for almost 80 percent of the city’s overall emissions and of that, 18 percent is from governmental and institutional buildings. By accepting the challenge, the higher education institutions are leading by example in helping to make a sizable dent in the city’s overall emissions.

AASHE was founded in 2006 with a mission to promote sustainability in all sectors of higher education – from governance and operations to curriculum and outreach – through education, communication, research and professional development. It aims to advance the efforts of the entire campus sustainability community by uniting diverse initiatives and connecting practitioners to resources and professional development opportunities.

# # # # #

   * Posted on: Fri, Dec 5 2008 1:07 PM

JHQ: Manhattan Monthly December 2008 NEWSLETTER

http://www.manhattan.edu/newsletters/ManhattanMonthly/2008_12/index.html

Manhattan Monthly

December 2008 NEWSLETTER

NEWS

Presidential Proclamation

Declares Manhattan’s Efforts To Increase Sustainability

College To Honor Syska Hennessy Group Chairman at De La Salle Dinner

College Presents a Candlelight Christmas Celebration

Lasallian Conversation

Manhattan Professor and Student Develop Ways to Measure Property Changes of Optical Materials

Two Engineering Students Win Scholarships From Prestigious Industry Group

Communication Students Work To Establish Mentor Program at South Bronx High School

Staff Council Elections

Let It Snow

Relay For Life Cancer Walk

In Memoriam

Staff Convocation Honors Dedicated Employees

Faculty and Staff Accomplishments

Welcome New Employees

Manhattan College Milestones

Athletic Hall of Fame Induction Ceremony

Jaspers Helping Jaspers

Gulf Coast Christmas Luncheon

Service Trip Planned to the Ninth Ward in New Orleans

Yearbook Release for Class of 2008

Treasure Coast Alumni Luncheons

Manhattan vs. Siena at Times Union Center

Alumni Travel Program Goes to Ireland

Alumni Directory Project

Does Your Class Year End in a 4 or 9?

Contact Your Alumni Office

CALENDAR

Jaspers Basketball Squads

Volleyball’s Sherryta Stokes ’09

Jasper Alum Chris Cody ’06

Manhattan Athletics Expands JasperVision Platform

# # # # #

   * Posted on: Fri, Dec 5 2008 9:35 PM

JFound: “idealist”, Rachel [MC2008]

http://www.idealist.org/if/i/en/av/UserProfile/178878-61

http://jxymxu7sn5ho9d.files.wordpress.com/2008/12/07-w80-w80h103.jpg?w=80&h=103

07-w80-w80h103.jpg

Rachel

Location: New York, New York, United States

Area of Focus: Children and Youth, Community Service and Volunteering, Education and Academia, Family and Parenting, Health, Mental, Media and Journalism, Race and Ethnicity, Women’s Issues

Language(s): English

Description:

I am a recent B.A. graduate of Manhattan College, completing my undergraduate studies a semester ahead (December 2008). I double majored in developmental psychology and philosophy, maintaining a 3.8 GPA currently (posted: 12/1/08), and have been inducted in numerous honor societies as a result. My career goal is to study School Counseling on a Master’s level, but advancement is always an option. I have experience in multiple social service and non-profit oriented environments. I have worked with KidsPeace (New Jersey), in Residence Life (Resident Assistant), the American Cancer Society (Team Development), at a local nursing home, and have served in various leadership and editor positions within publications at my undergraduate college. I would love to find a job through idealist.org that would enable me to benefit others, but also have the flexible schedule required for me to pursue my graduate studies.

# - # - #

“idealist”, Rachel [MC2008]

[JR: I love a "treasure hunt". Here's a challenge. Who is this "mysterious" young woman? And, how does a job find her with no last name? OK, where are the Zero Xeres (i.e., 08, 09, 07, 04, 05, and 06) to solve this mystery?]

# # # # #

   * Posted on: Sat, Dec 6 2008 8:22 AM

JEmail: Bennett, Lainie (MC1990) is offering a 10% discount on resumes to all Jasper!

REPORTING LIVE FROM THE LINKEDIN NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

Manhattan College Alumni Society

Today’s Activity:1 question

Questions & Answers (1)

Any Manhattan College Alums Need A Professional Resume?   

Asked by Lainie Bennett, President/CEO at Millennium Personnel Corp.

Millennium Resume Service is offering a 10% discount on resumes to all students, employees and alums of Manhattan College. In addition to the discount, they will receive a free cover letter. A professionally written resume is the best way to ensure that you get an interview in this tight job market. Please look us up on the web: www.mpc-nyc.com

# - # - #

Bennett, Lainie (MC1990)

[JR: I'm a sucker for a Jasper discount!]

# # # # #

   * Posted on: Sat, Dec 6 2008 8:56 AM

Comment on JOY: Mahoney,Lisa [MC????] weds Villetto, Matthew [MC????] by Lou J.

I know these 2. They met freshmen year in 2000. Congrats!

# # # # #

   * Posted on: Thu, Dec 4 2008 1:12 PM

   * Updated: Sat, Dec 6 2008 9:10 PM

ENDNOTE: Friends with benefits

http://psychcentral.com/blog/archives/2008/11/03/friends-with-benefits/

Friends with Benefits

by John M. Grohol, Psy.D.

November 3, 2008

*** begin quote ***

One of my dearest female friends is in a relationship with a friend of her own. It’s not an unhealthy relationship, but the man has made it clear to my friend that it has a definite ending as he needs to move away for a job. She understands this, intellectually anyway. But there’s some question as to whether our intellect can overrule our emotion in every instance and in every situation.

*** and ***

But I also think it’s difficult for us, as humans, to separate sexuality from our emotions (even though it appears men are more able to do so than women). Even when men do so, I believe many do so only outwardly. Inside, perhaps unconsciously, they still feel the connection they’re making through sex.

*** end quote ***

I can’t think of one concept that has invaded the popular culture that is more destructive to marriage.

The concept of “compulsory education”, as implemented in Government Schools and Government Control of “Education”, has turned American children into mindless unthinking automatons. The ideas of Mann have made children into soldiers and factory workers easily led by the elite. The “eduction industry” is the breeding ground of Socialists and Communists.

“Friends With Benefits” is a result of that hedonistic, smirking, “make me feel good” thinking.

Hopefully, the next generations of Jaspers are smart enough and moral enough to realize the trap.

# # # # #

   * Posted on: Sat, Dec 6 2008 8:37 PM

# # # # #

# # # # #

“Bon courage a vous tous”

-30-

The Chasm Between the Bench and Bedside

On November 1, 2008, Newsweek Magazine’s Sharon Begley pointed out in an article entitled Where Are the Cures? that “Scientists call the gulf between a biomedical discovery and new treatment ‘the valley of death.’  The article reiterated a common misperception of scientists and their role in therapy development.

Scientists are neither trained nor equipped to take therapies from laboratory to clinical trial.  They do experiments on rats and other small animals in their laboratories to establish proof of concept.  Most scientists don’t know how to scale therapies from rats to humans.   They don’t know how to get therapy ready for human use.  Few have participated in or organized clinical trials.  Very few know how to raise the funding necessary for clinical trials.

In the days of Jonas Salk, it was possible for a single scientist to usher a therapy from laboratory to clinic without involving a company.  These days are now over.  Therapy development has become big business.  Pharmaceutical companies are therapy development machines.  They have regulatory, preclinical, and clinical departments.  What they cannot do in-house, they farm out to consultants and contract to professional organizations that will do the job in accordance to regulatory standards and on schedule.

Many clinicians are too busy to participate in, much less organize clinical trials.  Most have not been trained to run clinical trials.  Despite the advent of “evidence-based” medicine, most therapies (particularly surgery) that clinicians use have never been tested in double-blind randomized placebo-controlled trials while new therapies are subject to rigorous standards of multicenter phase 3 clinical trials.  Who will bridge the chasm?

In theory, the pharmaceutical industry is the bridge between the bench and bedside.  However, the industry estimates that it now takes over a billion dollars and ten years to move a therapy from discovery to market.  The funds must come from the investors, government, or foundations.  If funds are insufficient, it takes forever to develop therapies and many bite the dust along the way.  This problem is not unique to spinal cord injury or so-called “orphan disease” that affects less than 200,000 people.  It affects development of all therapies.

Pessimism seems to have gripped the clinical and patient communities.  In spinal cord injury, for example, after decades of telling patients that they will never walk, many clinicians do not believe that any therapy will restore function, particularly in people who have been injured for many years.  Understandably, patients, having been told by their doctors that no therapies are or will be available, are going overseas in droves to spend their life savings for unproven experimental therapies.

Medical tourism only aggravates the problem by diverting people and resources to therapies that are unlikely to help and may well cause harm.  Few of these clinics have done any serious research on the conditions that they are claiming to be able to cure.   They often take some undocumented therapy, claim that it is 100% safe and 80% effective, advertise the therapy to patients with incurable conditions, and charge them what the market will bear.  At present, that market price is US$20,000-$30,000.

Clinics that sell experimental therapies have a serious conflict of interest.  They depend on the funds for their existence and therefore cannot be relied upon to provide objective opinions concerning the therapies.   Most will not submit their therapies to rigorous clinical trials and few collect or publish data concerning the risk and benefit of the therapies.  Worse, many offer false hope to lure people to pay the cost of therapies that are unikely to work.

Competition for funds to develop therapies is fierce at every level.  At the National Institute of Health (NIH), less than 10% of grant applications are being funded.  Clinical trial grants must compete with basic science.  Some diseases, such as cancer and AIDS, get much more funding than others.  Within companies, the fight for resources is just as intense.  Probably less than 5% of initiatives get off the ground.  In the marketplace, probably less than 1% of biotech companies succeed in getting a therapy to market.

Every therapy must be championed by one or more people who obtain the support of key opinion leaders, compete for internal and external funds, and lead the product development and clinical trial teams.  These teams may have hundreds of people.  Many companies spend a large portion of their budget on public relations to convince internal and external investors to support the project.  Each therapy must pass through many gauntlets in the quest for funds.

Product development decision-making is risk-averse.  A therapy must supported by good basic science before peer review panels at NIH will approve a clinical trial grant.  It must be well-patented before any company will invest.  Once underway, each therapy must achieve multiple milestones or else the entire project may be “canned”.   Many companies have “canning” committees, whose only purpose is to stop development of risky projects.  Many therapy development projects run out of steams or funds before reaching clinical trial stage.

Many companies consequently invest a lion’s share of their research funds on “me-too” products or product cycle development that pose the little risk of failure.  “Me-too” products are drugs that do the same thing and the clinical trials just have to show therapeutic equivalence.  Product cycle development usually produce different versions, such as capsules or time-release, of the same drug, to extend the life of the product.  But these activities just split the market and do not generate new business.

Spinal cord injury is not only a small market condition but is regarded by many doctors to be one of the most challenging unsolved problems in medicine.  Many in the spinal cord injury community have given up and have gone overseas to fly-by-night clinics to try unproven therapies.  In the face of economic, clinical, and community pessimism, how does one convince our government, companies, and foundations to invest in developing therapies for spinal cord injury?

Christopher Reeve once pointed out that he could accept it if scientists told him that we don’t know enough about growing the spinal cord and it will take a long time.  Instead, most scientists told him that the spinal cord can regenerate.  The major obstacles to cure is money and politics.  Relatively little money is required and a large majority of Americans favor the research.  We spend more before breakfast in one day of an unpopular war in Iraq than a whole year of spinal cord injury research.  Christopher set about reversing the money and politics.  Unfortunately, he died before he completed his task.  It is now up to us.

Three developments in recent years give me hope that curative therapies for spinal cord injury will happen and faster than most of us think.  First, much recent evidence suggest that spinal cord injury therapies are profitable and worthwhile.   Several therapeutics companies are investing in therapies for spinal cord injury.  Second, we have a pipeline full of promising therapies that work in animals.  We just need clinical trials to test these therapies.  Third, spinal cord injury clinical trials are much efficient than for other conditions.  We have well-standardized and validated clinical outcome measures.  I will discuss each of these sequentially.

The therapeutics industry is under much pressure to reduce costs and increase the efficiency of therapy development.  “Me-too” drugs and product cycle development can only generate so much revenue.   A company that succeeds in developing a new class of products for a new condition can make many billions.  One successful product can boost a company from a struggling biotech company to a fortune 500 company.  A few major products can make a big difference, even for large companies such as Pfizer.

Much evidence suggest that investors now believe that profits can be made from small-market conditions.  For example, multiple sclerosis (MS) affects only about 380,000 people in the U.S.  Biogen and Teva are making billions from several drugs they have developed for this condition.  One spinal cord injury company, Acorda Therapeutics, has made it through its initial public offering and has achieved market capitalization of about $600 million in the past year.

These examples are attracting the attention of major pharmaceutical companies.  They appreciate the argument that spinal cord injury may serve as a bridge to other conditions.  For example, a therapy that protects, repairs, regenerates, or remyelinates the spinal cord may well be applicable to other more prevalen conditions such as traumatic brain injury and stroke, multiple sclerosis, peripheral nerve or neurodegenerative diseases.  More important, Just spinal cord injury alone can provide sufficient return.

What is the price of a therapy that restore function in spinal cord injury?  As people found out, the limit is much higher than people thought.  Would people and insurance companies be willing to pay $20,000 for a therapy that restores bowel and bladder function?   Insurance companies will because that is how much they would pay for surgery or life-long care of complications.  Even if only 100,000 people received a $20,000 therapy, the revenues could potentially add up $2 billion.

The standard joke in the spinal cord injury community is that the rats have it better than humans because there are therapies that allow them walk.  We should be glad that there are many therapies that make rats walk.  Things that work in a rat may not work in human.  That is why is good that many therapies work because the chances that one or more may be effective in humans is greater.  The vast majority of scientists believe that the spinal cord can regenerate if several obstacles to regeneration can be overcome.

The first obstacle is the injury site itself, which is often inhospitable to axonal growth.  Astrocytes in the spinal cord may wall off the injury site, if it considers it to be “outside” of the cord.  The injury site may be surrounded by extracellular chondroitin-6-sulfate-proteoglycan (CSPG) that normally deflects axonal growth.  These problems can be overcome to some extent by transplanting cells that bridge the injury site.  The bacterial enzyme chondroitinase breaks down CSPG.

The second obstacle is the lack of sustained growth factor support.  During the first hours and days after injury, the injury response and inflammation causes cells to release growth factors.  However, regeneration is slow and may take months or even years after injury.  A sustained soure of growth factors is needed to stimulate long-distance regeneration.  The recent discovery that lithium and other glycogen synthetase kinase (GSK) inhibitors stimulates neurotrophic factor production by umbilical cord blood mononuclear cells is of considerable interest.

The third obstacle is the presence of axonal growth inhibitors.  The most prominent and best studied of these inhibitors in myelin-based Nogo which can be covered by antibodies.  Alternatively, it is possible to use soluble Nogo receptor protein itself which binds to all the proteins that activate the Nogo receptor.  Finally, the intracellular messenger for the Nogo receptor is rho which is phosphorylated by rho kinase.  Inhibitors of rho and rho kinase stimulate regeneration, leading to a new class of therapies called “rhok and rho” inhibitors.

Unlike other conditions such as stroke and traumatic brain injury, spinal cord injury outcomes are predictable and well-defined.  For example, less tha 5% of people who have so-called “complete” spinal cord injury will recover walking spontaneously.  Any therapy that restores walking in even 20% of such patients can be detected with small populations of patients.  Thus, while a trial for stroke may require a thousand or more patients, a trial for spinal cord injury may show significant results with only  100 patients.

Several outcome measures in spinal cord injury are well-defined and have been extensively validated.  For example, the American Spinal Injury Association (ASIA) classification, motor and sensory scores have been successfully used in the National Acute Spinal Cord Injury Studies (NASCIS), the first double-blind randomized placebo-controlled clinical trials to show an effective therapy for acute spinal cord injury.  Other examples include the Walking Index of Spinal Cord Injury (WISCI) and the spinal cord independence measure (SCIM).

Neuroprotective, reparative, regenerative, and remyelinative therapies can be tested in spinal cord injury.  The first should be tested in acute spinal injury.  The second would be appropriate in subacute injury.  The third and fourth can be tested in chronic spinal cord injury, where there is no dearth of patients willing to volunteer for clinical trials.  Thus, spinal cord injury is an excellent model injury in which to develop and test therapies.

Finally, rehabilitation of spinal cord injury is more advanced and standardized than for other types of neurological disorders.  Recent studies, for example, have shown that intensive locomotor exercise facilitates recovery of walking in spinal-injured patients with incomplete spinal cord injury.  In many ways, that is what therapies are supposed to do, i.e. make the injury more “incomplete”.  Well-established locomotor training and other rehabilitation protocols are available.

We should be optimistic about the likelihood of safe and effective therapies that restore function in spinal cord injury.  Progress in the past 8 years has been slow and limited but this is astonishingly not due to the difficulty of the problem or ignorance about the therapeutic mechanisms needed tor restore function.  Rather, the problem appears to due to lack of investment by government and companies in clinical trials.  If I had to choose a problem to have, I would choose this one because it is easy to solve.

Christopher Reeve once said he could accept it if the reason why we don’t have a cure for spinal cord injury is because the science is too difficult or the spinal cord simply cannot regenerate.  However, he simply cannot tolerate it when the problem is not science or the inability of the spinal cord to regenerate but lack of funding and politics.  Worse of all, the amount of funding required to cure spinal cord injury is not so great.  We probably spend more in one day of the Iraq war.

The “chasm” between the bench and bedside is not unique to spinal cord injury.  The pharmaceutical industry estimates that it takes an average of more than ten years and over a billion dollars to take a therapy from discovery to market.  All fields, from cancer to AIDS, have this problem.  The solution to this problem is to have develop many therapies in parallel.  Each clinical trial has a finite probability of success.  More clinical trials add up to a greater probably of success.  Unlike casino, if anyone wins, everybody wins.

In summary, the field of spinal cord injury is poised for the first successful clinical trials showing therapies that restore function in chronic spinal cord injury.  We have many promising therapies that restore function in animals and are likely to be safe and effective in humans.  Some evidence suggest that combination therapies will be more effective than individual therapies.  Well-standardized, sensitive, reliable, and extensively validated outcome measures are now available for spinal cord injury clinical trials.  The solution is clear.  We need to do clinical trials.

Economic Roundup (Week of 12-1-08 to 12-5-08): Jobs Rapidly Disappearing; Government Spending Accelerating

This week I will not belabor the point that the evidence shows that the U.S. economy is sinking into a recession much deeper than most of us have ever experienced.  Below I have summarized the most important of last week’s bad news.  But after that I am also including a recap of the government programs and facilities designed to put a floor on the economic decline.  These programs and the announcement this weekend by President-elect Obama that he plans public works programs, such as rebuilding roads and bridges, expanding broadband Internet access, and producing alternative fuel and energy sources, will help to create jobs and stimulate the economy, with the hope of instilling confidence in the financial system and spurring consumer spending.  Occasionally, I see references in the media made to stemming the decline in housing prices, but we must remember that housing is in the midst of a correction, not a collapse (please see this prior post for an explanation.)

Economic Data

Government Program Scorecard

There have been so many federal government programs instituted since the beginning of the credit crisis, I thought it would be helpful to compile a scorecard (SOURCE: RGE Monitor):

The size of the bailout, or whatever one would like to call it, is more than $7 trillion, and that does not include the government’s pledge to back the more than $5 trillion of mortgages held by Fannie Mae and Freddie Mac.  Here are some interesting comparisons to put this amount in perspective:

chart courtesy of voltagecreative

via mindtangle (note that this data is already old!)

chart courtesy of Portfolio

via Agora Financial

[SOURCE: The Big Picture Blog]

One interesting point to note from the charts above is that the expenditure on World War II exceeded the total gross domestic product for the U.S.

Market Analysis

 

Market Behavior.  The plots of the two leading indices, the S&P 500 and the Nasdaq 100, provided for the most recent 30 business days, show that last week, since Obama has presented his economic tem and has outlined the seriousness and aggression they plan  to utilize, the market has responded with another recovery attempt.  In fact, if this trend continues, we may have witnessed a major market bottom on November 20.  This  recovery is still ongoing, as is also confirmed by our MACD trend analysis. 

Our Timing Systems.  We use two independent timing systems, referred to as slow and fast.  The slow system is based on conventional trend analysis, and its main ingredient is a modified MACD (Moving Average Convergence-Divergence) approach, determining and extending the trend of the most recent 30 business days.

The fast timing system is our original contribution.  It uses volume data of the most recent 15 days and provides daily forecasts – one day at a time.  It is fairly reliable for the upcoming 1-2 dys.  For both systems we update our calculations daily.  In the slow system trades are typically carried out 2-3 times a month, while in the fast system trades are performed almost every day.

The trades leading to our investment returns are carried out within the Rydex funds, providing a large variety of pairs of index funds, direct and inverse.  Changes in the direct funds are in phase with market changes, while for inverse funds they are out of phase – in fact opposed to them.  You can find a lot more about the Rydex funds in www.rydexfunds.com.

Investment Returns.  The table below compares the market and out investment returns.  All returns reported are our real time returns obtained in managed accounts.  On occasions people have stated that some of out results are “too good to be true”.  To remove any doubt we provide, upon request, fund financial statements for the timing system and period of interest.  If interested, you can drop us a note, and you will get the appropriae statement by return email.

The table is organized in two groups.  The upper 4 rows provides returns for completed periods, and the returns are provided with two decimal figures.  The lower 3 rows are for ongoing periods changing every day, and the returns are provided with one decimal figure.

As to the returns, 2007 was a decent year in the market, and both of our timing systems have outperformed the market.  As to 2008, it has been very problematic, especially the October crash, and the table is sprinkled with too many minus signs.  So far our timing systems have not handled well the market crash in the second half of 2008.

 

 

Nathan Jacobi, Ph.D.

Registered Investment Advisor

n.jacobi@shrago.net

California Mortgage Servicing Requirements

CALIFORNIA MORTGAGE SERVICING REQUIREMENTS

www.uslenderaudit.com

NOTE: The following is to be used for informational purpose and does is not legal advice. Legal practioners should not use these summaries to the exclusion of the actual statutory and regulatory materials. Note also that this does not include judicial interpretations.

Cal. Civ. Code §§ 2937, 2954 to 2954.8 (West)

Scope: Transfer requirements apply to transferor of servicing of

mortgage or deed of trust secured by real property located in state

containing one to four residential units. § 2937. Escrow requirements

apply to lenders or purchasers (and their agents) of obligations

secured by real property containing a single-family, owneroccupied

dwelling. § 2954. Provisions of § 2954.2 apply to

mortgagees of real property containing a one to four family

residence.

Exclusions: ??Servicing agent” does not include a trustee exercising

a power of sale pursuant to a deed of trust. § 2937.

Transfer Notice Requirements: Transferor and transferee of servicing

must notify borrower (or subsequent obligor) before borrower

becomes obligated to make payments to new servicer (if a notice

of default has been recorded or a judicial foreclosure is in progress,

should notify the attorney named in the notice of default or

foreclosure). Notice to borrower must include name and address of

new servicing agent; date the transfer will take place; address to

which payments should be sent; due date of next payment. Transferor

must notify new servicing agent about existing insurance

policies servicer is responsible for maintaining, including flood and

hazard insurance. Borrower not liable for amounts paid to former

servicer prior to borrower’s receipt of notice of the transfer, or for

late charges if these payments were otherwise on time. § 2937.

Borrower Inquiries: Borrower may request additional account

statements (discussed below). See also Appx. E.2, infra, for payoff

statement requirements.

Escrow Requirements:

Restrictions: Escrow may be required only for loan insured or

guaranteed by certain government agencies, or loan of more

than ninety percent of sale price, or after borrower has missed

two tax payments. If escrow used in absence of these conditions,

borrower must be told it is voluntary. § 2954. May not require

Appx. E.1-AZ Foreclosures

2

deposits in escrow account in excess of that permitted by

RESPA or reasonably necessary to pay taxes or insurance

premiums as they become due. Excess must be refunded within

thirty days, unless parties agree otherwise. Additional payments

may be required to make up deficiencies. § 2954.1.

Recordkeeping and Notice: Itemized annual accounting must be

provided free within sixty days of end of calendar year; information

includes accounting of moneys received, credited, or

disbursed for principal, interest, late charges, and payment of

taxes and insurance. Additional accounting statements at borrower’s

request, for prescribed fees?$.50 each for statements

requested in advance on a monthly basis, $1 when requested for

only one month, $5 for single cumulative statement. Borrower

must be notified of availability of additional statements. No

increase in monthly payments permitted until borrower has been

given an itemized accounting, listing the new payment amount

and explanation of reasons for increase. §§ 2954, 2954.2.

Handling of funds: Payments shall be made promptly to ensure

that insurance remains in force and tax payments are not

delinquent. § 2954.1.

Interest: Financial institutions must pay two percent interest on

funds held in escrow accounts for one to four family residences,

and must not charge any fee for maintaining escrow account that

will result in payment of less than two percent interest on

monies held in escrow accounts. Interest shall be credited to

borrower’s account annually or upon termination of account.

§ 2954.8.

Private Mortgage Insurance Requirements: If private mortgage

insurance is required, lender must notify borrower within 30 days

after close of escrow of the conditions under which cancellation is

possible, the information needed to communicate with lender and

insurer, and the procedure for cancellation. Thereafter, lender must

provide annual notice that cancellation may be possible, and an

address and phone number for inquiries. This information may be

included in the annual accounting required by § 2954.2. Private

mortgage insurance on a loan for personal, family or household

purposes secured by an owner-occupied one to four unit dwelling

may be cancelled by a request in writing two years after origination

if the loan balance is not more than 75%, no required payment has

been more than 30 days late in the past 24 months, and no other

default has been recorded. Within 30 days after cancellation,

insurer must refund any unused premium to person designated by

insured. These sections do not apply to loans such as FHA and VA

that require insurance for the life of the mortgage. Cal. Ins. Code

§§ 117, 12640.02; Cal. Civ. Code §§ 2954.6 through 2954.7.

Additional Requirements: None specified.

Private Remedies: Any person harmed by violation of escrow

requirements may sue for actual damages and injunctive relief.

§§ 2954, 2954.1. Any person harmed by violation of private

mortgage insurance requirements has a cause of action for injunctive

relief, treble damages, costs and reasonable attorney fees. Cal.

Civ. Code § 2954.6.

State Remedies: Willful and repeated violations of escrow requirements

punishable by fines of $50 to $200. § 2954.

Special Servicing Requirements for High-Cost Loans: Cal. Fin.

Code §§ 4970, 4973 prohibit increasing interest rates upon default

on payments. See also Cal. Fin. Code § 1916.7 (adjustable rate loan

requirements.)

Recordkeeping and notice: Borrower must be provided without

charge notice stating amounts to be paid into escrow sufficient

for payment of taxes and insurance when due. § 36a-716.

Handling of funds: Taxes and insurance premiums must be paid

when due, provided sufficient funds are in account, and bills

received at least fifteen days before due date. If amount in

escrow account insufficient after borrower has paid amounts

requested by servicer, servicer must pay taxes and insurance

from its own funds. In such case, servicer must give borrower

option to pay shortage over period of not less than one year, and

servicer may not charge interest on the shortage during that year.

§ 36a-716. Connecticut Housing Finance Authority (CHFA)

loans must provide for monthly payments into escrow, and must

reserve amounts sufficient to pay estimated amounts for taxes

and insurance when due. Conn. Agencies Regs. § 8-248E-27.

Interest: Lender or servicer must pay interest on funds held in

escrow for taxes and insurance. Rate set by Banking Commissioner

based on Federal Reserve Board deposit index, except

shall not be less than 1.5%. § 49-2a (exceptions set out in

§ 49-2c). CHFA loans must pay at least four percent interest on

escrow account. § 8-248E-27.

Private Mortgage Insurance Requirements: Lender who requires

private mortgage insurance on a loan for personal, family, or

household purposes, secured by a owner-occupied one-to-four unit

residence, must disclose at time application is filed that this

insurance is required, that its purpose is to protect the lender, the

conditions under which borrower may cancel, and a good-faith

estimate of initial and monthly costs. This may be included in a

RESPA good faith estimate. These disclosures are not required for

loans such as FHA or VA that require insurance for the life of the

loan. Conn. Gen. Stat. §§ 36a-725 and -726.

Additional Requirements: None specified.

Private Remedies: Mortgage servicer is liable for any penalties,

interest, or late fees resulting from late payments of taxes and

insurance in violation of § 36a-716, and for actual damages,

including losses that should have been covered by insurance that

was allowed to lapse, plus costs and reasonable attorney fees.

§ 36a-717.

State Remedies: Banking commissioner may order restitution or

issue cease and desist orders. § 36a-718. Lender or servicer can be

fined not more than $100 per violation for failure to pay interest on

escrow accounts. § 49-2a.

Special Servicing Requirements for High-Cost Loans: Conn. Gen.

Stat. §§ 36a-746 to 36a-746g prohibit increasing interest rates upon

default on payments or charging fees for loan modification.

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touching on finance.

Hi, i hope that you all have had a wonderiul weekend,  today i though we should touch on finance.  The following is from the Mortgage Business online, which i believe has a lot of significance on how we will weather the economic storm.

Australia’s economy does not have to fall into recession but negative sentiment could see the country talk itself into one, BIS Shrapnel warned today.

According to the analyst the RBA’s recent rate reductions and government’s fiscal stimulus package will reboot the economy with Australia unexposed to the dire problems facing other developed nations.

The real problem, the economic forecaster said, is the lack of confidence affecting household and business expenditure.

BIS Shrapnel’s comments coincide with prime minister Kevin Rudd’s calls for consumers to “go out and spend” their share of the government’s cash injection to keep the economy from stalling.

“By spending their payments, families and pensioners will help create Australian jobs and strengthen the Australian economy,” Mr Rudd said.

“I urge families and pensioners who have been doing it tough to spend their payments in a responsible way to make their family Christmas all the more special.”

The government is handing over $4.8 billion to pensioners and $3.9 billion to families in a bid to ward off an economic downturn.”

 

 

And then we have the employment uncertainty as Anz has scaled back its operations….

ANZ confirmed on Friday that up to 800 of the bank’s employees will lose their jobs before Christmas.

In a statement last month, the bank told Mortgage Business the job cuts will be to middle management roles.

Meanwhile the broader outlook for employment continues to weaken with the Olivier Job Index recording a drop in job advertisements for the fifth consecutive month in November.

48,000 fewer jobs were recorded per week on average over the month, compared to October, the index showed.

With the doom and gloom on the stock market and the scare of families loosing their income i do believe that we can all come out on top. Look at your budgets and live within this, dont over spend on credit cards and finance the I wants that you dont have to pay for interest free ,…. Be wise with the funds the government is handing out, and be wise with Xmas spending…….

Mumbai: Behind the attacks lies a story of youth twisted by hate

The pitted roads around Multan, the city of saints, stretch flat across the fields. They lead past rundown factories, workshops, shabby roadside teashops and mile after mile of flat fields broken only by the mud and brick houses of the villages of Pakistan’s rural poor. One road leads south-east to the nearby city of Bahawalpur, the biggest recruiting base of the militant groups currently being blamed by India for the Mumbai attack; another leads north-west to Faridkot, the home village of Mohammad Ajmal Mohammad Amin Kasab, a 21-year-old Pakistan national named yesterday in the Indian media as the only gunman involved in last week’s atrocity now alive and in custody.

Already a picture claimed by the Indian media to be Kasab, showing a young man dressed in combat trousers, carrying a backpack and an AK47, on his way to to Mumbai’s main station to carry out his deadly work, has become an iconic image of the assault on the city.

Two other militants have been named. Like Kasab, according to the Indian media reports, they are said to be from the Multan region, southern Punjab. They, too, are said to be members of the Pakistan-based militant group Lashkar-e-Taiba (Army of the Pure) and to have followed a five-month training period to prepare them for the attack. The charge of the group’s involvement, denied by its spokesmen, has explosive political consequences for the volatile region and must be treated with caution. In the long-running contest between India and its neighbour, propaganda and misinformation is far from rare. But if the details now emerging are confirmed, the link to Pakistan may spark war.

For though it is widely acknowledged that Pakistan’s civilian government has limited control over local militant groups, it is clear that Pakistan’s military and security establishment does.

Lashkar-e-Taiba was originally founded with the support of the Pakistani military intelligence service, the ISI, to fight as ‘deniable’ proxies in the contested territory of Kashmir, part of a decades-old strategy by the militarily weaker Pakistan to ‘bleed’ its bigger rival. The ISI also has connections with Jaish-e-Mohammed, the second group that New Delhi security officials has accused of involvement in the Mumbai attacks.

For the moment little is known about the three men named yesterday or their accomplices. But their place of origin comes as no surprise to experts. Both Lashkar-e-Taiba and Jaish-e-Mohammed draw the majority of their recruits from the southern Punjab. Last week The Observer travelled to the twin towns of Multan and Bahawalpur, the centres of the region, to investigate the reality of the groups’ power on the ground, their relations with the Pakistani intelligence services and the factors which drive young men, possibly including the Mumbai gunmen, to join them.

Trace a line from where US special forces battle Taliban fighters in the corner of empty desert where the Afghan, Pakistani and Iranian frontiers meet, follow it through the badlands of the Pakistani North West Frontier and on through the bomb-blasted cities of northern Pakistan and down through Delhi, attacked in September, to shell-shocked Mumbai, and one thing becomes clear: this zone has displaced the Middle East as the new central front in the struggle against Islamic militancy. The southern Punjab falls on the line’s centre point. There may be doubt over the identity of the attackers, but there is none that Multan and Bahawalpur and villages such as Faridkot are in the Indians’ sights.

For most militants in the region the story - and that of Azam Amir Kasab is unlikely to be very different - starts at school. The southern Punjab has one of the highest concentrations of religious schools or madrassas in south Asia. Most teach the ultra-conservative Deobandi strand of Islam that is also followed by the Afghan Taliban and, crucially in this desperately poor land, offers free classes, board and lodging to students.

In Bahawalpur the Jaish-e-Mohammed group, believed responsible for a string of brutal attacks across south Asia, including the murder of Jewish American journalist Daniel Pearl, has been linked to two such madrassas. One is the headquarters of the group - a semi-fortified and forbidding complex in the centre of the town. The other is the Dar-ul-Uloom Medina, where the brother-in-law of Rashid Rauf, the Bahawalpur-based suspected British militant thought to have been killed in an American missile attack eight days ago, is a teacher. Surrounded by some of the 700 students, he told The Observer that ‘jihad’ was the duty of all his young charges.

The pupils at the more radical Bahawalpur and Multan schools grow up soaked in extremist ideology. The most senior cleric in Bahawalpur, Maulana Riaz Chugti, said his students could only go ‘for training or to fight’ after their studies or when the schools were shut for the holy month of Ramadan.

‘To fight in Afghanistan or Kashmir and to struggle against the forces who are against Islam is our religious duty,’ Chugti, who oversees the education of 40,000 students, told The Observer.

In Bahawalpur both the effects and the limits of the recent reversal of policy by the ISI, the powerful Pakistani military intelligence service, are evident. A crackdown on the militant groups was launched after they were blamed for a bloody attack on the Indian parliament in 2001 which almost brought India and Pakistan to open war. The groups, previously seen as a strategic asset, were suddenly seen as, at least for the moment, a liability. When their operatives were linked to plots to assassinate the then President, and evidence of collusion with al-Qaeda itself became clear, the pressure mounted on the ISI to rein in their former protégés.

‘The militants have had to lower their profile,’ said one local security official. ‘They are no longer recruiting or preaching or raising funds openly. Things are much more difficult for them. If they recruit at all they do it individual by individual, not en masse like before. There is no production line.’

But the groups - along with break-away outfits with their roots in sectarian Shia-Sunni violence in the region - still have a significant presence in the region, particularly in remote villages such as that of Azam Amir Kasab. ‘They may be semi-retired, but in my village there are 300 men who have fought in Afghanistan and have training and can be activated with one phone call,’ one local former militant said. That fighters for one operation should come from the same place was not surprising. ‘When I went to Afghanistan I went with five guys who I knew from school,’ he said.

The young men of the southern Punjab have been found across a broad swath of south Asia and even further afield. In Kabul in August, The Observer interviewed Abit, a 23-year-old from Bahawalpur who had surrendered to Afghan police seconds before he was supposed to blow himself up in a huge truck bomb. Other militants from the town have been found as far away as Bangladesh. Lashkar-e-Taiba members have even been located in Iraq.

The groups are also of great interest to British intelligence services, who fear their key role as intermediaries between young volunteers from the UK’s Muslim community - such as Rauf - and al-Qaeda leaders based in the volatile tribal zones along Pakistan’s western frontier. The groups, the sources say, have a UK support network to supply funding.

The groups’ relationship with the intelligence services is complex. Front organisations for the groups have even put up candidates in recent elections and travel without fear throughout Pakistan. Earlier this year The Observer interviewed a representative of one group alleged to be linked to Lashkar-e-Taiba in the foyer of a luxury Lahore hotel.

Local politicians said groups in the region were still powerful enough to intimidate the local government and security forces and even to collect tax or mediate in legal disputes in some areas. Roshan Gilani, a Shia community leader in Bahawalpur, said music shops had received Taliban-style threats, telling them to close or risk violence. Prominent Shias have been told they are on a hit list.

Until the Mumbai attacks, the recent series of bombings in India had been attributed by most analysts to a home-grown militant outfit: the Indian Mujahideen. With many highly educated and middle-class recruits among its ranks, and led by a 36-year-old computer engineer, the group’s members have a very different profile from the Pakistani groups’ recruits. But though their paths may be very different, the militants’ eventual destination - fanaticism, violence and hate - are the same.

Intelligence agencies have done much research since 9/11 into how individuals become terrorist killers. Dehumanising the enemy is seen as key. Civilians are no longer seen as innocent but as complicit in a war waged by their governments against Islam. Group dynamics also play a huge role, particularly when teams of militants are isolated from normal society for long periods of time. Training camps - such as those in which Azam Amir Kasab is said to have spent months - are the perfect way of reinforcing solidarity and the new ‘world view’ which will allow them to execute murderous operations, such as killing diners in a hotel restaurant in cold blood.

Indian authorities believe local members of the Indian Mujahideen may have acted as scouts to prepare the ground and gather intelligence before the attack. Security services now recognise that militant groups looking to prepare attacks seek out resources and often enter into temporary coalitions with other outfits when necessary. Though criminal links to Islamic militants are rare, they are not unknown, and there are some suggestions that local underworld networks may have been exploited to get the attackers to the targets by sea.

Lashkar-e-Taiba (Army of the Pure)

Battling to end Indian rule in Kashmir, this Pakistan-based group is routinely blamed by Indian security forces for attacks. The surviving gunman arrested in Mumbai is said to be a member.

Maoists, also known as Naxalites

Prime Minister Manmohan Singh has said the Maoists are the most serious threat to national security. Their battles with police cause a steady death toll.

Liberation Tigers of Tamil Eelam

The violence caused by this Sri Lankabased separatist group spilled into India in 1991 when a suicide bomber killed Prime Minister Rajiv Gandhi.

Sikh separatists

President Indira Gandhi’s Sikh bodyguards shot her in 1984 in revenge for the hundreds killed when the military, aiming to suppress separatist militants, stormed a temple in Amritsar. Riots followed.

Students Islamic Movement of India

An Islamist fundamentalist organisation. Indian police suspect involvement in the attack on Jaipur this summer.

United Liberation Front of Asom

Formed in 1979 to establish a ’socialist Assam’ through armed struggle. One of many such groups in north-east India.

Check your luggage at home and avoid excess baggage charge misery. Works with bags up to 44kg.

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Jubilant crowds cheer army counter-attack on Nariman building

Aftermath of the terror attacks in Mumbai

Rates Near Historic Lows!

The Fed has indicated that they would like to be a buyer of Mortgage Bonds, which has resulted in attractive, lower rates right now. But as stated above, the trading environment is extremely volatile, and opportunities to capitalize on lower rates that make sense should be taken advantage of. There have been recent rumors of interest rates being brought down towards 4.5% by the Treasury. This irresponsible release included no definitive plan, no indication of who might qualify, or what the restrictions would be. Like many other recent legislative “solutions”, the restrictions might be very tight, with income limits set very low, and as a result, helping very few people. Remember, it may make sense for you to act now, and take advantage of current historically low rates…with the possibility of refinancing should rates decline further.

In other news to note from last week, the Bank of England and the European Central Bank both cut their key benchmark interest rates in an effort to revive their sagging economies. The reduction in rates was expected as part of a global coordinated effort, and our Fed is widely expected to cut its benchmark rate during its meeting on December 16. While a cut by the Fed often causes home loan rates to rise - because a Fed rate cut can lead to inflation, which is the arch enemy of Bonds and home loan rates - the deflationary environment we are currently in may prevent home loan rates from worsening significantly after the Fed cut.

I will keep you updated as things progress, but give me a call to talk about the current historically low rates, and how this opportunity might benefit you.

If you drive a car, truck or van for work, the Internal Revenue Service (IRS) has announced news that impacts you. That’s because the IRS has released the new standard mileage rates for 2009. The rates will be used to calculate deductible costs for driving an automobile for business, charitable, medical and moving purposes. The new mileage rates for business, medical and moving purposes will be slightly lower than the rates for the second half of 2008, which were raised in the middle of last year due to spiking gas prices. The rate for charitable driving, however, is set by law and will remain unchanged from 2008.

Beginning January 1, 2009, the standard mileage rates for 2009 are as follows:

Overall, these rates reflect the higher transportation costs compared to a year ago. However, the rates are slightly lower than the second half of 2008 to factor in the recent drop in gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, also enter the calculation.

But before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Remember, you don’t have to use the standard rate! Although the IRS provides the standard mileage rate for ease and convenience, you’re not required to use it. If you choose, you have the option of calculating the actual costs of using your vehicle instead of using the standard mileage rates. So keep that in mind as you calculate your automobile usage for business, medical, moving, or charity driving in 2009!

 

SPY or IVV; The S

Structure is Everything

When ETFs were first being created they were called Unit Investment Trusts (UITs).  UITs are structured in a way that the investors in the fund actually can redeem the underlying holdings or have it done automatically on the UIT’s termination date.  For an ETF investor, redeeming the underlying securities is reserved only for market makers and is prohibited to individual investors.  The units can only be created and redeemed in units of 50,000. ETFs filed as UITs are held in trust and units of the trust are sold and traded. 

State Street’s “Spider”

The SPDR fund, SPY, is the oldest and most traded ETF in the US. SPY is set up as an UIT and State Street is the trustee of the fund.  SPY has no termination date and is continuously held until the ETF shares are sold. What is notable about the fund is that SPY sells at 1/10 of the index price.

The manager of SPY must fully replicate the S&P 500 at all times. The manager cannot lend shares as a way to generate revenue. Dividends must be held in cash until paid to shareholders. All Fund Expenses (0.08%) are paid from the dividends earned by the underlying holdings. 

Because SPY’s net asset value (NAV) always closely mimics the S&P 500 index it is very reliable and suitable for options trading.  Without this strict structure, price deviations from the index may disrupt an option strategy. Any strategy depending on the ETF tracking very closely S&P 500 should rely on SPY.  Because of that reason SPY is a favorite, relative to IVV for intraday trading.  Traders and strategy investors demand no surprises other than what is reflected by the underlying stocks or trading on the ETF.  In the same way, long term investors are not as concerned with small price differences.

Dividends that are earned from the underlying equities in SPY are held in cash until paid out on a quarterly basis. Since dividends cannot be reinvested, a ‘dividend drag’ is created where during climbing markets dividends are not reinvested to add to the return of SPY.  During descending market periods holding the dividends in cash is more profitable.

 iShares IVV

Barclay’s iShares, a leading ETF provider, offers IVV as a way to track the S&P 500. The open-end structure of IVV gives the portfolio manager more freedom.  For instance, IVV can loan shares and receive interest.  IVV is not required to hold all 500 of the underlying stocks in the index, although it usually does. The fund can also use an optimization approach to best represent the index.  All these freedoms allow IVV to reduce the cost of operation to investors. The most important difference between IVV from SPY is that as dividends are earned by the underlying equities, IVV reinvest them into the index until they are to be paid out quarterly. This will increase the return in an upward moving market or the opposite in a downward market.

Option trading on IVV is available; however trading volume is not as competitive as SPY. In highly volatile markets, we have not seen the option prices move with price fluctuations of IVV. For a protection strategy this may be ok, but for more speculative trading this could cause a problem.

Conclusion

The difference between SPY and IVV is fairly straight forward; do you want your dividends reinvested into the index, or held in cash. Since 2000 Barclays and State Street have competed for assets and continually lower expense ratios.  This competition has made the two ETFs some of the lowest cost funds available. We will note that SPY has the lower annual expense ratio at .08% and IVV closely trails at .09%.  However SSgA writes in small print on the SPY section of their website: “agreed to waive a portion of its fee until February 1, 2009, but may thereafter discontinue this voluntary waiver policy.”  This indicates that the small price tag on SPY may just be a bait and switch tactic. We suspect that as the market recovers and money flows back into the market that both fees will continue to decrease. When you are ready to invest in a large cap index ETF, you are now equipped to make the right choice for you.

Casey T Smith

Research by Kyle Waller

This book put an end to my problems and gave me my life back

Just another WordPress.com weblog

Hi,

My name is Gary Stevens. I’m a 38 year old dad and  live in New York City with my wife and two kids. I wrote this (rather long) article because I know how being in debt and living day in and day out knowing that I owed money to someone else and worrying about when my own savings were going to run dry had literally sucked the life out of me. It had caused so much stress to me and my family and is something that i never want to go through again.

About 15 years back I was employed as a manager in a local  automobile showroon. I really enjoyed my job and had great people to work with and my boss although a perfectionist was quite considerate to us employees. However due to certain dealership issues the company unfortunately had to shut down and the job which I held for 7 years came to an end. I had lost my job but had enough savings in the bank to last me and my family a good 5 to 6 years. Anyway after a month or so of job hunting I finally found one with a health care company which was not too far from my home. The pay was actually better than that of the previous company I worked with so I gladly accepted the job. However a few weeks into the job and my boss was already asking me to put in extra hours of work promising me incentives or something. He was also starting to get a bit nasty and would keep playing his little mind games with me whenever he had the chance. I had already been planning a couple months earlier of starting my own real estate brokerage which is something I always wanted to do and had taken the necessary exams to do so. I was getting sick and tired of my present job and decided now was the time to do it. So I sent in my resignaton from the company and walked out a little nervous but a much happier man.

Three months into my resignation my dream became a reality and I finally set up my very own real estate brokerage. For the first one year I was only involved with the brokerage side of the business and was basically a middleman between the buyer and the seller. The properties I sold were in the price range of $500,000 to $1,000,000 and at a 3% commission I was pocketing $15000 to $30,000 per sale. One year into the business and I had successfully managd to sell 14 homes averaging more than a sale a month. I had made more than 10 times the income I would have made at my regular job and I kept reinvesting the profits back into the business. I soon got onto buying properties of my own and selling them for a solid profit. The profit margins were far higher from selling properties of your own rather than acting as a middleman but it was also much more riskier. I started out small but my business soon expanded and in a matter of time I had three employees working for me. I now owned 8 properties bought with loans from  banks as well as my own funds.

However with the economic downturn in the US and with families cutting down on their expenses I was unable to find any new buyers to sell to. The mortgage still had to be paid though and I had invested most of my savings into the business. The combined mortgage came to about $50,000 a month and with only $250,000 in savings I had to do something quick.  A couple months later though the economy was still in a bad state and inspite of lowering the sale prices considerably I only managed to sell 1 property. I was now in a really bad state and with over $80,000 in debt  I was getting desperate.  After being refused a loan by various debt relief agencies edebtassurance agreed to give me a personal loan for a pretty large sum. That helped keep me afloat for a while and gave me time to calm myself and think of the next step to take.

While I was researching on the internet for debt relief providers I stumbled upon a book called Multiple Streams Of Income by Robert.G.Allen. Apparently Robert had quite a lot of experience in the real estate industry and in generating income streams from various sources. I had heard about him before but never really bought  any of his books. His book priced at $29.95 was a downloadble product and came with a 1 year money back guarantee. It seemed like it would be an interesting read and something I could really use considering the situation I was in.

I bought the book and as i read through it I was astounded by the number of ideas this guy had and the way he could turn relatively simple ideas into huge profitable income streams. I found some parts to be a bit unnecessarily long but overall his ideas and methods of generating incomes from various sources were simply brilliant. I personally learnt so much about stock options, tax liens, index funds, covered calls, discounted mortgages and some other interesting things which I never even heard before.  I learnt how in an economic downturn tax liens could be extremely profitable and where to get them cheap and sell them for a high profit. I made an absolute killing buying and selling tax liens and soon managed to pay off my mortgage. His report on how he made $24,000 online in 24 hours has opened my eyes to the power of the internet and literally how much money can be made online.

The knowledge that I gained from this book is what got me and my family out of debt and is the reason why I can look forward to future investments instead of worrying day and night about my dues. I would recommend this book for anyone who is interested in learning new, different and creative methods of generating a solid income apart from your regular 9 to 5 and definitely to anyone who is in debt

You can check out his book at www.robertallenmedia.com

December 8, 2008 at 1:36 pm

Fuel prices and political business cycles

A few years back when the Indonesian government, on the advice of the World Bank and IMF, decided to make cuts in subsidies for fuel. This caused a lot of resentment, and demonstrations took place in the major cities.

The argument from the defenders of the cut in subsidies was not bad, on my view. Subsidies used to be relatively cheap economically when Indonesia was a great net exporter of oil, and very easy to administer. The effect would be to support infrastructure across the country. Now the subsidies are a lot less cheap.

In addition to subsidies being expensive, there are two main downsides to this policy. From a distributional perspective it is a problem that the more fuel you consume, the higher the subsidy. So the richer you are, the more subsidies you get. From an environmental perspective it is a problem that the relative benefits of investing in less fuel consuming means of transportation have been low.

Together, these two problems go some way toward explaining the huge problems of traffic congestion and pollution in Indonesia.

In the short run it is very hard to do much about it. Cutting the fuel prices has been unpopular in particular, of course, among minibus and pedicab drivers who see part of their income disappearing. The ‘deal’ when cutting the subsidies was allocate funds instead for transfers targetted directly for poor groups, the socalled Bantuan Langsung Tunai. But these funds are allocated mainly for non-working poor, and they are not as easily administered as are subsidies. At the local level, it is of course a hassle who gets the benefits, and who does not.

The government is now rowing back on the issue, re-introducing the subsidies. According to The Jakarta Post, the government’s main argument is to benefit industry and trade.

If nothing else, this move should at least benefit the government in the upcoming elections next year. The theory of political business cycles could not have predicted a more perfect date: If you set aside a little time for a quick legislation process and swift implementation, the first effects should be felt by voters just in time for the elections.

Of relevance here is a recent report on Air Pollution in Mega-cities, which states:

12/8/08

Who Are The Mortacracies? Part V

[first published May 8, 2006] I lied. I wrote that this would be the concluding part of this series on defining the world’s mortacracies, with my identification of the final list and what to do about them. But, I came across the Fund For Peace webste on failed states with beautiful data for my purpose here. So, never one to let good data rest in peace, I will exploit them to further define mortacracies.

Before going on, I have to clarify a possible confusion of terms. In line with my source, I will have to use the term “state” for the sovereign nations or countries of the world. In previous parts, I have been using the term “country,” which is a more general term for both a state and the non-sovereign territories of a state, although by context it should have been clear that I meant states. Sometimes, because of my background in international relations, I also may unthinkingly use the term “nation” for state, or “nation state.”

Now, keeping in mind that I am not focused on defining failed states in order to assess the risk of conflict, as is The Fund For Peace, but on defining mortacracies, not all 12 indicators are relevant t this purpose. So, I excluded indicators 1, 5, 11, and 12, and recalculated the total sum of the remaining eight indicators. The maximum possible failure is a total sum of 80 on these eight indicators, and the minimum is 0. The worst failure, then, is Sudan with a total of 74.6, and the least failure is Norway with 9.8 (these are the same lowest and highest failures on all 12 indicators). The U.S. is at 21, just above the U.K., which is 20.7. The average is 45.9, with a median of 50.3 and a standard deviation of 16.7.

The next step is to standardize these totals to get a relative picture of what nations are high in failure and to plot the result. The plot is shown below (if the plot is unclear or does not show, see here:

These comprise the 21 states shown below (if the list is unclear or does not show, see here):

This is quite a list. Unlike some of the other lists of possible mortacracies, this one has virtually all the states I would have included intuitively, especially the top ones. Even North Korea and Burma are captured by these indicators.

Now, from all I have done, it is time to choose a final list of mortacracies. I promise.

China Weighs New Plans To Boost Economic Growth

 BEIJING (AP) — Chinese leaders began weighing possible plans Monday to expand a massive stimulus package with higher spending on health and social programs amid signs an economic slowdown is worsening.

According to the AP.

The meeting of top planners also might consider proposals to boost exports, cut income taxes and to inject government money into slumping Chinese stock markets, according to state media and analysts. The government has released no agenda for the meeting.

The meeting comes as Beijing tries to figure out how to get the most out of a 4 trillion yuan ($586 billion) package announced Nov. 9 that is meant to shield China from a global slowdown with spending on construction and other projects.

Optimism that the meeting will produce more steps to bolster the economy lifted stock markets in Hong Kong and Shanghai. China’s main market index closed up 3.6 percent while Hong Kong’s Hang Seng index surged 7.5 percent Monday.

The plan’s key goal is to lift consumer spending, and analysts say that is unlikely until Beijing creates a stronger social safety net for Chinese families, which have to save heavily to pay for health care, schooling and retirement.

Alarm about job losses and possible unrest has mounted after economic growth slowed in the last quarter to 9 percent, down from 2007’s 11.9 percent. A slowdown in factory output, construction and other areas is worsening.

The annual planning meeting of top Communist Party and Cabinet officials is meant to make strategy for 2009. The government’s Xinhua News Agency announced it opened Monday morning but gave no details of the agenda or who would attend. Last year’s participants included President Hu Jintao and Premier Wen Jiabao.

Hu warned Communist Party leaders in a Nov. 29 speech that China was losing its competitive edge and said the downturn would test their “governing ability.”

China’s planning agency, the Cabinet’s National Development and Reform Commission, was working on a plan for more spending on schools, health and other social programs, according to the Economic Observer, a leading Chinese business newspaper.

The Cabinet and NDRC press offices did not respond to requests for information.

Other Chinese news reports said planners might consider proposals to boost slowing export growth.

They also might take up a proposal to cut taxes on lower-income Chinese workers, said Merrill Lynch economists Ting Lu and T.J. Bond in report. They said policymakers also might try to support stock markets but they downplayed the effectiveness of a stabilization fund.

“We think it’s just a token move on the part of the central government to try to revive investors’ confidence,” they said.

China and the United States, in a joint announcement after two days of economic talks, pledged Friday to boost exports by offering up to $20 billion in loans to finance imports of their goods by developing countries. Such credit in developing economies has dried up as lenders try to shield themselves from global financial turmoil.

The planning meeting also might release details of how Beijing will finance its stimulus package, the government newspaper China Daily said.

Officials say the central government will pay for 1.2 trillion yuan ($176 billion) of the package, with the rest coming from local governments and state companies. But no details have been released.

UAF: December 8, 2008 Student Investment Group battles the storm in the equity markets (December 7, 2008)

Article here.

“It’s a once in a lifetime chance,” Barber said.

For these students, the nation’s recession offers a rare learning experience and an insight to Wall Street.

“Bear markets help find out which companies are healthy and which ones are not,” Barber said.

Students of UAF’s School of Management have been overseeing the SIF program for more than 15 years now, with great success. It has paralleled the S&P 500, the primary benchmark for the SIF, since its inception and even surpassed the esteemed Standard & Poor’s Index for the leading 500 companies in the U.S. The SIF portfolio consists of about 40 securities, which are groups of companies in which students have decided to invest.

The Student Investment Fund was funded with a $100,000 grant from the UA Foundation in 1991. In the first seven years, the fund climbed to $186,000. During the bull market of 1998, the fund swelled to $311,000 within a 12-month period, then more than doubled to more than $640,000 by the end of 1999.

Tulsa Mortgages and Business Loans: ZFG Mortgage of Tulsa

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Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years to recoup the costs of refinancing your loan, so if you don’t plan to stay that long it isn’t worth the money. But if your interest rate is high it may be smart to refinance to a lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance.

Yes. It’s called a ceiling, or lifetime cap. This is a guarantee that your interest rate will never exceed a designated percentage. For instance, if your introductory rate was 5% and you have a lifetime rate cap of 6% (meaning that your interest rate can never increase more than 6% during the life of the loan) then your ceiling would be 11%.

 

 

 

 

 

 

 

 

WeSeed = We

I like Jennifer Openshaw.  As part of the Oprah/Dr Phil/CNN circuit. she does a fantastic job of bringing financial theory and practice to the masses.  Her book, The Millionaire Zone, focuses on basic tools like budgeting. complete with worksheets and learning materials.

I’d say she is to personal finance what Malcolm Gladwell is to behavioral finance.

As an extension of her brand and reach, it appears that Jennifer Openshaw has overreached with the announcement of her new venture, WeSeed (Read a good review of WeSeed at Mashable). The new site, billed as “the stock market for the rest of us”, looks like it was built to address those 100 million Americans with no stock market experience.

The site uses virtual money to abstract investing away from stocks and toward companies.  Users are encouraged to find fields that they know something about (kids, houses, fashion, etc.) and invest in them.  So like Peter Lynch, users get accustomed to looking at the stock market through a personal lens, where a user’s personal experience meets the corporate world.

To get market performance for a small part of his savings, ETFs are more appropriate.  Do we really want to increase stock ownership across a broad swath of investors who can’t afford to see the value of their portfolio swoon?  Will this demographic be next in line for a bailout after they purchased financial instruments they didn’t understand?

Openshaw is on to something here.  If she can parlay WeSeed to help the same demographic learn about ETFs and index funds, I think there would ultimately be more value.

Life Insurance

There are plenty of reasons to look for the best life insurance policy for our personal circumstances. Getting the best quote is really an important part of finding the right policy.

1) Term Life Insurance Quote Online

Terms and conditions: Term Life insurance policies vary, depending upon the company offers and so it is important to understand the scope of the cover being offered by reading the insurance companies Key facts document before taking out the policy.

2) Family Protection Life Insurance

3) Mortgage Protection Term Life Insurance

4) Mortgage Payment Protection Insurance

5) Whole Life Insurance UK

This policy pays out on death at any time of the person whose life is assured, as long as the whole life insurance policy is still in force. He is expected to pay premiums on the whole life throughout his life or until the person whose life is assured reaches a certain age, when premiums could stop, but cover continues.

Treasuries seen at risk of

Fri Dec 5, 2008 3:29pm EST

By John Parry and Jennifer Ablan

NEW YORK (Reuters) - U.S. government debt, long considered the safest investment in the world, looks like it too has been hit by “bubble” fever.

Prices of U.S. Treasury bonds appear dangerously overstretched after a soaring rally, another sign of how financial markets have been turned on their head.

“Treasuries are the riskiest securities on the planet,” said Tom Sowanick, chief investment officer for $22 billion in assets at Clearbrook Financial LLC in Princeton, New Jersey.

While few fear that the U.S. government will fail to honor its debts, many see a risk that bond prices may plunge just as spectacularly as house, commodity and stock prices have in recent months.

“It looks like the Treasury market is in bubble territory,” said William Larkin, fixed-income portfolio manager with Cabot Money Management, in Salem, Massachusetts.

The rally in the nearly $5 trillion U.S. government bond market picked up speed this week when the Federal Reserve hinted it may buy longer maturity government bonds.

Fears of a bubble in Treasuries underscore how far investors have fled from risk since ballooning house price valuations popped in 2007, causing huge losses in markets across the board and sparking a global economic crisis.

Yields on long-maturing bonds are below 3 percent and only 1-2 basis points on three-month T-bills, the lowest in decades.

After buying billions of dollars worth of government debt, U.S. institutional investors and foreigners including Asian central banks could incur enormous capital losses.

“Treasuries are pricing in depression and I just don’t think we will dive into depression-like activity. I wouldn’t buy them here,” said Brian Gendreau, an investment strategist in New York for ING Investment Management Americas.

That said, the relentless rise in Treasury prices may continue further amid little sign of an end to the panicked exodus from stocks which are down nearly 40 percent this year, and corporate bonds, hurt by fears of default.

Data on Friday showing November as the worst month for U.S. job losses since 1974, which prompted some economists to predict the country’s recession could be longer than previously thought.

“SELF-DESTRUCTING YIELD”

Some investors and economists also fear deflation, an environment of falling prices. That would push yields, or the return for investors on bonds, yet lower than their already five-decade troughs.

The stampede into Treasuries has left the benchmark 10-year Treasury note’s yield, which moves inversely to its price, at 2.51 percent this week, the lowest since the 1950s.

“I think it is safe to say that Treasuries have moved into a self-destructing yield environment,” Sowanick said.

Treasuries got a hefty boost on Monday after Fed Chairman Ben Bernanke said the U.S. central bank might buy long-dated Treasuries. Such a move would help lower mortgage rates and address one of the root causes of the global credit crisis.

Despite the slump in yields and fears of a new bubble, investors are reluctant to move away from their favorite safe-haven. Many fund managers are staring at huge losses in riskier markets and would be unwilling to make big bets there.

“You will have many hiding there, bidding up the market, because many investors can’t stand to lose anymore money before closing the books this year,” Sowanick added.

The latest gains bring the U.S. government bond market closer to the brink of a potentially vicious sell-off. It is now highly vulnerable to a surge of between $1 trillion and $2 trillion of new government issuance to pay for massive bailouts of the financial sector, bond analysts warn.

If that issuance impacts the market just when investors start venturing back into corporate bonds, the fall in prices could be rapid.

“Once confidence returns, which I expect over a six-month time horizon, safe-haven flows will go into some of these markets with more appealing returns such as corporate bonds,” said Ward McCarthy, managing director with Stone & McCarthy Research Associates, in Princeton, New Jersey.

Even if rates do not change over the next 12 months, total returns from the 10-year note would be a measly 2.6 percent versus a 3.4 percent dividend yield for the Standard & Poor’s 500 .SPX index of leading shares.

Doug Kass, president of Seabreeze Partners Management, told Reuters that he is shorting the government bond market, betting on a fall in prices.

“There is huge price exposure in Treasuries and the longer you go out into the Treasury curve, the riskier you are getting,” Kass told Reuters. “What are deemed to be risky, that is equities, are becoming safer and I am gingerly buying.”

(Reporting by John Parry and Jennifer Ablan; Editing by Tom Hals)

Your employer may be stealing from you!

Intrigue over at 7m7y.com! Who’s the Millionaire … In Training leaving? And why? Click here to find out

___________________________

1. Little or no choice of investments

2. Have to wait to traditional retirement age to receive the benefits

3. Stuck with low-returning investment choices

4. Little or no opportunity to ‘gear’ (I guess the employer match and tax benefits counts as a kind of gearing)

5. Fees

6. Your employer may be ’stealing’ from you

Stealing?!

Yeah, in a way … but, first let’s take another quick look at fees [AJC: Inspired by a comment left on a post by Dustbusterz ... thanks 'Dusty'!]; in 1998 (!) the Department of Labor received and published an independent Study of 401(k) Plan Fees and Expenses.

It found the following average fees being charged by the larger 401k funds:

Total Annual Plan Fees

(Source: Butler, Pension Dynamics Corporation, in Wang, Money, April 1997)

Now, this goes back to 1997, but I just covered some very recent work by Scott Burns, noted financial columnist, and published in his new book, Spend ’til the End, which points to the fees continuing to trend up, citing average (mean? median?) fees of 1.88% now.

Remember that, according to Scott, even a “1% increase in a fund’s annual expenses can reduce an investor’s ending account balance in that fund by 18% after twenty years”!

I calculate that a 1.88% fee reduces your returns after 20 years by a whopping 38%

But, do you know how your employer actually chooses your funds / 401k provider? On the basis of better returns to you? Given the possible 38% ‘hit’, you would assume at least on the basis of lowest fees for you?

Right?!

Nope … not a chance. In fact, the study quoted an earlier report that found that “78% of plan sponsors [employers] did not know their plan costs” (Benjamin) …

… Great! You are putting your financial future into the hands of your employer, 3/4’s of whom don’t even know what the plans that they are choosing will cost you!

So how do they choose the plan that’s right for you [AJC: ironic snicker]?

The study found, one of two ways:

1. In my opinion, an unethical way: The Study of 401(k) Fees and Expenses quoted a prior report that found employers most often choose “the institutions that furnish the firm other financial services - banking, insurance, defined benefit plan management - to provide their 401(k) plan services and may not make an independent search for the lowest cost provider.”

Your employer feathers the bed of their own business relationships with your retirement money. Nice!

2. In my opinion, a criminal way: That would have been enough for me, if I hadn’t accidentally come across what is regarded as the Retirement Industry’s ‘Big Secret’ … it’s a doozy: it’s where the 401k provider shares some of the fees that you pay them with your boss!

Think about it; your employer provides you with a match to encourage you to remain employed then gets back some of that in fees, rebates, ‘free’ services, or just good old ‘relationship building’ at your expense, literally!

How do the funds and your bosses get away with this? Simple, nobody’s looking: “Revenue sharing is a poorly disclosed and relatively unregulated practice, which falls into the gap between Department of Labor and SEC oversight.”

OK, so does this mean that you shouldn’t participate in your employer’s 401K?

Not at all … it just means that you should do the following:

1. Decide if the 401k is going to do the job for you … will it get you to your Number? At a maximum ‘investment’ of $15,500 per year and a compound annual growth rate of 8% - 12% less fees, this is highly unlikely … you run the numbers then make your choice!

2. If not, is it still wise to continue your 401k (consider it a backup plan) as well as more aggressively investing elsewhere?

3. If you can’t do both, you have no choice but to decide which investing strategy is going to have to give way to the other?

4. If you do decide to continue with the 401k, choose any ultra-low-cost Index Fund option that may be on offer over any other selection; if not available, choose a ‘no load’ fund (be careful … some ‘no loads’ are actually just ‘lower load’). And, do your own homework on fees, because you just know your employer ain’t doing it!

5. Lobby your employer to pass back any revenue-sharing back to the employees

6. Insist that your employer choose funds that work best for you over the funds that work best for them.

Strategies

“I never buy anything unless I can fill out on a piece of paper my reasons. I may be wrong, but I would know the answer to that. “I’m paying $32 billion today for the Coca Cola Company because…” If you can’t answer that question, you shouldn’t buy it. If you can answer that question, and you do it a few times, you’ll make a lot of money.” - Warren Buffett 

 

Strategies are at the heart of trading. They’re the market inefficiencies, the pockets of predictability, the repeating patterns that you are trying to detect and then exploit for profit. They provide the reasons you want to get into a trade, the reasons why you think there is a profit opportunuty there in the first place. A trading strategy has certain necessary components, in my opinion. Firstly, it must be rigorously tested. This can be done either by careful backtesting (which has serious limitations - a subject for another post), or by what I liked to call “forward-testing” i.e. trading it for a significant time with a conservative amount of real money. The latter is my preferred option, but I always backtest too if it’s possible. Secondly, it should  be based on accurate premises. If your stock investment program assumes the market will never fall 40%+ in a year - well, that has happened before so one premise of your strategy is wrong right away. Many, if not most, trading strategies have at least one false premise, and this is often a cause of blowups at institutions like Long Term Capital Management (false premise - arbitrage spreads will not diverge more than X standard deviations from fair value and/or historical bounds), Fannie Mae (false premise - US house prices will never have a year-on-year fall), or Barings (false premise - your arb traders will never commit fraud and lie about their positions). False premises are avoided by a combination of defensive risk management, awareness of Murphy’s law, and a deep knowledge of decades (preferably centuries) of market history and related booms, busts, blowups, and “Black Swan” events. Third, a strategy should be internally coherent, and make logical sense. For example, if I saw a correlation between sunspots and the price of News International stock, I would never even waste a minute on trying to turn that into a strategy. A correlation between sun spots and corn prices on the other hand, might be worth a look. A correlation between US consumer confidence, and subsequent performance of stock in Tiffany’s, would be a fertile ground for investigation. Most correlations are a case of data-mining (the phenomenon where if you look at enough data, you will see spurious apparent correlations in past data, that have no actual causal link and are unlikely to repeat in future), and don’t have a causal link. But some are good, and that is all we need. Some fields of knowledge and learnings are *extremely* useful for judging strategies - knowledge and training in scepticism, logic, philosophy, empiricism, maths/statistics, philosophy of science, inference, and induction (basically - the scientific method, and empirical/sceptic philosophy e.g. Hume) will all help in distinguishing between genuine causation, and coincidence, false signals, false premises etc. 

Samsung Says Ouch!

Dec. 9 (Bloomberg) — Samsung Electronics Co., the world’s largest maker of memory chips, liquid-crystal displays and televisions, said the global recession is wiping out profits at those businesses this quarter.

The glut in the memory-chip market has worsened, making it “difficult” for Samsung to earn a profit from the product, Executive Vice President Chu Woo Sik, head of investor relations, said yesterday in San Francisco. The company is “struggling very hard” to make money from LCDs and falling prices have evaporated profitability from TVs, he said.

A failure to generate profit from semiconductors, screens and TVs would leave Suwon, South Korea-based Samsung relying on mobile phones as its only means of avoiding the company’s first quarterly loss on record. Samsung’s struggles may signal bigger shortfalls at Toshiba Corp. and LG Display Co. because Samsung produces memory chips and LCDs more cheaply than any rival.

“Profit expectations for Samsung keep going down, but a fourth-quarter loss as a whole would be quite negative for investor sentiment,” said Baik Jae Yer, a fund manager at Korea Investment Trust Management Co. in Seoul, who oversees $3.5 billion in equities in Seoul. “Samsung can’t be unaffected by the global economic slowdown, even if it may fare better than its competitors.”

Samsung fell 1.6 percent to 456,500 won on the Korea Exchange as of 11:20 a.m. Seoul time, underperforming the 0.3 percent decline in the MSCI Asia Pacific Index. The stock has dropped 18 percent this year.

Chu declined to comment on whether the company, also the world’s second-largest maker of mobile phones after Nokia Oyj, is poised to report a fourth-quarter loss as a whole.

Conservative Spending Plans

Chu said that the company will be very conservative with its budget for new plants and equipment next year, after spending about 10 trillion won ($6.9 billion) in 2008. The company will have to pay at least 6 trillion won just to keep its plants up to date, he said.

Analysts forecast fourth-quarter profit will tumble 63 percent to a seven-year low of 818 billion won, based on the median of 12 estimates compiled by Bloomberg in the past month. Operating profit, or sales excluding the cost of goods sold and administrative expenses, may fall 76 percent to 431 billion won.

Mercados de Café, Cacao y Azucar

Jurgens Bauer’s Daily Soft Market Comments

In contrast to recent bearish price action the soft markets all blasted off upward in Monday’s trading. The sharply weaker dollar, combined with stronger equities and firmer oil prices encouraged short covering and attracted some fresh buying into the soft markets. Having already been stoked by tales that large index funds have liquidated positions in preparation for January redemption’s, and that the pressure from such liquidations has abated, values of most commodity markets rebounded causing some to question whether a bottom is near.

I agree that commodities have been over done on the downside and have been talking about the vulnerability to bouts of short covering for some time now. Today was one of those days. These markets may continue to correct from oversold conditions, so be mindful. Watch for stop hunting.

Serious traders are concerned over the relative thin conditions that exist which sets the tone for fueling additional short covering, but stops may also be near underneath should prices fail to follow through.

Economic conditions haven’t improved and the situation remains scary for many. As a result there are a lot of producers looking to raise cash. The volatility seen in these markets warrants attention and makes it difficult to see the potential to sell options. Instead owning options makes prudent sense especially when you can limit your risk.

I do not trust one day of strength amidst bear market conditions. The short side doesn’t disappear overnight. So while the attention and glamor seen from today’s action be wary and know that in most cases the trend is still down. Therefore, I look to give long puts a try on any further upside push.

Coffee: Support: 106.75-106.50, 105.1, 104, 102 Resistance:110.75, 111.35, 114.50

Cocoa: Support: 2200, 2120 Resist: 2310-2320, 2410-2420

Sugar Support: 1121-1110, 1080, 1060-1044, Resist: 1144-1152, 1188-1200

Cotton Support: 4300-4280, 4100, Resist: 4540-4560, 4605, 4750

I welcome your comments

Jurgens H. Bauer

US News Round-up: Economy

Bailouts Dwarf Spending on Climate and Poverty Crises - Alternet 11/25/08

Fed clears BofA/Merrill deal - Raw Story 11/26/08

US will guarantee up to $1.4T in bank debt - AP/Int’l Herald Tribune 11/22/08

US has nationalized nearly 100 banks - Bailout Sleuth 11/22/08

Economy: Biggest GDP drop in 7 years - CNN 11/25/08 

 

The State of the U.S. Dollar

Lately I have been hearing rumors and anecdotal evidence of an expected collapse in the value of the U.S. dollar, including some doomsday-type scenarios offered by currency traders (hat tip to Steve).  While I generally am not interested in extremist positions (they are inevitably wrong), they are sometimes good indicators that something is wrong.  It’s just that the end of civilation is usually not the result of an economic crisis, and our country endured some shockingly bad crises during its first 50 years of existence.  In this case, I suspect that the concern is how the U.S. government is going to pay for all of the packages and programs it has used and will use in the near future.

The Problem:  Rapid Expansion of U.S. Government Debt

As I noted in the last post, the total outlay of funds by the U.S. government to combat the severe recession in which we find ourselves is at $7 trillion and counting.  To pay for this, the government will issue more 10-, 20- and 30-year treasury bonds.  The more debt the government issues, the more interest it must pay for what it borrows.  The government then has to print money to pay the interest on the debt, because it will not be able to raise taxes until the economy had made a complete turnaround.  Even then, no tax increase will be large enough to repay the debt.  Another option for the government to lower its interest payments is to “monetize” the debt.  Monetizing debt generally means printing money and using those funds to buy back treasury bonds.  We don’t need to get bogged down in the minutia of how a government funds a deficit, my point is that all of these methods increase the money supply.

Expansion of Debt Negatively Affects Factors Involved in the Value of Dollar

If one could create a list of what factors go into the value of the U.S. dollar, or any currency for that matter, I do not believe the list could ever be thorough or accurate enough.  The reason why currencies are traded is because they have no fixed value.  The dollar is only worth what the market believes it is worth, and belief is more of an issue than most might imagine.  To keep our discussion focused, I am going to concentrate on what I, in my humble opinion, believe are three of the most important influences on the value of the dollar: (1) money supply; (2) federal funds rates; and (3) credit default swaps (CDS) prices.

Money Supply

Like most economic transactions, the value of the dollar really comes down to supply and demand.  One reason why the dollar has rallied over the past few months (see chart below) is that we are going through a period of disinflation as asset prices have corrected from all-time highs.  The price of a barrel of oil for example has dropped more than $100 from its peak in June.  As all asset classes have been dragged down, the resulting credit destruction has contracted the money supply.  Even though the government is literally throwing money at the problem, that money is not flowing through to the whole economy.  Also, demand for dollars has risen as foreign investors seek a safe haven from an investing environment where everything is losing value.  Increased demand and decreased supply equal a big rally in the value of the dollar.

[SOURCE: The Wall Street Journal]

However, the money supply is growing, and once bank lending normalizes, the massive amount of dollars issued by the government will cause inflation.  This eats at the value of the dollar, and will thus reduce demand for the currency.  Increased supply and decreased demand will equal a drop in the value of the dollar.

Interest Rates

The current federal funds rate is 1 percent.  This is low both in nominal and historical terms.  As the government continues to fight the recession, we may see a 0 percent federal funds rate.  Low rates discourage saving and encourage lending.  This practice is another way to increase the money supply.

Credit Default Swaps

CDSs seem to be discussed only in light of mortgage-backed securities.  However, there are healthy markets in CDSs for all kinds of debt, including U.S. Treasuries. One of the offshoots of the rising U.S. government debt may be a concern that the U.S. will have trouble paying off the debt (or as doomsdayers predict, will not be able to pay it off).  When concerns about U.S. default rise, so do prices on CDSs for treasuries.  Usually, the Fed would raise its rates to counter rising CDS rates.  However, if the economy will not allow for that, then the government will need to monetize its debt in order to avoid default, which would be catastrophic to future debt issuances.  Thus, the money supply would increase, and most likely dollar demand would drop sharply.

Prediction

I believe that over the next year or longer, the value of the dollar will steadily decrease, touching or breaking through its previous lows of last Spring for the reasons outlined above.  However, I do not foresee a monumental breakdown in demand for the dollar, if only because the rest of the world is going to be struggling right along with us, and the U.S. will most likely lead the world out of the recession.  Also, it appears that the economic team put together by President-elect Obama will closely monitor the money supply and take action as necessary to ensure that it does not spiral out of control.  Of course, governments by their nature never move fast enough, and that is why I predict that the dollar will give back its current rally.  But, at the same time, I see no reason to buy guns, ammo and canned goods and move to a cabin in the woods.

Anyone who is interested in investing either for or against the dollar may be interested in two exchange-traded funds: PowerShares U.S. Dollar Bullish and Bearish (ticker symbols UUP and UDN).  These funds use currency futures to earn a daily return that mimics the movement of the dollar index.

12/9/08

Will Oil Rock Energy ETFs?

This year’s outlook also included a study of 800 of the world’s largest oil fields. What we’ve seen in the oil and energy sector is an over-reaction to the good as well as the bad news, resulting in irrational pricing. In essence, the issued report highlights that the long-term supply and demand picture for oil continues to favor higher prices. The study found that rising depletion rates at existing oil fields make it increasingly hard for supplies to keep pace. If you don’t believe this, feel free to use the new short ETF from ProShares.

According to the IEA, the world needs to invest some $26 trillion over the next decades in infra-structure and exploration. Over the next seven years, the IEA expects the price of oil to average $100 a barrel. Investors have multiple options to benefit from increased spending in the oil sector and a recovery in oil prices. The United States Oil Fund (Ticker: USO) is directly linked to the price of light sweet crude oil. If the price of crude oil goes up by 10%, so will USO. The Vanguard Energy ETF (Ticker: VDE) provides broad exposure to oil and energy companies via holdings such as Exxon Mobil, Chevron, Schlumberger, Halliburton and many others. Barclays Global offers two not so new ETFs with more narrow focus. The iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (Ticker: IEO) and iShares Dow Jones U.S. Oil Equipment & Services Index Fund (Ticker: IEZ) might be first in line to benefit from the trillions of dollars needing to be spent on infrastructure.

Life Insurance Specialists

1) Term Life Insurance Quote Online

2) Family Protection Life Insurance

Life Insurance Specialists will advise you the appropriate cover, the adequate term depending on the future expenses, years of financial dependence and it is going to be a multiple of life assured’s salary.

4) Mortgage Payment Protection Insurance

5) Whole Life Insurance UK

Term Insurance - premiums only go towards a mortality element paying out only if one dies within the term.

Whole of Life - premiums go partly towards a mortality element and partly towards a savings element. An investment fund is naturally built that helps to pay the beneficiary. Though it’s a bit more expensive than Term Policies, it ultimately has its own benefits.

Whole of life insurance from Life Insurance Specialists:

What you need to know about protecting your personal information, and how the new enhanced drivers licence can put you at risk

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In an age where we are constantly having to adjust to new technologies that are often touted as “time saving” and “convenient”, such new technologies can also put you at risk for identity theft.

Such is the case with the new, ‘enhanced’ drivers licence that B.C. is currently testing via 521 guinea pigs who willingly signed up for the right to try it out.  A reader emailed a link to a recent story detailing the risks.  The reason for such an enhancement was to accommodate the American border entry requirements, in lieu of having a passport. The licences contain an RFID chip- radio frequency identification technology that uses radio waves to store and retrieve your personal information. A “reading” device picks up the information contained on your card , through those radio-waves, allegedly facilitating a faster entry to the US.

 The information on the licence is encrypted, however security experts now say that they have been able to obtain personal information from individuals who carry passports that contain the same chip. Although Canadian passports have yet to include this chip, many countries overseas use the RFID chip within the document. This opens the possibility that anyone who is able to obtain or create a reader could access your information from a distance via the use of an antennae, and Canadas Privacy Commissione is concerned about the repercussions.

When this technology was introduced to Japan via their passport system, it was claimed that the radio frequency encryption was unbreakable, however, the story states that it only took two weeks for someone to figure out a way to access the system.

In BC, the licences contain a “security sleeve” that allegedly prevents illegal readers from scanning the card, which is only as good as the hacker who overcomes it. They are also keeping all the information stored on them in Canada, not the US - so they claim.

None of these assurances mean anything in the end. There will always be someone smarter than the person who designed it to break into it, and both the provincial and Canadian governments have outsourced information storage and billing to American companies in the past. The initiative must be taken by the consumer, and each of us as individuals to ensure the right choices are made in securing our personal information. I blogged recently about a contracted Canada Post outlet wanting to scan my identification, and this was followed shortly thereafter with a warning from the privacy commissioner to not let retailers scan your identification, or photocopy it. 

A good majority of us have become far too complacent with our information - and it shows. Identity theft is on the rise, and it can ruin your life. Credit rating trashed, debts owed that we didn’t incur, police reports and endlessly trying to prove who you are for years are the tragic results. We hand out sensitive information all the time without realising it: contest entries, rental applications for cars and apartments, store memberships, etc etc, and most often you don’t question why they need this information or if it is even legal to ask for it. We assume companies will keep our information safe, but this is often not remotely true.

To help you make the right choices, here is an identity theft checklist, to protect your personal information and keep it secure, from the office of the privacy commissioner. As well, pay attention to the following :

A full index of fact sheets  from the Privacy Commissioner can be accessed at  http://www.privcom.gc.ca/fs-fi/index_e.asp

3 December 2008 Newz Bits

TALKING POINT

HIGHLIGHTS

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December 9, 2008 Daily Highlights

MARKET REVIEW

MEDIA HIGHLIGHTS

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10 December 2008 Newz Bits

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ETFs See Cash Inflows Even as Asset Values Fall

ETFs and ETNs continue to see net cash inflows even as total assets under management fall. The conclusion is this is a function of just falling asset values.

According to the National Stock Exchange (NSX), at the end of November, total U.S. listed ETF and ETN assets fell 16.8% to $487.6 billion from $585.8 billion in November 2007. However, net cash inflows for the month were $26.4 billion, bringing the total net cash flow for the 11 months through Nov. 30 to $136.8 billion. In November, 315 ETFs saw net cash inflows, while 179 saw outflows. ETNs split at 16 each.

Ameristock/Victoria Bay. All those firms saw net cash inflows for the year through Nov. 30 increase compared with the first 11 months of 2007. Vanguard did as well. ProShares’s assets under management rocketed 112% to $20.9 billion. SSGA’s assets grew 8.3% to $142.9 billion. This really shouldn’t be a surprise. ProShares sponsors the inverse and leveraged ETFs that have proved hugely popular in the market turmoil. SSGA sells the largest, most liquid ETF, the SPDR (SPY), which tracks the S&P 500. Many investors making a flight to safety or seeking a place to hold cash on a temporary basis will move to the S&P 500. Even as the S&P 500 sinks, the SPDR’s 2008 net cash inflows have surged 86% year-over-year through Nov. 30 to $18.23 billion.

Meanwhile, BGI’s iShares saw assets tumbled 29% to $229.3 billion.

Firms with net cash outflows in November included PowerShares, $309 million, and Merrill Lynch’s HOLDRs, which saw redemptions of $889 million. Surprisingly, the HOLDRs saw net cash outflows of $3.6 billion in 2007, but are up $1.2 billion so far this year. Other firms that experienced outflows in November were WisdomTree, FirstTrust, and SPA-ETF. Firms with net outflows year-to-date include Bank of New York, Rydex, X-Shares, Ziegler, FocusShares and BearStearns. The last two have gone out of business this year. Rydex is suffering as the strengthening dollar hurts its CurrencyShares.

As for ETNs, Barclay’s iPath family saw assets plunge 36% to $2.6 billion. In November, iPath saw outflows of $39 million. Morgan Stanley/Van Eck ETNs recorded outflows of $16 million in November. Meanwhile, Goldman Sach’s ETNs net cash outflows grew to $97 million year-to-date. Comparisons are not relevant for many of the other ETN firms as they had few funds, if any, last year.

Among the top ten ETFs and ETNs, the SPDR (SPY), iShares MSCI EAFE Index Fund (EFA), SPDR Equity Gold (GLD), iShares S&P 500 Index Fund (IVV), iShares Russell 1000 Growth Index Fund (IWF) and iShares Russell 2000 Index Fund (IWM) all saw net cash inflows in November, according the NSX. Of the 10 largest funds, these saw outflows last month: iShares MSCI Emerging Markets Index Fund (EEM), PowerShares QQQ (QQQQ), iShares Barclays Aggregate Bond Fund (AGG) and the Dow Diamonds (DIA).

The NYSE Group also releases volume data for its exchanges. Average daily matched volume for ETFs, or the total number of shares of ETFs executed on the entire NYSE Group’s exchanges surged 93.5% to 672 million shares from 347 million shares in November 2007. Total matched volume for the month totaled 12,765 million shares, a 75.1% increase. Total volume year-to-date through Nov. 30 jumped 74.7% from the same period last year to 102,583 million shares.

Handled volume, which represents the total number of shares of equity securities and ETFs internally matched on the NYSE Group’s exchanges or routed to and executed at an external market center, totaled 14,813 million shares last month, a 77.6% surge over the year-ago month. Average daily handled volume rocketed 96.3% to 780 million shares from 397 million shares a year ago. Year-to-date total volume climbed 78.1% to 117,629 million shares.

The NYSE also reported total ETF consolidated volume for the month leapt 92.1% to 45,151 million shares, while total average daily volume soared 112.3% to 2,376 million shares. Year-to-date, total consolidated ETF volume surged 119.4% over the first 11 months of 2007 to 355,133 million shares. I think those refer just to the NYSE Group.

Managed Funds Do Not Outperform Index Funds

There is building evidence that, over time, actively managed mutual funds do not outperform, and in some cases underperform, index funds.  A recent article in The Economist discusses momentum investing (that is chasing the latest “hot” stock) and investigates why some stocks on occasion move up or down for an extended period of time based solely on “momentum.”  What I found most interesting in the article is the discussion of mutual funds, and the fact that investors chase and leave funds and they go through periods of over- and underperformance, respectively.  But this is likely a waste of time, and fund management fees, as all funds, over long time horizons, tend to revert to the median.

In fact, a recent study published by Standard & Poor’s confirms the mutual funds are not worth the costs they charge compared to simply investing in an index fund.  The report concludes that “[o]ver longer time horizons, indicies continue to outperform active managers.”  Specifically, the report demonstrates that over a five-year period ending June 2008, the S&P 500 Index outperformed 68.6 percent of all actively managed large cap funds, the S&P 500 MidCap 400 outperformed 75.9 percent of all mid cap funds, and the S&P Small Cap 600 outperformed 77.8 percent of all small cap funds.

Among other interesting findings in the report is that over 5 years, 26.8 percent of U.S. equity funds, 22.5 percent of global equity funds and 24.7 percent of fixed income funds had been merged or liquidated—and that was before the recent credit crisis-related market crash.  The lesson from the report is that buying into an actively managed fund requires the same amount of effort towards doing one’s homework as buying an individual stock.  Investors must always know what they own.  For those who don’t have the time to do the work, buying into an index fund seems to be the better path to take.

[SOURCE: Standard and Poor's Indicies Versus Active Funds Scorecard, November 12, 2008]

WORLD:Crisis Threatens S.Africa

id="blog-title">MyAyiti.Com

id="tagline">A Place for Haitian Empowerment!

By Rebecca Harrison

Under black economic empowerment (BEE), which has stirred controversy but is now broadly accepted by corporate South Africa, firms in Africa’s biggest economy must meet quotas on black ownership, employment and procurement.

That means bringing black investors on board and giving them an equity stake usually via complex deals funded by the company, banks and existing shareholders through the issue of new shares.

Black investors usually repay the loans with dividends and sometimes cashflow, and the shares themselves act as collateral.

In a bull market, the newly-rich black investors see their assets grow and comfortably use healthy dividends and cashflow to meet monthly payments, even using stock to back more loans.

But South Africa’s Top-40 index of blue-chip stocks has plunged almost 30 percent this year and falling commodity prices have hit cashflow in the key mining sector. BEE deals sealed at the height of the market are looking increasingly vulnerable.

“There is no doubt that the current economic crisis will have a material impact on BEE transactions done in the last few years,” said Ajay Lalu, director of Bravura Economic Empowerment Consulting firm, which advises companies on BEE.

Industrial group Imperial (IPLJ.J: Quote, Profile, Research, Stock Buzz) and Eqstra (EQSJ.J: Quote, Profile, Research, Stock Buzz), which it spun off in May, have been the first big firms to see their BEE deal fall prey to sliding markets.

Imperial and Eqstra stock prices have slipped closer to a trigger or share cover ratio level built in to the deal, and they said this month they had to pump in an extra 100 million rand ($10.08 million) in cash to shore up BEE partner Lereko.

Imperial, Africa’s biggest transport and logistics firm, said if it hadn’t injected cash the deal would have collapsed and funders would have taken control of Lereko’s board. Imperial and Eqstra would also have lost their empowerment credentials which are crucial for doing any business with the government.

DOUBLE WHAMMY

Other companies that inked stock-backed deals between late 2005, when the Top-40 last plumbed current depths, and the market peak in May, might also have to restructure or pump in more cash.

Petrochemicals firm Sasol (SOLJ.J: Quote, Profile, Research, Stock Buzz) sealed the biggest BEE deal yet in March with a transaction worth some $3.2 billion at the time, issuing shares at 366 rand each.

The stock dropped to 287.32 rand by Friday’s close and certain share cover ratios will be breached if the ten-day volume weight average falls below 211 rand, forcing Sasol to buy back shares issued to the banks to rescue the deal.

Barloworld (BAWJ.J: Quote, Profile, Research, Stock Buzz) repriced its planned BEE deal in August given plunging asset prices — a move that ruffled some shareholder feathers at the time but in hindsight looks astute.

In the mining sector, black investors face a double whammy of falling asset prices and battered commodity prices.

Black-owned junior miner Anooraq (ARQ.V: Quote, Profile, Research, Stock Buzz) has delayed a deal with Anglo Platinum (AMSJ.J: Quote, Profile, Research, Stock Buzz) as it struggles to raise funds in current market conditions. The initial price tag was $445 million but is being renegotiated given a slide in platinum prices.

“In our view, this is nothing less than a failed business enterprise,” said Royal Bank of Canada’s mining analysts in a research note on BEE in the gold and platinum mining sector. “So what does the government then do in order to deliver on the promise of BEE, or does BEE slowly become yesterday’s dream?”

RETHINK

BEE has long faced criticism for simply shifting wealth into the hands of a few powerful black businessmen — many of whom have strong links to the ruling ANC.

And while job quotas have successfully spawned a black middle class that has powered the economy by snapping up flash cars, homes and designer clothes, affirmative action has arguably stirred white resentment and accelerated the flight of skilled workers from South Africa to Europe or Australia.

But BEE goes to the heart of the ruling ANC’s policy of trying to reverse the economic injustices of apartheid without taking radical steps such as nationalizing businesses.

BEE deals worth 96 billion rand were agreed in 2007, 19 percent of total M&A, according to Ernst & Young.

Scrapping BEE altogether is unthinkable.

Some commentators say the government could relax quotas.

“Given current equity markets, there may be less emphasis on BEE ownership and more emphasis on management and procurement,” said Craig Brewer, investment banking principal at Absa Capital.

The crisis has already prompted some consolidation among the plethora of black investment firms and analysts expect more.

The answer may be financing models that do not rely on volatile stock prices — perhaps using mezzanine funding, or debt rather than equity, although obviously leveraging is tough in today’s credit markets.

African Bank Investments (Abil) (ABLJ.J: Quote, Profile, Research, Stock Buzz) CEO Leon Kirkinis said he opted to spread risk by clinching a series of smaller deals rather than going for BEE credentials in one swoop.

More recent deals have included black employees and often a discounted sale of stock to black members of the public.

Ultimately, the financial crisis may be good for BEE, highlighting its pitfalls and perhaps forcing a more pragmatic approach, as well as underlining the lesson that nothing comes for free and markets slide as well as soar.

“One of the rationales of BEE is that it allows equity participation and that comes with risks and rewards,” said Absa’s Captal’s Brewer. “At the moment we are talking about the risks, but the rewards will be felt again in the future.”

(Additional reporting by Serena Chaudhry; Editing by Chris Wickham)

Source: Reuters

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Fears of a million layoffs a month in corporate America

Fears of a million layoffs a month in corporate America

As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis.

November was the worst month in the US labour market since the oil crisis of 1974, as more than 500,000 US workers were laid off, according to official figures released on Friday.

But Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.

Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds.

Turner says when the gap between the yield on high-risk company bonds and US Treasuries widens sharply, unemployment tends to shoot up - and current credit conditions are pointing to a doubling in the pace of layoffs, to more than a million workers a month, by spring.

‘The correlation is holding up all too well,’ he said. ‘It’s very disconcerting.’ He added that the pace of layoffs already happening in the US ‘is indicative of panic’. During the 1970s oil crisis the panic was relatively short-lived, he says. ‘But the worry now is that this will just roll on and on.’

On Friday alone, embattled car firm General Motors, fund manager Legg Mason, and motor parts supplier Gentex announced plans to shed staff.

November’s jobs figures were so much worse than analysts had expected that the Dow Jones share index actually rallied by 259 points, more than 3 per cent, as investors bet that Washington would have to launch a major new rescue package for the economy even before President-elect Barack Obama takes over the White House in January.

The scale of the layoffs in the US, which pushed unemployment to 6.7 per cent, could also point towards a further deterioration in conditions in the UK: David Blanchflower, an independent member of the Bank of England’s Monetary Policy Committee and labour market specialist, warned recently: ‘What happens in the US tends to be repeated six to nine months later in Britain’.

David Frost, director-general of the British Chambers of Commerce, believes Britain’s companies are gearing up for large-scale layoffs.

‘There will be a huge raft of redundancies. I am sensing that talking to firms. The worry is that next year the job losses will be just horrendous. All sectors are taking the hit. In the middle of the year it was construction and estate agencies. Now it is services, the automotive industry, retailers. Firms are waiting for Christmas and if they can’t see any improvement they will cut their payrolls.’

Woolworths administrators made 450 of its office staff redundant on Friday, but the future of the 25,000 staff who work in its stores remains uncertain.

ValueVision Media Inc. (NASDAQ:VVTV)

ValueVision Media Inc. (NASDAQ:VVTV) is exactly the kind of opportunity we like to find: a net net stock with a management taking active steps to rectify the situation. At yesterday’s close of $0.44, VVTV has a market capitalization of $14.8M, which is half its net current asset value of around $29.5M, or $0.88 per share and 20% of our estimate of its value in liquidation of around $74.8M or $2.23 per share. After receiving some full and frank advice on an August earnings call, VVTV’s board of directors has publicly announced that it has appointed a special committee of independent directors to “review strategic alternatives to maximize stockholder value.” The company is currently conducting an auction expected to close in February 2009. The auction has uncovered a number of interested bidders, including GE Capital Equity Investments (most recent 13D filing here), which owns 13.7% of the company. Activist investor Carlo Cannell of Cannell Capital LLC has disclosed an interest in the company and has also sent a number of entertaining letters to the CEO (which we’ve reproduced below).

About VVTV

According to its website, VVTV is a direct marketing company that markets, sells and distributes products directly to consumers through various forms of electronic media and direct-to-consumer mailings. The company’s principal electronic media activity is the television home shopping business, which uses on-air spokespersons to market brand name merchandise and private label consumer products at competitive prices. A live around the clock television home shopping programming is distributed primarily through cable and satellite affiliation agreements and the purchase of month-to-month full- and part-time lease agreements of cable and broadcast television time. In addition, ValueVision Media distributes its programming through a television station in Boston, Massachusetts. It also markets and sells an array of merchandise through www.shopnbc.com and www.shopnbc.tv.

The value proposition

According to its most recent 10Q, VVTV lost $15.7M in the August quarter, which continues a string of five quarterly losses. Operating cash flow jas also turned negative for the August quarter, which is particularly concerning. The company does have value on the balance sheet, however, as our summary analysis demonstrates (the “Carrying” column shows the assets as they are carried in the financial statements, and the “Liquidating” column shows our estimate of the value of the assets in a liquidation):

With $59.7M in cash and equivalents, $55.7M in receivables and $55.6M in inventory, VVTV’s is trading at a substantial discount to its current assets alone. The company has $1.78 per share in cash. We’ve discounted the receivables by 20% to $44.6M or $1.33 per share and the inventory by a third to $37.3M or  $1.11 per share. Subtracting all liabilities of $74M or $2.20  per share and the preferred stock of $44.1M or $1.31 per share gives us a net current asset value for VVTV of around $29.5M or $0.88 per share. At yesterday’s closing price of $0.44, VVTV is trading at a 50% discount to its net current asset value alone.

VVTV has other valuable assets, including substantial property, its FCC broadcasting licence, its NBC trademark licence agreement and its Cable distribution and marketing agreement. We have no idea how to value these assets, but discounted by an arbitrary 50%, they are worth an additional $45.3M or $1.35 per share. This puts our estimate of the company’s liquidating value at around $74.8M or $2.23 per share, which means that VVTV is trading at 20% of its value in liquidation.

Carlo Cannell suggested in the October 27 letter to the CEO (reproduced below) that VVTV’s value is much higher. He thinks the company is “worth closer to $6.00 per share, exclusive of the $120 million net operating loss and substantial intangible value in the broad 72 million reach enjoyed by ShopNBC.” Cannell’s analysis is as follows (all figures are $/share figures):

VVTV is trading at less than 7% of Cannell’s valuation.

The catalyst

VVTV’s stock is down about 91% ($5.53 per share) this year. During VVTV’s second-quarter conference call in August, shareholders lambasted management and called for the sale of the company. As a result, VVTV disclosed in its 10Q that it was pursuing “strategic alternatives”:

On September 11, 2008, our board of directors announced that it had appointed a special committee of independent directors to review strategic alternatives to maximize stockholder value. The committee currently consists of two directors: George Vandeman, who will serve as the committee’s chairman, and Robert Korkowski. We expect to appoint an additional independent director to the board, who we anticipate will serve on the special committee. The special committee retained Piper Jaffray & Co., a nationally-recognized investment banking firm, as its financial advisor. There can be no assurance that the review process will result in the announcement or consummation of a sale of our company or any other strategic alternative. We do not intend to comment publicly with respect to any potential strategic alternatives we may consider pursuing unless or until a specific alternative is approved by our board of directors.

On September 24, 2008 Cannell Capital amended an earlier 13G filing for VVTV in this 13D filing, annexing an entertaining letter from Carlo Cannell to Mr. John Buck, VVTV’s CEO (reproduced below):

Dear Mr. Buck

Cannell Capital LLC (”Cannell”), an investment adviser and General Partner to several private investment funds and partnerships, which own shares in ValueVision Media Inc. (”VVTV”), is amending its reporting requirements to reflect a more active stance.

Congratulations on your September 11, 2008 decision to appoint “a special committee of independent directors to review strategic alternatives to maximize shareholder value.” Cannell interprets this to mean that the representatives of the shareholders (aka “Directors”) have finally elected to monetize the assets on behalf of its owners.

ValueVision’s stock price is $2.20 per share. Based upon analysis our from Craig-Hallum it is our opinion the company is worth closer to $6.00 per share, exclusive of the $120 million net operating loss and substantial intangible value in the broad 72 million reach enjoyed by ShopNBC.(1)

We will be watching carefully to make sure the committee’s actions are congruent with the interests of shareholders. We are concerned that the hiring of Piper Jaffray & Co. may be a ploy to continue to justify its pattern of wheel spinning and protection of jobs over what is best for the owners of the business. For example, on Monday, September 15, 2008 we were shocked to learn that your agent (Piper Jaffray & Co.) called to “permission” when and to whom we might talk at our Company. This is characteristic of Stalinist Russia, not America. This does not have a good taint to it. You may try to muzzle other investors, but not Cannell. It bites.

You further have called for representatives to the Board of Directors. We have several candidates in mind. Two will be contacting you shortly to present their credentials directly.

It is amazing to us how much value has been destroyed under your stewardship. That you would have to hire an agent at all to advise you on what should have been done long ago is shameful.

Godspeed!

Cannell sent a follow up letter on October 27, 2008, which was annexed to this 13D filing and is reproduced below:

Dear Mr. Buck

Thank you for taking the time to speak with us this month. I imagine that you are busy consulting with sundry advisors as to ways to maximize shareholder value, including, but not limited to the immediate liquidation of our assets.

Regrettably, at this rate there will not be much value to realize. The price of the common stock has declined 65% this month alone.

I am sorry that you feel the name of the broker hired to sell our buildings at 6740, 6680 and 6690 Shady Oak Road, Eden Prairie, MN 55334 to be material non-public information. I disagree.

Given the slope of shareholder wealth destruction and given the inconsistency of information delivered to us by sundry directors and officers of our Company I would like to suggest that you deliver a special dividend of $1.20 per share to its owners, the shareholders.(1) Although I can’t speak for all shareholders, it is my opinion that most would see copious opportunities to allocate their capital to other stewards of this capital than that of the current board of VVTV.

If the board agrees with me, please tell me by Halloween when my investors and other shareholders might get their dividend. (Time is of the essence. If Senator Barack Obama is elected President the taxation of dividends is likely to become less favorable.) If you disagree, please state the reasons behind your opposition.

In the case of the latter outcome, Cannell Capital LLC will review your opposition and, if appropriate, we will evaluate our options in calling a special meeting of all shareholders to vote upon whether: (i) our cash should be returned to its owners or (ii) the existing board should be allowed to continue to manage it.

Best regards!

Sincerely

On a conference call with analysts to discuss VVTV’s third quarter results, Mr. George Vandeman, who is chairman of VVTV’s special committee of independent directors, said the company had received bids from a number of companies and instructed its advisers to invite several of the proposed buyers to take part in the next phase of the process. Final bids would be due after that phase is completed. One of those interested bidders is GE Capital Equity Investments, which disclosed its holding in this November 17, 2008 13D filing. Vandeman also said the committee was “evaluating other alternatives to boost value, including share buybacks, paying a dividend and monetizing its balance sheet.”

The special committee and its financial advisors continue to review the full range of strategic alternatives available to the company. We anticipate that the special committee will conclude its review by the end of the fiscal year.

VVTV’s fiscal year ends February 2. These are all promising developments for VVTV.

Conclusion

This seems to us to be one of the better opportunities available in the present market. VVTV, a net net stock with additional valuable assets, is very cheap. At yesterday’s close of $0.44, VVTV has a market capitalization of $14.8M, which is half its net current asset value of around $29.5M, or $0.88 per share. Including the other assets - its property, FCC broadcasting licence, NBC trademark licence agreement and the Cable distribution and marketing agreement - we estimate VVTV is worth closer to $2.23 per share. Cannell Capital sees the value as high as $5.98 per share. The company also seems to be taking steps to realise that value, publicly announcing that it has appointed a special committee of independent directors to “review strategic alternatives to maximize stockholder value.” Currently, that means that the company is conducting an auction with a number of interested bidders but it may also mean the company buys back shares, pays a dividend or monetizes its balance sheet. The committee expect to complete this process by February 2, 2009, which means that this opportunity won’t be around for much longer.

VVTV closed yesterday at $0.44.

[Disclosure: We have a holding in VVTV. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.]

Simple Advertising Secrets For The Home-Based Business Owner

Marketing Tips & Business Information

CAMBODIA: Children miss out on school because of corruption

The teacher demanded he stand for an hour by the door until the class finished. “It was humiliating, but it happens a lot to students,” said the 19-year-old son of a food vendor, graduating years late because of what he calls “high corruption fees”.

“We have to pay unfairly for almost everything at school,” he complained, including exams, tests and even class time.

“I don’t think the problem is getting better,” he said. “Young people in Cambodia have lived with this all our lives and no one has done much to stop it.”

Chronic poverty

“New teachers often face a many-month delay before they receive their salaries,” David Coleman, education chief of the UN Children’s Fund (UNICEF) for Cambodia, told IRIN. “Teachers sometimes supplement their income with a second job. This can affect their own attendance at school, and can put pressure on the amount of time they have to prepare their lessons.”

Teachers’ salaries start from US$50 a month, even less than garment factory workers earn, Coleman added. High oil and gas costs, which have only fallen slightly since their summer peak, despite a global price plummet, could be adding to teachers’ salary woes, said Soprach, a primary school teacher in the capital, Phnom Penh.

“The price I pay for gas every month is almost the same as my salary,” Soprach told IRIN. “How am I supposed to survive and feed my family without charging extra?”

Daily fees of 700 riel (20 cents) do little to drain students of money while keeping his own family afloat with $200 a month, he added.

Yet others think the tiny costs add up in significant ways, unfairly forcing poorer students out of school.

A 2007 report by the Cambodian NGO Education Partnership (NEP) reveals education costs for each child averaged $108 annually, or 9 percent of each family’s annual income. The inability to pay informal fees was the most common reason parents gave for their children dropping out, the report stated.

“When you include informal and formal school costs, and private classes and snacks, many students are paying $2.50 every day,” Leng Theavy, education and capacity-building officer for the NGO Education Partnership (NEP), told IRIN.

“That money is a lot because many Cambodians don’t make more than $60 a month. In the survey we found the informal fees to be small, but we think the numbers could be much higher now,” she added.

The study also noted that a quarter of parents were unaware that their children were entitled to a free education, a legal right. Informal fees are prevalent in Phnom Penh, not in the countryside, the report said, though Theavy said corruption still happened in the provinces.

“Some teachers in the countryside take large fees too, and often the communes receive documented complaints from parents,” she said.

Tackling corruption

As part of Cambodia’s Education Strategic Plan for 2006 to 2010, the Ministry of Education is seeking ways to improve efficiencies to reduce informal fees.

The establishment of a Teacher Professional Code, ensuring on-time payments and raising teacher salaries are priorities.

However, Theavy said government had only limited options.

“The situation is out of the control of the Ministry [of Education] even though they circulated a ban on informal payments,” she told IRIN. “Teachers commit this on their own.”

financial stories

MARKET TURBULENCE PROFITS - ACCESS BANK MD 

NSE DG ADVISES PARENTS,LAUDS ACESS BANK 

MARKET TURBULENCE PROFITS - ACCESS BANK MD 

NSE DG ADVISES PARENTS,LAUDS ACESS BANK 

China–Far from Broken

But there have been signs of a turnaround recently. Dennis Gartman, the eponymous editor of the influential Gartman Letter, writes today the FXI chart “tells a great and evolving story.” The downtrend has been broken, while relative strength has been steadily rising even while the market still was falling in absolute terms, suggesting the bears were getting exhausted.

Most importantly, Gartman adds, the FXI gapped up two sessions ago and remains higher. Early Wednesday afternoon in New York, the FXI was up another 7%.

The rally would be most welcome in Beijing given the mounting unrest over the slowing in China’s economy, which needs about 7% growth just to absorb workers looking for urban jobs. To boost the economy, the government recently announced a massive fiscal stimulus program and eased monetary policy aggressively–including halting the appreciation of the remnimbi.

How long will it take until that rouses the ire of U.S. protectionists such as Sen. Chuck Schumer? And what will be the Obama Administration’s response if it thinks Beijing is keeping its currency cheap to spur exports while the U.S. remains mired in a deep recession? The market doesn’t seem worried about that at the moment. Anyway, it’s nice to see a bull market somewhere.

U.S. Stocks Advance as Car Bailout Bets Spur Commodity Rally

U.S. stocks rose, recovering more than one-third of yesterday’s slide, as speculation lawmakers will approve a $15 billion bailout to keep automakers afloat and boost the economy pushed commodity producers higher.

Freeport-McMoRan Copper & Gold Inc. jumped 13 percent amid bets that Congress will approve a rescue, lifting demand for metals. Chevron Corp. advanced 4.5 percent as oil climbed after Russia signaled it may coordinate a production cut with OPEC. American Express Co. dropped 8.3 percent after Citigroup Inc. recommended selling the credit-card company.

The Standard & Poor’s 500 Index added 1.3 percent to 900.29 at 12:53 p.m. in New York. The Dow Jones Industrial Average gained 102.59 points, or 1.2 percent, to 8,793.92. The MSCI World Index of 23 developed markets added 1.4 percent to 900.38. Energy and raw-material companies posted the largest rallies among 10 industries in the S&P 500 as the U.S. House neared a vote on the auto bailout.

“That has lessened some concern that we’re going to have massive layoffs, greater strains on the banks, that domino effect,” said Peter Sorrentino, a Cincinnati-based money manager at Huntington Asset Advisors, which oversees about $16 billion. “That has buoyed the market.”

The S&P 500 extended its rebound from an 11-year low to 21 percent this week, marking a technical end to a 14-month bear market, as President-elect Barack Obama stepped up efforts to pull the economy out of a recession. The index has tumbled 42 percent from its 2007 record as the collapse of the subprime mortgage market curbed earnings for five straight quarters.

Disappointing Forecasts

The S&P 500 slid 2.3 percent yesterday after companies from FedEx Corp. to Danaher Corp. forecast earnings that disappointed investors as the deepening recession crimps sales.

Democrats reached a tentative agreement with the Bush administration that calls for the appointment of a so-called car czar who could force General Motors Corp. and Chrysler LLC into Chapter 11 bankruptcy protection if the companies don’t come up with a restructuring plan by March 31, according to a senior Bush administration official who requested anonymity.

GM reversed a 6.4 percent rally today to fall 3.8 percent to $4.52, while Ford Motor Co. dropped 4.9 percent to $3.07 after Democrat Max Baucus of Montana, the chairman of the Finance Committee, said he will oppose the legislation. The proposal will probably run into Republican stalling tactics in the Senate.

Freeport-McMoRan, the largest publicly traded copper producer, rallied 13 percent to $22.30. Raw-material producers in the S&P 500 added 3.1 percent collectively, the second-biggest gain among 10 industries. Copper climbed 4.1 percent in New York.

Biggest Rally

Chevron, the second-largest U.S. energy company, advanced 4.6 percent to $79.03. Chesapeake Energy Corp. surged 18 percent to $17.03. The S&P 500 Energy Index increased 5 percent, the biggest rally among 10 industries.

Oil futures for January delivery rose 7.9 percent to $45.41 a barrel in New York on speculation that Russia and the Organization of Petroleum Exporting Countries will act to end the five-month, $100 slump in prices.

Coal producers Peabody Energy Corp. and Massey Energy Co. gained as the fuel rose to the highest in seven days in Europe, spurred by an increase in the cost to ship it. Peabody added 17 percent to $25.41, while Massey Energy rose 14 percent to $15.43. Consol Energy Inc. rallied 16 percent to $32.32.

American Express, the credit-card company most dependent on capital markets for cash, lost 8.3 percent to $21.35. Citigroup analyst Donald Fandetti rated the stock “sell” in new coverage, saying earnings will be hurt as the economy slows and the turmoil in credit markets eliminates cheap sources of funds.

Job Cuts

Yahoo! Inc., the owner of the second-most popular U.S. Internet search engine, climbed 6.2 percent to $12.94 after a person familiar with the plan said the company will begin cutting about 1,500 jobs today in response to a slowdown in Internet advertising. The shares have fallen 44 percent this year.

Electronic Arts Inc. lost 16 percent to $16.29. The world’s second-largest maker of video games predicted fiscal 2009 revenue and profit will be lower than previously forecast because of slow holiday sales in North America and Europe. The company said it will reduce costs by making fewer games and increasing job cuts.

Eastman Kodak Co. slumped 8.2 percent to $6.61. The 128- year-old photography company cut its second-half and full-year sales and profit forecasts on the deepening global recession and changes in the value of the U.S. dollar.

Nike Inc., the world’s largest athletic-shoe maker, slipped 4 percent to $50.82 after it was downgraded to “neutral” from “buy” at Bank of America Corp., which cited a slowdown in demand.

55% Plunge

A global stock slump may have further to go, according to Tobin’s Q ratio, which compares the market value of companies to the cost of their constituent parts, CLSA Ltd. strategist Russell Napier said.

The ratio, developed in 1969 by Nobel Prize-winning economist James Tobin, shows the S&P 500 is still too expensive relative to the cost of replacing assets, said Napier. While the 39 percent drop in the index this year pushed equity prices below replacement cost, history suggests the ratio must sink further as deflation sets in, he said. The S&P may plunge another 55 percent to 400 by 2014, Napier said.

S&P 500 companies reported an average 18 percent decline in profits in the third quarter, prompting analysts to cut estimates for next year. They now project profit growth of 8.2 percent for S&P 500 companies in 2009, about one-third of their forecast of 23 percent at the end of the third quarter, according to data compiled by Bloomberg.

Crimson Red Harvard Endowment Stays in the Black with Managed Futures

Russia To Join Opec Oil Gang

Oils fair in love and war…eh. As long as the FRB has an algorithm to manage commodity prices (low) and elevate the USD to fund it’s hegemony, the Russian’s have to do what they have to do. They are swimming in oil like Brazil only they both need trillions to develop it, and it is not going to be ‘cheap’ oil. It does not even make sense until oils around 60 bucks a barrel to develop.

I put up a few controversial posts now and them to attract blog readership. It seems people search for the same thing every day, and who knows and odd one might be  interested in the truth. I won’t publish your comments if they include vulgarities and  death threats and cursing. Please desist with the death threats. Thanks.

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Dec. 10 (Bloomberg) — Crude oil climbed on speculation that the economy and energy demand will recover as U.S. lawmakers hammer out a $15 billion bailout of automakers.

Oil led other commodities, including copper and corn, higher a day after congressional Democrats and President George W. Bush’s administration reached an agreement on the plan. Prices also rose after Russia signaled it may coordinate an output cut with OPEC next week to end the five-month, $100 slump in prices.

“The economy is all that matters right now,” said Brad Samples, a commodity analyst for Summit Energy Inc., an energy- management company in Louisville, Kentucky. “We are expecting a major stimulus and it looks like they’ve come to some kind of agreement to help the automakers.”

Crude oil for January delivery rose $3.45, or 8.2 percent, to $45.52 a barrel at 12:44 p.m. on the New York Mercantile Exchange. Futures, which have dropped 53 percent this year, are heading for the biggest annual decline since trading began in 1983, as global economies falter.

House Speaker Nancy Pelosi said she plans to have a vote on the auto bill today in the House, where Democrats have a large enough majority to make passage likely.

Stocks rallied worldwide. The Dow Jones Industrial Average rose 84.27, or 1 percent, to 8,775.60. The Standard & Poor’s 500 Index increased 8.73 points, or 1 percent, to 897.40.

‘Greater Confidence’

“There’s greater confidence that policy makers are going to do whatever is needed to boost growth,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “There are great hopes that Obama will be able to get things done.”

Crude-oil prices climbed 7.1 percent on Dec. 8 after President-elect Barack Obama pledged the biggest U.S. public works program in half of a century to revive the economy.

The dollar dropped versus the euro, adding support to commodity markets. A weaker U.S. currency increases demand for commodities as a hedge and makes raw materials cheaper for buyers with euros, yen or sterling. The euro rose 0.7 percent to $1.3019 from $1.2927.

Energy Minister Sergei Shmatko said Russia will announce proposals for reducing output by Dec. 17, when OPEC meets, Interfax reported. The group, source of more than 40 percent of the world’s oil, may trim production by as much as 2.5 million barrels a day, next week, billionaire hedge-fund manager Boone Pickens said yesterday.

“There’s greater optimism that OPEC will take strong action at its next meeting,” said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. “They will probably cut by at least 2 to 2.5 million barrels a day at this meeting.”

‘Significant’ Cut

Shmatko said he had spoken on the phone to the president of the Organization of Petroleum Exporting Countries and that the group is preparing “significant” output cuts, Interfax said. Russia is the world’s second-largest exporter after Saudi Arabia. Norway, the next biggest non-OPEC exporter, has no plans to cut output, the petroleum ministry said.

OPEC should make a “substantial” output cut when it meets on Dec. 17 in Algeria, Shokri Ghanem, Libya’s top oil official, said on Dec. 8. Oil has tumbled 29 percent since the group announced a 1.5 million-barrel-a-day supply reduction on Oct. 24.

OPEC will “work it back up to $100,” Pickens said yesterday in an interview in New York. “It will all be determined by the global economy. If you get a recovery in the global economy, you will get it back up.”

Prices dropped earlier after the U.S. government released a report that showed inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, climbed last week as refineries increased operating rates and demand dropped.

Brent crude oil for January settlement increased $2.74, or 6.6 percent, to $44.27 a barrel on London’s ICE Futures Europe exchange.

Rio Tinto to cut 14,000 jobs, slash spending

“Drastic times call for drastic measures. They’ve addressed all parts of the equation. They’ve definitely gone into survival mode, which is appropriate given the market circumstances,” Schroeders said.

Rio’s London shares jumped 11.3 percent to 1,400 pence by 9:15 a.m., outperforming a 4.2 percent increase in the UK mining index. Its Australian shares closed up 12 percent as investors had anticipated its announcement, said UBS analyst Glyn Lawcock.

The group’s shares had dropped 54 percent in the past month, more than five times the drop in the broader market.

Rio said it would reduce its global headcount by 14,000, including nearly 6 percent of its own employees and more than half its contractors, and increase the range of assets it was looking to sell, but said it was too early to be specific.

“We will minimize our operating and capital costs to appropriately low levels until we see credible and meaningful signs of a recovery in our markets, but will retain our strategic growth options.”

SLASHES 2009 CAPEX

Rio said it would slash capital spending next year by more than half to $4 billion from the previously forecast $9 billion.

Some projects would be deferred and others canceled, with details provided at year-end results due in February.

The group also canceled plans to boost its dividend by at least 20 percent this year and next.

To date, Rio has raised just $3 billion from disposals.

Analysts said the measures should be enough for it to meet the $10 billion in debt reduction it has targeted.

“Even if there’s some slippage in asset sales, the other measures — staff reductions, cost cutting at operations, and the dividend — will more than likely very much see them make that payment in October next year,” said Pengana’s Schroeders.

The mid-point of 1,050 basis points is about 40 basis points tighter than Tuesday’s end-of-day price as shown by Markit data.

That means buying protection against the default of 10 million euros of the miner’s debt over a five-year period would cost 1.05 million euros a year.

Asked whether it was a mistake for Rio Tinto not to have entered talks with BHP on its takeover offer, which Rio Tinto rejected outright, Albanese said: “I don’t think it would have changed the outcome.”

(Additional reporting by Denny Thomas in SYDNEY, Eric Onstad and Jane Baird in LONDON

…Noah and the 40 day flood

The fallout of optimism, over-gearing and over-paying

A vignette into the aberrant theories of a private equiteer

The LPX50 has dropped some 60-70% in 12 months. That’s dystopic in anyone’s language. But I find myself asking why values have dropped so much in such a short period if the world still has a relatively strong pulse. Here are the few off the cuff reasons that large funds have seemingly faired much worse:

Mega-buyouts enjoyed a period of higher and higher multiples and easier and easier debt. But that’s finished. The fallout from being overly optimistic is much worse than most of us thought it would be (including me). If there’s anything to learn here, it’s that low purchase multiples and low gearing are key to sustainable private equity investing. Also, businesses are always going to be sensitive to falls in sales when they’re even only moderately geared.

Forbes Recommends Clean Energy Stocks

Although energy stocks are receiving a battering with the falling price of oil, Forbes.com says that they are here to stay.

We are not really sure if the piece was supposed to be ironic as they don’t seem to provide any of the good news, and Forbes are notorious for providing inaccurate coverage of CleanTech and renewable energy, but the top message is still good.  As the headline says:

Just make sure you time it right.

We believe that clean energy stocks will continue to suffer through the downturn, whether it becomes a full-blown depression or not, but once the pace of the economy picks up again, and oil, rare-earth metals and other resources start to become scarce once more, we will see the first big green boom.

Roger Biduk - Auto Plan

Roger Biduk writes:

BOND INVESTORS PUT MONEY ON LAYAWAY

As continuing stock market volatility leaves investors searching for a safe place to put their money, many have decided government bonds are the best option - even if the bonds give back a bit less than investors put in.

Short-term bond yields have hovered around - or below - zero since the credit crisis began with Lehman Brothers’ collapse in mid-September. That means investors in those bonds essentially pay the government to watch over their money and take back the same amount or even a little less when they get their money back from Uncle Sam.

It’s not just a few people investing in zero-interest bonds, either. Tuesday, the Treasury auctioned $30 billion worth of 28-day bills Tuesday at a yield of 0%, after receiving $126 billion in open interest. The yield on the 3-month bill dipped as low as -0.2% Tuesday before closing above 0%.

Demand for bonds with no return remains high amid a continually dim economic outlook. The U.S. economy is in a deep, prolonged recession with escalating job losses, record-low consumer confidence, rising foreclosures, a housing market that has yet to hit bottom and an ongoing credit crunch.

As investors look to avoid uncertainty and stock market volatility, Treasury-only money market funds have become increasingly popular, said Pierre Ellis, senior economist at Decision Economics.

“There is a desperate urge to avoid all risk” and investors are opting to “step back and wait for the smoke to clear,” he said.

Bush administration officials have dedicated trillions of dollars in programs aimed at easing credit and restoring the financial markets to normalcy. But lawmakers and policy analysts have criticized the government’s handling of the bailouts, saying they lack clear objectives and oversight.

The House Financial Services Committee held a hearing of key bailout official Neel Kashkari as well as appointed oversight personnel to determine the issues facing and methods of fixing the economic rescue package.

With no clear recovery in sight, investors are looking for a safe haven that will shield their money from the stormy economic environment, even if that means getting back the same amount they put in. With stocks unable to choose a direction and commodity prices continuing to plummet, Treasury bonds have been the only safety net of late.

Even with historically low yields, longer-term Treasurys have actually performed quite well for investors. As S&P 500 index investors have lost 40% on their investments this year, bond fund investors have gotten back about 12% during the same time period, according to the Lehman Brothers Aggregate U.S. Treasury index.

Bond prices: Yields edged higher Wednesday as stocks rallied as a government bailout of U.S. automakers moved closer to reality.

When equities show strength, investors typically shift assets out of the safety of Treasurys to take advantage of the higher returns that come with stocks. And lately, the market gyrations have suggested a rebound may be coming.

“There is a perception that the stock market may be bottoming,” said Ellis, and investors don’t want to be left out of a big Wall Street rally.

Prices, which move in a direction opposite to yields, were lower after the Treasury auctioned $28 billion worth of 3-year notes Wednesday and $20 billion worth of 278-day bills. The Treasury was set to auction $16 billion worth of 10-year bonds on Thursday.

The benchmark 10-year Treasury fell 14/32 to 109 7/32, and its yield rose to 2.69% from 2.64% late Tuesday. Two weeks ago, the 10-year yield fell below 3% for the first time since the note was first issued in 1962, and on Dec. 4, the yield on the benchmark Treasury closed at a record low of 2.55%.

The 30-year bond slipped 1-3/32 to 127-4/32 and its yield rose to 3.09% from 3.04%.

The 2-year note was down 1/32 to 100-25/32 and its yield rose to 0.87% from 0.86%.

The yield on the 3-month note, which is closely watched as an indicator of investor confidence, rose to 0.02%.

Investors and money-market funds shuffle funds in and out of the 3-month bill frequently, as they assess risk in the rest of the marketplace. A higher yield indicates that investors are slightly more optimistic.

Lending rates: The overnight Libor rate fell for the eighth day in a row to 0.12%, according to data available on Bloomberg.com, which pushed the bank-to-bank lending rate to a new record low. On Monday, the rate was 0.14%.

Libor, the London Interbank Offered Rate, is a daily average of what 16 different banks charge other banks to lend money in London, and is used to calculate adjustable-rate mortgages. More than $350 trillion in assets are tied to Libor.

The overnight lending rate has been falling to record lows for the past several sessions as central banks have lowered their key lending rates, flooding the system with liquidity.

The 3-month Libor rate also moved lower, falling to 2.1% from 2.16%.

Two market indicators signaled modest optimism. The “TED spread” narrowed to 2.08 percentage points from 2.13. The TED spread measures the difference between the 3-month Libor and the 3-month Treasury bill, and is a key indicator of risk. The higher the spread, the more unwilling investors are to take risks.

Another indicator, the Libor-OIS spread, narrowed to 1.84 percentage points from 1.91 percentage points. The Libor-OIS spread measures how much cash is available for lending between banks, and is used for determining lending rates. The bigger the spread, the less cash is available for lending.

 

BOND INVESTORS PUT MONEY ON LAYAWAY By David Goldman, Catherine Clifford, CNNMoney.com,

http://biz.yahoo.com/cnnm/081210/121008_credit_market.html?.v=3&printer=1

Billion Dollar Brains: How Wealth Puts Knowledge in its Pocket

This is the second article of a series on foundations, academia and their role in Empire-building, first published in 1969. The first article can be read here.

Part III of this series, Sinews of Empire,  is already available online and tells how these ‘billion dollar brains’, in conjunction with US federal support, created the sinews of a global empire.

Courtesy of Michael Barker who has also embedded invaluable sourcewatch and related hyperlinks. Originally published in Ramparts, May 1969.

I. ENTREPRENEURS OF HIGHER EDUCATION

TODAY’S GENERATION OF STUDENTS, who at this very moment are being suspended, beaten bloody and jailed for their efforts to end the subservience of intellect to power, loosen up entrance requirements, create new departments and colleges and attempt to make the university more relevant to their needs, might be interested in knowing how the system got set up in the first place. It did not, as it might seem, spring full-blown from the head of the absent­minded professor. The development of the modern American university was not left to the natural bent of those within its ivory towers; it was shaped by the ubiquitous charity of the foundations and the guiding mastery of wealth.

On an autumn day in 1875, a solemn ceremony in Nashville, Tennessee, marked the opening exercises of Vanderbilt Univer­sity, whose benefactor, the semi-literate Cornelius Vanderbilt, figures in Gustavus Myers’ History of the Great American Fortunes as “the foremost mercantile pirate and commercial blackmailer of his day.” (His first millions were pilfered from the federal government, in very modern fashion, through the corruption of post office officials.) Commodore Vanderbilt’s New York minister, the Reverend Charles F. Deems, had come down especially for the occasion, and during the concluding moments of the ceremony he rose to read the following tele­gram: “New York, October 4. To Dr. Charles F. Deems: Peace and goodwill to all men. C. Vanderbilt.” Then Deems, a true servant of the pulpit and the purse, gazed up at a portrait of the benefactor hanging on the wall and intoned the Holy Scripture, Acts Ten, the Thirty-First Verse: “Cornelius, thy prayer is heard, and thine alms are had in remembrance in the sight of God.”

Cornelius Vanderbilt was not the only wealthy patron of the times attempting to earn his passage through the eye of the needle by bestowing alms on collegiate supplicants. John D. Archbold, for example, chief bagman for Standard Oil, cast his benevolent grace on Syracuse University; Mrs. Russell Sage, whose husband began his career by stealing a railroad from the city in which he was an official, blessed Rensselaer Polytechnic Institute with a new school of mechanical engineer­ing; and there were hosts of others.

Prior to the Civil War, when the style of giving was still aristocratic and restrained, the largest single benefaction to a college had been Abbot Lawrence’s $50,000 to Harvard. Colleges then were small, humble and well suited to their purpose as finishing schools and theological seminaries for the gentlemanly well-to-do. As the century matured, however, the rogues and robber barons of the new industrial age began to get into the act, demonstrating how paltry the conceptions of education had been in the preceding era. Rockefellers and Stanfords endowed whole institutions, not with tens of thou­sands, but tens of millions. The horizons of academe expanded. Greek and Latin, classical education, philosophy—these may have been fine for effete gentlemen but of what use were they in the real world? The real world, of course, was defined by the money which had suddenly become available for new and expanded institutions of learning.

From Stephen Van Rensselaer to Peter Cooper, from Charles Pratt (Standard Oil) to Andrew Carnegie, industrialists flocked to finance technological institutes which would honor and preserve their names (an important consideration for many who had amassed fortunes but no families) and promote the technical progress that would keep the money mills rolling. Nor was technology the only area of learning in which business­men sought to open new paths. Joseph Wharton, a Philadel­phia manufacturer of zinc, nickel and iron, was concerned that “college life offers great temptations and opportunities for the formation of superficial lightweight characters, having shallow accomplishments but lacking in grip and hold upon real things….” To overcome the shallowness of the current college generation, Wharton proposed to the trustees of the University of Pennsylvania that they set up a “school of finance and economy.” His plan was given a sympathetic hearing by the trustees. As one academic historian describes it: “The $100,000 Wharton offered to fulfill his proposal tempted the trustees into immediate acceptance” – and the Wharton School of Finance and Commerce was born.

Not only business schools and technical institutes but medical and other professional schools made their first appearance in this period. The college was giving way to the university. And the patrons of the new age were the captains of industry, the lords and masters of the times. The power of these men in education, as elsewhere, was a function not only of the size of their capital and their dispensations, which were gigantic, but of their aggressive dynamism as well. As givers, they became “entrepreneurs in the field of higher education.”

The autobiography of G. Stanley Hall, president of Clark University, reveals that he was forced to break contracts at the orders of the founder, to reduce the scale of salaries because the founder wished to economize, and to add an undergraduate college to what he had planned as a graduate institution. This relationship was not wholly typical, in part because the presi­dent retained his independence of mind, even though he lacked the independent financial muscle to put his ideas into practice. Usually, college administrators were far more servile. Indeed, the attitude of the academic community as a whole towards its patrons bordered on sycophancy. The patrons of the univer­sity, being uncultivated themselves, often sought association with the men of learning. According to Walter Metzger, a recent historian of academic freedom, they received from academics “ornate courtesies of gratitude. They did not enter academe as intruders; they were welcomed into the realm and escorted to its high places by its very grateful inhabitants. Within the academic fraternity, to cultivate the goodwill of donors was a highly approved activity, betokening fine public spirit. To offend the bearer of gifts was an action sometimes defined as the deepest disloyalty and treachery. Cordiality was thus demanded of professors by the most compelling of mo­tives – self-interest and the desire for social approval.”

ONE OF MAJOR HIGGINSON’S primary concerns in con­ducting his philanthropic campaigns on behalf of Harvard had been that the end of aristocratic tutelage appeared to be imminent, that “Democracy has got hold of the world, and will rule.” How fortunate, then, that with a little sprinkling of the wealth that was literally pouring into their pockets (“Think how easily it has come,” Higginson remarked to one of his correspondents), the wealthy donors could sustain a filial relationship with the teachers of society’s elite and the shapers of its knowledge: “Our chance is now – before the country is full and the struggle for bread becomes intense and bitter…. I would have the gentlemen of this country lead the new men, who are trying to become gentlemen…. Give one-fourth of your last year, and count it money potted down for quiet good.”

And if any ingrates tried to raise an audible note of discord to mar the harmony of Knowledge and Industry, of the ideal and the practical, retribution was swift.

During the radical upsurge of the ’80s and ’90s, d series of exemplary firings of liberal scholars took place, usually as a result of the professors having linked some of their abstract ideas with the issues of the hour (populism, free silver vs. gold, the monopolistic trusts). As the liberal English economist J. A. Hobson pointed out at the time, “Advanced doctrine may be tolerated, if it is kept well in the background of pure theory; but, where it is embodied in concrete instances drawn from current experience, the pecuniary prospects of the college are instinctively felt to be endangered.”

Of course, no college administration admitted that it was interfering with the spirit of free inquiry. Far from it. The professors were dismissed, the colleges said, not because of their views, but because of their lack of professionalism, their partisanship (justification of the status quo was of course considered in keeping with scholarly neutrality and objectivity). While the threat of dismissal was to retain a certain utility as an instrument for inducing “responsible” academic behavior, in the long run the actual costs of carrying it out were to prove excessively high. The protestations the administrators were already forced to make showed that, as a method of sanitizing higher education, the presumptive sack was too crude for scholars, and therefore inefficient.

Where it is available, however, the carrot is always more efficacious and gentlemanly than the stick. As education became more and more bound up with the success of the industrial system, therefore, the nexus of control exercised over academics came increasingly to lie in the positive advantages which the established powers were able to bestow on a pro­fessionalism ready to serve the status quo and to withhold from “partisan” scholarship ranged against it. Advancement, prestige, research facilities, entree into high society and later into government itself, were all reserved for responsible – and respectful – exemplars of the academic profession. Radicals were left to wither on the university vine.

II. ENTER THE BIG FOUNDATIONS

AS ONE REVIEWS THE RELATIONSHIP between institutions of higher learning and the major foundations during the critical first two decades of this century,” writes a former division chief of the Rockefeller Foundation, “one finds oneself wandering if it is too much to say that the foundations became in effect the American way of discharging many of the functions performed in other countries by the Ministry of Education.” The division chief need not have been so modest.

Between them, the Rockefeller and Carnegie Foundations (there were several of each) had an annual revenue which, as a congressional report of 1915 pointed out, was “at least twice as great as the appropriations of the Federal Government for similar purposes, namely, educational and social service.” But the lump sums only begin to tell the story.

In the first place, while the Carnegie and Rockefeller Foundations decided on an expenditure of funds during this period which amounted to a fifth of the total income of colleges and universities, “When one realizes . . . that essen­tially all the funds available to the foundations were free for the encouragement of innovation while almost all the regular income of the university was tied to ongoing commit­ments, it is easy to comprehend the overwhelming significance of the foundations’ part.” (Robert S. Morison, a former director of medical and natural sciences for the Rockefeller Foundation.)

In the second place, while the foundation millions really represent taxable surplus that ought to be in the hands of the Community and dispensed by a real Ministry of Education, they actually come from the charitable trusts in the form of “gifts.” And this very fact transforms their power and gives them a geometric possibility known as “matching.” The Rockefeller Foundation offers to put up $10 million but stipulates that the beneficiary must raise two or three times that to receive its benefaction. This puts the Rockefeller Foundation in the driver’s seat, as far as conditions are concerned, and doubles or triples the power of its money. Thus, the massive endow­ment drives between 1902 and 1924 were inspired by the necessity of raising $140 million in order to receive $60 million from the Rockefeller’s General Education Board. By 1931-32, it was estimated that the foundations had directly stimulated the giving of $660 million, or fully two-thirds of the total en­dowment of all American institutions of higher learning—colleges, universities and professional schools.

Furthermore, the potential for qualitative influence on the part of the foundations was enhanced by the fact that they were the largest single contributors to these endowment funds, and, more importantly, by the fact that as income sources they were permanent features of the educational scene, and hence their future goodwill had to be cultivated as well. This is probably the most subtle and significant new factor in the foundation approach to educational benefaction. For these are “perpetual trusts,” and while a Cornelius Vanderbilt may die and leave his millions to playboy heirs no longer interested in the training of tomorrow’s elite, the Rockefeller and Carnegie Foundations which were here yesterday will be here in the future, managed by active leaders of the business world who understand the vital role that an educational estab­lishment can play in the preservation and expansion of their wealth-producing system.

ANDREW CARNEGIE DID NOT ORIGINALLY SET OUT to impose a general system of standards on American institutions of higher learning. Rather, he thought to make grand gesture of generosity by using some of the millions he had stolen from the public through watered stock in his steel combines to ameliorate the condition of a dedicated and penurious segment of society: the college teacher. And so Carnegie announced that his Foundation would provide free pensions to all college teachers. It seemed like a very simple proposition.

But no sooner had the proposal been made than the president of the Carnegie Foundation, Henry S. Pritchett, ad­vised the benefactor that higher education in America was in a state of utter confusion. Since, with the exception of a cer­tification system associated with the University of Michigan, there were no general standards for defining a college or university, there was a plethora of conceptions of what a col­lege should be. While among these institutions were diploma mills run solely for the profit of the proprietors – inevitable in a market system – there were also community financed and administered colleges, often set up by religious denominations and reflecting the needs of the communities themselves: chaos or freedom, depending on how you looked at it. President Pritchett looked at it and decided that “some criterion would have to be introduced [into the pension scheme] as to what constituted a college.” After all, it wouldn’t do to give a free $200,000 endowment (later this was escalated to $500,000) or, in the case of State universities, an annual income of $100,000 – requirements which served to force the institutions into an even greater dependence on wealth. Colleges had strict entrance requirements, including so many hours of sec­ondary education (these came to be known as “Carnegie units” and had a revolutionizing, and many would maintain damag­ing, effect on the secondary school curriculum). A college had at least eight distinct departments, each headed by a PhD (the beginning of the enthronement of that stultifying credential).

No institution that wanted to attract or retain quality teachers could afford to resist the Foundation’s offer, and so these became the standards of the day. The process and its power was well exemplified in the Foundation’s additional stipulation that institutions accepted into the program must give up their denominational affiliations. (In the broad univer­sity scene, this stipulation was subverted by the General Education Board which followed Carnegie’s conditions in making its own grants, but chose to support the big denomina­tional colleges while ignoring the small ones.) Among the colleges which gave up their religious character to receive Carnegie money were Wesleyan, Drury, Drake and Brown. Colleges which refused to comply with Carnegie and Rocke­feller conditions were “left to die from financial starvation and other ‘natural’ causes.”

THE ENORMOUS IMPLICATIONS of this sequence of events were remarked upon by the Walsh Commission, which in 1915 conducted the first government investigation of the foundations (and their relation to the industrial empires of their benefactors): “It would seem conclusive that if an institution will willingly abandon its religious affiliations through the influence of these foundations, it will even more easily conform to their will any other part of its organization or teaching.” (Provided, of course, that the influence is ever so subtly exerted.)

What has to be remembered is that the reforms which the foundations had demonstrated such an impressive power in inducing were all in fields of college activity to which they were not directly appropriating a single dollar. Similarly, for the most part, they did not themselves invent the standards which they were able, via the power of their purse strings, to impose, but selected them from existing proposals. Ivy Lee, the Rockefeller public relations man who was one of the pioneers of the new benevolent image of corporate America, had de­scribed for the Walsh Commission the importance of appear­ances. “We know,” Lee wrote, “that Henry VIII by his obsequious deference to the forms of law was able to get the English people to believe in him so completely that he was able to do almost anything with them.” It was the forms of law, of democracy, that had to be observed to achieve max­imum influence and power. Looked at formally, the foundations were imposing nothing. They did not invent the standards; the colleges were at every point free to accept or reject them. Their own role was not one of compulsion, but support. They were even advancing the cause of academic freedom by making the professors more secure. In the appearance of things, as opposed to their reality (which was quite the same as if the foundations had the force of law behind their prescriptions), lay me chief danger of foundation power. For its very subtlety was its strength. Where overt control would have been resisted, these no less effective forms of influence were tolerated. In the realm of the mind, the illusion of freedom may be more real than freedom itself.

If in the period of its origins .the university was heavily dependent on foundation support, it was no less so in the period of its growth. As the university system expanded and non-foundation sources of income became available for endow­ment and building funds, administration and teachers’ benefits, and other areas in which the foundations had played a pioneering role, the foundation directors began to shift their sights towards the new areas of innovation and growth. As the above-cited former division director of the Rockefeller Foundation put it, foundation funds were now “increasingly reserved for new and presumably venturesome undertakings which, once they had proved their worth, would be taken over by the universities’ general funds.” It was precisely the availability of foundation funds for the “growing edge” of knowledge, “for experimenting with new educational methods, developing research programs, and demonstrating the value of new knowledge,” that made it possible for the foundations to maintain their guiding role in the shaping of higher learning in America. For with few exceptions, and until very recently, foundation funds were the only significant monies available for nonmilitary organized research and institutional innova­tion in the academic world.

The ability of the foundations to dominate the margins of growth in the university system was viewed with a critical and prophetic eye by Harold Laski, shortly after he had spent a few tumultuous semesters at Harvard. The passage of time has only made his perceptions more acute. “A university principal who wants his institution to expand,” he wrote, “has no alternative except to see it expand in the directions of which one or other of the foundations happens to approve. There may be doubt, or even dissent among the teachers in the institution, but what possible chance has doubt or dissent against a possible gift of, say, a hundred thousand dollars? And how, conceivably, can the teacher whose work fits in with the scheme of the prospective endowment fail to appear more important in the eyes of the principal or his trustees than the teacher for whose subject, or whose views, the foundation has neither interest or liking? … What are his chances of promotion if he pursues a path of solitary inquiry in a world of colleges competing for the substantial crumbs which fall from the foundation’s table? And, observe, there is not a single point here in which there is the slightest control from, or interference by, the foundation itself. It is merely the fact that a fund is within reach which permeates everything and alters everything. The college develops along the lines the foundation approves. The dependence is merely implicit, but it is in fact quite final … where the real control lies no one who has watched the operation in process can possibly doubt.”

ON PAPER, THE CONTEMPORARY AMERICAN system of higher education looks wonderfully diverse, a vast pluralistic sea of independent academic communities. There are more than 2000 institutions of higher education in America, 800 publicly supported and 1400 private. Half the publicly supported colleges are district or city schools, and two-thirds of the private institutions are denomi­national. If higher education were in practice anything like its appearance on paper, then despite the historical evolution of the university, its links to wealth and the ability of the founda­tions to dominate its innovational areas, the sheer quantity of institutions would cause the foundation largesse to be spread so thin that its influence would evaporate.

The fact is, however, that the American system of higher education is a highly centralized, pyramidal structure in which the clearly defined escalating heights intellectually dominate the levels below. Perhaps the most tangible indication of the rigid hierarchy which characterizes the academic community is the concentration of PhD programs in select prestige centers at the apex of the pyramid. For the PhD is at once a validating credential and the certificate of entry into the academic pro­fession. It also represents an arduous apprenticeship in the accepted principles and acceptable perspectives of academic scholarship; it defines the methodological and ideological horizons which command academic respect and within which the “professional” operates.

Although there are over 2000 colleges and universities in America, 75 per cent of the PhD’s are awarded in a mere 25 of them, institutions which constitute a Vatican of the higher learning, the ultimate court of what can and what cannot be legitimately pursued within the academic church. Most of these select universities – Harvard, Yale, Princeton, the Uni­versity of Chicago, Columbia, Johns Hopkins, Stanford, MIT, Cornell – had emerged as dominant institutions by the advent of World War I. Together with such latecomers as the Univer­sity of California, they form a relatively tight-knit intellectual establishment. As David Riesman and Christopher Jencks observe in their study, The Academic Revolution:

The similarity of ideas and perspectives among scholars who otherwise lay strenuous claims to intellectual independence and ideological diversity presents no real mystery to the outside observer – the apprenticeship and training of academics within the centralized structure of the university system could be expected to produce no other result. The first stage in an academic career is the completion of a PhD, an effort which in the non-exact sciences can take anywhere from five to ten years, and which is accomplished under the watchful eyes and according to the principles and conceptions of the already established masters of the guild. Having completed the PhD, which represents his first serious work as a “scholar,” the apprentice professor still has four to seven years of non-tenured status during which he is subject to review on an annual basis. This period of insecurity during which he is at the mercy of his tenured superiors (and in most institutions the university administrators as well) coincides with a time in his personal life when he has probably acquired a family and sunk some local roots. Hence the threat of being dispatched to the hinterlands should he fail to show – by publication of approved articles and further commitments of his intellectual energy and reputation – that he is still a responsible fellow and under­stands what is scholarly and professional according to ac­cepted canons, is a real threat indeed. Especially when the action needed to dismiss him is the excessively simple and unobtrusive one of not renewing his contract at the end of the year. The Jesuits only asked for a human mind up to the age of seven years in order to control it forever; the American academic establishment has it to thirty-five. Is it any wonder that the product is generally so timid, conservative and conformist?

RESPONSIBILITY FOR THE MONOPOLISTIC structure of the academic marketplace (a structure which neatly mirrors the economy on which it is founded) lies with the great foundations who at the outset of the univer­sity era made a calculated decision to create a “lead system” of colleges, which by virtue of their overwhelming prestige would set the standards for, and in effect dominate, the rest of the educational scene. Thus, while the foundations stimulated two-thirds of the total endowment funding of all institutions of higher learning in America during the first third of the century, “the major portion” of the funds they were responsible for were “concentrated in some 20 of these institutions.” (Hollis, Philanthropic Foundations and Higher Education.)

Even more important than the concentration of endow­ment funds was the concentration of innovational and research funds, and funds for the creation of those facilities which provide the basis for a major center of learning. “The development of major university centers of research,” an official account of the Rockefeller philanthropies explains, “be­came the most important part of the [Laura Spelman Rockefeller] Memorial’s program. Chicago, Harvard, Columbia, Yale … and many others were assisted in developing rounded centers of social-science research. This frequently involved fluid research funds appropriated to the university to be used in its own discretion; aid to university presses; the provision of special sums for publication; grants to enable a number of the centers to experiment with different types of training … and various other devices for stimulating and encouraging the development of techniques and teaching in the social studies.”

In 1929, the chancellor of the University of Chicago, Robert Hutchins, summed up the achievements of this agency in the following terms: “The Laura Spelman Rockefeller Memorial in its brief but brilliant career [it was later merged with the Rockefeller Foundation] did more than any other agency to promote the social sciences in the United States.”

The practice of concentrating funds in major university centers during this strategic period when the birth of institutions of research in the university complex took place has remained a permanent pattern of foundation financing. Thus the Ford Foundation distributed $105 million worth of grants in economics and business from 1951 through the first quarter of 1965, but 77.5 per cent of this went to only ten universities and five business-controlled research and policy organizations (Resources for the Future, the Brookings Institution, the Population Council, the National Bureau of Economic Re­search and the Committee for Economic Development). This has had an absolutely decisive effect in perpetuating the con­centration of institutionalized knowledge which the direct endowment of individual wealth had instigated. In 1912, 51.6 per cent of the articles in the major academic journals of economics were written by economists from only ten univer­sities. In 1962, although the individual universities had changed somewhat, 53.8 per cent of the articles were still being written at ten centers. Eight of these institutions were among those most favored by the Ford Foundation.

With few exceptions, of course, these major university research complexes coincide with the strongholds of the old wealth, the aristocratic centers of the American upper class (Harvard, Yale, Stanford, etc.). It is here that the channels to Wall Street and Washington are most open and inviting to the co-optable professor, and that social attitudes and tradi­tions exert the most powerful and most subtle conservatizing pressures. (It is for just these reasons, moreover, that such schools can afford the flexibility that has earned them the undeserved reputation of being the most academically “free.”)

ONE OF THE OLDEST of these centers outside the eastern Ivy League establishment (where the connections are well known) is Stanford University, down the peninsula from San Francisco. While by no means unique, the Stanford Research Institute (SRI)-Stanford In­dustrial Park complex built around Stanford University pro­vides, in fact, the most up-to-date example of the new levels of intimacy which Wealth and Intellect (and latterly the federal Defense establishment) have attained in the postwar period. (Only one Stanford trustee is not a corporate director: John W. Gardner, former president of the Carnegie Foundation, former secretary of Health, Education and Welfare, and presently head of the foundation/corporation-sponsored Urban Coalition.) William Hewlett and David Packard – two Stanford undergraduates who set up an electronics shop in their garage before World War II, got on the war production gravy train and eventually wound up with a billion-dollar military-industrial giant, the Hewlett-Packard Company – perhaps best exemplify the seamless web of vested interests which envelops this house of intellect.

Both Hewlett and Packard are trustees of Stanford and SRI, and both are directors of several large corporations in the Stanford Industrial Park. An impressive number of cor­porations in the park are in fact “spin-off” firms, resulting directly from research in Stanford’s chemistry, electrical engineering and physics laboratories. Packard, who was recently named deputy secretary of Defense, is also a trustee of the National Merit Scholarship Corporation and the U.S. Churchill Foundation. Hewlett is a member of the President’s Science Advisory Committee. Their positions of eminence in educational philanthropy and military-industrial moneymaking (“Profit is the monetary measurement of our contribution to society” – David Packard) are far from unique. Fellow SRI trustee and former Stanford University trustee Stephen D. Bechtel, of the Bechtel Corporation (builder of bigger and better military bases and longer oil pipelines), is also a trustee of the Ford Foundation. Another holder of dual trusteeships at Ford and Stanford is the Shell Oil Corporation, which has directors on the boards of both.

For the corporations involved in the Stanford-SRI-Indus­trial triangle, the relationship is pure gravy. Most of the industries involved are heavily research- and technology-oriented. The Bechtel Corporation, probably the biggest construction firm in the world, employs on a permanent basis (rather than under contract) only 2000 people, most of them high-grade engineers. The electronics firms are similarly intellect-oriented; in the words of one journalistic account of the success-studded career of a Stanford professor who became a moving spirit in the SRI and finally a director of Hewlett-Packard and other “Stanford” corporations: “The industry’s raw material is brain-power, and the university’s students and professors are a prime source.” Stanford not only supplies its corporations with the raw material, but provides refining facilities as well. Thus, under a new program Stanford engi­neering courses will be piped into the industrial enterprises via a four-channel TV network.

For the enterprising professor and student, the avenues to corporate success are manifold. William Rambo, associate dean of Stanford’s engineering school, has said that he expects his students to become executives and company direc­tors. All this opportunity for personal advancement (and aggrandizement) must inevitably have its effects on education. Perhaps as insightful a commentary as any was contained in James Ridgeway’s impressions after visiting the SRI complex: “Professors once sneered at businessmen and the profit motive,” he wrote, “but since they have been so successful in taking up the game themselves, the profit motive is now approvingly referred to as the ‘reward structure.’ “

IV. RIGGING THE MARKETPLACE OF IDEAS

DOMINATING THE AVENUES OF PRESTIGE and supplying the main funds for social research within the uni­versities, while providing the principal access to influence in the outside world, wealth has inevitably exerted the most profound, pervasive and distorting effects on the structure of knowledge and education in the United States. This has been achieved through lavish support and recognition for the kind of investigations and techniques that are ideologically and pragmatically useful to the system which it dominates, and by withholding support on any substantial scale from empirical research projects and theo­retical frameworks that would threaten to undermine the status quo. (Exceptional and isolated support for individual radicals may be useful, however, in establishing the openness of the system at minimum risk.)

Although it is an indubitable social fact that wealth provides the sea in which academic fish must swim, no self-respecting professor would admit to the full and unpleasant implications of that fact. Thus Robert Dahl, former president of the American Political Science Association, and one of the most eminent beneficiaries of foundation support, while admitting that the foundations, “because of their enormous financial contributions to scholarly research, and the inevitable selection among competing proposals that these entail, exert a consider­able effect on the scholarly community,” maintains that “the relationship between foundation policy and current trends in academic research is too complex for facile generalities.” (Of course there have been no systematic attempts by academics to investigate the cumulative impact of this relationship and discover even arduous generalities.) According to Dahl, “Per­haps the simplest accurate statement is that the relationship is to a very high degree reciprocal: the staffs of the foundations are highly sensitive to the views of distinguished scholars, on whom they rely heavily for advice.” For a sophisticated analyst of political power this statement exhibits remarkable naivete. For it is precisely in determining which distinguished scholars (e.g., Professor Dahl or C. Wright Mills, S. M. Lipset or Herbert Marcuse) they choose to listen to that the foundations “determine” everything that follows.

The foundations themselves regard their funds as “risk capital” which can be employed “to demonstrate the validity of a new idea” (Morison). If the idea is successful, if the investment of funds covering facilities, research needs and salaries for collaborative effort establishes the idea in the intellectual mainstream, then full development can be financed from “normal” sources of capital (e.g., from the university budget, the corporations or the government).

A spectacular example of how the alliance between brains and money can become an unbeatable combination in the academic marketplace is afforded by the rise of the behavior­alist persuasion and its offshoot pluralist ideology in the social sciences. Beginning as a localized academic phenomenon, with the benefit of the foundations’ capital it ultimately achieved unchallenged national preeminence. The intellectual inspirer and organizer of the new “value-free,” statistical-empirical outlook was Charles E. Merriam, and his department at the University of Chicago was the hothouse of its early develop­ment. Such stellar names in behavioralism as Harold Lasswell, V. O. Key Jr., David Truman, Herbert Simon and Gabriel Almond were either graduate students or, in the case of Lasswell, a faculty member, in Merriam’s department before World War II.

A politically-oriented individual, as well as a political scientist (he ran for mayor of Chicago on a “Bull Moose” Republican ticket), Merriam began his organizing efforts in the academic world in the early ’20s. As he himself summed up the crystallizing experience of his subsequent career, he had once gone to a high official of the University of Chicago and asked for a stenographer and other assistance in order to con­duct an enquiry. The reply was that “the University could not possibly afford to aid all its professors in writing their books.” The “answer” to this situation, wrote Merriam, “was the Social Science Research Building… and … the Public Administration Center” – both financed by the Laura Spelman Rockefeller Memorial, under the direction of Beardsley Ruml. (Ruml, who went from the Scott Company to the Carnegie Foundation to Rockefeller, was later to become dean of the Social Sciences Division at Chicago.)

The Rockefeller-Merriam team did not limit its horizons to local academic projects. The Social Science Research Council was founded in 1923, largely through Merriam’s and Ruml’s efforts, with Merriam as its chairman and Ruml as a member of its policy committee. Over the next ten years the Council, which was made up of representatives from the American Political Science Association, the American Socio­logical Society, the American Historical Association and four comparable groups in anthropology, economics, statistics and psychology, received $4.2 million in income. Of this, $3.9 million was from the Rockefellers, the rest from other private foundations. With these funds at its disposal, the Council became the “greatest single patron or clearing house of patronage for the social sciences,” and throughout the Hungry Thirties this patronage was used extensively in behalf of the behavioral outlook.

The idea itself, of course, was ripe for the times. But as Dahl has noted: “If the foundations had been hostile to the be­havioral approach, there can be no doubt that it would have had very rough sledding indeed.” How many equally ripe ideas lacked the risk capital to demonstrate their validity?

After the war, the behavioral movement got into full stride, as Rockefeller, Carnegie and the mammoth new Ford Foundation (which briefly set up its own Behavioral Science Division) got directly into the act, financing an unprecedented proliferation of ambitious behavioral investigations and ex­pensive but necessary survey research centers to amass and analyze the empirical data for behavioral studies. By then it was evident that the collaborative effort had paid off. In 1950, the behavioralist Peter Odegard was elected head of the American Political Science Association, and in subsequent years behavioralists held the presidency with increasing regu­larity; from 1965 to 1967, the behavioralists Truman, Almond and Dahl held the presidency, symbolizing the fact that theirs had finally become the established outlook in the field. (In a survey conducted among members of the Political Science Association in the early ’60s to determine their opinion as to the best political scientists of the postwar period, only one of the top eight was not a behavioralist.)

IN BACKING THE BEHAVIORALISTS, the foundation trustees had not only backed men whose goodwill they enjoyed (the very mechanism of grant-giving assures this) but whose ideas had a definit

Admit it, Gordon - You

11th December, 2008

The writer’s simple acceptance that all we have been doing in the free west for the last century has been wrong economically is astounding! It more or less argues that if only we’d been using the Sharia finance system everything would have been hunky dory.

It must be clear to any economist that methods of financial support and regulation and the societies in which they operate are intrinsically and inseparably interlinked. OURS developed as it has because of our western freedom to decide for ourselves - the FREE MARKET choice. Yes, it went too far. Yes, we allowed people to choose products which were far beyond their means of servicing. Yes, while the housing market was booming the banks/lenders were too greedy, in the knowledge/expectation that they could always repossess/foreclose and get their money back. Yes, our industrial base has been too low to support exports for years, considering our labour costs and the increasing competition from India and China.

DON’T THROW OUT THE ECONOMIC BABY

But none of this means that our system is intrinsically WRONG. Just that it took a wrong path in recent years. We should not throw out the baby with the bath water.

Now, I have no idea if Mr Brown is doing the right thing with all this borrowing from the future to pay off the present. I am not sure if he is bankrolling our children and grandchildren. But if he is, it’s no different from what has happened to many of us in recent decades. There must be very few of us who have not lived in hope and borrowed from any outlet we can in the hope and expectation that the corner will be turned for us personally and one of these days it’ll all come together. The loans/credit cards will be paid off and we will own our homes outright, and even be able to leave something to the next generation or two.

We bought/borrowed into this system with our eyes wide open.

We must not panic and allow ourselves to be persuaded that a system which is new and untested at international level, Sharia, is the answer.

There are at least two priniciple reasons we must not buy/borrow into this system, tempting as it may be for some.

1. It will not work over the long term. Banks may use Sharia finance systems in the short term to stabilise some quarters of the financial market - and THAT may actually work; for a short time. But as soon as the recovery sets in, banks will be back to lending in the usual way, the old western capitalist way. It’s in our blood and in our expectations.

2. Sharia Finance is the conjoined twin of Sharia Law which will try to impose its legal practices on defaulters. Not that your right hand will be chopped off in Britain or America for missing a payment.  BUT, little by little a whole new regime will legitimise stringent codes of practice which will in turn be taken up by western governments as legislation as the banks then in control (Sharia) help the governments in question out of their financial and electoral hole. He who pays the piper.

So what is the answer?

Whatever western governments do, they must not embrace Sharia Finance as the answer. That would be to give power and control of our country’s finance and future to an outside entity.

There is no better time to ensure that we STOP Sharia (Law & Finance). Click here and add your name to the list.

Sharia-compliant, or Islamic, finance is committed to promoting goals any proud progressive would recognise: equity, moderation, social justice. It is a system that revolves around prudent lending, the reduction of risk, the sharing of profits and an absolute ban on speculation and the short-selling of stocks. Debt is actively discouraged and so dealings with any organisation that has a balance sheet more than a third of which is debt (which is to say, all banks!) are forbidden, as are investments in enterprises deemed unethical by Islamic scholars, such as casinos or weapons factories.

Perhaps the rarest feature, however, is the prohibition of interest - or making money out of money. As it is not permissible for banks to charge interest on their loans, sharia-compliant deals are usually structured so that the bank ends up leasing the property to the homeowner, who essentially ends up paying rent until ownership is transferred. Critics charge that the rent seems suspiciously similar to interest payments. They also point out that it ends up costing homeowners more to set up and pay off Islamic mortgages than conventional products, like with all other niche products and, in particular, ethical investments: the so-called “piety premium”.

Islamic financiers disagree, stressing the joint-ownership and profit-sharing aspects of the sharia model. “The relationship between us and the customer is based on sharing risk and sharing the rewards from the financing and investments we make on their behalf,” says Sultan Choudhury, commercial director at the Islamic Bank of Britain, this country’s only stand-alone, sharia-compliant retail bank. “The returns are based on the amount of profit realised from each transaction.”

Let me declare an interest here (in case you had not already noticed the name on the byline): I am a Muslim myself, a practising, believing Muslim. Yet, to my shame perhaps, I own not a single sharia-compliant financial product or asset. Until the recent implosion of the banking system, I had paid very little attention to the Islamic finance industry, assuming it was simply a niche activity at best, or a gimmick at worst. As a result, my own current account, pension, mortgage, loans and credit cards are all as traditional, conventional and mainstream as the next (non-Muslim) man.

Islamic finance marries the freedom of the market economy to the fairness of social democracy

Yet the reality is that Islamic finance is growing faster than any other subset of world banking, at an average annual rate of between 15 and 20 per cent. The IMF says the number and reach of sharia-compliant financial institutions worldwide has risen from one institution in one country in 1975 to more than 300 institutions operating in more than 75 countries today. Over the past year alone, sharia-compliant assets across the globe have grown by almost a third to more than $639bn, according to the latest analysis of the industry from the Banker magazine. If the current trends continue, Islamic finance will have broken through the $1trn mark by 2010.

Here in Britain, the Financial Services Authority has licensed five stand-alone Islamic banks - including the Islamic Bank of Britain, which has been reporting a significant increase in the number of non-Muslim customers applying for accounts since the start of the financial crisis. Bank officials say the numbers are growing because Islamic finance offers a “safer option” for savers and investors, regardless of faith. According to the Islamic Bank of Britain’s marketing director, Steven Amos: “Our core business will always be Muslims, but the numbers of non-Muslims are really picking up. We’ve had increased interest and it’s one of the number of reasons why we’re insulated from the credit crunch.”

To get an Islamic bank account you don’t have to go to the Islamic Bank of Britain only. So far, 20 major global banks have set up units to provide sharia-compliant financial services. HSBC began offering Islamic products and services to its customers in 2003; Lloyds TSB followed in 2005. The mainstream has gone Muslim.

Emile Abu-Shakra, spokesman for Lloyds TSB, explains. “We started offering Islamic financial products about three years ago and when we started out we were just in five branches around the country,” he says. “Now we are in two thousand branches.”

The bank has now expanded its range of products to include a current account, a mortgage, a student account, an investment fund and a business and corporate account. Its Islamic finance products are designed with Muslims in mind, but anyone can use them if they fulfil their needs.

Does Lloyds TSB believe further growth and diversification in the field are still possible? “The principles of Islamic finance could be applied to a number of different products, so there are possibilities for Islamic versions of credit cards, loans, saving accounts and asset finance as well,” says Abu-Shakra. “It’s just a matter of time.”

The remarkable feature of Islamic financial institutions, products and assets is that, although they may have not produced fantastically high returns in any one year, they have produced consistent returns over the past decade - and continue to do so even now, in the wake of the credit crunch. This year, global markets are down by more than a third off their peak but the Dow Jones Islamic Financials Index, in comparison, has lost 7 per cent over the same period and actually rose 4.75 per cent in the most recent September quarter.

Such statistics make me truly wonder whether Islamic banking, with its antipathy towards excessive risk, debt and interest, and with its emphasis on linking deposits and investments to real, underlying assets, could have saved us from the credit crunch.

“Had the Islamic financing principle of fairness and the concept of investing in partnership been slightly more prevalent in conventional banking of late, events may have turned out a little differently,” says Dan Taylor, head of banking at the accountancy giant BDO Stoy Hayward. “The Islamic principle of requiring securities to be backed by assets means that the use of, say, collateralised debt obligations, or CDOs, would not have been allowed by sharia-compliant institutions.”

Professor Rodney Wilson, who teaches Islamic finance at Durham University, agrees. He mentions that not a single sharia-compliant financial institution has failed since the start of the current crisis. Why? “Islamic banks follow a classical model of funding from their own deposits rather than borrowing from wholesale markets.”

Excessive leverage is therefore not an option for a sharia-compliant bank - as opposed to conventional banks, which in this country by 2008 were lending out roughly £700bn more than they took in deposits, betting that the good times would go on for ever and tomorrow would never come.

Well, it did: the conventional banking sector is now on the verge of collapse. Meanwhile, Islamic institutions here in Britain continue to make money. The European Islamic Investment Bank, a UK AIM-listed sharia-compliant investment bank, reported revenues up 14 per cent in June 2008 interims. On the retail side, the Islamic Bank of Britain reported 5.5 per cent growth in customer numbers and 7.2 per cent growth in customer deposits in the six months to June.

So, it is no wonder that the British government - despite distancing itself from the Archbishop of Canterbury’s ten tative support for sharia law courts - has been proactively encouraging the proliferation of sharia-compliant financial institutions for several years now. When he was chancellor, Gordon Brown repeatedly urged the City of London to become the “gateway to Islamic finance”.

Just late last month, the government announced the launch of the first sharia-compliant pension funds, and officials are now even considering using special interest-free, asset-backed Islamic bonds, or sukuks, to help fund the building of the athletes’ village for the London 2012 Olympics.

In America early last month, the US treasury department hosted a course for policymakers called “Islamic Finance 101”. This followed a visit to Saudi Arabia by the treasury deputy secretary Robert Kimmitt, during which he confirmed that sharia-compliant finance is now firmly on his country’s agenda. “The US government is studying the salient features of Islamic banking to ascertain how far it could be useful in fighting the ongoing world economic crisis,” he said.

The Islamic finance industry is entering a brave and surprisingly welcoming new world - but obstacles remain. Determining exactly what is or isn’t sharia-compliant, for example, can be difficult. Banks such as HSBC and Lloyds TSB have their own sharia advisory boards, made up of senior Islamic scholars, but one board’s interpretation of compliance with the sharia is not necessarily the same as another’s. Standardisation of rules and regulations across the sector is vital, but could take some time.

It could also be a while before we even have enough scholars to carry out the standardising - right now, according to one survey, there are only about 260 Islamic scholars worldwide who have the requisite knowledge, business savvy and linguistic skills.

However, others, like Professor Wilson, are more sanguine. “The shortage of qualified and experienced scholars should not be a problem in the longer run, as there are aspiring British Muslim scholars studying for higher degrees who have a good knowledge of both Islamic law and modern finance.”

So Islamic banking is here to stay. It is a practical, viable and resilient alternative. To borrow a phrase from the Archbishop of Canterbury, the spread of sharia finance, if not sharia law, now “seems unavoidable”.

I have even convinced myself: I now intend to invest in a sharia-friendly sukuk and to try to switch my interest-only conventional mortgage to an interest-free Islamic version. In this era of financial crises and economic chaos, it may be time for all of us - Muslims and non-Muslims, investors and savers alike - to join the halal banking revolution.

It may be our only hope.

“It would not be wise, or correct, to say that there is no support from Indian Muslims for the violence perpetrated by groups who speak on behalf of Muslim suffering. Muslims in India have legitimate grievances about discrimination—communal riots such as those that occurred in Gujarat and the human rights violations in Kashmir are causes for great concern among Muslims and others. Neither do I wish to say that there are no legitimate Hindu grievances in the neighboring countries of Pakistan or Bangladesh. What I do want to say, however, is that it has becoming increasingly common for Indian Muslims to be in complete disagreement with certain actions being taken in their name. A political community in which individuals have not agreed to be represented is inconceivable; when an individual cannot agree with what is being done in his or her name, the question of action is as acute in politics as in religion. Thus, the responses of ordinary Muslims to militant actions can take various forms—ranging from feelings of helplessness to those of outrage …”

Sen. Susan Collins: We must protect our seniors from harmful retirement account penalties

She is urging the Treasury Department to use its regulatory authority to suspend the mandatory withdrawal rule.

From Fosters.com (New Hampshire)

By Sen. Susan Collins

Article Date: Thursday, December 11, 2008

The precipitous decline in our nation’s financial markets is presenting America with its greatest economic challenge in decades. According to the Dow Jones Wilshire 5000 Composite Index, which tracks the value of all stocks actively traded, the markets have lost more than 40 percent of their value ¿ nearly $7 trillion ¿ since the beginning of this year.

The effects of this crisis are felt by all — in every community, business, and home. The effects are especially damaging to our seniors. Retirees over 70½ years old face a unique predicament: they are obligated by law and regulation to withdraw funds from their retirement accounts or face a tax penalty of 50 percent of the amount that should have been distributed.

http://www.fosters.com/apps/pbcs.dll/article?AID=/20081211/GJOPINION03/712109829/-1/SANNEWS

Cross pendants

Cross pendants – A symbol of faith

Cross pendants have become a splendid way for people to celebrate and show their Christian faith. This can be worn as an attractive and unique piece of jewelry at various occasions. There are quite a few styles and types of pendants and chains available in the shops to choose from when one is looking for a new pendant. They also make for ideal gifts for all occasions. The pendants can either be worn around the neck or used as a bracelet or key chain hanging. Cross pendants come in different metals like:

Types of Cross pendants:

The cross pendants come in many styles. Some of the common ones that can be used to wear as a fashion accessory or just a symbol of faith are:

Curved Cross pendants: The curved pendants are the most popular ones. They bring a simple elegance and classy style to your piece of biblical faith wear. It lends an almost fluid sense to the cross itself.

Chunky cross pendant: The chunky cross pendants are also very popular accessories and also make for great gifts. Though a bit bulkier and heavier, it looks quite substantial. The styles of these chunky pendants are less traditional and more distinctive. They also serve a great medium to evangelize Christian faith.

Diamond Cross Pendants: The diamond cross pendants have become the latest craze these days. They are inexpensive diamond pendants available these days that make for wonderful gift items.

Where to shop for Cross pendants?

The Cross pendants make for ideal gift items. You can buy a cross pendant as a gift for your wife, fiancée, kids or grand children. Gifting a cross pendant can really make the occasion memorable.

You can either shop for the cross pendants at the secular shops or buy it from the non-profit organizations. It is always better if you purchase them from a non-profit organization because the funds raised in such organizations go for noble causes like expanding the Kingdom of Jesus. So, you can also be a part of it.

Besides that you can also shop for your Cross pendant online. Just take your pick from the online gallery and place your order from any where across the world. The product will be shipped to your door in time. Many times these websites also offer discounts during special occasions like Christmas.

Y U Must Immediately Bet on Inflation

I know some of you are wondering about deflation vs inflation. Excerpted from Tom Dyson of the Daily Wealth newsletter:

Christian Silver Bracelets

Silver Bracelets for religious reasons!

Silver jewelry looks good on anyone and is an amazing way to accessorize in the name of God. Silver has charm of its own and when it is given the shape of a cross or other symbols that represent Christianity; its glory is heightened even more. You can make statements about your faith and trust in the Lord by wearing the Christian Silver bracelets. By this way, you can stay silent and yet let the world know how much you love Jesus.

You will find a mixed bag of Christian silver available in the shops in the form of crosses, fishes (Icthuses) and symbols representing Christianity. The Silver bracelets also come with prayers or the name of Jesus inscribed on them. These make for lovely gifts for your sweetheart. What can be a better way to let your love know how holy and pure your love is? By gifting Christian Silver bracelets, you can also show your reverence and love to the Lord. These bracelets can be worn on all occasions.

Where to get the Christian Silver bracelets from?

You can purchase the Christian Silver bracelets from the wholesale fashion jewelry shops. There are also many retail shops that sell these bracelets. However, it is recommended that you buy these items from fund raising or Christian organizations. It is so because these organizations use the fund raised in some charitable purpose or to further the kingdom of Lord.

You can also buy the Christian Silver bracelets online. You can view the wide assortments of bracelets in the gallery and make your choice. You can place your order from any corner of the world and your silver bracelet will be shipped to you. You can also take the advantage of the discounts available during Christmas and other special occasions.

Things to Note while purchasing Christian Silver bracelets:

When shopping for Christian Silver bracelets from a wholesale seller, do a little reading up on the process of manufacture. This is just to ensure that no seller passes off a piece of junk to you saying that it is authentic. Many people are unaware of the fact that silver metal must be mixed with some other metal to make it strong enough to form into rings, and bracelets. Sterling silver jewelry has about 7% copper mixed in to make it stronger. Be sure that the silver bracelet piece that you buy has a high percentage of silver content.

Autobytel Inc (NASDAQ:ABTL)

Autobytel Inc (NASDAQ:ABTL) is a net net stock with an investor declaring an active interest in late November. At yesterday’s close of $0.43, ABTL has a market capitalization of $19.4M and is trading at 63% of our estimate of its liquidation value of $30.7M. On November 21, 2008, Trilogy, Inc. filed its Schedule 13D notice, declaring an interest of 5.01%.

About ABTL

ABTL is a automotive media and marketing services company focused on helping dealers sell cars and services, and manufacturers build brands through marketing and advertising primarily through the Internet. The company owns and operates automotive websites MyRide.com, Autobytel.com, Autoweb.com, Car.com, CarSmart.com, AutoSite.com and CarTV.com. It connects automotive marketers with vehicle shoppers visiting these websites and third-party websites (primarily search engines, automotive information providers and other auto related venues). You can see the corporate website here.

The value proposition

ABTL’s most recent 10Q, specifically its earnings and cash flow, was abominable. The company lost $5.36M last year but surpassed that in the September quarter alone, losing$5.63M. ABTL had negative cash from operating activities last year of $6.91M and $2.88M in the quarter to September. As always we can find some value on the balance sheet, as our summary analysis demonstrates (the “Carrying” column shows the assets as they are carried in the financial statements, and the “Liquidating” column shows our estimate of the value of the assets in a liquidation):

With $32.2M or $0.71 per share in cash and equivalents on the balance sheet and total liabilities of $12.7M or $0.28 per share, ABTL is trading at its net cash value of $0.43. If we add in receivables of $12.7M (which we’ve written down by 20% to $10.2M or $0.22 per share), property, plant and equipment of $9.2M (written down to $4.6M or $0.10 per share) and a nominal $0.9M or $0.02 per share for the prepaid expenses, ABTL has a a liquidating value of $35.3M or $0.78 per share. ABTL’s liquidating value of $0.78 is 82% higher than its stock price of $0.43, which is a substantial margin for error (or safety).

The catalyst

Trilogy, Inc. filed its Schedule 13D notice, declaring an interest of 5.01% on November 21, 2008. The filing contains the standard boilerplate that says a great deal without actually disclosing Trilogy’s true purpose for the purchase.  Trilogy is a private operating company in the technology consulting industry, not a fund manager, so there is little public information available about its strategy. It seems odd for a technology consulting business to buy a substantial active stake in a listed company. It’s possible that the filing is a precursor to a bid for ABTL. An affiliate of Trilogy, Trilogy Automotive Advertising Services, operates a business focussed on the automotive industry. ABTL might fit nicely into that business. We’re only speculating, but on the basis that it might turn into a bid, ABTL is worth watching.

Conclusion

At its close yesterday of $0.43 ABTL is trading at its net cash and at a 45% discount to its value in liquidation. In short, it’s a bargain. With Trilogy disclosing an active interest that could be a precursor to a takeover bid, ABTL is worth a look.

ABTL closed yesterday at $0.43.

[Disclosure: We do not have a holding in ABTL. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.]

Will the dollar, and treasuries collapse?

id="desc">Forex, Stocks, Bonds, Credit Crisis…

 

UST Bubbles Growing Larger

Dec. 11 (Bloomberg) — The rally in Treasuries that pushed yields on bills below zero percent this week is adding to concerns that the $5.3 trillion market for government debt is a bubble waiting to burst.

Investors seeking safety from losses in equity and credit markets charged the Treasury zero percent interest when the government sold $30 billion of four-week bills on Dec. 9, the same day three-month bill rates turned negative for the first time since the U.S. began selling the debt in 1929. Yields on two-, 10- and 30-year securities touched record lows this month.

“Treasuries have some bubble characteristics, certainly the Treasury bill does,” said Bill Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., which oversees the world’s largest bond fund. “A Treasury bill at zero percent is overvalued. Who could argue with that in terms of the return relative to the risk?” he said in a Bloomberg Television interview yesterday.

The 30-year bond returned 23.6 percent since September, including reinvested interest, more than it earned in any one year since gaining 34.1 percent in 1995, according to Merrill Lynch & Co. index data. Treasuries of all maturities gained an average of 11.9 percent this year, compared with a 39 percent drop in the Standard & Poor’s 500 Index and a loss of 15.3 percent in Merrill Lynch’s broadest corporate bond index.

Rising Supply

Rising supply of government debt to pay for the bailout of the economy and financial system has done little to damp demand. Treasury Assistant Secretary Karthik Ramanathan said in a speech yesterday in New York that the U.S. may introduce new financing methods to meet borrowing needs of $1.5 trillion to $2 trillion in the financial year that ends in September.

While supply has increased, rates on three-month bills fell 2.89 percentage points in the last year to 0.01 percent today, after trading as low as negative 0.05 percent on Dec. 9. The rate on four-week bills plummeted from a peak of 5.175 percent on Jan. 29, 2007. The three-month bill yield was unchanged today.

An investor who bought $1 million in three-month bills at the closing rate of negative 0.01 percent on Dec. 9 would realize a loss of $25.56 when the securities mature. Bills are sold at a discount and appreciate to par at maturity.

Even at the low yields, the government received bids for four times the amount of four-week bills it auctioned this week, according to the Treasury.

‘Insatiable Demand’

“There is basically insatiable demand for Treasury bills,” Ira Jersey, a New York-based interest-rate strategist at Credit Suisse Group AG, said in a Bloomberg Television interview. “There is a number of reasons for this, not only angst over deflation and what’s going on with risky assets, but there is also just a lot of cash that does not want to take any credit risk.”

Hunger for Treasuries increased as financial companies reported $984 billion of losses and writedowns related to the collapse of subprime mortgages since the start of 2007. The losses froze credit markets and helped send the U.S., Europe and Japan into the first simultaneous recessions since World War II.

Gross said he regrets not buying Treasuries in the past year. “If we went back 12 months and we had known then what we know now, it would have been all invested in Treasuries,” he said in the interview.

David Rosenberg, the chief North American economist at New York-based Merrill Lynch, said last week that demand for Treasuries had reached the “bubble” phase like in technology stocks in 2000 and real estate six years later.

Waive Fees

Record-low yields on government debt have led money-market funds to waive fees to keep returns positive. If the Federal Reserve cuts its 1 percent target rate for overnight loans between banks, as is expected next week by all but two of 56 economists surveyed by Bloomberg, some Treasury fund returns may turn negative, said Peter Crane, president of Crane Data LLC, a research firm in Westborough, Massachusetts.

Treasuries have “absolutely” entered a bubble, said David Brownlee, who oversees $15 billion as head of fixed income at Sentinel Asset Management in Montpelier, Vermont. “There is very little rationality in my mind to bills trading at zero.”

Sentiment among investors in Treasuries turned negative for the first time in four months, according to a JPMorgan Securities Inc. survey of clients. The firm’s weekly index fell to minus 6 on Dec. 8, from this year’s high of 27 a month ago. The figure is the difference between the percentage of investors betting prices will rise and those expecting a decline.

Deflation Speculation

Speculation that the recession will result in deflation, or a prolonged slide in prices, is also driving demand for Treasuries. Consumer prices fell 1 percent in October, the most since records began in 1947, and may drop 1.2 percent in November, according to a Bloomberg survey of economists.

Deflation may worsen the economic downturn by making debts harder to pay and countering the impact of Fed rate cuts. Deflation also makes bonds more valuable, even with yields at record lows.

Treasuries may actually be “fairly valued,” Tony Crescenzi, chief bond strategist at Miller Tabak & Co. in New York, said in a report yesterday. Even so, yields will likely rise in mid-January as investors’ focus turns to prospects for an economic recovery, he wrote.

The U.S. pledged $8.5 trillion, more than half of the country’s gross domestic product, to spur lending and limit the damage of the recession.

Economists forecast higher bond yields as those efforts take effect over the next year. The yield on the 10-year note will rise to 3.66 percent by the end of 2009 from 2.67 percent today, according to 50 estimates in a Bloomberg survey. That would result in a loss of 3.88 percent as bond prices decline.

“At some point we are going to get some signal, some indication that this massive policy response is getting some traction,” said Mitchell Stapley, who oversees $22 billion as chief fixed-income officer for Grand Rapids, Michigan-based Fifth Third Asset Management. “The flight out of Treasuries is something that will be breathtaking.”

Default Risk for Sovereign Bonds Increases

 

Dec. 11 (Bloomberg) — The global economy is falling off a cliff, central banks are slashing policy rates, so everyone and her cat should move what’s left of their incredible shrinking cash piles into the can’t-be-beaten security of government bonds.

Except stocks are as cheap as chips and even managed to rally after last week’s Armageddon-like U.S. jobless numbers, so investors should be snapping up equities as fast as their fingers can click the buy button.

Except inflation is deader than the collateralized-debt- obligation market, prices of everything from houses to cars to Russian art are collapsing around our ears, and everybody knows you should put your nest egg into fixed-income securities now that deflation is the new black.

Except President-elect Barack Obama is poised to sign a new New Deal, French President Nicolas Sarkozy has set aside $33 billion for a “Vive la France!” sovereign wealth fund, U.K. Prime Minister Gordon Brown has belatedly remembered his tax-and- spend-spend-spend roots, and governments everywhere are building roads to nowhere and Bridges of Sighs — all to be funded by printing stacks and stacks of government bonds.

Confused? So am I.

Record low yields in the U.S. Treasury market and a collapse in borrowing costs for governments around the world suggest investors are nonplussed by the prospect of a flood of freshly minted debt to fund a raft of bailout plans. Those conditions also point to a surge in demand for low-risk assets as banks cut back on leverage — which is how you get absurdities such as three-month Treasury bills trading at negative yields this week.

Making Money

Betting on bonds has been a winning strategy this year; all of the 26 bond indexes tracked by Bloomberg show fixed-income investors have made money this year. Australian securities led with 18 percent gains and even Hungary’s debt market eked out a 1 percent return, the least lucrative.

Rise In Dollar, Widens Trade Deficit..

Regardless of the Budget Deficits, this massive trade deficit even with cheap oil will sink the dollar.

==========================================

Dec. 11 (Bloomberg) — The U.S. trade deficit unexpectedly widened in October as faltering global demand led to a third consecutive drop in exports, signaling the American economy is sinking even faster than previously estimated.

The gap expanded 1.1 percent to $57.2 billion from a revised $56.6 billion in September, the Commerce Department said today in Washington. Exports dropped to the lowest level in seven months as foreign purchases of U.S. aircraft, automobiles, chemicals and food waned.

The global credit crunch is slowing growth in Europe, Asia and Latin America, indicating the U.S. can no longer count on gains in trade to help offset the recessions in housing and manufacturing. American households and businesses are also retrenching, a sign that purchases of foreign oil, televisions and computers will keep softening.

“Trade is going to be a significant drag on fourth-quarter growth,” said Dean Maki, co-head of U.S. economic research at Barclays Capital Inc. “The slowdown in foreign demand is hitting manufacturing.”

Jobless Claims

Another government report today showed the number of Americans filing first-time claims for unemployment benefits surged more than forecast last week to a 26-year high. Initial jobless claims increased 58,000 to 573,000 in the week ended Dec. 6 from 515,000 the previous week, the Labor Department said. The number of workers staying on benefit rolls gained to 4.429 million.

The trade gap was projected to narrow to $53.5 billion from an initially reported $56.5 billion in September, according to the median forecast in a Bloomberg News survey of 70 economists. Estimates ranged from deficits of $47 billion to $57.5 billion.

After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the deficit surged to $46.4 billion from $42 billion in September. Another Labor Department report showed prices of goods imported into the U.S. plunged in November by the most on record. The 6.7 percent drop in the import price index followed a 5.4 percent decline the prior month. Prices excluding fuel fell 1.8 percent and the cost of imported petroleum plummeted a record 25.8 percent.

Hurt Growth

The jump signals trade may subtract from fourth-quarter growth after adding 1.1 percentage points in the previous three months when the economy shrank at a 0.5 percent rate. The already year-long U.S. recession is likely to be the longest in the postwar era, according to economists surveyed this month by Bloomberg News.

Exports dropped 2.2 percent to $151.7 billion, reflecting a broad-based retreat in demand for American products.

Japan’s economy will shrink 0.2 percent in 2009, while the euro area will contract 0.5 percent, according to a revised forecast by the International Monetary Fund last month. Its global growth estimate for 2009 was scaled back to 2.2 percent from 3.7 percent this year.

John Lipsky, the IMF’s first deputy managing director, yesterday said the lender will probably reduce its global growth forecasts again next month.

Higher Dollar

A rebound in the value of the dollar, by making American- made products more expensive to overseas buyers, is contributing to the dimming outlook for U.S. exports. The dollar jumped 17 percent from mid-July to the end of November, reaching the highest level in three years on Nov. 21, according to figures from the Federal Reserve.

Cummins Inc., the maker of more than a third of North America’s heavy-duty truck engines, said this month it will eliminate at least 500 jobs by the end of the year because of “continued deterioration” in the U.S. economy and other key markets. Cummins said in October that sales growth will be about 12 percent this year, lower than it previously forecast, as the U.S. and European economies weakened.

“Cummins already has taken a number of actions across the company to try to bring costs in line with our reduced current demand,” Chief Executive Officer Tim Solso said a Dec. 5 statement. “Despite those efforts, we have now reached a point where we will have to take more significant steps to reduce our professional workforce around the world.”

Industrials Slump

Reflecting the falling demand for machinery, the Standard & Poor’s Industrial Machinery Composite Index yesterday was down 42 percent so far this year, compared with a 39 percent decline for the S&P 500 Index

A decline in airplane deliveries by Boeing Co., reflecting the effects of a two-month strike that was resolved Nov. 1, contributed to the softening in American exports. Boeing delivered 4 aircraft overseas in October, down from 6 in the prior month, according to company data.

Imports declined 1.3 percent to $208.9 billion, the lowest level since March. Decreases in demand for foreign-produced automobiles, televisions, computers and fuel reflected the worsening slump in U.S. consumer and business spending.

Rather than helping shrink the trade gap last month, as most economists predicted, oil contributed to the deterioration. A record $15.56 drop in the price of imported crude in October was swamped by a 70.9 million-barrel jump in purchases that was also the biggest ever, the report showed. Excluding petroleum, the trade gap was little changed at $24.5 billion.

International trade next year may shrink 2.1 percent, the first contraction in more than a quarter century, the World Bank said in a report this week.

The trade gap with China increased to a record $28 billion from $27.8 billion in the prior month. China surpassed Canada to become the largest source of imports into the U.S. last year. Since it joined the World Trade Organization in 2001, China has also been the fastest growing major export market for American- made products, according to U.S. government data.

A Cup Of Jo: Coffee demand to outweigh supply from 2009-10

id="blog-title">Frontier Markets

id="tagline">random macro musings centered around the frontier

Kudos to Tom Lydon for returning my gaze back to coffee, which along with cocoa, is one heck of a tasty commodity to track.

Lydon cites Bloomberg’s Claire Leow, who reported on Tuesday that world coffee consumption may outstrip production by as much as 8 million bags in 2009-10 because of the smaller crop in Brazil, the world’s top grower:

Prices of the mild-tasting arabica coffee used by Starbucks Corp. jumped 6.1 percent yesterday, the biggest gain in almost three years as Brazil’s Agriculture Minister Reinhold Stephanes said output may drop as much as 22 percent next year to as low as 36 million bags. Prices of the bitter-tasting robusta used in espresso and instant coffee by Nestle SA climbed 4.3 percent.

Interestingly, coffee has outperformed commodity indexes since prices plunged at the end of June.  Arabica has dropped 29 percent in New York, for example, compared with a 61 percent slump in the S&P’s GSCI index of 24 raw materials.  Leow’s report mentions, by the way, the other two coffee exporters of note–Colombia and Vietnam:

Colombia was expected to produce 12.5 million bags, “but rains may have reduced that by 200,000 to 500,000 bags.  Good management practices will keep the crop at between 12 million and 16 million bags in coming years, said [Nestor Osorio, International Coffee Organization Executive Director].

“Vietnam isn’t losing very much because the industry is still young and the trees have strong yields,” he said, estimating the current crop at 21 million bags. Output in the next three years may stabilize at 18-20 million bags, he said.

Finally, the  iPath Dow Jones AIG Coffee TR Sub-Index ETN (NYSEArca: JO) is down 24.8% since inception.  It, along with the other soft commodity funds from the iPath family, is arguably a prudent play, especially if you buy into the Jim Rogers’ secular commodity hype that reasons that the world is only getting bigger, and demand can only outpace supply in the long run.

Japan moves carefully toward Islamic finance

Watch out for news alert!

BY MANABU HARA, STAFF WRITER

The Japanese government has taken a small but important step toward introducing Islamic finance here amid the global financial crisis triggered by unsustainable subprime loans in the United States.

Earlier this month, the Financial Services Agency (FSA) amended financial regulations to let bank subsidiaries handle Islamic finance operations.

The Islamic finance market has become increasingly attractive for Japanese, having already grown to about $1 trillion with a potential to reach an estimated $4 trillion.

Obviously, “oil money” has been undermined by the global financial crisis. Yet the latest push forward by the FSA strongly suggests that Japan has a growing interest in Islamic finance as a competitive way to attract huge amounts of petro-funds.

Last year, the Japanese government revealed its Asia Gateway Initiative, which includes the promotion of Islamic finance as a method to develop the Asian bond market.

The Ministry of Economy, Trade and Industry also touched upon Islamic finance in last year’s White Paper on Trade.

Other countries, like Britain and Singapore, are way ahead of Japan in the field, having made moves to use Islamic finance to enhance their own financial markets.

Bringing in oil money

Yoshihiro Watanabe, managing director of the Institute for International Monetary Affairs, said the significance of Islamic finance is “to bring in oil money to Japan and stimulate the Japanese economy.”

Etsuaki Yoshida, deputy division chief at the Policy and Strategy Department for Financial Operations at the Japan Bank for International Cooperation (JBIC), is known as one of the few specialists in Japan.

“Although this is my personal view, the current (global) situation actually heightens the relative significance of getting involved (in Islamic finance),” he said.

Although only a few books on Islamic finance have been published in Japan, Yoshida has already written two of them.

Experts acknowledge that Islamic finance is also important for starting projects in the Middle East and can serve to enhance the Asian bond market.

Despite the various barriers remaining in Japan, the private sector has been participating in a number of overseas projects through Islamic financing methods. This year, a Mizuho Corporate Bank subsidiary in the Netherlands became a lead manager of a syndicated loan for a Saudi Arabian project to mine and refine phosphate ore. Part of the loan was made through Islamic financing.

In Malaysia, a subsidiary of Aeon Credit Service Co. and Toyota Capital Malaysia Sdn. Bhd now extends car loans through Islamic financing plans, while the Tokio Marine Group sells Takaful Insurance, a type of Islamic insurance.

Islamic finance has also spread to bourses. The Tokyo Stock Exchange and Standard & Poor’s jointly developed an index for Shariah-compliant companies. Daiwa Asset Management Co., meanwhile, created Shariah-compliant exchange-tradable funds that are now a feature on the Singapore Stock Exchange.

JBIC has taken the leading role in dealing with Islamic finance in Japan, participating in syndicated loan investment projects partly funded through Islamic financing in Bahrain in 2005 and Saudi Arabia in 2006.

One of JBIC’s goals was to accumulate know-how and experience regarding Islamic finance. But the JBIC’s role in those projects was limited to financial assistance through conventional methods.

In 2006, JBIC established the Shariah Advisory Group within its headquarters to learn from Muslim scholars well-versed in the tenets of Islam and Islamic finance. The organization has since been hosting study groups with three major Japanese banks: Bank of Tokyo-Mitsubishi UFJ Ltd; Sumitomo Mitsui Banking Corp Ltd.; and Mizuho Corporate Bank.

Furthermore, JBIC became the first Japanese organization to join the Islamic Financial Services Board (IFSB), an international organization based in Malaysia whose goal is to promote and enhance the Islamic financial services industry. JBIC also has business ties with the Central Bank of Malaysia concerning Islamic financial services.

Overcoming barriers

However, in the face of the “worst global financial crisis in 100 years” and watching crude oil prices drop sharply, skeptics doubt if oil money can really weather this financial storm. In fact, the rapid growth of Islamic finance in the Middle East has been showing signs of a slowdown since last year. Some say Islamic finance has actually started to shrink.

Watanabe, however, remains optimistic.

“A revaluation loss on oil money should have occurred, but the money (as compared to the West) is not gained through debt-based investments but rather profits from oil sales,” Watanabe said.

“Crude oil prices have gone down, but (oil) funds will continue to accumulate. (Middle East countries) are facing the major issue of where to look for safe, high-return investments.”

Although bank subsidiaries in Japan can now participate in Islamic financial transactions, the environment has not reached a point where one can expect a surge in banking institutions specializing in Islamic finance.

Specialists like Watanabe and Yoshida both point to complications in the Japanese tax and legal systems that have hampered the spread of Islamic finance.

Watanabe said transactions involving commodity trade are subject to value-added tax, which makes the financial transaction too expensive.

Yoshida said it is necessary to define the nature of sukuk, or Islamic bonds. According to Yoshida, if sukuk are indeed corporate bonds, they should not be taxed. But if they are considered trust beneficiary rights, they become subject to withholding tax at the source.

Yoshida also cited the difficulty of networking. The crux lies in finding investors and matching them with suitable investment choices, he said.

Watanabe added, “If the main body (company headquarters) cannot handle Islamic finance, it will probably become an overwhelming burden.”

Under the ongoing global financial crisis, money that arrived here via banking institutions in Europe and the United States is already being channeled back to the United States. And that is what is causing serious damage to stock and real estate prices.

If Japanese financial institutions could channel oil money directly to Japan, it may help to mitigate the crisis here. That is precisely why some say Japan needs to overcome the hurdles and promote Islamic finance.

Fact File: A system based on Shariah principles

Islamic finance differs in various ways from conventional financial services that have developed in the West.

The basis of all Islamic finance lies in the principles of Shariah, or Islamic Law. Thus, the Islamic form of finance is sometimes called Shariah-Compliant Finance.

Central to Islamic finance is the fact that interest, known as riba, is prohibited. All gains and risks must be shared between the person providing the capital and the business proprietor or owner. And the transactions must basically involve trade backed by assets.

Speculation (Maisir) is also forbidden, as are transactions with businesses dealing with pigs, alcohol, gambling and other items that are not Shariah-compliant.

One popular form of transaction used by banks is Murabahah financing, which is said to account for as much as 70 percent of all Islamic finance deals.

Murabahah financing involves markups on goods, such as cars and houses, mostly for personal use. A bank plays go-between for the supplier and the purchaser by buying the desired commodity from the supplier.

The bank then resells the commodity with a markup price to the client, who pays for it in installments, including the markup amount.

Conventional Japanese regulations have prevented banks from buying or selling commodities as part of their business operations. But a recent measure adopted by the Financial Services Agency allows subsidiaries of banks to take part in such transactions.(IHT/Asahi: December 12,2008)

Source: www.asahi.com

World ministers gather in Poland for

The ministerial high segment of the UN climate change summit started yesterday with the hope that all nations would go together for a green future.

Today is the last day of the Poznan conference, which was termed the “halfway mark” of the Copenhagen deal in 2009. So far, no concrete decision was made about way forward to deal with climate change in coming future.

UN Secretary General Ban Ki-moon, Poland President Lech Kaczynski, Guyana President Bharat Jagdeo, Tuvalu Prime Minister Apisai Lelemia, Sweden Prime Minister Fredrik Reinfeldt and UNFCC Executive Secretary Yvo De Boer spoke at the ministerial talks chaired by Conference of Party (COP) President Prof Nowciki.

Raja Devasish Roy, special assistant to the chief adviser for environment and forest ministry, was present at the occasion as the head of the Bangladesh delegation. He is going to present Bangladesh’s position about climate change at the shared vision meeting today.

The UN secretary general in his speech said the world’s poorest should not suffer first and worst from a problem they did least to create. The nations need to sketch out the critical elements in a long-term vision, he added.

“We need a basic framework for cooperative action starting today, not in 2012. Within this framework, industrialised countries must set ambitious long-term goals, coupled with mid-term emission reduction targets,” he said.

“We must re-commit ourselves to the urgency of our cause.”

Meanwhile, the two-day European heads of state and government meeting started in Brussels yesterday to decide about the European Union’s climate change policies up to 2020.

The EU summit in Brussels holds “great consequences for the whole world,” which looks to the EU for leadership on climate change, UN chief Ban Ki-moon warned in his speech.

“We look for leadership from the European Union. The decisions currently being made by the European leaders in Brussels are (of) great consequences for the whole world.”

Ban also called for a “Green New Deal” under which part of the massive stimulus to tackle the world financial crisis would be devoted to weaning economies from carbon pollution.

Meanwhile, sources in the Bangladesh delegation in Poznan said Bangladesh is going to demand legal status for climate migrants today along with others demands including quick disbursement of LDCs fund and developing a climate index mechanism before allocating adaptation fund.

The sources added the LDCs climate change fund could be settled at the Poznan meeting. The LDCs are pushing it so that they can start implementing their emergency projects from the beginning of 2011.

The LDCs fund already has an amount of $172 billion what could be raised up to $200 billion as many countries are committed to contribute to the LDCs fund.

The Bangladesh delegations and Oxfam international had a bilateral meeting yesterday at the conference centre where they discussed adaptation funds, adaptation and mitigations issues. Barry Coates, Antonio Hill and Ziaul Hoque Mukta from Oxfam were present.

Swedish Prime Minister Fredrik Reinfeldt announced Sweden’s pledge of $500 million for adaptation to be shared among multiple adaptation funds.

Former US vice-president and Nobel laureate Al Gore is set to deliver his speech at the conference today.

No comments yet.

BUSH DROPS THE BALL

Dec. 12 (Bloomberg) — The Bush administration dropped its opposition to using the $700 billion bank bailout fund to provide financing for U.S. automakers, after the Senate yesterday failed to approve emergency loans.

The administration’s willingness to give short-term help to General Motors Corp. and Chrysler LLC eased the concern of at least some investors that the companies will collapse and worsen what’s already the longest recession since the early 1980s. Stocks pared their declines.

“Congress has really punted the ball over to the White House,” John Bogle, 79, founder of the $80.6 billion Vanguard 500 Index Fund, said in a Bloomberg Television interview. “That will give them temporary stopgap aid. I do not think General Motors is going to go out of business.”

The economy’s accelerated decline prompted the reversal from the White House, which had insisted money from the Troubled Asset Relief Program be used only for financial firms. GM needs $11 billion to pay bills by the end of the month, and Ford Motor Co. Chief Executive Officer Alan Mulally last week predicted his company could be dragged into bankruptcy by a GM failure.

“Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” Treasury spokeswoman Brookly McLaughlin said in an e-mailed statement.

$15 Billion Remaining

Treasury Secretary Henry Paulson had until today resisted calls to use the TARP to aid the automakers. The Treasury has committed all but about $15 billion of the first half of the funds since the plan was enacted Oct. 3.

Neither the Treasury nor the White House’s statements today indicated whether the TARP funds would come with terms or concessions. Paulson repeatedly insisted that any injection of funds needs a plan ensuring “viability” for the automakers.

“The intent of the TARP was to deal with financial institutions and major systemic issues and getting lending going in capital institutions,” Paulson said in a Nov. 13 Bloomberg Television interview. “Congress, I believe, should address the question of the auto industry.”

While the Treasury’s one-sentence statement doesn’t mention the TARP, White House spokeswoman Dana Perino said earlier in a separate statement that the Bush administration is considering using some of the program to keep the auto companies afloat.

‘Other Options’

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” Perino said. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary –including use of the TARP program — to prevent a collapse of troubled automakers.”

Emergency loans for GM and closely held Chrysler were rejected late yesterday in the Senate after talks failed over Republicans’ demands that union workers accept a cut in wages next year. Ford said this week it doesn’t intend to seek loans from the emergency fund.

Senator Bob Corker, a Tennessee Republican involved in failed efforts to forge a compromise last night, said providing TARP money without union commitments to restructure and wage concessions would make it “less likely” that the companies become more competitive. Such a move would put “good money after bad,” Corker said in a Bloomberg Television interview.

GM Chief Executive Officer Rick Wagoner told Congress last week, and has said repeatedly, that the Detroit-based automaker is trying to avoid bankruptcy at all costs. Lead director George Fisher said last week that GM considered and rejected the option and it was “way down the list” of alternatives.

Month-End Bills

Still, GM also has said it will lack the minimum $11 billion needed to pay bills by the end of this month, raising the prospect of bankruptcy should it fail to win a cash infusion. GM reported having $16.2 billion as of Sept. 30.

An attempt to restructure GM in bankruptcy would end up as liquidation, because sales would plummet as buyers flock to solvent car companies, Wagoner has said.

Chrysler has said it will run out of money early next year. It ended the third quarter with $6.1 billion in cash and needs at least $3 billion on hand to operate, Chief Executive Officer Robert Nardelli told Congress on Nov. 18.

Pressure was mounting on GM and Chrysler this week before the congressional failure as both faced demands from a small number of parts makers for payments in advance because of the bankruptcy concerns, people familiar with the matter said.

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REPUBLICAN HARD ASSES BLOCK AUTO COMPANY SURVIVAL

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No Bailout for Auto: World Market Plunging

Investors were rattled after the bailout for Detroit’s struggling Big Three automakers failed in the U.S. Senate. The collapse came after bipartisan talks on the auto rescue broke down over Republican demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with U.S. plants of Japanese carmakers.

The bankruptcy of any of the big American automakers would deal another blow to the world’s largest economy, already in recession.

“This will likely keep markets on edge over the coming weeks…unless it is evident that TARP funds will be used,” said Kotecha.

It’s not just stock markets suffering in the wake of the failure of the Senate to pass the rescue deal. The dollar slumped overnight too, particularly against the yen.

The dollar fell to a low of 88.16 yen, its lowest level since Aug. 2, 1995 — before it recovered to trade above 90 yen.

That heaps more bad news on major Japanese exporters like Toyota and Sony — already reeling from waning global consumer demand — whose overseas income is eroded by an appreciating yen.

Figures this week show that China’s economy is feeling the pinch of the global slowdown. For the first time in seven years, exports fell in November.

____

Conventional Investment Management

“You must unlearn what you have learned.”  -Yoda

OUTDATED .. or maybe OLD SKOOL (yes that is a word, especially for all of us vintage rap music fans) in my opinion, words that best describe what the mainstream financial services industry promotes, as far as investing concepts.

Think about that.  We live in a world that changes rapidly.  Are you still wearing the same clothes that you did in the 1970’s (I hope not!  LOL!)? or sporting the same hairstyles of the ’80’s…better yet, the ’50’s?  What about your car or computer…still using the Commodore 64 or driving in a Ford Fairmont Station Wagon?  I seriously doubt it!  My list could go on, but I think you get my point.

Proponents of Conventional investing use several “sales” tools to rationalize their recommendations:

The famous Ibbotson Study:  http://corporate.morningstar.com/US/documents/MarketingOneSheets/ LicensedData/INS_LDT_OneSheet_SBBI_datafeed.pdf

Jeremy Siegel’s book, Stocks for The Long Run

Modern Portfolio Theory (MPT) … Pioneered by Nobel Prize winner Harry Markowitz

Dive into the above and you’ll see 80 years of market data with beautiful charts, read about things like correlation matrixes, and Captial Asset Pricing Model.  You’ll learn all about the “Efficient Frontier.”  Brokers and other financial advisors, after citing information from the above sources, will assure you that “If you had a $1 in 1925, and you invested it in various equity classes, you would have several thousand dollars today…through Great Depression, World Wars, Geo-Political crisis, Oil Embargos…etc……”

Today, I want to begin challenging all of the mainstream and conventional financial advisors and media.  IN THE NATURE OF BEING BRIEF, I will pose some questions in bullet format to my readers.  You be the judge.  It doesn’t matter what I think.  It is your money…you are the investor…spend some time researching what is in this blog today, and come to your own conclusion.  Obviously, for someone, who has a tagline of “Strategically Managing the Environment of Change”, I am biased.

I believe that in March of 2000, we entered a Secular Bear Market, that has the potential to last 15 years or more…man, I hope it is shorter…but valuations suggest otherwise, unfortunately.  What do you think?  Start with your portfolio, how has it performed since 2000?  Has it waxed..or has it waned?  Perhaps, it has marched to the beat of a different drummer (I hope)?  Where are we headed for the next 10 years?

Visit us at www.richinvest.com or send me an email mfalvey@richinvest.com

Cheers..Matt

                                         

South Korean central bank slashes key interest rate

South Korea’s central bank carried out its biggest interest rate cut ever Thursday, slashing borrowing costs by a full percentage point to a record low in a bid to stave off possible recession.

The Bank of Korea said it was slashing its benchmark seven-day repurchase rate to 3 percent from 4 percent during a regular policy meeting.

Deteriorating economic data have raised alarm bells that Asia’s fourth-largest economy could fall into its first contraction since 1997, when the country was in the throes of the Asian financial crisis. Exports fell 18.3 percent in November from the same month last year.

“It’s quite surprising,” Citibank Korea economist Oh Suk-tae said regarding the size of the rate cut, which suggests that the bank may think “growth could be zero next year” given South Korea’s export decline and neighboring China’s first fall in exports in seven years in November.

Citibank’s Oh said he will likely have to lower his forecast for a 2 percent expansion for next year. He said the economy will likely still manage to grow just above 4 percent in 2008. That would be down from 5 percent last year.

“General measures of economic activity are decelerating rapidly,” International Monetary Fund official Subir Lall said in a speech Tuesday in Seoul.

Lall cited slowing consumer spending and exports as well as falling business confidence as evidence for the emerging weakness in South Korea’s economy.

Thursday’s rate cut marked the fourth time the central bank has lowered borrowing costs in the past two months and exceeded the 0.75 percentage point emergency cut on Oct. 27, previously the largest ever.

The rate has gone from 5.25 percent to 3 percent since the cycle of easing began on Oct. 9.

The previous record low for the bank’s benchmark rate was 3.25 percent last seen in October 2005.

South Korea’s benchmark stock index showed little reaction to the decision, rising 0.4 percent to 1,150.33 points in late morning trading.

The South Korean won, which has been battered this year, traded 2.4 percent higher against the dollar at 1,361.

__

APTN cameraman Yong-ho Kim and APTN producer Hyun-ah Kim contributed to this report.

Source

Arundhati Roy defines Mumbai

environ mentalism, fresh articles, interviews & checkitouts from Sydney.

This is copied from The Guardian, Roy’s piece is entitled Mumbai was not our 9/11. It’s 5000 words of essential reading, so grab coffee/yerba/chai and strap in. All that follows is a powerful op ed from one of the world’s most valuable living writers.

Mumbai was not our 9/11

by Arundhati Roy

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. Like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “Bad Guys” he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

But November isn’t September, 2008 isn’t 2001, Pakistan isn’t Afghanistan and India isn’t America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It’s odd how in the last week of November thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara – one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you may not have heard that ordinary people too died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness. The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of India Shining and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish centre.

We’re told one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company I think) said “Hungry, kya?” (Hungry eh?). It then, with the best of intentions I’m sure, informed its readers that on the international hunger index, India ranked below Sudan and Somalia. But of course this isn’t that war. That one’s still being fought in the Dalit bastis of our villages, on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet. So maybe, like everyone else, we should deal with the one that is.

There is a fierce, unforgiving fault-line that runs through the contemporary discourse on terrorism. On one side (let’s call it Side A) are those who see terrorism, especially “Islamist” terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit and has nothing to do with the world around it, nothing to do with history, geography or economics. Therefore, Side A says, to try and place it in a political context, or even try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that though nothing can ever excuse or justify terrorism, it exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed, who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias and Democracy and believes that jihad should be waged until Islam, his Islam, rules the world. Among the things he said are: “There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera): “We didn’t spare a single Muslim shop, we set everything on fire … we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.”

(Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently in Kandhamal in Orissa, Christians were the target of two and a half months of violence which left more than 40 dead. Forty thousand people have been driven from their homes, half of who now live in refugee camps.)

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jehad with his twisted, fiery sermons. On December 11 the UN imposed sanctions on the Jammat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest. Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide he left the VHP to join the Shiv Sena. Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat. So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata.

Suhel Seth, a TV impresario and corporate spokesperson, recently said: “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted. The RSS has 45,000 branches, its own range of charities and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister AB Vajpayee, current leader of the opposition LK Advani, and a host of other senior politicians, bureaucrats and police and intelligence officers.

If that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organisations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

In this nuclear subcontinent that context is partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes and families, was drawn virtually overnight. It was Britain’s final, parting kick to us. Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India left their homes with nothing but the clothes on their backs.

Each of those people carries and passes down a story of unimaginable pain, hate, horror but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives. Pakistan, the Land of the Pure, became an Islamic Republic, and then, very quickly a corrupt, violent military state, openly intolerant of other faiths. India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990 they were ready to make a bid for power. In 1992 Hindu mobs exhorted by LK Advani stormed the Babri Masjid and demolished it. By 1998 the BJP was in power at the centre. The US war on terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy. This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism in the subcontinent and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and LK Advani of the Rashtriya Swayam Sevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express and the 2007 bombing of the Samjhauta Express, the government of India announced that it has “incontrovertible” evidence that the Lashkar-e-Taiba backed by Pakistan’s ISI was behind the Mumbai strikes. The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies the Lashkar operates in India through an organisation called the Indian Mujahideen. Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy. Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously. In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. Neither will war. (Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighbouring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.)

Thanks largely to the part it was forced to play as America’s ally first in its war in support of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening towards civil war. As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistan army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to.

Certainly it did not expect them to come calling in heart of the Homeland on September 11. So once again, Afghanistan had to be violently remade. Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders. Nobody, least of all the Pakistan government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs and the maniacs who believe that Islam will, or should, rule the world is mostly the detritus of two Afghan wars. Their ire rains down on the Pakistan government and Pakistani civilians as much, if not more than it does on India.

If at this point India decides to go to war perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before. If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbours. It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front. The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary. Over three days and three nights we watched in disbelief as a small group of very young men armed with guns and gadgets exposed the powerlessness of the police, the elite National Security Guard and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this they indiscriminately massacred unarmed people, in railway stations, hospitals and luxury hotels, unmindful of their class, caste, religion or nationality. (Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.) But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill – and be killed – mesmerised their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news. Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.) Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people and inflict as much damage as they could before they were killed themselves. They left us completely bewildered. When we say “nothing can justify terrorism”, what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it’s precious. So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself Imran Babar. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror emails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir. “You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for? Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don’t figure in their calculations except as collateral damage. It has always been a part of and often even the aim of terrorist strategy to exacerbate a bad situation in order to expose hidden faultlines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project. A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theatre, spectacle and symbolism, and today, the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the attack was being condemned by TV anchors, the effectiveness of the terror strikes were being magnified a thousandfold by TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid. Instead we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed (is it alright for the poor to remain unprotected?). We had people suggest that the government step down and each state in India be handed over to a separate corporation. We had the death of former prime minster VP Singh, the hero of Dalits and lower castes and villain of Upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir, give us his version of George Bush’s famous “Why they hate us” speech. His analysis of why religious bigots, both Hindu and Muslim hate Mumbai: “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.” His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.” Didn’t George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and leftwing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army and virtually asking for a police state. It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid television flashcards like the Police are Good Politicians are Bad/Chief Executives are Good Chief Ministers are Bad/Army is Good Government is Bad/ India is Good Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically, this regression into intellectual infancy comes at a time when people in India were beginning to see that in the business of terrorism, victims and perpetrators sometimes exchange roles. It’s an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation. Eventually the courts acquitted two out of the four accused, including SAR Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him but was then convicted for a fresh, comparatively minor offence. The supreme court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.” Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19 this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur and Ahmedabad in 2008. An assistant commissioner of Police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists” known and rewarded for having summarily executed several “terrorists”. There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics and activists all of whom demanded a judicial inquiry into the incident. In response, the BJP and LK Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying it was “suicidal” and calling them “anti-national”. Of course there has been no inquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the CBI said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted 2kg of RDX and two pistols on them and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir). Ali and Qamar who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS) that was investigating the September 2008 Malegaon blasts arrested a Hindu preacher Sadhvi Pragya, a self-styled God man Swami Dayanand Pande and Lt Col Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu Nationalist organizations including a Hindu Supremacist group called Abhinav Bharat. The Shiv Sena, the BJP and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists”. LK Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On the November 25 newspapers reported that the ATS was investigating the high profile VHP Chief Pravin Togadia’s possible role in the Malegaon blasts. The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai Attacks. The chances are that the new chief whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

While the Sangh Parivar does not seem to have come to a final decision over whether or not it is anti-national and suicidal to question the police, Arnab Goswami, anchorperson of Times Now television, has stepped up to the plate. He has taken to naming, demonising and openly heckling people who have dared to question the integrity of the police and armed forces. My name and the name of the well-known lawyer Prashant Bhushan have come up several times. At one point, while interviewing a former police officer, Arnab Goswami turned to camera: “Arundhati Roy and Prashant Bhushan,” he said, “I hope you are watching this. We think you are disgusting.” For a TV anchor to do this in an atmosphere as charged and as frenzied as the one that prevails today, amounts to incitement as well as threat, and would probably in different circumstances have cost a journalist his or her job.

So according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police. This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world and yet refuses to ratify the International Covenant on Torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the Underworld and the Encounter Specialists virtually does not exist.

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them? There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse. If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US army is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire. (Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?) Hundreds of thousands people including thousands of American soldiers have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S allies/agents (including India) and U.S interests in the rest of the world has increased dramatically since 9/11. George Bush, the man who led the US response to 9/11 is a despised figure not just internationally, but also by his own people. Who can possibly claim that the United States is winning the war on terror?

Homeland Security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland. We have a hostile nuclear weapons state that is slowly spinning out of control as a neighbour, we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalise, end up as a threat not just to India, but to the whole world. If ten men can hold off the NSG commandos, and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix. Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go. Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain (it would be naïve to say end) terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says Justice, the other Civil War. There’s no third sign and there’s no going back. Choose.

December 13, 2008 at 12:08 pm

Next Week

The three premier events next week happen early: Japan’s quarterly business survey (also known as the Tankan) at 23:50 GMT on Sunday, Euroland’s preliminary PMI readings for manufacturing, services, and the composite index due Tuesday at 09:00 GMT, and the FOMC interest rate announcement later on Tuesday at 18:15 GMT.

At least six other central banks hold interest rate meetings. Norway’s Norges Bank probably will implement a cut of more than 100 basis points. The benchmark rate in the Czech Republic will decline at least 50 basis points, and Hong Kong’s Monetary Authority should at least match whatever the Fed does. It might even exceed the size of the Fed’s cut in light of intervention needed to keep the Hong Kong dollar from climbing above its fixed corridor against the U.S. dollar. The Bank of Japan is not expected to cut its 0.3% rate target, nor is a  rate change anticipated from Colombia’s central bank. I would not be shocked if there were a surprise cut in the Philippines, given the size of rate reductions this week in Taiwan and South Korea. China will be rounding out its slew of monthly data, including the release of industrial production and fixed investment. The increasingly alarmed tone of Chinese officials commenting on their economic outlook and reports of some increased social unrest create conditions for further interest rate relief soon, although a meeting at China’s central bank is not scheduled next week.

Besides the Tankan survey, Japan releases its Tertiary index and all-industry index next week. Both will have lower readings in October than the month before. The all-industry index, a supply-side monthly proxy for GDP, may fall by more than 1.5%.

Many economies in Europe will be reporting consumer price data next week. Inflation is receding at a commensurately rapid pace with economic activity. Germany also announces producer prices and the IFO index of business current conditions and expectations. French business sentiment and wage data are scheduled, assuming unions do not block the report.

Next week is a big one for British data. Releases will include consumer prices, unemployment, wages, retail sales, the CBI monthly survey of retailers, public finances, consumer sentiment, M4 and lending data, and business investment. The Bank of England minutes from earlier this month, when the benchmark rate was sliced to 2% from 3%, probably will not include an dissents. The Bank of England clearly fell behind the curve.

From the United States arrives the Treasury TIC figures for monthly capital flows, the more comprehensive Commerce Department quarterly report of the current account and all capital flows, industrial production, housing starts, consumer prices, leading indicators, the Empire State factory index, the Philly Fed index, and weekly jobless claims, chain store sales, and energy inventories.

Canada chimes in with the monthly manufacturing survey, retail sales, wholesale sales, net securities transactions, consumer prices, and wholesale turnover. From Australia, investors will get a chance to peruse minutes of the November central bank meeting and the latest data on trade and housing starts.

As always, currency market participants will keep a close eye on stock markets, especially how such react to whatever transpires in the discussions involving U.S. automakers.

Tulsa Mortgage Lenders Are Optimistic About Tulsa

Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years to recoup the costs of refinancing your loan, so if you don’t plan to stay that long it isn’t worth the money. But if your interest rate is high it may be smart to refinance to a lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance.

Yes. It’s called a ceiling, or lifetime cap. This is a guarantee that your interest rate will never exceed a designated percentage. For instance, if your introductory rate was 5% and you have a lifetime rate cap of 6% (meaning that your interest rate can never increase more than 6% during the life of the loan) then your ceiling would be 11%.

U.S. Treasury Ready to Prevent Failure of Automakers (Update6)

The Bush administration dropped its opposition to using the $700 billion bank bailout fund to provide financing for U.S. automakers after the Senate yesterday failed to approve emergency loans.

The administration’s willingness to give short-term help to General Motors Corp. and Chrysler LLC eased the concern of at least some investors that the companies will collapse and worsen what is already the longest recession since the early 1980s. Stocks pared their losses.

“Congress has really punted the ball over to the White House,” John Bogle, 79, founder of the $80.6 billion Vanguard 500 Index Fund, said in a Bloomberg Television interview. “That will give them temporary stopgap aid. I do not think General Motors is going to go out of business.”

The economy’s accelerated decline prompted the reversal from the White House, which had insisted money from the Troubled Asset Relief Program be used only for financial firms. GM needs $4 billion from the government by the end of the month to pay its bills, and Ford Motor Co. Chief Executive Officer Alan Mulally isn’t asking for any federal aid now and last week predicted his company could be dragged into bankruptcy by a GM failure.

“Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” Treasury spokeswoman Brookly McLaughlin said in an e-mailed statement.

Stock Prices

Stocks in the U.S. and Europe rebounded somewhat after the announcement, Treasury notes declined and the dollar recouped some of its losses. The Standard & Poor’s 500 Index was down 11.01 points, or 1.25 percent, at 862.67 at 11:58 a.m. in New York. Before the announcement, S&P futures tumbled 4 percent.

GM shares fell 3 cents, or 0.7 percent, to $4.09 at 1:17 p.m. in New York Stock Exchange composite trading. Ford rose 12 cents, or 4.1 percent, to $3.02.

Treasury Secretary Henry Paulson had until today resisted calls to use the TARP to aid the automakers. The Treasury has committed all but about $15 billion of the first half of the funds since the plan was enacted Oct. 3.

Neither the Treasury nor the White House’s statements today indicated whether the TARP funds would come with terms or concessions. Paulson repeatedly insisted that any injection of funds must include a plan ensuring “viability” for the automakers.

“The intent of the TARP was to deal with financial institutions and major systemic issues and getting lending going in capital institutions,” Paulson said in a Nov. 13 Bloomberg Television interview. “Congress, I believe, should address the question of the auto industry.”

‘Other Options’

While the Treasury’s one-sentence statement didn’t mention the TARP, White House spokeswoman Dana Perino said earlier in a separate statement that the Bush administration is considering using some of the program to keep the auto companies afloat.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” Perino said. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary — including use of the TARP program — to prevent a collapse of troubled automakers.”

Chrysler was “pleased” to see the White House decision to consider TARP, Chief Executive Officer Robert Nardelli said in an e-mail to employees today.

GM ‘Encouraged’

GM, in a statement, said it was “encouraged” and will work with the administration “on possible solutions that could prevent further damage to our nation’s economy and also allow us to embark on an aggressive restructuring plan for long-term viability.” Ford had no comment.

Emergency loans for GM and closely held Chrysler were rejected late yesterday in the Senate after talks failed over Republicans’ demands that union workers accept a cut in wages next year. Ford said this week it doesn’t intend to seek loans from the emergency fund.

Senator Bob Corker, a Tennessee Republican involved in failed efforts to forge a compromise last night, said providing TARP money without union commitments to restructure and wage concessions would make it “less likely” that the companies become more competitive. Such a move would put “good money after bad,” Corker said in a Bloomberg Television interview.

UAW President Ronald Gettelfinger said today the union reached a tentative agreement last night with Corker, only to have it rejected by other members of his party in the Senate.

‘Tear Down’

Republicans “wanted to tear down any agreement we came up with,” Gettelfinger said at a news conference in Detroit.

Corker, speaking with reporters today, said talks with the UAW broke down because the union wouldn’t agree to a deadline for worker wage cuts.

“I basically pleaded with them to give me something,” Corker said. “So that is where it broke down.” He said his plan would have gotten 90 votes in the Senate.

House Speaker Nancy Pelosi, in a letter to President George W. Bush, said providing funds to the automakers “is the right decision” and urged him to require the same “tough accountability and shared sacrifice” from all sides in the industry as were set in a bill passed by her chamber.

Senate Majority Leader Harry Reid blamed last night’s failed vote on “stubborn Republicans” and said he was encouraged the Bush administration is considering emergency loans to the carmakers.

Connecticut Democrat Christopher Dodd, who negotiated with Corker, said on Bloomberg Television the Bush administration should announce plans today to aid the automakers because car dealers and suppliers can’t get credit from local banks.

‘Hurting Today’

“They’re hurting today,” Dodd said. “We need an announcement today out of the White House.”

GM Chief Executive Officer Rick Wagoner told Congress last week, and has said repeatedly, that the Detroit-based automaker is trying to avoid bankruptcy at all costs. Lead director George Fisher said last week that GM considered and rejected the option and it was “way down the list” of alternatives.

Still, GM also has said it will lack the minimum $11 billion needed to pay bills by the end of this month, raising the prospect of bankruptcy should it fail to win a cash infusion. GM reported having $16.2 billion as of Sept. 30.

An attempt to restructure GM in bankruptcy would end up as liquidation, because sales would plummet as buyers flock to solvent car companies, Wagoner has said.

Chrysler has said it will run out of money early next year. It ended the third quarter with $6.1 billion in cash and needs at least $3 billion on hand to operate, Chief Executive Officer Robert Nardelli told Congress on Nov. 18.

Pressure was mounting on GM and Chrysler this week before the congressional failure as both faced demands from a small number of parts makers for payments in advance because of the bankruptcy concerns, people familiar with the matter said.

European stocks close down on US car sector fears

LONDON – European shares closed lower Friday amid a global stocks sell-off on worries the U.S. auto industry may go bust after the Senate refused to grant it a $14 billion lifeline.

He expects some sort of bailout of the automakers to be reached. “These firms are simply too important — economically and politically — to be allowed to disappear completely,” Jessop said.

The bankruptcy of any of the big American automakers would deal another blow to the world’s largest economy, which is sliding deeper and deeper into recession.

The Commerce Department said retail sales dropped 1.8 percent in November, the fifth straight monthly drop. The weakness was led by a 2.8 percent fall in auto sales, a decline that had been expected given that automakers already had reported that November was their worst sales month in more than 26 years.

It’s not just stock markets suffering in the wake of the failure of the Senate to pass the auto rescue deal. The dollar slumped overnight too, particularly against the yen.

The dollar fell to a low of 88.16 yen, its lowest level since Aug. 2, 1995 — before it recovered to trade above 91 yen.

That heaps more bad news on major Japanese exporters like Toyota and Sony — already reeling from waning global consumer demand — whose overseas income is eroded by an appreciating yen.

Figures this week show that China’s economy is feeling the pinch of the global slowdown. For the first time in seven years, exports fell in November.

Meanwhile, the euro was 0.2 percent higher at $1.3349.

Inflation, CRR, Credit Crunch and few other financial Jargons

                               Economic Slowdown - After the cruel death of many big enterprises and the evaporation of trust world over, the whole world is in a state, which is totally unforeseen and unfathomed even a few months back.  We are hearing a lot of economic terms from financial analysts world over. Let us unravel and connect them!

                              Inflation - Inflation is an upward movement in the average level of prices. In India, Inflation is calculated using “Wholesale Price Index”. What causes inflation? Supply-Demand theory.

               To curtail inflation, government hikes the Cash Reserve Ratio (CRR) or reduce the supply of money.  CRR refers to the mandate on each bank to maintain a certain ratio of their funds in deposits and p-notes.  So with less fund to lend, banks increase the ‘Interest Rate’ on loans to compensate on the reduction in disbursable funds.

               To curtail inflation, government hikes the Repo Rate or Reverse Repo rate. Repo rate - rate at which banks borrows money from RBI. Since the funds become dearly, the increase in rate of interest is passed on to the common man thereby curtailing the supply of money. everse Repo rate - rate at which RBI borrows money from banks. Since RBI is a safe haven, banks deposit all their money thereby draining the available money in the finance system. So funds become unavailable to common man. Realty, Capital Goods, Auto and many other business generally feel the heat.  

                              Economic Slowdown->Credit Crunch.  What is Credit Crunch? A credit crunch (also known as a credit squeeze) is a sudden reduction in the general availability of loans (or credit), or a sudden increase in the cost of obtaining loans from banks. (frm Wikipedia).

                               But in India, the credit crunch is for a different reason. In the western countries, if it is the lack of trust, in India, it is the increase in demand for the available credit. The CDR (Credit-Deposit ratio - ratio of the deposits lent out.) of India is at an all-time high. So the nation is buoyant and there is no reduce in the supply of money from banks.  The problem is that sectors, which were dependent on money from foreign funds or non-banking firms, are coming to domestic banks for funds. So there is a credit squeeze.

                                What is the government doing? It is reducing the CRR, Repo rate and Reverse Repo rate.  And banks are canvassing for deposits, by offering increased Rate of Interest. So you will be buying cars, homes, etc at a lesser rate of interest in the near future!!

Iceland’s Meltdown - Hyperinflation and then The Second Great Depression

Décryptage, Analyses, Veille - Downside The World News

 

 

 

 

Nigel Holmes is a graphic designer. Megan McArdle, an Atlantic associate editor, blogs at meganmcardle.theatlantic.com.

 

http://www.theatlantic.com/doc/200812/map-iceland

 

 

Invest and Hold

If you feel that you don’t have either the inclination nor the patience to research and cherry-pick choice stocks,  then why not set aside some funds to invest in index funds?    Remember,  you don’t need to get the timing exactly right.  It’s time to buy for the next decade.  =)

39 ARTICLES OF FAITH FOR CHRISTAINS-Easter 2008 of Resurrection of Jesus in AMERICA

THIS BLOG IS ON ORGANIZED CRIME AND TERRORISM AND THE FESTERING WOUNDS OF ISRAEL AND KASHMIR THAT HAVE GRIPPED THE WORLD AND ARE DUE TO THE FILTHY ANTAGONISTIC POWER HUNGRY,CRIMINAL,LOOTING TENDENCIES OF THE BRITISH COMMONWEALTH

WITH GUTTER MEHRAULI ARYA SAMAJ SEX MANY WOMEN SATISFACTION ,BLACK DYE USER FROM AGE 40,BALD KALRA

BOTH AT AGE 55.ALSO RADIOACTIVE NUCLEAR WASTE AS WELL AS NUCLEAR MATERIALS FED IN FOOD CAN LEAD TO SERIOUS BODY AND HAIR LOSS WHICH THESE SINNERS ARE INFLICTING ON THE HONEST.PLEASE READ THE LETTER SENT TO DRDO JUST YESTERDAY ON HOLI-22-3-2008 AND JUDGE FOR YOURSELF.

© Copyright 2000 - 2008 The Hindu

http://wkdkigodatabase03.blogspot.com/2007/06/jasmine.html

There is but one living and true God, everlasting, without body, parts, or passions; of infinite power, wisdom, and goodness; the maker and preserver of all things both visible and invisible. And in unity of this Godhead there be three Persons, of one substance, power, and eternity; the Father, the Son, and the Holy Ghost.

The Son, which is the Word of the Father, begotten from everlasting of the Father, the very and eternal God, and of one substance with the Father, took man’s nature in the womb of the blessed Virgin, of her substance: so that two whole and perfect natures, that is to say, the Godhead and manhood, were joined together in one person, never to be divided, whereof is one Christ, very God and very man, who truly suffered, was crucified, dead, and buried, to reconcile His Father to us, and to be a sacrifice, not only for original guilt, but also for all actual sins of men.

Christ did truly rise again from death, and took again His body, with flesh, bones, and all things appertaining to the perfection of man’s nature, wherefore He ascended into heaven, and there sitteth until He return to judge all men at the last day.

The Holy Ghost, proceeding from the Father and the Son, is of one substance, majesty, and glory with the Father and the Son, very and eternal God.

Holy Scripture containeth all things necessary to salvation: so that whatsoever is not read therein, nor may be proved thereby, is not to be required of any man, that it should be believed as an article of the faith, or be thought requisite or necessary to salvation.In the name of Holy Scripture, we do understand those Canonical books of the Old and New testament, of whose authority was never any doubt in the Church.

- 1970 - 1980 - 1990

Hanuman was born as the son of Anjana a female vanara. Anjana was actually an Apsaras (a celestial being), named Punjikasthala, who, due to a curse, was born on the earth as a female vanara. The curse was to be removed on her giving birth to an incarnation of Lord Shiva. Anjana was the wife of Kesari, a strong vanara who once killed a mighty elephant that was troubling sages and hermits. He therefore got the name ‘Kesari’, meaning lion, and is also called Kunjara Südana, the elephant killer.

The other speciality of this place is that the waterfall flows upwards… a few more kilometers trek away from this place. is said that the wind is so strong that it pushes the water flow upwards… probably that is why he is called the son of Wind God - Pavan Putra Hanuman

of the Mughal Empire and the possibility of expanding to fill the

power vacuum. Without Nader, “eventual British rule [in India]

would have come later and in a different form, perhaps never at all

http://en.wikipedia.org/wiki/Nadir_Shah

on his way to fight the Daghestanis, an assassin took a shot at him but

Nader was only lightly wounded. He began to suspect his son was behind

the attempt and confined him to Tehran. Nader’s increasing ill health

made his temper ever worse. Perhaps it was his illness that made Nader

lose the initiative in his war against the Lezgin tribes of Daghestan.

Frustratingly for him, they resorted to guerrilla warfare and the

Persians could make little headway against them. Nader accused his son

of being behind the assassination attempt in Mazanderan. Reza

angrily protested his innocence, but Nader had him blinded as punishment,

although he immediately regretted it. Soon afterwards, Nader started

His PhD is in the area of Brain and Cognitive Science from the

Massachusetts Institute of Technology (MIT), where he was also a

visiting physician at the Clinical Research Center. He completed his

post-doctoral work as a Clinical and Research Fellow in Neurology at the

Massachusetts General Hospital, Harvard Medical School.

Professor Nader has conducted research on neurochemistry,

neuroendocrinology, and the relationship between diet, age, behavior,

mood, seasonal influences, and neurotransmitter and hormonal activity,

and on the role of neurotransmitter precursors in medicine.

His interest in natural health care led him, while at MIT,

to conduct research on Maharishi Ayur-Veda herbal and mineral

preparations for their safety, their effects on memory and behavior, and

their ability to prevent aging and disease, including cancer.

He also conducted original research on the effects of Maharishi’s

Transcendental Meditation and TM-Sidhi Program in solving social

and international problems.

Professor Nader’s desire to gain total understanding of the human mind and

body-of consciousness and physiology-led him to the study of Maharishi’s

Vedic Science and Technology under the guidance of His Holiness Maharishi

Mahesh Yogi.

He has organized courses and lectured widely on Maharishi Ayur-Ved, the

ancient system of perfect health, in more than 50 countries, and held positions

as a professor and director of Maharishi’s Vedic Approach to Health Programs.

He is currently International President of Maharishi Open Universities;

International President of Maharishi’s World Parliament or World Peace;

Director of the Council of Supreme Intelligence of Maharishi’s Global

Administration through Natural Law; International President of Maharishi

Ayru-Veda Universities; president of Maharishi University of Management,

Holland; and President of Maharishi European University of Management, Brussels.

Professor Nader was honored by Maharishi as Custodian of the Constitution

of the Universe in 1997. He was also given the title Chakravarti by Maharishi

on the day of Guru Purnima, 1997.

On the basis of his knowledge of physiology, Dr. Nader has successfully

correlated each aspect of the Vedic Literature to a specific area of physiology, with the conclusion that human physiology is the expression of Veda and the Vedic Literature.

This is the subject matter of this book.

In honor of his discovery, Professor Nader received his weight in gold at a historic

celebration in February 1998, at Maharishi Vedic University in Vlodrop, Holland,

in the presence of Maharishi.

This discovery has been appreciated by scientists and political leaders

throughout the world, including the Presidents of India, Mozambique, Lebanon,

Turkey, Trinidad and Tobago, and the Maronite Patriarch of Antioch and of all

the Middle East.

From 12 October to 16 October, 2000, during a five-day coronation ceremony

(Rajyabhishek), Professor Tony Nader, was crowned the First Sovereign Ruler

of the Global Country of World Peace, with its authority in the invincible

organizing power of Natural Law, which naturally and eternally governs the

evolution of all life everywhere.

On 17 October, Professor Nader, honoured with the title Nader Raam,

in keeping with the tradition of the Royal Rulership of Raam- the rule of

Natural Law- graciously accepted his new sovereign role and announced the

forty Ministries of His Global Country of World Peace, each upheld by the

Chequered kacha of Khalistan which Latika Rana permenantly displayed on my first floor Terrace

THIS BLOG IS ON ORGANIZED CRIME AND TERRORISM AND THE FESTERING WOUNDS OF ISRAEL AND KASHMIR THAT HAVE GRIPPED THE WORLD AND ARE DUE TO THE FILTHY ANTAGONISTIC POWER HUNGRY,CRIMINAL,LOOTING TENDENCIES OF THE BRITISH COMMONWEALTH

Virtual Insanity

What is it with the worldly importance of the male sexual organ? Why is it something that has been drawn, sculptured and admired for thousands of years?

Even mother nature has her own version… meet the REAL magic mushroom.

MEERUT/BEIRUT

It’s so perfect that it usually has one or more “balls” at it’s base.

Another interesting phallus would be the one in Luqa, Malta that greets our tourists as they drive past it on their way to their hotels.

Ansals have just two months to pay up or else their property is to be auctioned to satisfy the liability. Expectedly, whispers have arisen saying that this judgement would open the floodgates of liability litigations prompted by lawyers. Tulsi retorts: “ the open defiance of safety laws can only be contained by opening these floodgates. We are glad that the floodgates have been opened, albeit only a little.”

After the assassination of Kennedy, the Federal Bureau of Investigation investigated Marcello. They came to the conclusion that Marcello was not involved in the assassination. On the other hand, they also said that they, “….did not believe Carlos Marcello was a significant organized crime figure,” and that Marcello earned his living, “….as a tomato salesman and real estate investor.” As a result of this investigation, the Warren Commission concluded that there was no direct link between Ruby and Marcello.

The Marcello family and descendants still own or control a significant amount of real estate in southeast Louisiana.

Sanjay also publicly initiated a widespread family planning program to limit population growth. But this resulted in government officials and police officers forcibly performing vasectomies in order to meet quotas and in some cases, sterilizing women as well. Officially, men with two children or more had to submit to sterilization, but many unmarried young men, political opponents and ignorant, poor men were also believed to have been sterilized. This program is still remembered and criticized in India, and is blamed for creating a public aversion to family planning, which hampered Government programmes for decades.

- 1970 - 1980 - 1990

At that time Hindustan Motors’ Ambassador was the chief car, and the company had come out with a new entrant, the Premier Padmini which was slowly gaining a part of the market share dominated by the Ambassador. For the next ten years, the Indian car market had stagnated at a volume of 30,000 to 40,000 cars for the decade ending 1983.

Sanjay Gandhi was awarded the exclusive contract and licence to design, develop and manufacture the “People’s Car”. This exclusive rights of production generated some criticism in certain quarters, which was directly targeted at Indira Gandhi. Over the next few years, the company was sidelined due to the Bangladesh Liberation War and emergency.

In the early days under the powerful patronage of Sanjay Gandhi, the company was provided with free land, tax breaks and funds. Till the end of 1970s, the company had not started the production and a prototype test model was welcomed with criticism and skepticism. The company went into liquidation in 1977. The media perceived it to be another area of growing corruption. [4] Unfortunately, Maruti started to fly only after the death of Sanjay Gandhi, when Suzuki Motors joined the Government of India as a joint venture partner with 50% share.[5]

After his death, Indira Gandhi decided that the project should not be allowed to die. Maruti entered into this collaboration with Suzuki Motors, The collaboration heralded a revolution in the Indian car industry by producing the Maruti 800. The car went on sale on December 14, 1983. It created a record by taking 13 months time to go from design to rolling out cars from a production line.

Hanuman, actually devine and is an reincarnation of Lord Shiva. Pavan is anoather name of Vayu. Pavan had played an important role in Anjana’s begetting Hanuman as her child. Hanuman’s spiritual father is Vayu, so Hanuman is also called Pavan-putra (meaning ’son of Pavan’) or Maruti. Being divine, Hanuman was born with immense physical strength, the power to fly, and divine levels of endurance.

Hanuman was born as the son of Anjana a female vanara. Anjana was actually an Apsaras (a celestial being), named Punjikasthala, who, due to a curse, was born on the earth as a female vanara. The curse was to be removed on her giving birth to an incarnation of Lord Shiva. Anjana was the wife of Kesari, a strong vanara who once killed a mighty elephant that was troubling sages and hermits. He therefore got the name ‘Kesari’, meaning lion, and is also called Kunjara Südana, the elephant killer.

The other speciality of this place is that the waterfall flows upwards… a few more kilometers trek away from this place. is said that the wind is so strong that it pushes the water flow upwards… probably that is why he is called the son of Wind God - Pavan Putra Hanuman

The Disability Law and Policy e-Newsletter - University of Iowa - em inglês

The Disability Law & Policy e-Newsletter

An electronic publication of

December 9, 2008

Volume 5, Issue 10

Dear Colleague:

Below is a topical overview of the items presented in this issue.

G. EMERGENCY RESPONSE / PREPAREDNESS: Disaster mitigation and preparedness news

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

A. CIVIL RIGHTS

http://www.walmartspeakout.com/page/-/ADAreport.pdf

http://www.walmartspeakout.com.

Full Story:

http://www.law.com/jsp/article.jsp?id=1202426195671

Full Story:

http://www.uiowa.edu/~fyi/issues/issues2008_v45/11032008/profiles.html

Full Story:

http://pmr.uoregon.edu/science-and-innov…istance-center/

http://media.www.vermontcynic.com/media/…e-3548139.shtml

Full Story:

http://www.perkins.org/assets/downloads/lantern/2008-fall-lantern_.pdf

Full Story:

http://www.press-citizen.com/apps/pbcs.dll/article?AID=/20081015/NEWS01/810150304/1079

1. Will Technology Replace Service Animals?

Full Story:

http://www.eetimes.com/showArticle.jhtml…cleID=211601091

Full Story:

http://www.computeractive.co.uk/computeractive/news/2230257/disabled-children-specially

Full Story:

http://www.sciencedaily.com/releases/2008/11/081107072015.htm

Full Story:

http://www.ssa.gov/cola/colafacts2009.htm

Full Story:

http://www.nytimes.com/2008/11/19/health/policy/19fda.html?ref=health

Also available at

http://www.iht.com/articles/2008/11/20/healthscience/19fda.php and http://www.starnewsonline.com/article/20081119/ZNYT04/811193013

Full Story:

http://www.hrhero.com/hl/100308-lead-ada_amendments_act.html

Full Story:

http://www.dol.gov/opa/media/press/odep/odep20081327.htm

For more information on USBLN:

http://www.usbln.org/

Full Story:

http://www.newstimes.com/ci_10942030

Full Story:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1303047

Full Story:

http://www2.ljworld.com/news/2008/nov/17/county_emergency_making_sure_nobody_left_behind/

Full Story:

http://www.tmcnet.com/usubmit/2008/11/11/3778464.htm

Full Story:

http://www.nj.com/news/times/regional/index.ssf?/base/news-15/1226811912192100.xml&coll=5

Full Story:

http://www.unhcr.org/refworld/docid/48db99e82.html

https://wcd.coe.int/ViewDoc.jsp?Ref=NE18…orLogged=A9BACE

Full Story:

http://www.mdri.org/mdrihtmlemail/Nov2008Alert.html

For more information,

http://www.mdri.org/index.html

Full Story:

http://www.irinnews.org/Report.aspx?ReportId=81016

http://disability.law.uiowa.edu/

The e-Newsletter is archived at http://disability2.law.uiowa.edu/

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Diamonds are everywhere

 

 

 

 

 

 

 

Interest Rate Update and Market Report

Interest rates as of December 12, 2008

What a week!  Below are some of the best rates we have EVER seen along with some important comments.

Market Comments -

Today was one of those ‘Strange Days’ marked by wild, volatile swings in both stocks and bonds. Stocks went crazy as well with the Dow trading in a 335 point range. The day’s economic news was mostly bond-friendly, but it took a back seat to the drama taking place in Washington, D.C. with the auto bailout legislation. A surprising defeat in the U.S. Senate for a $14 billion bailout bill followed by an announcement by the U.S. Treasury that it was ready to come to the aid of the Big 3 automakers turned stock and bond traders on their heads, triggering a session filled with frenzied selling and buying as positions were flipped back and forth. 

News of a $50 billion investment fund Ponzi scheme engineered by Bernard Madoff, a former chairman of the Nasdaq Stock Market, also caused ripples in the financial markets. The Producer Price Index (PPI) fell -2.2% vs. a consensus of -2.0% for November. An 11.2% drop in energy costs led the decline in wholesale inflation. After excluding volatile food and energy costs, the Core PPI rose by 0.1% vs. an estimate of 0.2%, its smallest gain since last March. This is another positive for bonds. 

November Retail Sales fell by a less than forecast -1.8% vs. a consensus estimate of -2.0%. After factoring out auto sales, Retail Sales fell -1.6% vs. a consensus estimate of -1.8%. Preliminary Consumer Sentiment for December was reported at a higher than expected 59.1 vs. a consensus of 55.0, probably due to lower energy costs. Economists were expecting Consumer Sentiment to rise to 58.0 from November’s level of 55.3. The Dow managed to gain 64 points to close at 8,629 while the broader S&P 500 Index advanced 6 points to end at 879. The NASDAQ Composite Index rose 32 points to finish at 1,540.

Now is the time to be refinancing or buying a home that’s for sure!  Call Mike with any questions!

black swan 4.bla.00200 Louis J. Sheehan, Esquire

Louis J. Sheehan, Esquire .  For most of October, it seemed nearly everything that could go wrong with the markets did. But the rout turned into a jackpot for author and investor Nassim Nicholas Taleb.

Mr. Taleb last year published “The Black Swan,” a best-selling book about the impact of extreme events on the world and the financial markets. He also helped start a hedge fund, Universa Investments L.P., which bases many of its strategies on themes in the book, including how to reap big rewards in a sharp market downturn. Like October’s. http://louis-j-sheehan-esquire.blog.friendster.com

Separate funds in Universa’s so-called Black Swan Protection Protocol were up by a range of 65% to 115% in October, according to a person close to the fund. “We’re discovering the fragility of the financial system,” said Mr. Taleb, who says he expects market volatility to continue as more hedge funds run into trouble.

A professor of mathematical finance at New York University, Mr. Taleb believes investors often ignore the risk of extreme moves in the market, especially when times are good and volatility is low, as it was for several years leading up to the current turmoil. “Black swan” alludes to the belief, once widespread, that all swans are white — a notion that was proven false when European explorers discovered black swans in Australia. A black-swan event is something that is highly unexpected.

Assets under management at Universa have neared $2 billion since the fund launched early last year with $300 million under management. While Mr. Taleb frequently consults with Universa’s traders, the Santa Monica, Calif., fund is owned and managed by Mark Spitznagel, who worked for several years in the 1990s as a pit trader on the Chicago Board of Trade. http://louis-j-sheehan-esquire.blog.friendster.com

To execute its strategy, Universa buys far-out-of-the-money “put” options on stocks and stock indexes. These are bets that the market will see a sharp, sudden downturn. They become extremely valuable in a market decline of 20% or more in a one-month period.

When times are good, such options are cheap and Universa gobbles them up, taking small losses along the way. When the market makes a quick, steep turn south, as it has recently, Universa’s positions gain value as investors scramble to protect themselves in the downturn by buying puts. The strategy, which keeps more than 90% of assets in cash or cash equivalents such as Treasury bonds, either breaks even or loses small amounts in most months while waiting for periodic, infrequent spikes in volatility.

Here’s an example of a trade the fund made recently. In late September, when the Standard & Poor’s 500-stock index was trading around 1200, Universa purchased put options that would pay off if the index fell to 850 by late October. Since such a plunge was considered highly unlikely, such options cost only 90 cents. On Oct. 10, those options cost $60 as the S&P 500 tumbled sharply. Universa sold most of its position in the high-$50 range.

The fund has “done what it was supposed to do for us,” says John Salib, a partner at Landmark Advisors, a New York fund that invests in other hedge funds and that invested in Universa in July. “We wanted to protect our portfolio against this kind of environment.”

Mr. Taleb made his first killing on Black Monday, the crash of Oct. 19, 1987, as a trader with the investment bank First Boston (now a part of Credit Suisse), with a large position in out-of-the-money Eurodollar contracts. Investors fled into the highly liquid contracts as the market crashed, causing their value to surge.

While the black-swan strategy has paid off handsomely this year, it hasn’t always. Mr. Taleb’s previous fund, Empirica Capital, which used similar tactics, shut down in 2004 after several years of lackluster returns amid a period of low volatility. The strategy may face another test after the current bout of market turmoil. http://louis-j-sheehan-esquire.blog.friendster.com

The task for the fund’s managers is to persuade clients to stick around after their big gains. Historically, such dramatic downturns have been rare events, occurring only once or twice a decade.

Mr. Spitznagel cautions against optimism. “You could say that so much value has been destroyed that there just isn’t much left,” he said. That is “a dangerous assumption, since things can always get worse.” Louis J. Sheehan, Esquire

War Goddess ATHENA Invoked in South Asia as IIP Slump Heralds DISASTER in Shining India!

 

The Indus Valley Civilization (Mature period 2600–1900 BCE), abbreviated IVC, was an ancient civilization that flourished in the Indus River basin. Primarily centred in modern day Pakistan (Sindh and Punjab provinces) and India (Gujarat and Rajasthan), it extends westward into the Balochistan province of Pakistan. Remains have been excavated from Afghanistan, Turkmenistan and Iran, as well. Historically part of Ancient India, it is one of the world’s three earliest urban civilizations along with Mesopotamia and Ancient Egypt. The mature phase of this civilization is technically known as the Harappan Civilization, after the [1]first of its cities to be unearthed: Harappa in Pakistan. Excavation of IVC sites have been ongoing since 1920, with important breakthroughs occurring as recently as 1999.[2]

The civilization is sometimes referred to as the Indus Ghaggar-Hakra civilization[3] or the Indus-Sarasvati civilization. The appellation Indus-Sarasvati is based on the possible identification of the Ghaggar-Hakra River with the Sarasvati River mentioned in the Rig Veda,[4] but this usage is disputed on linguistic and geographical grounds.[

Many Indus valley seals show animals. One famous seal shows a figure seated in a posture reminiscent of the Lotus position and surrounded by animals was named after Pashupati (lord of cattle), an epithet of Shiva and Rudra.[56][57][58].

“Following the Mumbai attacks and the subsequent tension between Pakistan and India, the United Jihad Council has decided to remain silent,” an unnamed commander of one of the militant groups in the UJC told ‘The News’ daily.

He said the current Pakistani leadership is pursuing the policy adopted by ex-President Pervez Musharraf and “statements on Kashmir issued so far by President Asif Zardari had made it clear that the present Pakistan government would extend no support” to them.

In India, the elite stay above the fray. They live in walled compounds, have their own source of electricity, hire their own security guards  and educate their children in private schools, avoiding the issues confronting the government and the masses. But for the first time as it happened that the 60-hour siege that struck the heart of India’s financial and entertainment center, killing 171 people, has fractured that secure existence, galvanizing thousands of middle- and upper-class Indians to get involved. A day after the assault ended, dozens turned out for a march along Mumbai’s elegant Marine Drive. “I’m gonna vote!” shouted Shrenik Kenia, a 24-year-old engineering student. “We’re all gonna vote!” It’s not something many affluent Indians bother with, but mep the state, with its notoriously turgid, corrupt, and inefficient government.

Now the Ruling Hegemonies and their Agencies including National governments and security forces with Creamy Layer Policy Makers have been SET for MASS DESTRUCTION everywhere in this part of the Galaxy so Complex with ETHNIC DIVIDES! Thus, the War Goddess ATHENA is Invoked far away from the TROY of GREECE!

India is hurtling towards an industrial recession despite the much hyped Risilience claims by the outgoing Chettiar Gangsters of World Bank, FIMNMIn and RBI!Indian exports have already recorded double-digit declines in October and November. Imports continue to rise, which could put the balance of payments under immense pressure.The government said on Friday that the Index of Industrial Production in October was 0.4% lower than what it was a year ago. This is the first such decline in industrial output since 1993.

The FREEsenSEX is in CHOPPING times and it is all the PLEASURE for the BEARs! The recent interest rate cuts and fiscal stimulus will make an impact a few months later. Forget 8%: even a 7% growth rate seems unlikely now.

Since early September, the Organization of the Petroleum Exporting Countries has already agreed to reduce supply by a total of two million barrels per day (bpd).

OPEC oil ministers are scheduled to meet in the western Algerian city of Oran on Wednesday amid expectations they will endorse a large cut in supplies to prevent further falls in oil prices.

Khelil, who is also Algeria’s energy and mining minister, said Russia and some other non-OPEC oil producing countries like Azerbijan are to due attend the Oran meeting.

Army Chief Deepak Kapoor on Saturday asserted that Indian security forces are well equipped to handle any challenges saying, the country can produce many Unnikrishnans who will readily sacrifice their lives on the motherland.

Addressing the Passing Out ceremony of Indian Military Academy in Dehradoon, the Army chief said that our security forces have faced various challenges many times and are always ready to handle all kind of difficult situations.

“Our forces will produce many Unnikrishnans who will be ready to sacrifice their lives for the motherland,” Chief guest Kapoor said adding, “India is a secular country and the main duty of our soldiers are to protect the countrymen.”

He said “our officers not only ensure the security of the country but also uphold it’s honour and dignity.”

He added that our officers were not only soldiers but also doctors, teachers, environmentalists and technical experts.

Advising the cadets during the ceremony, Kapoor said that one should never stop the process of acquiring knowledge which helps in facing any adversary.

He addressed 498 cadets, including six from Assam Rifles and 24 from foreign countries like Nepal, Tazhakistan and Bhutan on the occasion.

While prestigious ‘Sword of Honour’ award and Gold medal was bestowed on Abhishek Gurgmukh, cadets Atul Kumar Rai and Kunandan Kumar were awarded with silver and bronze medals respectively during the ceremony

However, Army Banner Award was given to Casino company of Bhagat Batallion.

Just note the US TURNAROUND! You depend so much on it!

“Is that the message the US has sent out?” McCormack was asked. “No,” he replied.

“…Pakistan did this because it saw it in its interest. As we have said many, many times over, the threat from violent extremists is as much a threat to Pakistani people and the Pakistani government as it is to anybody else. All that said, it’s a welcome step that they took,” he said.

“This is a day-by-day process, and it’s something that requires vigilance every single day, fighting terrorism,” he said making the point that at no time was there any talk of branding Pakistan as a terrorist state.

The Spokesman was also asked to clarify if the banning of the Jamaat would be one of the topics that the Secretary of State Condoleezza Rice would be covering when she visits the United Nations next week.

Rice is scheduled to be in New York for two days starting Monday for discussion on a range of issues including Zimbabwe and piracy.

“…there are a lot of different things that she’s going to be talking about up there. I’m sure that she will touch on the issues related to India and Pakistan. I know that Foreign Secretary Miliband, at least at this point in time, plans to be up there and she plans to see him. And if they do get together, I’m sure that that topic will come up,” he added.

Whoever may be behind the Terrorist activities, they never happen to be the Majority of the People. We may not blame the innocent Pakistani People for the crimes of Pakistani Military, ISI or even the government of pakistan. We never know the role played by United states of America and its NOTORIOUS Intelligence agency CIA, infamous for creating WAR and CIVIL WAR like Environment to protect US ZIONIST interests worldwide. Mind you, after POKARAN, Russia holds the ARMS MARKET MONOPOLY and since seventies America and NATo and the WEST never entered the Indian ARMS Market! Just because of SANCTIONS imposed by the same United satates of America! The Western Weapon Industry was very keen to operationalise the Indo US Nuclear deal and the US Congress obliged so easily. We got the NSG green Signal without any hinderance after DR Manmohan Manipulated Parliamentary Mandate at home! What for President BUSH has done all this HARD Work if US interests are not involved at all. Why does Barack OBAMA is so involved in Indian Affairs! The Ruling Hegemony knows very well that they have the best CHANCE to get an ESCAPE Route out of Recession in SOUTH ASIA if India and Pakistan tend to move into the US Weapon Market with long long shopping list!

Zardari’s ability to deliver anything beyond the current crackdown is in serious doubt. In a new twist to the Mumbai terror attack probe, the only surviving terrorist captured during the Mumbai attacks -Ajmal Kasab-has written a letter to the Pakistan embassy pleading for legal aid! What Option remains at last?

May we Consider the Option of War against Pakistan considering that India’s economy could expand at a much lower rate than estimated with data released on Friday showing that industrial output in October contracted by 0.4%, the first time this is happening in 15 years, because of a decline in both domestic and external demand.

Earlier, addressing the International Conference of Jurists on Terrorism, Rule of Law and Human Rights, Bhardwaj said time had come for a “really very effective” legislation to combat the menace in the aftermath of the Mumbai mayhem last month.

“We would arm ourselves with laws specifically aimed at terrorist and disruptive elements. The government would very soon declare the contents of the law,” he said. The minister said the country never thought that it will face terrorism to such an extent. “But now the time has come for really very effective laws,” he said.

 

 

Goddess ATHENA depicts Power as Indian Goddess Durga. But Durga, in her all forms, is associated with Lord SHIVA. As durga represents the PRAKRITI, Nature and Shiva , the MAN. Eternal relationship in between Nature and Man is thus symbolised in Age OLD Myths in India. Goddess Kali seems to be Aryanised in form of DURGA while Lord remains the same. We see durga mentioned well in Vedic Literature as well as in Upanishads and puran to be believed written by Aryans who created the Goddess replicating Indigenous Kali agnaist aboriginal indigenous black untouchables! Durga kills the Asuras, the aboriginal communities. kali is also described by the Aryans as war Goddess!Aboriginal Gods and Goddesses were ARYANISED to convert the NATIVES in Hindutva and occasionally fighting against the indigenous tribes as well as amongst themselves, that they conceived of some elemental gods and goddesses adopting the aboriginal and indigenous gods and goddesses as Shiva, Kali and even Durga!All documents and literature relating to Indigenous Dravid civilisation were first destroyed in Harappa and Mohanjodoro. US Imperialism did the same thing in Iraq and Afganistan! Mohanjodoro has not any legacy anywhere as they wiped out. Charvak philosophy was diluted in hindutva.south and North Indian dalits and Tribals are divided!ruling galaxy hegemony is NOTHING but  but an expression of racial supremacy which began with the destruction of Mahergargh, Harrapa and Mohanjodoro as well as Maya and Inca civilisations!Since the Indus script has not been deciphered and apart from the bathhouse in Mohenjo-doro there are no religious structures! But  we have enough evidences of their Indigenous developed agriculture, Civil Society, religion and culture. The Linga and YONI images which later transformed into SHIVALINGA is rooted in MOhanjedoro! The TERECOTA Seal found in HARAPPA depicts the Goddess of fertility, the Earth upsied down as the head lying underneath and the rest of the body stands vertically ERECT with stretching Legs and the stomock generating Production System depicted by storage of cereals. it resembles with the Abstract Modern Painting of Picasso! Not only this, the Goddess has two tigers face to face standing by her side. Mind you, Goddess durga stands on the Lion. She is the Daughter of Himalayas which has been always inhibited by Indigenous people but they were not Black! As the people of Kashir are also not Black but they never happen to be Aryans. We know about Baisno Devi, the Himalayan version of Goddess Durga! Thus, it may be understood that the Goddess of Peace and Fertility was translated as the Goddess of War by the Culture in Aggression, the Aryan!

But our people worship Goddess Kali, the SAVIOUR! She is known as Raksha Kali! The Kali who protects and who, at the same time depicts the fiercest REALITIES of life as we see in the Kali Idol in kalighat , well portrayed by Gunter Grass!

 

The question is, will their involvement make a difference? India is run by a massive, lumbering, outdated and frequently corrupt bureaucracy. While a civil service job used to be among the greatest professional plums for India’s educated classes, these days the rich and ambitious focus far more on the country’s fast-growing private sector.

And politics is riddled with century’s-old class conflicts, religious divisions and nepotism.

Also, in the 60 years since independence, India’s leaders have done the math and turned to the nation’s hundreds of millions of rural poor to win office, prompting the middle class to withdraw from the political process.

Residents lost friends, relatives and colleagues and live with the dread that it could have been them trapped as the gunmen sprayed five-star restaurants with bullets and grenades. Many now wonder where to meet for lunch.

The attack “has galvanized the middle class and elite like no other act of violence has before,” said Nilekani, who has just written a book on Indian society and politics, “Imagining India: Ideas for the New Century.”

Their quest for change is not unprecedented. The swelling ranks of educated, affluent Indians have already transformed the country into an emerging economic power and a high-tech leader. But this has been largely done despite the government and India’s primitive infrastructure.

For now, the frustrations amount to little more than symbolic gestures and an inchoate demand for change.

The Society of Indian Law Firms, a group of 60 top firms across the country, filed a petition last week, urging the Bombay High Court to compel the government to take concrete steps to improve security and set up a citizen oversight committee to make sure reforms stay on track. The Bombay Chamber of Commerce and Industry, a group of about 2,000 businesses based in Mumbai, signed on in support.

Pakistan has placed the charity’s leader Hafiz Saeed under house arrest and ordered its assets frozen after the UN Security Council listed it as a terror group following the attacks that left 172 people dead, including nine gunmen.

“The forces of terrorism, inspired by ideologies of hatred, intolerance and exclusion, pose today a fundamental challenge to liberal democracies,” Singh told a conference of jurists in New Delhi.

“They pose a challenge to democracy at home, to democracy in our region, to democracy around the world,” he said.

“Governments and authorities in our region and elsewhere have therefore a moral duty to act firmly and quickly,” he said.

New Delhi had previously blamed “elements in Pakistan” for being behind the 60-hour siege that ended on November 28, raising tensions between the two nuclear-armed South Asian rivals.

US Secretary of State Condoleezza Rice has said “non-state actors” operating on Pakistani soil were responsible for the attacks.

Indian Foreign Minister Pranab Mukherjee meanwhile voiced scepticism over Pakistan’s arrests of Saeed and Maulana Masood Azhar, the leader of Jaish-e-Mohammed, which like LeT is fighting Indian rule in Kashmir.

“We shall have to see whether these (actions by Pakistan) are taken to their logical conclusion,” said the minister, noting Islamabad had detained the pair in 2002 but later released them.

“All our common friends and responsible statesmen are playing their important role in defusing the situation and I’m pretty sure that will work.”

Gilani said Pakistan was taking its own action against groups and people put on a U.N. terrorist list, and the chances of India resorting to air strikes against militant targets were remote.

“I think India is equally responsible and they won’t. There is no fear of anything like that,” Gilani said.

Indian and U.S. officials have levelled accusations at Lashkar-e-Taiba, a jihadi organisation that fought Indian rule in Kashmir and, according to analysts, has had close ties to the Pakistani military’s Inter-Services Intelligence (ISI) agency.

Miss Trinidad and Tobago was named the second runner-up. The others in contention in the final five were Miss South Africa and Miss Angola.

India had high hopes on 21-year-old Parvathy to win the crown that last came to the country in 2000.

India boasts of Miss Worlds like Reita Faria (1966), Aishwarya Rai Bachchan (1994), Diana Hayden (1997), Yukta Mookhey (1999) and Priyanka Chopra (2000).

The ruling Hegemonies in this divided Bleeding Geopolitics of south Asia have done everything to make the Nation State Colonised SURRENDERING Sovereignity and FREEDOM. Have done everything to Americanise the People ENSLAVED with inherent inequality, injustice and GRADED Caste system sustaining! They havd done every thing to DESTROY Production systems and Productive FORCES. Corporate IMPERILISM, supported by Fascism and BETRAYAL of MARXISTS, has the Last Say in this Subcontinent. Now we share the US Destiny in Life and Death!  In the wake of last month’s terror attacks in Mumbai and the subsequent crackdown by the Pakistan Government on the banned 

 

Data released by the Central Statistical Organisation (CSO) on Friday showed that in the first seven months of this fiscal year (April-October), the Index of Industrial Production (IIP) grew 4.1% compared with 9.9% during the same period a year ago. The output of the manufacturing sector, which accounts for around 80% of IIP, shrank 1.2% in October, while those of the electricity and mining sector rose 4.4% and 2.8%, respectively. And while the output of intermediate goods and consumer goods companies fell, those of companies in the basic and capital goods sectors registered weak growth. Economists here do not expect the factory output numbers to get better in a hurry.

“Some 620 people have been redeployed in suitable positions in the bank and other group entities in India. The leavers have been placed in the bank’s priority returners scheme which will give them first preference for suitable jobs that come up in the next year,” the statement said.

Chairman of Central Board of Excise and Customs P.C. Jha commissioned two classes of vessels - three category I vessels and six category III vessels at the Mumbai Port Saturday evening.

These vessels shall be stationed in Mumbai, Raigad, Ratnagiri (Maharashtra), Goa, Mangalore (Karnataka), Kochi, Trichy (Kerala), Okha, Kandla, Valsad and Umargaon (Gujarat).

The vessels, built by a Malaysian company, Gold Bridge, can stay at sea for up to three days. The category I vessels are air-conditioned, 20 metres in length and can attain speeds of up to 25 knots, Jha said.

The category III vessels, built by a Singapore company, Brunswyck, are small speed boats measuring between six to nine metres and capable of achieving speeds of up to 35 knots and can remain at sea for up to 10 hours.

The induction of these vessels comes barely a fortnight after a group of terrorists entered Mumbai unobtrusively from the Arabian Sea and created mayhem for almost three days in which over 170 people lost their lives and nearly 300 others were injured.

“As an enforcement agency we are continuously faced with new challenges and complexities and the greatest challenge is to augment our capacity to respond effectively to those seeking to breach our coasts,” Jha said while commissioning the vessels.

The government will acquire another 24 such vessels over the next 15 months from Gold Bridge, he added.

In addition, a contract has been signed to acquire advanced patrol vessels in the category II, which are 13.5 metres long with a speed of 40 knots. Equipped with sophisticated communication and navigational aids like radar, GPS, satellite communication, VHF and other equipment, these shall be built by Bahrain’s Al Dhaen Craft, Jha said.

In the first phase of this programme, surveillance on the west coast shall be beefed on the coastal states of Gujarat, Maharashtra, Goa, Karnataka and Kerala.

India has a total coastline measuring 7,600 km.

The new vessels shall also augments efforts to monitor smuggling activities, narcotics trade through the sea, sneaking in arms and ammunition, apart from checking potential terrorist threat and bio-security threats.

The three large vessels commissioned today are named “Ila”, “Chitra”, and “Kaushalya” after the former senior women officers who served the customs department.

The Goa government, which has been urging the Centre to take steps to denotify the three notified SEZs in the state, will have to continue its discussions with developers to come to an amicable settlement on the issue. The state government had declared last December that it would not allow any SEZs and all existing zones would be scrapped.

Since three of the zones in the state are notified and have units, the state is finding it difficult to get rid of them.

SEZs, where developers have undertaken construction activity, can also be denotified if there are no units in the zone and the developers agree to refund the tax benefits they received during the construction phase.

SEZ developers and units get a host of tax breaks including tax-exemption on profits for a specified period. The problem of credit squeeze and global economic slowdown which has cast its shadow on the Indian industry at large, is also making it difficult for SEZ developers and units.

The commerce department has already asked the RBI to expedite action on the Centre’s decision to grant infrastructure status to SEZs (for all activities barring the acquisition of land), so that SEZs get access to funds at lower rate of interest.

In the board of approval (BoA) meeting of SEZs earlier this week, about six SEZs had applied for partial denotification of their land. Mr Pillai pointed out that it was routine for SEZ developers to ask for both pruning and expansion of their areas. “As long as the SEZs do not breach the minimum area and maximum area norms, it is allowed,” he said.

http://economictimes.indiatimes.com/Economy/Cranked-up_SEZs_wont_be_denotified/articleshow/3830674.cms

According to data released by the Reserve Bank of India (RBI) in its weekly statistical supplement (WSS), government banks borrowed Rs 30,986 crore — way higher than the enhanced limit of Rs 20,000 crore, which was revised upwards from Rs 6,000 crore in November in anticipation of revenue mismatches, as two government bond auctions were cancelled during the month.

WMA is a temporary advance to meet government revenue mismatches. At any given point in time, the government cannot have an outstanding borrowing over the prescribed limit under this facility. When 75% of the limit of WMA is utilised by the government, RBI may trigger fresh floatation of market loans. Borrowings within the prescribed limit are at the prevailing repo rate, while loans in excess of the limit attract an additional 2% interest.

Following a severe liquidity squeeze through October, the central bank on November 12 had enhanced the WMA limit to Rs 20,000 crore until December 31, 2008. RBI had then said, “The temporary enhancement of the limit of WMA will help meet the unanticipated mismatches between government payments and receipts arising from the cancellation of two auctions scheduled for October 2008, and the bunching of expenditure following the supplementary demand for grants.”

“The second half of Friday’s session conveys buoyancy returning to the market. Unless the US markets tank tonight in reaction to the failure of the auto makers’ bailout, (although it seems unlikely) there could be some downside for our markets. But our markets seem poised for a steady upmove with another round of fiscal stimulus on the cards,” said Sandeep Shenoy, head-equities at PINC Research.

Moreover, the image of FIIs scrambling en masse to the exit doors has changed with the reversal of trend in FII activity in the month of December. Till date this month, FIIs have turned buyers to the tune of Rs 2048.7 crore in equities, according to SEBI data. Anlaysts feel that the trend is likely to remain intact till the month end.

“In the last one week, we have observed that despite external insecurities, the Indian market has shown strength. Even after the collapse of the US automakers bailout and dismal IIP data, Indian equities showed remarkable strength. Bond markets were rallying on hopes of another round of rate cuts and fiscal package measures next week. This could keep the market sentiment upbeat,” said Anita Gandhi, head-institutional business at Arihant Capital.

The government is likely to announce another fiscal stimulus package next week aimed to prevent further deceleration in India’s growth rate, Commerce and Industry Minister Kamal Nath said.

“The package will be directed at employment-intensive sectors. It could include sops for engineering and textile sectors as well as refinance for exporters,” he said at the sidelines of a function organised by Spanish Institute of Foreign Trade.

According to initial estimates with the commerce ministry, exports have fallen by over 10 per cent in November compared with growth of over 30 per cent in the same month last year. This will be the second consecutive month in which exports have dipped owing to a waning demand from overseas clients.

The new package is likely to include enhanced rates of Duty Drawback and Duty Entitlement Passbook Scheme, which will allow exporters higher reimbursements of indirect taxes paid. Moreover, some sectors like textile could get additional subvention in interest rate on export credit.

India’s industrial production unexpectedly declined in October. Although the Indian economy depends largely on its services sector, analysts feel a contraction in the manufacturing sector is still of concern to its overall growth outlook. The slump in industrial output during October was likely attributed to a decline in both domestic and external demand.

The industry recorded negative growth for the first time in 15 years, falling to 0.4 per cent in October as against 12.2 per cent expansion a year ago as the impact of the global economic downturn deepened in the country. The fall is partly due to a dip of over 12 per cent in India’s exports.

Policy makers said the fall was bigger than expected even as they exuded confidence that the December 7 stimulus package would arrest any further decline.

Job losses force investors to turn traders

Increasing fears of job losses have prompted investors to raise cash levels and make money out of the intraday volatility.

The high volatile trading seen in the markets in the last few months was the result of the change in investor sentiment and attitude. The cascading effects of the global recession have changed the basic rules of the game.

The emerging economies like India have also not been spared from the slowdown threat. Job cuts, though not severe in Indian industries, is still creating havoc among the workforce. Employees from IT, realty and auto sectors are more worried about their job security. Employees, who were the long term investors in the stock markets and have lost their jobs, are now attracted towards intraday trading.

Kiran Bhagat who was with one of the top IT companies had invested Rs 1,00,000 on April 3, 2006 when Nifty was at 3473 level. Even after holding his shares for two years, he incurred a loss of Rs 17000 as on December 11, 2008. He would have remained invested for a longer time if he could have saved his job.

“I could have kept my investments for a longer duration but the sudden job loss has forced me to liquidate my investments at loss. However, I had invested Rs 25,000 on Oct 27 when Nifty was at 2450 levels and by October 31, I earned about Rs 3000 on my investments. A return of 12 per cent in 4 days,” said Bhagat.

Same is the case with another long term investor Unmesh Deodhar. He lost about Rs 48000 in the recent stock market carnage. “Investment from a long term point view is good, but when you are out of job or uncertainty lingers over your daily income you have to change yourself as per the situation,” said Deodhar.

He further added that, “When the future is not known and the present is bleak one should always play with the momentum. For me it’s better to loose some money in short term trade rather than losing from a long term approach. Now I have started going by my gut feelings. It helped me immensely for intraday trading.”

Fears of slowdown get dense as the index of industrial production data has turned into negative for the first time in at last 10 years. India’s index of industrial production for October turned negative for the first time in last 10 years. The industrial production fell to -0.4 per cent in October against 4.8 per cent in September and 12.22 per cent a year earlier.

“It is but obvious that when one’s source of income comes under the uncertainty, he ought to change his investment attitude. This is very natural thing. The volatility increases when players opt to go for very short term trade to avoid locking money for longer duration. However, there is a high risk for the unprofessional investors to trade from a very shorter time perspective or an intraday trading,” said Tanuj Shukla, analyst with Krug and Bordan Advisory.

Contrast this to the US reaction towards internal security, post the 9/11 attacks. The US initiated one of the largest multi-layered reforms to integrate its federal, state and local government efforts to secure its land, maritime, air, space and cyber domains.

The creation of the department of homeland security enabled synergy of efforts of otherwise disparate departments and agencies of the federal and local governments, thereby unifying the vision and ensuring cohesive strategic approach.

This was followed by the creation of office of director, national intelligence, the homeland security council, and the national counterterrorism centre. Extensive legal reforms included the US PATRIOT Act, the Intelligence Reform and Terrorism Prevention Act of 2004, and the Protect America Act of 2007. And what was the outcome? Despite being the prime target of global terrorism, the US did not have a single incident of major terrorist attack over the past seven years.

India has to necessarily learn lessons from the US experience and follow suit. To begin with, we should have a dedicated ministry for internal security, which would integrate the host of agencies and departments involved in preventive operations, enforcement of law, collection of intelligence, tasks of immigration, customs, coastal security and criminal investigation and prosecution upon such crime. Federal crimes, especially terror attacks, inter-state organised crimes, and Naxalite movements need to be tackled exclusively by federal agencies for investigation and prosecution.

Extensive legal reforms should be undertaken on a war footing. Legal and structural reforms are badly needed to prevent economic and cyber crimes, which can decimate the country. Criminal justice system should be overhauled at least for the limited purposes of investigating, prosecuting and trying persons accused of crimes against national security, in a manner comparable with military courts.

India’s borders are porous and we do not have an immigration policy or an enforcement system similar to that of the US. Cross-border infiltration from Bangladesh, Nepal and Pakistan is detrimental to national security. As a long-term strategy, we should deport all the illegal migrants from neighbouring countries.

Financial inclusion for the under-privileged

When I asked Bhavani why he had not yet opened a recurring deposit with his account, so that he could save the excess income he made during the peak periods of the year, such as during festive times, he looked bewildered. “Nobody at the bank told me anything, once the bank account was opened. What does this recurring deposit mean?”

In the statistics of the Government of India, Bhavani would be counted as one of the financially included, but on the ground, nothing has changed for him. The staff at the bank had fulfilled the statistical requirement of opening a bank account but had nothing else. Unfortunately Bhavani’s is not an isolated example. In a study by the management consulting firm, The Boston Consulting Group, it is estimated that close to 40% of all the no-frills account holders rarely access their accounts. While the bank account holders in rural India face other challenges such as the cost of reaching the banks as well as potential loss of income for that day, in urban India, the problem is essentially one of financial illiteracy.

What is financial inclusion? It is the access that an individual has to the full range of financial services, including savings, credit, insurance and investment advice.

At one end of the spectrum is the financially privileged individual who is constantly pursued by banks and other financial institutions wanting to give him loans, credit cards etc. (Anybody who has been at the receiving end of a persistent tele-caller trying to sell a credit card, guaranteed free for a life time, would fall into this category!). At the other extreme end are those who do not even have a bank account. But, as Bhavani’s example illustrates, having an account alone is not enough.

What is imperative is a systematic process which lays down the series of steps that the bank-staff need to go through in making the full range of financial services available to the individual with a no-frills account. Let’s take these up one by one.

Savings account: Most self-employed people belonging to this category earn in cash. They need to be coached on the habit of putting their surplus money beyond their immediate needs, in the savings account, through regular deposits. The life time habit of keeping this money either tucked away in the house in some corner, or with a ‘reliable friend’ is hard to break and needs diligent coaching.

Reports said that 11 more arrests were made from different parts and almost all offices of the JuD had been closed down either by the security agencies or by the JuD itself.

An interior ministry official said three out of four men who came under sanction by the U.N. Security Council Sanctions Committee on Wednesday — Muhammad Saeed a.k.a. Hafiz Muhammad Saeed, Zaki-ur-Rehman Lakhvi, Haji Muhammad Ashraf Arian, and Mohmoud Mohammad Ahmed Bahaziq — were apprehended, while the agencies were conducting raids to arrest Arian, an important member of the Lashkar-e-Taiba (LeT).

However, media reports said Arian had died some six years back. A report by GEO television quoting his close relatives said Arian died during his arrest in jail in 2002 after he was picked up from his home from interior Sindh.

Arian’s family migrated from Indian Punjab to Sindh in 1947 during the partition and since then was living there. His family members said security officials had raided their house and they were shown his death certificate issued by jail authorities.

Pakistan never implemented its earlier ban on LeT and allowed its leaders to work in freedom to recruit and train terrorists and collect funds, they charged on Friday.

“What is different this time?” they asked and sent a petition to UN Secretary-General Ban Ki-moon demanding that the world body threaten Pakistan with action unless it reins in terrorists operating from its territory.

“Otherwise, the world would witness another Mumbai massacre soon,” they warned, while carrying placards listing the demands.

Several participants suggested India should attack terrorist training camps inside Pakistan if Islamabad fails to do so within a short time.

But the Mumbai attacks, they said, were ‘most audacious’ so far as their planning and execution was concerned and showed that ‘weak action’ by Indian government had encouraged them.

But advocating more balanced approach, NRIs for Secular and Harmonious India (NRI-SAHI) commended the Indian government for not escalating the situation on the borders with Pakistan while simultaneously sending a strong message to Islamabad against encouraging terrorist outfits.

Cautioning the opposition parties which are demanding ‘war’ with Pakistan, NRI-SAHI said any conflict would be ‘disastrous’.

“Children of both countries need books, need bread and not bombs and bullets,” it said.

It also pointed out that Pakistan itself has been victim of terrorism and has suffered severely at the hands of religious extremists.

Islamabad (PTI): As the Pakistani government cracks down on terrorists linked to the Mumbai carnage, the media in the country has embarked on a “soul-searching exercise”, with questions being raised as to why the Islamic nation has become “the hub of militancy and terrorism.

“Soul-searching is in order, and an acceptance of the fact that Pakistan is indeed a hub of militancy and terrorism, the influential Dawn newspaper said on Saturday.

The Pakistani government has cracked down on the banned militant group Lashker-e-Toiba (LeT) and its affliate group Jamaat-ud-Dawa (JuD), which has been declared a terrorist organisation by the UN.

The newspaper lamented that even though an overwhelming majority of Pakistanis do not support militancy “a small fanatical fringe has come to dictate the agenda” of the country.

In an editorial headlined ‘The common enemy,’ it said “we have a collective responsibility to look inwards”.

The News daily said the JuD and the LeT were known to have scouted Punjab for suitable people to join their ranks.

“It is only when its roots are pulled out that an organisation like the JuD can be stopped. Otherwise, like a weed, it will continue to spread rapidly,” it said in an editorial on Saturday.

The media has highlighted the pull of money and identity for the self-styled ‘jihadis’. “The resentment the powerless feel may be cloaked in anti-Americanism or religiosity but in actual fact it boils down to a class conflict,” Dawn argued.

It warned that as long as nothing is done to address the growing underemployment in this country, “the militants will find no shortage of fresh recruits”. “At least that is the case in Pakistan,” it added.

The Dawn said becoming part of a militant or terrorist organisation “empowers poor, impressionable young men”. It cited the case of Ajmal Amir Kasab, the sole terrorist caught alive in the Mumbai carnage. Kasab, who hails from Faridkot, apparently first sought refuge from poverty in crime and then gravitated towards jehadi outfits.

The paper demanded the country’s leadership to inform the nation in unequivocal terms” that extremism will enjoy no sanction and will not be tolerated.

The News highlighted the fact that many of the leaders of the militant organisations were backed by the country’s top spy agency to fulfill its diplomatic agenda set by its leaders.

It said that in the mid-1980s, the LeT and Hafiz Muhammad Saeed enjoyed the backing of the CIA and the ISI to battle Soviet troops in Afghanistan.

“This patronage helped it to evolve into an organization believed to be one of South Asia’s largest militant forces. The links with elements within the ISI are thought to have been retained as the guns turned away from Afghanistan and towards Kashmir”, The News underlined.

“This background means that the current action against the JuD may not be enough,” it stressed, for “Its tentacles run deep and enwrap many minds”.

In effect, the media argued that Pakistan as a nation “face isolation, and internal ruin” if the militants are not “brought to book.

India has blamed Pakistan-based LeT and its front organisation JuD for planning and carrying out the Mumbai attacks on November 26 that killed nearly 200 people.

 

Expressing his condolences for the victims of the Mumbai attack, he saluted all the peace keepers who helped in saving the bleeding city. For A.R Rahman, art is like medicine in these trying times.

He felt the need to escape from the city to change his frame of mind and the nomination of ‘Slumdog Millionaire’ for the Golden Globes has been the only good news that comes his way as he lost a co-worker to the terror attack.

A hoax call and Pakistan went up in smoke!

The story titled ‘Hoax calls bring about end of the world’ says a caller pretending to be Indian Prime Minister Lal Krishna Advani called Zardari and told him that Indian missiles had landed on Lahore and Karachi and Islamabad was next.

“Zardari immediately ordered nuclear strikes on New Delhi and Mumbai in retaliation which resulted in counter-strikes by India. India hit back strongly by nuking Islamabad, Lahore, Karachi and Hyderabad. And Pakistan went up in smoke!” wrote a spoof writer known as Sunil Bhuneja.

Zardari reportedly took a phone call from a man pretending to be India’s External Affairs Minister Pranab Mukherjee on November 28, apparently without following the usual verification procedures.

The hoax caller threatened military action against Pakistan in response to the then ongoing Mumbai attacks. India subsequently clarified that Mukherjee had made no such call to Zardari.

According to the spoof, as India and Pakistan were being attacked, another hoax caller called ‘US President Sarah Palin’ and claimed to be Russia’s President Dmitry Medvedev.

The prank caller informed Palin that Russia has nuked New York, Los Angeles and Chicago. “Palin ordered half a dozen Russian cities to be nuked. But due to missile-launcher malfunction, a couple of them landed on Chinese soil by mistake.”

Within next half an hour, the US was inundated by nuclear missiles from both Russia and China landing on all its major cities,” the spoof item said.

Mukherjee said that India had on a number of occasions demanded immediate hand-over of those using Pakistani soil to carry out terrorist activities and now it had to act as per international demand.

Stating that Pakistan was now under international pressure, Mukherjee said, “but it has to act.”

Pakistan has to abide by the international demand for action against terrorist organisations in that country, he said.

Referring to agreement signed between former Prime Minister Atal Behari Vajpayee and former Pakistan President Pervez Musharraf that Pakistan soil would not be allowed to be used to target India, Mukherjee said, “we would like Islamabad to keep the sanctity of the agreement.&

mumbai was not india

Arundhati Roy:

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. Like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “Bad Guys” he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

But November isn’t September, 2008 isn’t 2001, Pakistan isn’t Afghanistan and India isn’t America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It’s odd how in the last week of November thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara – one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you may not have heard that ordinary people too died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness. The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of India Shining and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish centre.

We’re told one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company I think) said “Hungry, kya?” (Hungry eh?). It then, with the best of intentions I’m sure, informed its readers that on the international hunger index, India ranked below Sudan and Somalia. But of course this isn’t that war. That one’s still being fought in the Dalit bastis of our villages, on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet. So maybe, like everyone else, we should deal with the one that is.

There is a fierce, unforgiving fault-line that runs through the contemporary discourse on terrorism. On one side (let’s call it Side A) are those who see terrorism, especially “Islamist” terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit and has nothing to do with the world around it, nothing to do with history, geography or economics. Therefore, Side A says, to try and place it in a political context, or even try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that though nothing can ever excuse or justify terrorism, it exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed, who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias and Democracy and believes that jihad should be waged until Islam, his Islam, rules the world. Among the things he said are: “There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera): “We didn’t spare a single Muslim shop, we set everything on fire … we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.”

(Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently in Kandhamal in Orissa, Christians were the target of two and a half months of violence which left more than 40 dead. Forty thousand people have been driven from their homes, half of who now live in refugee camps.)

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jehad with his twisted, fiery sermons. On December 11 the UN imposed sanctions on the Jammat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest. Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide he left the VHP to join the Shiv Sena. Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat. So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata.

Suhel Seth, a TV impresario and corporate spokesperson, recently said: “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted. The RSS has 45,000 branches, its own range of charities and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister AB Vajpayee, current leader of the opposition LK Advani, and a host of other senior politicians, bureaucrats and police and intelligence officers.

If that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organisations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

In this nuclear subcontinent that context is partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes and families, was drawn virtually overnight. It was Britain’s final, parting kick to us. Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India left their homes with nothing but the clothes on their backs.

Each of those people carries and passes down a story of unimaginable pain, hate, horror but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives. Pakistan, the Land of the Pure, became an Islamic Republic, and then, very quickly a corrupt, violent military state, openly intolerant of other faiths. India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990 they were ready to make a bid for power. In 1992 Hindu mobs exhorted by LK Advani stormed the Babri Masjid and demolished it. By 1998 the BJP was in power at the centre. The US war on terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy. This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism in the subcontinent and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and LK Advani of the Rashtriya Swayam Sevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express and the 2007 bombing of the Samjhauta Express, the government of India announced that it has “incontrovertible” evidence that the Lashkar-e-Taiba backed by Pakistan’s ISI was behind the Mumbai strikes. The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies the Lashkar operates in India through an organisation called the Indian Mujahideen. Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy. Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously. In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. Neither will war. (Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighbouring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.)

Thanks largely to the part it was forced to play as America’s ally first in its war in support of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening towards civil war. As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistan army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to.

Certainly it did not expect them to come calling in heart of the Homeland on September 11. So once again, Afghanistan had to be violently remade. Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders. Nobody, least of all the Pakistan government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs and the maniacs who believe that Islam will, or should, rule the world is mostly the detritus of two Afghan wars. Their ire rains down on the Pakistan government and Pakistani civilians as much, if not more than it does on India.

If at this point India decides to go to war perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before. If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbours. It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front. The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary. Over three days and three nights we watched in disbelief as a small group of very young men armed with guns and gadgets exposed the powerlessness of the police, the elite National Security Guard and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this they indiscriminately massacred unarmed people, in railway stations, hospitals and luxury hotels, unmindful of their class, caste, religion or nationality. (Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.) But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill – and be killed – mesmerised their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news. Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.) Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people and inflict as much damage as they could before they were killed themselves. They left us completely bewildered. When we say “nothing can justify terrorism”, what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it’s precious. So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself Imran Babar. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror emails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir. “You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for? Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don’t figure in their calculations except as collateral damage. It has always been a part of and often even the aim of terrorist strategy to exacerbate a bad situation in order to expose hidden faultlines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project. A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theatre, spectacle and symbolism, and today, the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the attack was being condemned by TV anchors, the effectiveness of the terror strikes were being magnified a thousandfold by TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid. Instead we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed (is it alright for the poor to remain unprotected?). We had people suggest that the government step down and each state in India be handed over to a separate corporation. We had the death of former prime minster VP Singh, the hero of Dalits and lower castes and villain of Upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir, give us his version of George Bush’s famous “Why they hate us” speech. His analysis of why religious bigots, both Hindu and Muslim hate Mumbai: “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.” His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.” Didn’t George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and leftwing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army and virtually asking for a police state. It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid television flashcards like the Police are Good Politicians are Bad/Chief Executives are Good Chief Ministers are Bad/Army is Good Government is Bad/ India is Good Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically, this regression into intellectual infancy comes at a time when people in India were beginning to see that in the business of terrorism, victims and perpetrators sometimes exchange roles. It’s an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation. Eventually the courts acquitted two out of the four accused, including SAR Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him but was then convicted for a fresh, comparatively minor offence. The supreme court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.” Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19 this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur and Ahmedabad in 2008. An assistant commissioner of Police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists” known and rewarded for having summarily executed several “terrorists”. There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics and activists all of whom demanded a judicial inquiry into the incident. In response, the BJP and LK Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying it was “suicidal” and calling them “anti-national”. Of course there has been no inquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the CBI said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted 2kg of RDX and two pistols on them and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir). Ali and Qamar who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS) that was investigating the September 2008 Malegaon blasts arrested a Hindu preacher Sadhvi Pragya, a self-styled God man Swami Dayanand Pande and Lt Col Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu Nationalist organizations including a Hindu Supremacist group called Abhinav Bharat. The Shiv Sena, the BJP and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists”. LK Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On the November 25 newspapers reported that the ATS was investigating the high profile VHP Chief Pravin Togadia’s possible role in the Malegaon blasts. The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai Attacks. The chances are that the new chief whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

While the Sangh Parivar does not seem to have come to a final decision over whether or not it is anti-national and suicidal to question the police, Arnab Goswami, anchorperson of Times Now television, has stepped up to the plate. He has taken to naming, demonising and openly heckling people who have dared to question the integrity of the police and armed forces. My name and the name of the well-known lawyer Prashant Bhushan have come up several times. At one point, while interviewing a former police officer, Arnab Goswami turned to camera: “Arundhati Roy and Prashant Bhushan,” he said, “I hope you are watching this. We think you are disgusting.” For a TV anchor to do this in an atmosphere as charged and as frenzied as the one that prevails today, amounts to incitement as well as threat, and would probably in different circumstances have cost a journalist his or her job.

So according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police. This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world and yet refuses to ratify the International Covenant on Torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the Underworld and the Encounter Specialists virtually does not exist.

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them? There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse. If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US army is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire. (Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?) Hundreds of thousands people including thousands of American soldiers have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S allies/agents (including India) and U.S interests in the rest of the world has increased dramatically since 9/11. George Bush, the man who led the US response to 9/11 is a despised figure not just internationally, but also by his own people. Who can possibly claim that the United States is winning the war on terror?

Homeland Security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland. We have a hostile nuclear weapons state that is slowly spinning out of control as a neighbour, we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalise, end up as a threat not just to India, but to the whole world. If ten men can hold off the NSG commandos, and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix. Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go. Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain (it would be naïve to say end) terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says Justice, the other Civil War. There’s no third sign and there’s no going back. Choose.

Japan moves carefully toward Islamic finance

GM CLOSER

Dec. 13 (Bloomberg) — General Motors Corp. moved closer to a possible government rescue yesterday as the Bush administration said it may tap a bank bailout fund for financing and GM’s top executive discussed terms with administration officials.

GM Chief Executive Officer Rick Wagoner spoke by telephone with White House Chief of Staff Joshua Bolten and Treasury Secretary Henry Paulson about a short-term plan to keep the automaker solvent, a person familiar with the talks said.

The talks followed a statement by the White House that it would consider using the Troubled Asset Relief Program to help GM and Chrysler LLC following the Senate’s rejection of an aid package the night before.

“Congress has really punted the ball over to the White House,” John Bogle, founder of the $80.6 billion Vanguard 500 Index Fund, said in a Bloomberg Television interview. “That will give them temporary stopgap aid. I do not think General Motors is going to go out of business.”

GM Chief Operating Officer Fritz Henderson also participated in yesterday’s talks. GM Chief Financial Officer Ray Young and other executives probably will work on the details with administration staffers this weekend, although any agreement isn’t likely until next week at the earliest, the person with knowledge of the matter said.

The administration is trying to keep GM and Chrysler from running out of money before the next Congress takes office Jan. 6, the person said.

Cerberus Too

Stephen Feinberg, founder of Chrysler owner Cerberus Capital Management LP, was also in talks with administration officials yesterday, people familiar with the discussions said.

Treasury spokeswoman Michele Davis didn’t immediately respond to a call seeking comment. GM spokesman Tony Cervone and White House spokesman Tony Fratto wouldn’t confirm the discussions. Chrysler spokeswoman Lori McTavish said the automaker isn’t informed of Feinberg’s schedule.

GM is reeling from almost $73 billion in losses since 2004 and a 22 percent slump in U.S. sales this year. The automaker last month said it lost $4.2 billion in the third quarter.

Chrysler has been battered by a 28 percent plunge in U.S. sales through November, the most among major automakers.

Senate Banking Committee Chairman Christopher Dodd said the Treasury Department has enough money left in its financial-rescue fund, or TARP, for an auto rescue. In addition, nine of the largest U.S. banks that received $125 billion in TARP money may also be able to help the car manufacturers, he said.

`Lot of Pockets’

“There are a lot of pockets you can go to, it seems to me, to meet this need,” Dodd said at a press conference yesterday in Washington.

Dodd said he disagreed with Fed Chairman Ben S. Bernanke, who wrote in a Dec. 5 letter to Dodd that it’s “unclear” whether carmakers have sufficient collateral to qualify for Fed loans.

House Speaker Nancy Pelosi, in a letter to President George W. Bush, said providing funds to the automakers “is the right decision” and urged him to require the same “tough accountability and shared sacrifice” from all sides in the industry as were set in a bill passed by her chamber this week.

Senator Bob Corker, a Tennessee Republican involved in failed efforts to forge a compromise with Dodd the night of Dec. 11, said providing TARP money without union commitments for restructuring and wage concessions would make the car companies “less likely” to become more competitive. Such a move would put “good money after bad,” Corker said in a Bloomberg Television interview.

Ensuring `Viability’

Neither the Treasury nor White House statements yesterday said whether any TARP funds provided would be accompanied by conditions. Paulson has insisted that any funds must include a plan ensuring “viability” for the automakers.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” White House spokeswoman Dana Perino said yesterday. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary — including use of the TARP program — to prevent a collapse of troubled automakers.”

The Treasury Department “will stand ready to prevent an imminent failure,” spokeswoman Brookly McLaughlin said in a statement. Paulson had resisted Congress’s bid to finance an industry rescue with TARP, saying the funds were intended only to bolster ailing banks.

Asked whether Bush will decide to provide the funds, Julian Zelizer, professor of history and public affairs at Princeton University in Princeton, New Jersey, cautioned that the president is willing to “defy what seems politically or strategically inevitable.”

“That said, ending his presidency with the collapse of one of the most important U.S. industries would be disastrous to his legacy and, he is well aware, potentially disastrous to the health of the economy,” Zelizer said. “While it is impossible to say he will do this, all the arrows point in this direction.”

GM dropped 18 cents, or 4.4 percent, to close at $3.94 yesterday in New York Stock Exchange composite trading, and Ford Motor Co. rose 14 cents, or 4.8 percent, to $3.04. GM plummeted as much as 37 percent earlier. Ford tumbled 27 percent.

GM shares have plunged 84 percent this year and Ford’s have dropped 55 percent. While Ford also is losing money, the automaker has said it’s not seeking short-term aid from the government.

United Auto Workers

United Auto Workers President Ron Gettelfinger endorsed emergency aid from the TARP program or the Fed, saying the automakers would be liquidated without U.S. assistance.

Job losses from an automaker failure in 2009 would total 2.5 million to 3.5 million in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 report from the Ann Arbor, Michigan-based Center for Automotive Research, which does studies for government agencies and companies.

Even with a possible new source of funds, GM and Chrysler’s default risk in the coming months “remains very high,” Standard & Poor’s credit analyst Robert Schulz said in a statement yesterday. “In addition, we remain concerned about the spillover effects of an automaker failure” on parts suppliers, he said.

GM’s 8.375 percent bonds due in July 2033 lost 2 cents to 15 cents on the dollar, according to Trace, the bond-pricing service of the Financial Industry Regulatory Authority. The yield was 57.6 percent.

Ford’s 7.45 percent bonds due in July 2031 dropped 2.9 cents to 21.5 cents on the dollar, yielding 34.7 percent, Trace data showed.

The Trojan Horse Was Here All The Time!

THE LIMA DECLARATION - GOODBYE AUSTRALIAN INDUSTRIES

The Lima Declaration arose out of a conference in Lima, Peru, on the 12th-26th March, 1975.  It was organised by the United Nations and a large number of countries attended.

Great concern was expressed about the poor, third world countries and their poverty and foreign debt.  The conference agreed that the rich countries, like Australia, would reduce their industries and farms and transfer those industries to the third world countries.

This would be done by removing or reducing our tariffs.  We would then import, and pay for, what we used to produce ourselves.  Australia agreed to this Declaration and was one of the few countries to “honour”! its promise.

The people of Australia were not even consulted, let alone asked their permission to suffer the loss of their industries and farms, massive unemployment, suicide, drug addiction, bankruptcy, family break-down, poverty and misery.  One could go on.  The result is on record.

When the Lima Declaration was adopted in March 1975, the Labor Government was in power.  In November 1975 Labor was thrown out and the Liberal Government came to power.  The Liberal Government picked up The Lima Baton and ran with it.

We have simply taken jobs off Australians and given them to people in foreign countries.

Some job losses have been caused by automation, but the point is we import much of what we used to produce ourselves.

Australian manufacturing has lost nearly half a million jobs and we have a trade deficit on manufacturers approaching $50 Billion a year (ANR, May/June 1998, p. 40).  More than half our manufacturing capacity has been destroyed since 1974 (A2000).  Large sections of the manufacturing industry which relied on tariff protection have been wiped out, particularly during the 1990’s recession (TSC).  The late B.A.Santamaria stated that in 1960…Australia had one of the largest manufacturing workforces in the world.  Today it struggles to maintain a manufacturing workforce equal to that of Turkey.  (TWA, 20-21/9/97).

200,000 farmers have been forced off the land (A2000).

The report by the Senate Standing Committee on Foreign Affairs and Defence,  titled: The New International Economic Order - Implications for Australia (published by Australian Government Publishing Service, Canberra, 1980) contains this statement:

“Australians may be called upon to make some sacrifices”.

The contempt for the Australian people is breathtaking.  We have been called upon to make some sacrifices alright: unemployment, poverty, suicide, bankruptcy, drug addiction and more.

The Lima Declaration was the forerunner to the economic rationalism, free trade, level playing field nonsense we suffer to this day.

The Lima Declaration is a 24 page document which included reference to The New International Economic Order (NIEO) approximately 21 times.  The important Clauses to note are Clauses 27, 28, 35, 41, 43, 52, and 59.

A copy of The Lima Declaration can be obtained, cost free, by telephoning the United Nations Association on (03) 9482 3655.

The full title is the “United Nations Industrial Development Organisation, Second General Conference of the United Nations Industrial Development Organisation, Lima, Peru, 12-26 March 1975, Lima Declaration and Plan of Action on Industrial Development and Co-Operation, adopted by the Second General Conference of UNIDO at its final plenary meeting.”

ECONOMIC RATIONALISM AND FOREIGN CORPORATIONS NOT PAYING TAXATION

Economic rationalism is the policy pursued by big business.  It is sometimes referred to as free-trade, level-playing-field, globalisation, internationalism, or New International Economic Order (NIEO).  The theory is that the goods produced by all the countries of the world will slosh around the world free of tariffs, quotas or any impediments at all.  Countries will not assist or subsidise their particular industries.  Every country is said to have a comparative advantage, i.e. each country is good at producing certain things.  Countries will export to their full potential, and we will all be rich.

After almost 25 years of this nonsense, Australia, and the world, are in a desperate situation.  The proof of the pudding is in the eating.  Economic rationalism has the world by the throat.  There is no community untroubled by debt.  Global unemployment (or under-employment) is estimated (1994) at 30% (worse then the Great Depression).  Starvation threatens more than 800 million people in the world.  35,000 people, more than half of them children, die from starvation every day.  See A2000.

The total wealth of the world’s 358 billionaires equals the combined incomes of the poorest 45% of the world’s population (A2000).

In Australia, many industries and farms have closed down; almost one in three Australians live in poverty (The Age 14/3/98), we have 20% unemployment  (refer to the television station Channel 9 news on 14/7/98 where the Government admits to “fudging” the unemployment figures; 70% youth unemployment in certain areas (Ch. 10, 23/6/98 and HS 22/6/97); hospitals in filthy, third world conditions in Victoria (Ch. 7, 22/6/98); 10 year old children selling their bodies for sex (Ch. 2, 24/11/97); a suicide every 4 hours (A2000); a 300% increase in bankruptcies in the last 19 years (Australian National Review (ANR) May/June 1998, p. 40; family breakdown; the 2nd worst level of child poverty in the industrialised world (The Age, 17/11/96).  Our rural towns are de-populating and dying because our industries cannot compete with cheap imports and the Government removes essential services.  One could go on.

All this in Australia - the richest country on earth.

There are many reasons economic rationalism is a failure, but these reasons stand out:

* While Australia removes or reduces our tariffs, other countries refuse to do so.  This results in cheap imports being dumped in Australia, driving our industries and farms out of existence.

“Practically every country in the world…has some type of restriction, some type of barrier, some type of subsidisation for their own people that gives their own manufacturers and workers an unfair advantage” (The Great Betrayal - How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy (TGB), by Patrick J.Buchanan, p. 312, 1998, Little, Brown and Co., USA.

“Our Governments are the laughing stock of Asia as we aim to further cut our support for efficient industries while our northern trading partners take the reverse stance “(Business Review Weekly, 18/11/96).

As the managing director of Hoescht Australia stated, in announcing his decision to quit the local plastics industry in Australia:

“You are surrounded by countries with high tariff policies.  Why Are you doing this?” (TWA, 1-2/2/97).

Why indeed?

* In many countries, wages are a fraction of Australians’ wages.        They can produce goods for much less.  We cannot compete with such cheap labour.  Hence, the invasion of Australia by foreign products.

On a level playing field the only way Australians can compete with cheap overseas labour is to drive our wages down to the same level.  Hence the workplace reforms we have seen recently.

The Age 14/12/97 and the HS 18/12/97 and 14/1/98, carried ominous reports concerning the possible attempt to employ Korean workers in a chicken factory, under work visas, unless Australian workers agree to their wages being cut by almost half.

Big business wants immigration because it drives down wages.  “A study by Harvard economists (USA)  found that immigration had a major impact on 20 million native born high school drop-outs who were competing with unskilled immigrants.  Between 1979 and 1995, the average hourly wage of American males who hadn’t finished high school fell from $12.22 to $8.92 (in constant 1995 dollars), a drop of 30%” (The Barbarians, p. 121).

“The Australian public has not learned about the research of these Harvard economists…who concluded that immigrants, for their first 20-25 years in a new country, are a net fiscal drain on society” (Ibid).

TWA, 9-10/5/98 reported that governments  will face increasing pressure to erode both wages and welfare in line with global economic trends.

Note, not just wages, but welfare, such as medical treatment, hospitals, pensions.

Radio National’s “Background Briefing”, late last year, reported that there are now 250 million child workers/slaves in Asia.

It is common knowledge that China employs millions of prisoners as slave labour.

* Small business is at a distinct disadvantage against big business, which can exert downward pressure on prices, lobby governments, and has ready access to finance.

A simple example is the corner milk-bar, butcher shop or greengrocer competing against a huge supermarket, owned and operated by a multinational corporation.  The supermarket can lower its prices, open 24 hours a day, 7 days a week, offer shareholder discounts, provide air conditioned comfort, convenience of shopping and use psychology to persuade the consumer into buying.

“Unequal competition between big and small business in an unregulated marketplace led to the destruction of real competition and the consolidation of control by big business” (ERADA, p. 35).

“…economic rationalism furthers the interests of big business and finance” (Ibid, p. 45).  “The inherent contradiction in competition was that it would ultimately destroy competition” (Ibid, p.18).

* The environment and occupational health and safety.  Australia has a relatively clean environment and relatively good work-place safety laws.  However, many other countries have very poor standards.

Consider the Foreword from ERADA.  “(In India) the environment pollution is immense.  A child breathing the air in New Delhi is ingesting pollutants at the equivalent of 10 cigarettes a day.  Wages are very low and show no signs of increasing quickly or in real terms, there are no effective labour laws, no effective prohibition on child labour and industrial health and safety laws are not policed”.

Thus, while we observe industrial safety and environment laws, we are forced to compete with countries which have virtually no such laws.  This puts us at a distinct disadvantage because it limits us and it adds to our costs of production.

Radio National’s “Background Briefing”, on 7/7/98, reported that economic rationalism means untold wealth for a very few and a large number of poor people.  Business executives get obscene salaries while workers get sacked.  If labour has no role, democracy has no future.  Workers get little, speculators get the profits.

On the same report, George Soros, a multi-billionaire who has made a vast fortune by speculating on the currency market, admitted:

“Market fundamentalism doesn’t work”

(He was referring to economic rationalism).

Today, multinational corporations control 70% of world trade; much of that is intra-firm trade, i.e. between branches owned by the same parent firm (ERADA, p. 110).

Page 167 of the book, A2000, states:

“Tariffs were reduced, export incentives eliminated and from a climate of encouragement by Government to manufacture locally we moved to disincentives.

“Our Federal politicians have failed us miserably in ensuring the loss of whole once-viable industries using the local steel…

“Almost as this book was going to print the latest proposals for Australia’s ill-fated steel industry appeared:

“In talks with Newcastle leaders yesterday the Prime Minister, Mr John Howard, discussed a proposal for a Chinese Government steel project to replace the BHP steel works, due to be closed in 1999…It is understood the proposed Chinese steel project would use direct-reduced iron processed in Western Australia for electric arc furnaces in Newcastle instead of exporting the iron for use in arc furnaces in China…

“Obviously, this is not confirmed yet.  But the fact it is even under consideration is outrageous.  Newcastle Steel commenced within weeks of the Gallipoli landing.  That it should even be contemplated that it should end this way is past understand.

“China is a recipient of IDA funds.  Australia is a donor.  China once again topped the list of World Bank borrowers, with $US2.8 Billion ($A3.8 Billion) in loans in 1997, well ahead of second-largest borrower, Russia, with $US1.7 Billion…

“China is also a recipient of finance from Australia’s Foreign Aid.  Money directly granted to China is as follows: 1993-94: $86.8 million; 1994-95; $84 million; 1995-96: $62.2 million; 1996-97: $57.2 million (est.); 1997-98: $53.5 million (est.).  Total, 1993-94 to 1997-98: $343.7 million.  It is insane to consider the possibility of Australian aid funding a foreign takeover of its own steel industry.

“Perhaps common sense will prevail, and Australian credit diverted back to the resuscitation of our own industries.  But the story of what is happening must be spread far and wide in the shortest possible time”.

TGB, p. 293 contains this quote from their former President, Abraham Lincoln:

“I don’t know much about the tariff.  But I know this much.  When we buy manufactured goods abroad, we get the goods and the foreigner gets the money.  When we buy the manufactured goods at home, we get both the goods and the money”.

        - Abraham Lincoln.

Certain people who advocate economic rationalism say that we cannot put the ’shutters’ up, isolate ourselves from the world and become ‘fortress Australia’.  They grossly misrepresent this as being the only alternative.

We have never isolated ourselves from the world.  We have fought and died in Two World Wars and Other Wars around the world.  We have always engaged and traded with the rest of the world and will continue to do so if we abandon economic rationalism.

But in engaging with the world we must do so in Australia’s interests, not the interests of international big business or the UN.

We must remind ourselves that we were the richest country on earth and be conscious of the fact that involving ourselves with the rest of the world beyond our national interests only pulls us down.

The population of the rest of the world continues to spiral, the environment continues to be degraded and resources reduced.  The more we unduly involve ourselves with the rest of the world the more we will be swept up in their calamities (e.g. the recent Asian economic chaos).

It is time for some common sense.  We must produce sufficient to satisfy our domestic needs.  Any excess can then be exported, provided we can do so without degrading our fragile, finite ecology and environment.

We must re-introduce tariffs and have Government intervention in re-establishing industries.

Certain people will say we must have an export-led-recovery.  This is pure nonsense.

90% of Australian corporations are foreign owned (ANR, May/June 1998; see also Oznews Newsletter, September 1998, p. 19, published by Austand, PO Box 173, Noosa Heads, Qld. 4567), so the profits from exports are being taken out of Australia.

Also, the drive to export degrades the environment and ecology.

Furthermore, foreign multinational corporation pay little of no tax in Australia.  Since 1953, multinational corporations have paid little or no tax (Jim Killaly, Assistant Commissioner of Taxation - reported in the Sydney Morning Herald, 28/10/96; also Oznews, Sept. 1998, p.18)).

Australian companies, having to pay the full rate of taxation, have been unable to compete (Oznews, p 19).  Hence only 10% of companies are Australian owned.  Probably less then 10% now.

From this 10% (or less), and from the wage and salary earners, the government has being trying to raise sufficient taxes to meet their needs.  It can’t be done (Ibid).

(The Chairman of Austand - which stands for ’stand up for Australia - is John Cumming, who served as an Officer in the Australian military forces in World War Two).

For this (and other reasons) the Government has been selling off our public utilities.  Privatisation, they call it.

Billions of dollars have been flowing out of Australia into multinational corporations for years.  Australia, the richest country on earth, has been looted, pillaged and plundered for many years, with the full support of all major parties: Labor, Liberal, National.  The Australian Democrats and the Greens have either gone along with this or have been irrelevant.

THE LINK BETWEEN THE A.L.P.- FABIANISM - SOCIALISM - COMMUNISM - THE REPUBLIC PUSH-THE COALITION AND WORLD GOVERNMENT

But first let us start with the Fabian Society.

The objective of Fabian Society is to achieve socialism by gradual means, rather than by sudden revolution.  The Fabian Society is an international organisation.

Rose L. Martin, writing in the book, the Fabian Freeway, p. 19, published by Western Islands, USA, 1966, said, in reference to Fabianism and their  objectives:

“The Fabian Society consists of Socialists…the Fabian Society looks to the spread of Socialist opinions, and the social and political changes consequent thereon…

“…nothing less than social revolution, to be achieved by devious means over a period of time rather than by direct action.  Violence as an ultimate measure was not renounced - it simply was not mentioned”.

Fabianism is creeping socialism (NDCC, p.28).

In his speech to the Fabian Society Centenary Dinner on 18/5/84 (Principals In Practice - The First Two Years; R.J.Hawke; ISBN 0 909953228) , Labor politician and then Prime Minister, Bob Hawke, stated:

“It is of course the classic concept of Fabianism - the inevitability of gradualness - and nothing is more widely misunderstood or more frequently misrepresented…Let me insist on what our opponents habitually ignore, and, indeed, what they seem intellectually incapable of understanding, namely the inevitable gradualness of our scheme of change.

“For the right moment you must wait, as Fabius did, most patiently, when warring against Hannibal, though many censured his delays; but when the time comes you must strike hard, as Fabius did, or your waiting will be in vain and fruitless”.

These excerpts are from the book, NDCC, pp 25-31:

“If you study Marx’ Communist Manifesto you will find that in essence Marx said the proletarian revolution would establish the socialist dictatorship of the proletariat.  To achieve the socialist dictatorship of the proletariat, three things would have to be accomplished: (1) The elimination of all right to private property; (2) The dissolution of the family unit; and (3) Destruction of what Marx referred to as the “opiate” of the people, religion.

“…Marx went on to say…the all powerful state would miraculously wither away and state socialism would give way to communism…But first, all communists must work to establish socialism.

“The drive to establish socialism, not communism, is at the core of everything the communists…do.  Marx and all of his successors in the communist movement have ordered their followers to work on building socialism.  If you go to hear an official communist speaker, he never mentions communism.  He will speak only of the struggle to complete the socialisation…If you go to a communist bookshop you will find that all of their literature pushes this theme.  It does not call for the establishment of communism, but socialism.

“Socialism is usually defined as government ownership and/or control over the basic means of production and distribution of goods and services.  When analysed this means government control over everything, including you.  All controls are “people” controls.  If the government controls these areas it can eventually do just exactly as Marx set out to do - destroy the right to private property, eliminate the family and wipe out religion”.

Note that the former Union of Soviet Socialist Republics (USSR) was not called the Communist Republics but the Socialist Republics.  Solzhenitsyn, in his address to the BBC on 26/3/76, said that socialism cost the Soviet Union 110,000,000 lives.  Note that he said socialism, not communism.

But there is no question that he was talking about communism.  The USSR was a communist union.

There is a wealth of evidence in the history books to prove that the objective of communism, and of the USSR, was total world domination (world government).  When the former USSR collapsed, the world’s communists did not simply disappear, they still exist.  They further infiltrated many organisations and, if anything, are even more insidious and subtle.

There is a thread running through Fabianism, socialism, communism.  In essence, there is no difference between them.

So, let us now return to Bob Hawke’s address to the Fabian Society on 18/4/84.  Hawke said:

“Almost from the beginning, its (The Fabian Society’s) founders envisaged that the vehicle would be a Labor Party…The (Fabian) Society drew its strength from its vision of the future of Labor and the Labor Party…

“Australian Fabianism and Australian Fabians have made a specific and significant contribution to the Australian Labor movement and the Australian Labor Party.

“I gladly acknowledge the debt of my own Government to Fabianism”.

Also in his speech, Hawke named several prominent Labor politicians as Fabians, and former Prime Minister, Gough Whitlam, as their own Fabius Maximus.

We have seen above that the objectives of communism include the removal of the right to own private property and the destruction of the family unit and of religion.

Again, Mr Hawke’s speech to the Fabians gives us further insights:

“1947 was also a year when the challenge against bank nationalisation forced on us a realisation of the restrictions and restraints imposed by the Constitution, and in particular by Section 92.  Consequently, this led to a rethinking of our approach.  Because, unless the platform was just to stagnate into irrelevance, the search had to be made for alternative means of achieving our objectives.

“In that search - and it was a search and a development of policy that went on for more then 20 years - Fabians were in the forefront…”.

The realisation of the restrictions and restraints imposed by the Constitution and the search for alternative means of achieving their objectives!

We have seen some of the objectives above, of Fabians, socialist and communists.

Readers are reminded of the ALP’s Platform and Rules, 1982, described above in the chapter, The Real Reasons for Attempting to Asianise Australia.  These include commitments to: an Australian republic, international socialism, a New International Economic Order (NIEO) (economic rationalism), a UN Bill of Rights, changing the Australian flag, emasculating the Senate and reducing the power of the Governor General.

All commitments designed to centralise power in Australia to facilitate take over by a World Government.

But wait, there’s more.  Again, in Mr Hawke’s Fabian speech:

“We all have to face the fact that if our Government is to make really great and worthwhile reforms - reforms that will endure, reforms that will permanently change this nation - then it is not enough simply to obtain a temporary majority at an election, or even successive elections.  For our reforms to endure, the whole mood and mind and attitudes of the nation must be permanently changed.

“…That specific task must go hand in hand with the more general and deeper, longer range task - the task of establishing, in the mood and mind of this nation, permanent acceptance of the naturalness and inevitability of change and reform, as the authentic way of life.

Here we have a former Labour Prime Minister calling for the control and manipulation of the minds of the Australian people.  In the same speech he drew attention to the restrictions imposed by the Australian Constitution on Fabian objectives.  Labour’s agenda is to get rid of the Constitution and make Australia a republic.

The Constitutional Heritage Protection Society, P.O. Box Q381, Queen Victoria PO, Sydney NSW 2001 Newsletter 1997, and The Australian newspaper 28/8/97 contain this quote from Kim Beazley, present leader of the ALP.  Whilst this related to another matter, the comment is of the utmost interest:

“I believe these things are done incrementally.  You prepare a public mind, a public attitude; you create an acceptance of the unacceptable…”

The Fabian Society exists to this day.

Perhaps, upon considering the above evidence, the Australian people will view through different eyes the push to make Australia a republic, and the ALP’s motives?

What of the present Government, the Liberal-National Coalition?  On many issues there is no difference between the ALP and the Coalition Government.  Former MHR, Graeme Campbell, calls them tweedeldumb and tweedeldumber.

On the television program, “Insight”, on Chanel SBS, former Prime Minister, Malcolm Fraser admitted that there was no difference between Labour and the Coalition.  He actually called for a Labor-Liberal-National Coalition!

For many years Labor and the Coalition had a bi-partisan agreement to maintain high immigration (despite public hostility to it) and to keep it off the election agenda.  (What contempt for democracy).

Labor opposed the GST in the last election, but had it won office, it would only have been a matter of time before they introduced a GST, no matter what they might say now.

The PM, John Howard prevaricates as to his position on the republic, but many, if not most, Coalition politicians are pro-republicans.

The Coalition is controlled by international forces.  It favours the NIEO, it has been party to the destruction of Australian industries, to numerous UN treaties, and to emasculating our military forces and disarming the people.

The Age, 20/7/98, reported: “For almost two decades, during the age of globalisation, the two major parties in Australia have conducted a democratic experiment in elite bi-partisanship, largely excluding from the policies and considerations signs of deep popular resistance to sweeping economic reform and cultural change”.  (Comment: A ‘democratic’ experiment?).

Both major parties collaborate to bring in World Government.

The following comments of A.K.Fuss, in the booklet, The Role of Finance in Government and Decentralised or Centralised Government, 1970, pp 12-18, (The Institute of Economic Democracy, PO Kingstown, via Armidale, NSW, 2350) highlight the threat to the rights we take for granted if we needlessly tamper with our Constitution:

“Constitutions are both the licence to govern, and the limit on excessive government.  It is often argued that constitutions become outdated.  This is a superficial and shallow view.  Constitutions are principles on paper and principles don’t change like the design of a motor car.  They are a barrier to the power-seeker, and the spirit in which constitutions are born makes possible satisfactory associations between men.

“The Triads of Molmutius, who ruled Britain about 450 BC probably provide the first simple constitution in British history.  They were simplicity itself, and started from the base that each man was entitled to certain freedoms, which no vote or law could remove from him.  This unique concept - that freedom, a spiritual quality, started from the individual - has always distinguished the British form of government from any other.

“Habeas Corpus, the essence of English common law, states quite clearly that no man may be held guilty until his crime has been proved.  The great law authorities have always held that the Molmutius laws can be regarded as the foundation and bulwark of British liberties, distinguished for their clearness, brevity, justice and humanity.

“…It was the same principles which were to be found in the Magna Carta (in the year 1215), described so vividly by Sir Winston Churchill in his ‘History of the English speaking Peoples’, in these words, ‘…when in subsequent ages, the State, swollen with its own authority, has attempted to ride roughshod over the rights and liberties of the subject it is to this doctrine that appeal has again and again been made, and never, as yet, without success’.

“The famous English constitutional authority, Sir William Blackstone, pronounced upon Magna Carta as follows: ‘It protected every individual of the nation in the free enjoyment of his life, his liberty and his property, unless declared forfeited by the judgement of his peers or by the law of the land’.

“It is important to note that all totalitarian contenders for power have directed their attacks upon the Constitution and the Upper House.  Hitler, on his assumption of power in Germany in the thirties, abolished the Upper House in Germany.  It stood in the way of his bid for power.

“In considering the value of our written Federal Constitution in Australia, it is essential to grasp that it was a grant of special powers from the States to the Federal Government.  Those who framed the Constitution attempted to embody in it what their forefathers had learned about governments over centuries.  They realised the menace of centralised government particularly in a vast country like Australia.  The people of the States were only persuaded to vote for Federation on the understanding that State sovereignties would be protected.

“Undoubtedly the most urgent task of all is to rally the entire community to defend the existing Federal Constitution, which stands as a barrier to the policies of those who would subvert our heritage”.

Becoming a republic and changing our flag will divorce us from our Christian heritage and English system of law which we inhered from England.  This includes the rights we take for granted.  Our rights to:

These are the rights we fought and died for in Two World Wars and Other Wars.

We take for granted the right to freedom of movement, e.g. to travel around Australia without being questioned by government authorities as to our reasons for doing so.

Freedom of speech, assembly, association and movement have recently been denied to people wishing to attend speeches of Pauline Hanson.  Whether one agrees or disagrees with Ms Hanson is beside the point, people have been denied their rights.  Some people only wanted to hear what she had to say, and were assaulted, sometimes seriously, abused as racists and intimidated by violent thugs.  Insufficient Police numbers were in attendance to prevent this happening.  In Ipswich, Queensland, on 4/8/98, Pauline Hanson’s One Nation Party was refused permission by the local Council to use the Council hall.  One Nation was forced to hold the meeting outside the Council in close proximity to protesters.

The Whitehorse Gazette, Victoria, reported on 5/8/98 that Whitehorse Council was considering whether to refuse to allow One Nation to use their hall to hold a meeting in the future.

At the risk of belabouring the point, it must be emphasised that divorcing us from Christianity, our system of law and the rights we take for granted, are some of the real reasons for the determined push by certain people to make us a republic.

Another reason is the fact that Australian Governments have for years signed many hundreds of treaties with the United Nations, unbeknown to the Australian people.  These treaties relinquish power of the Australian Government to a centralised UN.  We are surrendering our sovereignty as a nation.  But the actions of surrendering ourselves to UN treaties is of uncertain legality.

By becoming a republic, the Australian people will unknowingly put their stamp of approval on the relinquishment of their rights and remove any doubt about the legality of these UN treaties.  See the report by constitutional lawyer, Dr David Mitchell, BA, LLB, Ph.D, LLM in the National Focus, PO Box 182, Nanango, Qld. 4615, February 1998.

Some pro-republicans use the specious argument that becoming a republic will make Australia a sovereign country.  But becoming a republic will not increase our sovereignty one fraction.  And if we are so keen on increasing our sovereignty, why have we surrendered our financial system to international financiers?  Why have we surrendered ourselves to UN law by signing hundreds of treaties?  Why have we down-graded our military forces and disarmed the civilian population?

Becoming a republic will not increase our sovereignty one bit, it will be the catalyst for the complete loss of our sovereignty, rights and freedoms.

Under our present Constitutional Monarchy, The Crown is above party politics; it is above the nonsense and deceit we have to tolerate every election time.  The Governor General represents all Australians.  Politicians are elected to Parliament by those who vote for them.

We are a republic for all practical purposes, but with our rights and freedoms protected by the Constitutional Monarchy.  We have the best of both worlds.

Becoming a republic will clear the path for Australia to be swallowed by a World Government.

AUSTRALIA IS DEFENCELESS AGAINST MILITARY INVASION FROM ASIA

The present economic turmoil in Asia does not rule-out a military attack on Australia.

Australia today is defenceless.  With a population of 19 million people, we occupy a continent almost as large as the USA, rich in minerals and resources.  We have a relatively pristine environment.  We are a glittering prize.

To our north in Asia are teeming billions of people, many living in indescribable poverty, pollution, filth, congestion.  They are also armed to the hilt.  Indonesia’s military forces are several times greater than ours.  China’s military is several times greater then Indonesia’s.  (See HS 25/5/97).

The late B.A.Santamaria, who wrote regularly in TWA has said:

* The day will come when China will condemn us in the United Nations for occupying such a vast area of land with such a small population and will sharply demand that we hand it over to the starving millions.

* The Land of The Lotus Eaters will not be permitted to slumber forever.

Australian Governments, under their policy of economic rationalism have driven thousands of farmers off their land.  If this land is not used productively pressure will mount for this land to be made available to millions of people living in poverty in other countries.

Sir Phillip Baxter, former vice-chancellor of the University of NSW said in 1982 that conflict over food, energy and resources is inevitable (ANR July/August 1997).

China’s population is about 1.2 billion and increases every year by about 16 million people (almost the total of Australia’s population).

India’s population is about 1.2 billion and increases every year by about 18 million people (about the total of Australia’s population).

The nations of S.E. Asia were spending great sums of money on new, high-tech armaments in the world’s most dynamic arms race (The Australian 10/11/97).  (Most of this spending occurred before the recent economic crisis).

“Think for a moment, not using our logic, but as our northern neighbours must think.  As populations rise, the cost of land in Asia is constantly rising.  Here is a country to the south that has huge amounts of land and is vastly under-populated” (Business Review Weekly, 18/11/96).

(They see the vastness of Australia and our small population but they do not fully understand the limits placed on our population by our dry, harsh, fragile environment and soils).

“In Japan, Korea and Singapore, Australians are seen as sitting on a treasure chest of raw materials which they are too lazy to exploit to advantage and hence do not deserve” (HS 4/1/98).

On previous occasions, Australian political ‘leaders’ have gone to Asian countries and grovelled to Asian leaders.  What must they think of Australians?  Does this induce them to think we do not deserve this country?

“There is a very strong view in Asia that we are wasting (land) resources which they simply do not have” (The Australian 3/1/95).

The HS, 24/11/96, reported that one of the world’s leading defence experts warned that:

The report also said that a survey revealed that members of the Howard Government believed that:

* Australia faced security threats from China and Indonesia.

Readers are reminded of the billions of dollars of Australian taxpayers’ money our Governments have given to these countries over many years, including the report (above) that Australian taxpayers gave Indonesia $114 million in 1993 for military aid.

Over the past decades all western nations have been systamatically robbed by their own parliaments, parties of different hues but all carried out the same destruction selling off industry-farming etc to foreigners. to today we cannot sustain ourselves-industry decimated-produce only chavs and an underclass paid for from taxes. our countries are all open to any third worlders that want a better life-OURS. built by the sweat of Aussies- Brits- Americans- Canadians- Kiwis-also the various nations of Europe-all having to hand over their hard earned sovereignty won over centuries of wars-to those that think they have a right to walk in and take over-due to politicians opening the gates wide-…

 

And the German Liz never noticed at all………..Yea Right!

http://www.despatch.cth.com.au/Misc/JOHN_BURGE_1.htm

THE VENOM AGAINST PAULINE HANSON- NOW CLEAR WITH TIME-SHE WAS LIKE ENOCH CORRECT IN ALL SHE SAID!

The Trojan Horse Born And Bred At Home-Very Clever!

THE LIMA DECLARATION - GOODBYE AUSTRALIAN INDUSTRIES

The Lima Declaration arose out of a conference in Lima, Peru, on the 12th-26th March, 1975.  It was organised by the United Nations and a large number of countries attended.

Great concern was expressed about the poor, third world countries and their poverty and foreign debt.  The conference agreed that the rich countries, like Australia, would reduce their industries and farms and transfer those industries to the third world countries.

This would be done by removing or reducing our tariffs.  We would then import, and pay for, what we used to produce ourselves.  Australia agreed to this Declaration and was one of the few countries to “honour”! its promise.

The people of Australia were not even consulted, let alone asked their permission to suffer the loss of their industries and farms, massive unemployment, suicide, drug addiction, bankruptcy, family break-down, poverty and misery.  One could go on.  The result is on record.

When the Lima Declaration was adopted in March 1975, the Labor Government was in power.  In November 1975 Labor was thrown out and the Liberal Government came to power.  The Liberal Government picked up The Lima Baton and ran with it.

We have simply taken jobs off Australians and given them to people in foreign countries.

Some job losses have been caused by automation, but the point is we import much of what we used to produce ourselves.

Australian manufacturing has lost nearly half a million jobs and we have a trade deficit on manufacturers approaching $50 Billion a year (ANR, May/June 1998, p. 40).  More than half our manufacturing capacity has been destroyed since 1974 (A2000).  Large sections of the manufacturing industry which relied on tariff protection have been wiped out, particularly during the 1990’s recession (TSC).  The late B.A.Santamaria stated that in 1960…Australia had one of the largest manufacturing workforces in the world.  Today it struggles to maintain a manufacturing workforce equal to that of Turkey.  (TWA, 20-21/9/97).

200,000 farmers have been forced off the land (A2000).

The report by the Senate Standing Committee on Foreign Affairs and Defence,  titled: The New International Economic Order - Implications for Australia (published by Australian Government Publishing Service, Canberra, 1980) contains this statement:

“Australians may be called upon to make some sacrifices”.

The contempt for the Australian people is breathtaking.  We have been called upon to make some sacrifices alright: unemployment, poverty, suicide, bankruptcy, drug addiction and more.

The Lima Declaration was the forerunner to the economic rationalism, free trade, level playing field nonsense we suffer to this day.

The Lima Declaration is a 24 page document which included reference to The New International Economic Order (NIEO) approximately 21 times.  The important Clauses to note are Clauses 27, 28, 35, 41, 43, 52, and 59.

A copy of The Lima Declaration can be obtained, cost free, by telephoning the United Nations Association on (03) 9482 3655.

The full title is the “United Nations Industrial Development Organisation, Second General Conference of the United Nations Industrial Development Organisation, Lima, Peru, 12-26 March 1975, Lima Declaration and Plan of Action on Industrial Development and Co-Operation, adopted by the Second General Conference of UNIDO at its final plenary meeting.”

ECONOMIC RATIONALISM AND FOREIGN CORPORATIONS NOT PAYING TAXATION

Economic rationalism is the policy pursued by big business.  It is sometimes referred to as free-trade, level-playing-field, globalisation, internationalism, or New International Economic Order (NIEO).  The theory is that the goods produced by all the countries of the world will slosh around the world free of tariffs, quotas or any impediments at all.  Countries will not assist or subsidise their particular industries.  Every country is said to have a comparative advantage, i.e. each country is good at producing certain things.  Countries will export to their full potential, and we will all be rich.

After almost 25 years of this nonsense, Australia, and the world, are in a desperate situation.  The proof of the pudding is in the eating.  Economic rationalism has the world by the throat.  There is no community untroubled by debt.  Global unemployment (or under-employment) is estimated (1994) at 30% (worse then the Great Depression).  Starvation threatens more than 800 million people in the world.  35,000 people, more than half of them children, die from starvation every day.  See A2000.

The total wealth of the world’s 358 billionaires equals the combined incomes of the poorest 45% of the world’s population (A2000).

In Australia, many industries and farms have closed down; almost one in three Australians live in poverty (The Age 14/3/98), we have 20% unemployment  (refer to the television station Channel 9 news on 14/7/98 where the Government admits to “fudging” the unemployment figures; 70% youth unemployment in certain areas (Ch. 10, 23/6/98 and HS 22/6/97); hospitals in filthy, third world conditions in Victoria (Ch. 7, 22/6/98); 10 year old children selling their bodies for sex (Ch. 2, 24/11/97); a suicide every 4 hours (A2000); a 300% increase in bankruptcies in the last 19 years (Australian National Review (ANR) May/June 1998, p. 40; family breakdown; the 2nd worst level of child poverty in the industrialised world (The Age, 17/11/96).  Our rural towns are de-populating and dying because our industries cannot compete with cheap imports and the Government removes essential services.  One could go on.

All this in Australia - the richest country on earth.

There are many reasons economic rationalism is a failure, but these reasons stand out:

* While Australia removes or reduces our tariffs, other countries refuse to do so.  This results in cheap imports being dumped in Australia, driving our industries and farms out of existence.

“Practically every country in the world…has some type of restriction, some type of barrier, some type of subsidisation for their own people that gives their own manufacturers and workers an unfair advantage” (The Great Betrayal - How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy (TGB), by Patrick J.Buchanan, p. 312, 1998, Little, Brown and Co., USA.

“Our Governments are the laughing stock of Asia as we aim to further cut our support for efficient industries while our northern trading partners take the reverse stance “(Business Review Weekly, 18/11/96).

As the managing director of Hoescht Australia stated, in announcing his decision to quit the local plastics industry in Australia:

“You are surrounded by countries with high tariff policies.  Why Are you doing this?” (TWA, 1-2/2/97).

Why indeed?

* In many countries, wages are a fraction of Australians’ wages.        They can produce goods for much less.  We cannot compete with such cheap labour.  Hence, the invasion of Australia by foreign products.

On a level playing field the only way Australians can compete with cheap overseas labour is to drive our wages down to the same level.  Hence the workplace reforms we have seen recently.

The Age 14/12/97 and the HS 18/12/97 and 14/1/98, carried ominous reports concerning the possible attempt to employ Korean workers in a chicken factory, under work visas, unless Australian workers agree to their wages being cut by almost half.

Big business wants immigration because it drives down wages.  “A study by Harvard economists (USA)  found that immigration had a major impact on 20 million native born high school drop-outs who were competing with unskilled immigrants.  Between 1979 and 1995, the average hourly wage of American males who hadn’t finished high school fell from $12.22 to $8.92 (in constant 1995 dollars), a drop of 30%” (The Barbarians, p. 121).

“The Australian public has not learned about the research of these Harvard economists…who concluded that immigrants, for their first 20-25 years in a new country, are a net fiscal drain on society” (Ibid).

TWA, 9-10/5/98 reported that governments  will face increasing pressure to erode both wages and welfare in line with global economic trends.

Note, not just wages, but welfare, such as medical treatment, hospitals, pensions.

Radio National’s “Background Briefing”, late last year, reported that there are now 250 million child workers/slaves in Asia.

It is common knowledge that China employs millions of prisoners as slave labour.

* Small business is at a distinct disadvantage against big business, which can exert downward pressure on prices, lobby governments, and has ready access to finance.

A simple example is the corner milk-bar, butcher shop or greengrocer competing against a huge supermarket, owned and operated by a multinational corporation.  The supermarket can lower its prices, open 24 hours a day, 7 days a week, offer shareholder discounts, provide air conditioned comfort, convenience of shopping and use psychology to persuade the consumer into buying.

“Unequal competition between big and small business in an unregulated marketplace led to the destruction of real competition and the consolidation of control by big business” (ERADA, p. 35).

“…economic rationalism furthers the interests of big business and finance” (Ibid, p. 45).  “The inherent contradiction in competition was that it would ultimately destroy competition” (Ibid, p.18).

* The environment and occupational health and safety.  Australia has a relatively clean environment and relatively good work-place safety laws.  However, many other countries have very poor standards.

Consider the Foreword from ERADA.  “(In India) the environment pollution is immense.  A child breathing the air in New Delhi is ingesting pollutants at the equivalent of 10 cigarettes a day.  Wages are very low and show no signs of increasing quickly or in real terms, there are no effective labour laws, no effective prohibition on child labour and industrial health and safety laws are not policed”.

Thus, while we observe industrial safety and environment laws, we are forced to compete with countries which have virtually no such laws.  This puts us at a distinct disadvantage because it limits us and it adds to our costs of production.

Radio National’s “Background Briefing”, on 7/7/98, reported that economic rationalism means untold wealth for a very few and a large number of poor people.  Business executives get obscene salaries while workers get sacked.  If labour has no role, democracy has no future.  Workers get little, speculators get the profits.

On the same report, George Soros, a multi-billionaire who has made a vast fortune by speculating on the currency market, admitted:

“Market fundamentalism doesn’t work”

(He was referring to economic rationalism).

Today, multinational corporations control 70% of world trade; much of that is intra-firm trade, i.e. between branches owned by the same parent firm (ERADA, p. 110).

Page 167 of the book, A2000, states:

“Tariffs were reduced, export incentives eliminated and from a climate of encouragement by Government to manufacture locally we moved to disincentives.

“Our Federal politicians have failed us miserably in ensuring the loss of whole once-viable industries using the local steel…

“Almost as this book was going to print the latest proposals for Australia’s ill-fated steel industry appeared:

“In talks with Newcastle leaders yesterday the Prime Minister, Mr John Howard, discussed a proposal for a Chinese Government steel project to replace the BHP steel works, due to be closed in 1999…It is understood the proposed Chinese steel project would use direct-reduced iron processed in Western Australia for electric arc furnaces in Newcastle instead of exporting the iron for use in arc furnaces in China…

“Obviously, this is not confirmed yet.  But the fact it is even under consideration is outrageous.  Newcastle Steel commenced within weeks of the Gallipoli landing.  That it should even be contemplated that it should end this way is past understand.

“China is a recipient of IDA funds.  Australia is a donor.  China once again topped the list of World Bank borrowers, with $US2.8 Billion ($A3.8 Billion) in loans in 1997, well ahead of second-largest borrower, Russia, with $US1.7 Billion…

“China is also a recipient of finance from Australia’s Foreign Aid.  Money directly granted to China is as follows: 1993-94: $86.8 million; 1994-95; $84 million; 1995-96: $62.2 million; 1996-97: $57.2 million (est.); 1997-98: $53.5 million (est.).  Total, 1993-94 to 1997-98: $343.7 million.  It is insane to consider the possibility of Australian aid funding a foreign takeover of its own steel industry.

“Perhaps common sense will prevail, and Australian credit diverted back to the resuscitation of our own industries.  But the story of what is happening must be spread far and wide in the shortest possible time”.

TGB, p. 293 contains this quote from their former President, Abraham Lincoln:

“I don’t know much about the tariff.  But I know this much.  When we buy manufactured goods abroad, we get the goods and the foreigner gets the money.  When we buy the manufactured goods at home, we get both the goods and the money”.

        - Abraham Lincoln.

Certain people who advocate economic rationalism say that we cannot put the ’shutters’ up, isolate ourselves from the world and become ‘fortress Australia’.  They grossly misrepresent this as being the only alternative.

We have never isolated ourselves from the world.  We have fought and died in Two World Wars and Other Wars around the world.  We have always engaged and traded with the rest of the world and will continue to do so if we abandon economic rationalism.

But in engaging with the world we must do so in Australia’s interests, not the interests of international big business or the UN.

We must remind ourselves that we were the richest country on earth and be conscious of the fact that involving ourselves with the rest of the world beyond our national interests only pulls us down.

The population of the rest of the world continues to spiral, the environment continues to be degraded and resources reduced.  The more we unduly involve ourselves with the rest of the world the more we will be swept up in their calamities (e.g. the recent Asian economic chaos).

It is time for some common sense.  We must produce sufficient to satisfy our domestic needs.  Any excess can then be exported, provided we can do so without degrading our fragile, finite ecology and environment.

We must re-introduce tariffs and have Government intervention in re-establishing industries.

Certain people will say we must have an export-led-recovery.  This is pure nonsense.

90% of Australian corporations are foreign owned (ANR, May/June 1998; see also Oznews Newsletter, September 1998, p. 19, published by Austand, PO Box 173, Noosa Heads, Qld. 4567), so the profits from exports are being taken out of Australia.

Also, the drive to export degrades the environment and ecology.

Furthermore, foreign multinational corporation pay little of no tax in Australia.  Since 1953, multinational corporations have paid little or no tax (Jim Killaly, Assistant Commissioner of Taxation - reported in the Sydney Morning Herald, 28/10/96; also Oznews, Sept. 1998, p.18)).

Australian companies, having to pay the full rate of taxation, have been unable to compete (Oznews, p 19).  Hence only 10% of companies are Australian owned.  Probably less then 10% now.

From this 10% (or less), and from the wage and salary earners, the government has being trying to raise sufficient taxes to meet their needs.  It can’t be done (Ibid).

(The Chairman of Austand - which stands for ’stand up for Australia - is John Cumming, who served as an Officer in the Australian military forces in World War Two).

For this (and other reasons) the Government has been selling off our public utilities.  Privatisation, they call it.

Billions of dollars have been flowing out of Australia into multinational corporations for years.  Australia, the richest country on earth, has been looted, pillaged and plundered for many years, with the full support of all major parties: Labor, Liberal, National.  The Australian Democrats and the Greens have either gone along with this or have been irrelevant.

THE LINK BETWEEN THE A.L.P.- FABIANISM - SOCIALISM - COMMUNISM - THE REPUBLIC PUSH-THE COALITION AND WORLD GOVERNMENT

But first let us start with the Fabian Society.

The objective of Fabian Society is to achieve socialism by gradual means, rather than by sudden revolution.  The Fabian Society is an international organisation.

Rose L. Martin, writing in the book, the Fabian Freeway, p. 19, published by Western Islands, USA, 1966, said, in reference to Fabianism and their  objectives:

“The Fabian Society consists of Socialists…the Fabian Society looks to the spread of Socialist opinions, and the social and political changes consequent thereon…

“…nothing less than social revolution, to be achieved by devious means over a period of time rather than by direct action.  Violence as an ultimate measure was not renounced - it simply was not mentioned”.

Fabianism is creeping socialism (NDCC, p.28).

In his speech to the Fabian Society Centenary Dinner on 18/5/84 (Principals In Practice - The First Two Years; R.J.Hawke; ISBN 0 909953228) , Labor politician and then Prime Minister, Bob Hawke, stated:

“It is of course the classic concept of Fabianism - the inevitability of gradualness - and nothing is more widely misunderstood or more frequently misrepresented…Let me insist on what our opponents habitually ignore, and, indeed, what they seem intellectually incapable of understanding, namely the inevitable gradualness of our scheme of change.

“For the right moment you must wait, as Fabius did, most patiently, when warring against Hannibal, though many censured his delays; but when the time comes you must strike hard, as Fabius did, or your waiting will be in vain and fruitless”.

These excerpts are from the book, NDCC, pp 25-31:

“If you study Marx’ Communist Manifesto you will find that in essence Marx said the proletarian revolution would establish the socialist dictatorship of the proletariat.  To achieve the socialist dictatorship of the proletariat, three things would have to be accomplished: (1) The elimination of all right to private property; (2) The dissolution of the family unit; and (3) Destruction of what Marx referred to as the “opiate” of the people, religion.

“…Marx went on to say…the all powerful state would miraculously wither away and state socialism would give way to communism…But first, all communists must work to establish socialism.

“The drive to establish socialism, not communism, is at the core of everything the communists…do.  Marx and all of his successors in the communist movement have ordered their followers to work on building socialism.  If you go to hear an official communist speaker, he never mentions communism.  He will speak only of the struggle to complete the socialisation…If you go to a communist bookshop you will find that all of their literature pushes this theme.  It does not call for the establishment of communism, but socialism.

“Socialism is usually defined as government ownership and/or control over the basic means of production and distribution of goods and services.  When analysed this means government control over everything, including you.  All controls are “people” controls.  If the government controls these areas it can eventually do just exactly as Marx set out to do - destroy the right to private property, eliminate the family and wipe out religion”.

Note that the former Union of Soviet Socialist Republics (USSR) was not called the Communist Republics but the Socialist Republics.  Solzhenitsyn, in his address to the BBC on 26/3/76, said that socialism cost the Soviet Union 110,000,000 lives.  Note that he said socialism, not communism.

But there is no question that he was talking about communism.  The USSR was a communist union.

There is a wealth of evidence in the history books to prove that the objective of communism, and of the USSR, was total world domination (world government).  When the former USSR collapsed, the world’s communists did not simply disappear, they still exist.  They further infiltrated many organisations and, if anything, are even more insidious and subtle.

There is a thread running through Fabianism, socialism, communism.  In essence, there is no difference between them.

So, let us now return to Bob Hawke’s address to the Fabian Society on 18/4/84.  Hawke said:

“Almost from the beginning, its (The Fabian Society’s) founders envisaged that the vehicle would be a Labor Party…The (Fabian) Society drew its strength from its vision of the future of Labor and the Labor Party…

“Australian Fabianism and Australian Fabians have made a specific and significant contribution to the Australian Labor movement and the Australian Labor Party.

“I gladly acknowledge the debt of my own Government to Fabianism”.

Also in his speech, Hawke named several prominent Labor politicians as Fabians, and former Prime Minister, Gough Whitlam, as their own Fabius Maximus.

We have seen above that the objectives of communism include the removal of the right to own private property and the destruction of the family unit and of religion.

Again, Mr Hawke’s speech to the Fabians gives us further insights:

“1947 was also a year when the challenge against bank nationalisation forced on us a realisation of the restrictions and restraints imposed by the Constitution, and in particular by Section 92.  Consequently, this led to a rethinking of our approach.  Because, unless the platform was just to stagnate into irrelevance, the search had to be made for alternative means of achieving our objectives.

“In that search - and it was a search and a development of policy that went on for more then 20 years - Fabians were in the forefront…”.

The realisation of the restrictions and restraints imposed by the Constitution and the search for alternative means of achieving their objectives!

We have seen some of the objectives above, of Fabians, socialist and communists.

Readers are reminded of the ALP’s Platform and Rules, 1982, described above in the chapter, The Real Reasons for Attempting to Asianise Australia.  These include commitments to: an Australian republic, international socialism, a New International Economic Order (NIEO) (economic rationalism), a UN Bill of Rights, changing the Australian flag, emasculating the Senate and reducing the power of the Governor General.

All commitments designed to centralise power in Australia to facilitate take over by a World Government.

But wait, there’s more.  Again, in Mr Hawke’s Fabian speech:

“We all have to face the fact that if our Government is to make really great and worthwhile reforms - reforms that will endure, reforms that will permanently change this nation - then it is not enough simply to obtain a temporary majority at an election, or even successive elections.  For our reforms to endure, the whole mood and mind and attitudes of the nation must be permanently changed.

“…That specific task must go hand in hand with the more general and deeper, longer range task - the task of establishing, in the mood and mind of this nation, permanent acceptance of the naturalness and inevitability of change and reform, as the authentic way of life.

Here we have a former Labour Prime Minister calling for the control and manipulation of the minds of the Australian people.  In the same speech he drew attention to the restrictions imposed by the Australian Constitution on Fabian objectives.  Labour’s agenda is to get rid of the Constitution and make Australia a republic.

The Constitutional Heritage Protection Society, P.O. Box Q381, Queen Victoria PO, Sydney NSW 2001 Newsletter 1997, and The Australian newspaper 28/8/97 contain this quote from Kim Beazley, present leader of the ALP.  Whilst this related to another matter, the comment is of the utmost interest:

“I believe these things are done incrementally.  You prepare a public mind, a public attitude; you create an acceptance of the unacceptable…”

The Fabian Society exists to this day.

Perhaps, upon considering the above evidence, the Australian people will view through different eyes the push to make Australia a republic, and the ALP’s motives?

What of the present Government, the Liberal-National Coalition?  On many issues there is no difference between the ALP and the Coalition Government.  Former MHR, Graeme Campbell, calls them tweedeldumb and tweedeldumber.

On the television program, “Insight”, on Chanel SBS, former Prime Minister, Malcolm Fraser admitted that there was no difference between Labour and the Coalition.  He actually called for a Labor-Liberal-National Coalition!

For many years Labor and the Coalition had a bi-partisan agreement to maintain high immigration (despite public hostility to it) and to keep it off the election agenda.  (What contempt for democracy).

Labor opposed the GST in the last election, but had it won office, it would only have been a matter of time before they introduced a GST, no matter what they might say now.

The PM, John Howard prevaricates as to his position on the republic, but many, if not most, Coalition politicians are pro-republicans.

The Coalition is controlled by international forces.  It favours the NIEO, it has been party to the destruction of Australian industries, to numerous UN treaties, and to emasculating our military forces and disarming the people.

The Age, 20/7/98, reported: “For almost two decades, during the age of globalisation, the two major parties in Australia have conducted a democratic experiment in elite bi-partisanship, largely excluding from the policies and considerations signs of deep popular resistance to sweeping economic reform and cultural change”.  (Comment: A ‘democratic’ experiment?).

Both major parties collaborate to bring in World Government.

The following comments of A.K.Fuss, in the booklet, The Role of Finance in Government and Decentralised or Centralised Government, 1970, pp 12-18, (The Institute of Economic Democracy, PO Kingstown, via Armidale, NSW, 2350) highlight the threat to the rights we take for granted if we needlessly tamper with our Constitution:

“Constitutions are both the licence to govern, and the limit on excessive government.  It is often argued that constitutions become outdated.  This is a superficial and shallow view.  Constitutions are principles on paper and principles don’t change like the design of a motor car.  They are a barrier to the power-seeker, and the spirit in which constitutions are born makes possible satisfactory associations between men.

“The Triads of Molmutius, who ruled Britain about 450 BC probably provide the first simple constitution in British history.  They were simplicity itself, and started from the base that each man was entitled to certain freedoms, which no vote or law could remove from him.  This unique concept - that freedom, a spiritual quality, started from the individual - has always distinguished the British form of government from any other.

“Habeas Corpus, the essence of English common law, states quite clearly that no man may be held guilty until his crime has been proved.  The great law authorities have always held that the Molmutius laws can be regarded as the foundation and bulwark of British liberties, distinguished for their clearness, brevity, justice and humanity.

“…It was the same principles which were to be found in the Magna Carta (in the year 1215), described so vividly by Sir Winston Churchill in his ‘History of the English speaking Peoples’, in these words, ‘…when in subsequent ages, the State, swollen with its own authority, has attempted to ride roughshod over the rights and liberties of the subject it is to this doctrine that appeal has again and again been made, and never, as yet, without success’.

“The famous English constitutional authority, Sir William Blackstone, pronounced upon Magna Carta as follows: ‘It protected every individual of the nation in the free enjoyment of his life, his liberty and his property, unless declared forfeited by the judgement of his peers or by the law of the land’.

“It is important to note that all totalitarian contenders for power have directed their attacks upon the Constitution and the Upper House.  Hitler, on his assumption of power in Germany in the thirties, abolished the Upper House in Germany.  It stood in the way of his bid for power.

“In considering the value of our written Federal Constitution in Australia, it is essential to grasp that it was a grant of special powers from the States to the Federal Government.  Those who framed the Constitution attempted to embody in it what their forefathers had learned about governments over centuries.  They realised the menace of centralised government particularly in a vast country like Australia.  The people of the States were only persuaded to vote for Federation on the understanding that State sovereignties would be protected.

“Undoubtedly the most urgent task of all is to rally the entire community to defend the existing Federal Constitution, which stands as a barrier to the policies of those who would subvert our heritage”.

Becoming a republic and changing our flag will divorce us from our Christian heritage and English system of law which we inhered from England.  This includes the rights we take for granted.  Our rights to:

These are the rights we fought and died for in Two World Wars and Other Wars.

We take for granted the right to freedom of movement, e.g. to travel around Australia without being questioned by government authorities as to our reasons for doing so.

Freedom of speech, assembly, association and movement have recently been denied to people wishing to attend speeches of Pauline Hanson.  Whether one agrees or disagrees with Ms Hanson is beside the point, people have been denied their rights.  Some people only wanted to hear what she had to say, and were assaulted, sometimes seriously, abused as racists and intimidated by violent thugs.  Insufficient Police numbers were in attendance to prevent this happening.  In Ipswich, Queensland, on 4/8/98, Pauline Hanson’s One Nation Party was refused permission by the local Council to use the Council hall.  One Nation was forced to hold the meeting outside the Council in close proximity to protesters.

The Whitehorse Gazette, Victoria, reported on 5/8/98 that Whitehorse Council was considering whether to refuse to allow One Nation to use their hall to hold a meeting in the future.

At the risk of belabouring the point, it must be emphasised that divorcing us from Christianity, our system of law and the rights we take for granted, are some of the real reasons for the determined push by certain people to make us a republic.

Another reason is the fact that Australian Governments have for years signed many hundreds of treaties with the United Nations, unbeknown to the Australian people.  These treaties relinquish power of the Australian Government to a centralised UN.  We are surrendering our sovereignty as a nation.  But the actions of surrendering ourselves to UN treaties is of uncertain legality.

By becoming a republic, the Australian people will unknowingly put their stamp of approval on the relinquishment of their rights and remove any doubt about the legality of these UN treaties.  See the report by constitutional lawyer, Dr David Mitchell, BA, LLB, Ph.D, LLM in the National Focus, PO Box 182, Nanango, Qld. 4615, February 1998.

Some pro-republicans use the specious argument that becoming a republic will make Australia a sovereign country.  But becoming a republic will not increase our sovereignty one fraction.  And if we are so keen on increasing our sovereignty, why have we surrendered our financial system to international financiers?  Why have we surrendered ourselves to UN law by signing hundreds of treaties?  Why have we down-graded our military forces and disarmed the civilian population?

Becoming a republic will not increase our sovereignty one bit, it will be the catalyst for the complete loss of our sovereignty, rights and freedoms.

Under our present Constitutional Monarchy, The Crown is above party politics; it is above the nonsense and deceit we have to tolerate every election time.  The Governor General represents all Australians.  Politicians are elected to Parliament by those who vote for them.

We are a republic for all practical purposes, but with our rights and freedoms protected by the Constitutional Monarchy.  We have the best of both worlds.

Becoming a republic will clear the path for Australia to be swallowed by a World Government.

AUSTRALIA IS DEFENCELESS AGAINST MILITARY INVASION FROM ASIA

The present economic turmoil in Asia does not rule-out a military attack on Australia.

Australia today is defenceless.  With a population of 19 million people, we occupy a continent almost as large as the USA, rich in minerals and resources.  We have a relatively pristine environment.  We are a glittering prize.

To our north in Asia are teeming billions of people, many living in indescribable poverty, pollution, filth, congestion.  They are also armed to the hilt.  Indonesia’s military forces are several times greater than ours.  China’s military is several times greater then Indonesia’s.  (See HS 25/5/97).

The late B.A.Santamaria, who wrote regularly in TWA has said:

* The day will come when China will condemn us in the United Nations for occupying such a vast area of land with such a small population and will sharply demand that we hand it over to the starving millions.

* The Land of The Lotus Eaters will not be permitted to slumber forever.

Australian Governments, under their policy of economic rationalism have driven thousands of farmers off their land.  If this land is not used productively pressure will mount for this land to be made available to millions of people living in poverty in other countries.

Sir Phillip Baxter, former vice-chancellor of the University of NSW said in 1982 that conflict over food, energy and resources is inevitable (ANR July/August 1997).

China’s population is about 1.2 billion and increases every year by about 16 million people (almost the total of Australia’s population).

India’s population is about 1.2 billion and increases every year by about 18 million people (about the total of Australia’s population).

The nations of S.E. Asia were spending great sums of money on new, high-tech armaments in the world’s most dynamic arms race (The Australian 10/11/97).  (Most of this spending occurred before the recent economic crisis).

“Think for a moment, not using our logic, but as our northern neighbours must think.  As populations rise, the cost of land in Asia is constantly rising.  Here is a country to the south that has huge amounts of land and is vastly under-populated” (Business Review Weekly, 18/11/96).

(They see the vastness of Australia and our small population but they do not fully understand the limits placed on our population by our dry, harsh, fragile environment and soils).

“In Japan, Korea and Singapore, Australians are seen as sitting on a treasure chest of raw materials which they are too lazy to exploit to advantage and hence do not deserve” (HS 4/1/98).

On previous occasions, Australian political ‘leaders’ have gone to Asian countries and grovelled to Asian leaders.  What must they think of Australians?  Does this induce them to think we do not deserve this country?

“There is a very strong view in Asia that we are wasting (land) resources which they simply do not have” (The Australian 3/1/95).

The HS, 24/11/96, reported that one of the world’s leading defence experts warned that:

The report also said that a survey revealed that members of the Howard Government believed that:

* Australia faced security threats from China and Indonesia.

Readers are reminded of the billions of dollars of Australian taxpayers’ money our Governments have given to these countries over many years, including the report (above) that Australian taxpayers gave Indonesia $114 million in 1993 for military aid.

Over the past decades all western nations have been systamatically robbed by their own parliaments, parties of different hues but all carried out the same destruction selling off industry-farming etc to foreigners. to today we cannot sustain ourselves-industry decimated-produce only chavs and an underclass paid for from taxes. our countries are all open to any third worlders that want a better life-OURS. built by the sweat of Aussies- Brits- Americans- Canadians- Kiwis-also the various nations of Europe-all having to hand over their hard earned sovereignty won over centuries of wars-to those that think they have a right to walk in and take over-due to politicians opening the gates wide-…

 

And the German Liz never noticed at all………..Yea Right!

http://www.despatch.cth.com.au/Misc/JOHN_BURGE_1.htm

THE VENOM AGAINST PAULINE HANSON- NOW CLEAR WITH TIME-SHE WAS LIKE ENOCH CORRECT IN ALL SHE SAID!

Markham

Beginning in 2007, there has been an application on the books at the City for two parcels of land at Markham Road and McNicoll Avenue in northeast Scarborough. This is no ordinary application, rather it is for a massive convention centre, with retail and office space. From the January 24 preliminary staff report:

The proposed building looks something like Richmond Hill’s Times Square, but obviously with different uses. About half the site in the proposal is taken up by parking, both at-grade and in a 5-storey parking deck as described above. This is a substantial amount of parking.

I was unable to find out anything about the applicant (Evans Planning) or the owner of the property (David Chi-Leung Lam), as they both seem to lack an internet presence.

In an October 30th report, planning staff recommended to Scarborough Community Council that:

As you can see, under Section 37 of the Planning Act, the City has requested $400k for help in expanding the Miliken community centre. This is great news for the community.

Now, let’s take a look at the revised proposal compared to the January proposal:

Fairly substantial differences, especially in floorplate. This is generally what occurs in city planning applications, as the city staff reconcile the application with existing by-laws and regulations.

Interestingly, there was a public meeting April 17, 2008 regarding this by-law change, and the report states “no members of the public attended”. I would surmise that either has to do with the lack of publicity undertaken by the city, as well as the lack of interest in a by-law change in an industrial area not close to any homes.

That being said, I am having trouble thinking of any downsides to this project. It will bring jobs to the area, retain employment lands for employment purposes, intensify a corridor that desperately needs it, and overall it will contribute to an improved aesthetic appearance in the area (a $100 000 public art piece is a requirement). From the elevations provided in the staff report, the building does not look too bad either. Will it be well-executed?

YOU REAP WHAT YOU SOW (HOPEFULLY)

For the last year to year-and-a-half, anyone religiously following this system will have been sitting in Level 3 and will have been, hopefully, rather bored by the stock market gyrations around the world. That is because the value of their portfolio would have been barely moving on a daily basis, maybe flat, maybe down a few percent over the course of the year - depending on exactly when they moved into Level 3.

Well, be prepared to be not bored anymore. As we head towards Level 2 and possibly higher we are - for the first time in a long time - beginning to expose ourselves to the bright glare of the market which has been burning the rest of the investing world for 18 months now. We can afford to start to nibble away early because we neutralized our position early. If you did not take any defensive action up to this time, it is rather tricky to give you any advice at this point. Taking it now and going defensive with prices here is probably not smart and you could end up chasing higher prices to buy back in, thereby locking in what would probably be significant losses. Probably best to just close your eyes, take more pain and remember how it feels. That way, you won’t make the same mistake of doing nothing next time. In that case, at least something positive will have come from your awful 2008 experience.

It is now that those of us who did take timely and extensive defensive action begin to, hopefully, reap what we have sown by being essentially out of the market since late summer 2007. The size of the portfolio that we are gradually moving back into the market with is basically the same as the one we moved to defense to protect. So while the buy-and-holders and lazy indexers and the rest of Cramerica are forlornly looking at statements showing the value of their holdings down probably somewhere around 40-45%, smart market timers have essentially their whole portfolio to gradually invest at these massively lower prices. I’ve mentioned the famous stat before, but it can never be repeated often enough .. if a portfolio falls in value by 50%, it needs to go back up in value by 100% just to get back to where it originally was. Anyone out there confident of 100% return any time soon?

While  owning a portfolio that actually changes value when the market moves will be something of a novelty for us again (and maybe a little scary after a year of being basically flat), we have earned our shot at possibly making a little money here by virtue of our disciplined stance since late summer 2007.

48-45 [Passed] A Resolution Supporting a Fee Increase for the University of Missouri Club Sports

University of Missouri-Columbia

Whereas, the University of Missouri (MU) Club Sports fee is used to fund over 40 individual clubs and serves over 1000 students on the MU campus ensuring that the students participating in club sports such as the nationally ranked Men’s Soccer team and Racquetball team, Archery, Rugby, Ice Hockey, Lacrosse, and Water Polo have an affordable and safe experience, and

Whereas, Club Sports helps to create positive leadership opportunities, leisure opportunities, and foster social connections between students which are essential to college student health and happiness. MU’s Club Sport program provides a variety of opportunities to learn a new sport, make friends, stay fit, and compete against other university clubs or teams, and

Whereas, 94% of Club Sports funding $190,047.61 comes from student fees while the remaining 6% ($12,220.00) is generated from Mizzou Recreation Services, and

Whereas, the number of active student sport clubs has increased over 25% from 35 clubs in 2006 to 45 current clubs and there are currently 6 more clubs in the approval process, and

Whereas, the amount of the allocation to support each club has decreased due to the number of clubs needing allocation. The total allocation amount for the clubs has not increased in the past 2 years because other costs such as travel expenses, insurance, and salaries have increased, and

Whereas, to ensure fiscal responsibility among current clubs, members are expected to raise funds for their expenses, which are in turn matched by Club Sport funds, and

Whereas, the larger number of student sports clubs has required additional insurance beyond the inflationary increase.  Insurance has increased from $26K to $30K in 2 years (15.4%), and

Whereas, Club Sports is currently stretched to its fiscal, spatial and supervisory limit; facility space, funding, and supervisory and professional staff are all at maximum capacity. New student sport clubs cannot be added to Club Sports without an adverse affect on current clubs fiscal allocations, and

Whereas, Club Sports seeks an inflationary increase and an additional $0.12 per student per semester beyond the current $3.95 per student per semester fee to maintain the current student sport clubs, and the expenses associated with these clubs, that have been approved and/or are in operation, and

Therefore, the Student Fee Review Committee recommends that Club Spots receives an inflationary increase not below 0% but no higher than the percentage change in the Consumer Price Index as defined by the Missouri Higher Education Student Funding Act of 2007 in addition to a $0.12 (3%) increase per student per semester.

Respectfully submitted,

The Student Fee Review Committee

Blog at WordPress.com. Theme: Vermilion.

Book Review: Security Analysis

Of all the books on the shelves of investment professionals, Security Analysis by Benjamin Graham and David Dodd is likely the most ubiquitous book that’s been read the least.  Hyperbolically, everyone has it, but no one’s read it. Standing in at 766 pages, it is a little intimidating.  Most people tend to opt for Graham’s Intelligent Investor, and that was Graham’s intention. Intelligent Investor was meant for the average small investor, an Investing for Dummies in 1949.  It was before the days of index funds, and it served a distinct purpose in educating the non-professional who wanted to thoughtfully invest his money.  Conversely, Security Analysis is the director’s cut.  It’s the 100-proof version of Graham’s treatise on investing meant to indoctrinate students into the profession. I took the opportunity of the recent release of the sixth edition to read it cover-to-cover (I had previously been a grazer).  Some thoughts on the book:

JASPER JOTTINGS Week 50 - 2008 Dec 14

JASPER JOTTINGS Week 50 - 2008 Dec 14

Jasper Jottings - The achievement journal of my fellow Jaspers, the alumni of the Manhattan College

http://www.jasperjottings.com/2008/jasperjottings2008WEEK50.html

INDEX

01. POSITRACTION: Gone but not forgotten

02. JObit: Kerans, Edward [MC????]

03. JEmail: Quinlan, Liam (MC1985) gives us more info about Stoecker, Roy R. [MC????]

04. JObit: Oram, Robert E. [MC1954]

05. JOY: Motko, Richard [MC????] weds Theresa Lowe

06. MFound: MC and the 168th Street Armory

07. JEmail: McEneney, Mike (MC1953) updates some missing Class Years

08. LINKEDIN ALERT: Parganos, Nicole (MC2001) Senior Engineer at Ecology and Environment, Inc.

09. MNews: Remembering Jasper football

10. JUpdate: Buran, Bill (MC1999) is working toward Freedom, Prosperity and Peace

11. JObit: Macey, Herbert C. [MC1962]

12. MFound: “Jasper 9 Club” (baseball)

13. MFound: Dennis Day (1916-1988) was a MC Glee Club member

14. JFound: Modafferi, Richard [MC1960]

15. JUpdate: Cacchione, Richard [MC1965B] sighted

16. JFound: “Basile”, Tim (MC20??)

17. ENDNOTE: Maria Shriver: I’m “a Catholic in Good Standing” But Also Pro-abortion and Pro-Homosexual

# # # # #

POSITRACTION: Gone but not forgotten

http://www.breitbart.com/article.php?id=D94MN9VG0&show_article=1&catnum=1

Researchers: 139 WWII Marines entombed on atoll

Nov 26 12:06 PM US/Eastern

By MELISSA NELSON

Associated Press Writer

*** begin quote ***

PENSACOLA, Fla. (AP) - A Florida man’s quest to find hundreds of U.S. Marines buried anonymously after one of World War II’s bloodiest battles could lead to the largest identification of American war dead in history.

Researchers used ground-penetrating radar, tediously reviewed thousands of military documents and interviewed hundreds of others to find 139 graves. There, they say, lie the remains of men who died 65 years ago out in the Pacific Ocean on Tarawa Atoll.

Mark Noah of Marathon, Fla., raised money for the expedition through his nonprofit, History Flight, by selling vintage military aircraft rides at air shows. He hopes the government will investigate further after research is given to the U.S. Defense Department in January—and he hopes the remains are identified and eventually returned to the men’s families.

*** end quote ***

In past weeks, I asserted that the Gooferment doesn’t take Veterans seriously. Here’s yet another example of vets “left behind” and, for all intents and purposes, forgotten. Stories like this rub our nose in it.

# # # # #

* Posted on: Sun, Dec 7 2008 8:37 AM

JObit: Kerans, Edward [MC????]

http://www.legacy.com/NaplesNews/Obituaries.asp?Page=LifeStory&PersonId=121032063

Edward Kerans

Edward James Kerans Naples, FL

Edward James Kerans, 64, a resident of Naples and Tabernash, CO, passed away peacefully, surrounded by his family on November 21, 2008. Ed was born in Staten Island, NY in 1944. He was the son of James and Eleanor (Falvey) Kerans. He graduated from Xavier Military Academy and Manhattan College.

He married his college sweetheart, Patricia McCrave in 1964.

In 1966, Ed started his career in public accounting with Coopers & Lybrand in New York City. He and Pat lived in New York, Colorado, and Minnesota prior to his retirement from Price Waterhouse Coopers in 2002. Ed enjoyed his retirement to the fullest. He loved spending summers and holidays in the Colorado Mountains, and liked to say that he controlled the weather, by spending winters in Naples. He loved golfing, boating, biking, traveling and reading. His favorite pastime was playing ball and walking with his Cassie girl, a German Shorthaired Pointer. He was a master storyteller with a sharp wit and a charming smile. His humor was infectious. Ed was a thoughtful and positive thinker, and was admired by all who knew him.

He leaves behind his loving wife, Patricia; three children, Erin (Dave) Brush of Lake Forest, IL, Tara (Rob) Albrecht of Bellingham, WA and Gavin Roberts of Denver, CO; five grandchildren, Sam, Jack and Anna Brush and Dylan and Myles Albrecht; and sister, Barbara Lussier.

He was predeceased by his parents and sister, Mercedes Smith.

A memorial Mass celebrating Ed’s life will be held at St. Ann’s Catholic Church, 475 Ninth Avenue South, Naples, FL 34102, Friday, December 12th, 1:30 p.m. A reception will follow at the Windstar on Naples Bay Clubhouse.

In lieu of flowers, memorials may be made to Habitat for Humanity, 11145 Tamiami Trail East, Naples, FL 34113.

# - # - #

Dear John,

I do not find a record of Ed in my “stuff” but I would guess that he was either 1964 or 1965.

May He Rest In Peace.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# - # - #

Kerans, Edward [MC????]

Guestbook: http://tinyurl.com/5wzwjd

# # # # #

* Posted on: Sun, Dec 7 2008 8:53 AM

* Updated: Sun, Dec 7 2008 10:45 PM

JEmail: Quinlan, Liam (MC1985) gives us more info about Stoecker, Roy R. [MC????]

From: Quinlan, Liam (MC1985)

Date: December 7, 2008 10:05:26 AM EST

To: Distribute_Jasper_Jottings-owner

Subject: Re: [Distribute_Jasper_Jottings] JASPER JOTTINGS Week 49 - 2008 Dec 06

John:

And he’s a novelist, too! Remind you of anyone else?

[JR: James Patterson? ROFL. Inside joke. I'm just weeks away from releasing my self-published novel "It Started In Church - October 19, 1962". Jasper Liam thinks he's being funny.]

# - # - #

Roy R. Stoecker Ph.D

Roy Stoecker is one of the three co-founder’s of Energy and Environmental Analysts, and has been Vice President since its establishment in 1979. He formed and organized the Ecological Services Division of EEA. Dr. Stoecker serves as the Principal-In-Charge of all ecological, water quality and marine environmental studies. Prior to EEA, Dr. Stoecker was the Ecology Division Director of the Environmental Division of a national environmental and occupational health-consulting firm owned by the Equitable Life Assurance Society insurance company.

Many of Dr. Stoecker’s project activities involve design of large-scale scientific/environmental programs. He is currently Principal-in-Charge of the Army Corps of Engineers South Shore of Long Island Storm Damage Mitigation Program. Both the Fire Island Interim Plan (FIIP) EIS and the Storm Damage Reduction Reformulation Study focus on natural resource assessments for storm damage protection. As such, he is directly responsible for all of the natural resource studies presently underway. These include offshore and backbay fisheries programs, benthic invertebrates, submerged aquatic vegetation, bottom profiling, and many other programs.

Dr. Stoecker just recently began consulting for a proposed offshore wind energy project planned by Long Island Power Authority (LIPA). Through a team effort with other consultants, Dr. Stoecker was involved in a preliminary study of the entire south shore to locate possible sites for an offshore wind farm. Dr. Stoecker contributed to a study that describes the natural resources on the south shore of Long Island and addresses sensitive issues involved in the building of an offshore wind farm. Dr. Stoecker also spearheaded the Jamaica Bay Eutrophication Study, a marine aquatic sampling program designed to contribute data to a nutrient modeling program for the Jamaica Bay Estuary. Another one of his programs involves the design and bio-engineering of created wetlands at the Fresh Kills Landfill. This innovative project utilizes dredged materials as the wetlands underlayment thereby providing a beneficial end use for these materials.

In the past, Dr. Stoecker has been the principal-in-charge of numerous ecological siting feasibility studies. He designed and directed multi-year ecological studies of the Hudson River Center site adjacent to the Javits Convention Center and the East River Landing site adjacent to the South Street Seaport in Manhattan. Dr. Stoecker crafted an environmental study on the Great South Bay and associated barrier beaches, which included studies of avifauna, groundwater, and inte rtidal marsh vegetation in order to determine the potential impacts of residential development along the barrier beaches.

Dr. Stoecker is active in many environmental affairs relating to the Great South Bay and Barrier Islands. He has served on the following committees:

»Chairman, Town of Babylon Environmental Conservation Commission

»Chairman, Town of Babylon Beach Advisory Committee

»Save the Beaches Fund, Inc.

»Ad Hoc Committee for the Outer Beaches

»Technical Committee, South Shore Estuary Reserve Council

Dr. Stoecker received his Ph.D. in Botany from University of Hawaii. He is extensively published and author of “Aquatic Studies at the Hudson River Center Site In: Estuarine Research in the 1980’s: The Hudson River Environmental Society Seventh Symposium on Hudson River Ecology ((1992).

Dr. Stoecker is also a writer of fiction novels and an accomplished woodworker, adding character to Garden City’s office furniture.

# - # - #

http://www.eeaconsultants.com/biography/#Roy%20R.%20Stoecker%20Ph.D

JFound: Stoecker, Roy R. [MC????] Substratum Intake System: Once-Through Cooling Hybrid

# - # - #

Quinlan, Liam (MC1985)

Stoecker, Roy R. [MC????]

# # # # #

* Posted on: Sun, Dec 7 2008 10:56 AM

JObit: Oram, Robert E. [MC1954]

http://www.marshallindependent.com/page/content.detail/id/506289.html

Nov. 8, 1928-Nov. 25, 2008

CAMARILLO, Calif. - Robert E. Oram, member of the charter faculty of Southwest Minnesota State University, passed away Nov. 25, 2008, at his home in Camarillo, Calif. Oram founded the theatre program at Southwest, serving as department chair from the school’s opening in September 1967 until summer of 1974.

Oram was born Nov. 8, 1928, in Ballston Spa, N.Y., and grew up in the city of Manhattan. He received his bachelor’s degree from Manhattan College; his master’s from Catholic University in Washington, D.C.; and his doctorate from Wayne State University in Detroit. While at Catholic University, he toured Europe and the U.S. with Catholic Players; at Wayne State, he performed with the Hillberry Classic Theatre.

The first stage production at Southwest was the musical “West Side Story,” which Oram directed. Under the umbrella of the Cultural Opportunities Resource Center (CORC), a federal program, he directed “The Glass Menagerie” with artist-in-residence Julie Haydon. The production toured numerous small towns in the Marshall area. He also established Heartland Players, featuring professional actors on campus, along with guest director Douglas Campbell. Oram’s theatre department received the Governor’s Award for Excellence.

Oram left Marshall in 1974 to pursue a theatre career in Los Angeles, where he performed on stage, TV, and in films. He founded a theatre company in the San Fernando Valley, called The Folding Chair Theatre.

In 1980 Oram returned to Southwest State as guest director of the play “Hedda Gabbler.” At that time he also directed a production for the Cabaret Players of Redwood Falls.

Oram is survived by his wife of 49 years, JoAnne, who worked five years as writer/editor for the Marshall Independent; sons Robb, Steve, and Jim and their families, including three grandchildren.

# - # - #

Dear John,

I believe that Bob is a member of the Class of 1954.

May He Rest In Peace.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# - # - #

From: Grace Feeney

Subject: RE: Jasper Obit: Oram, Robert E. [MC 1954]

Date: December 9, 2008 2:45:05 PM EST

To: fjohn68

[JR: Thanks, Ms. Grace. Much appreciated. ]

# - # - #

Oram, Robert E. [MC1954]

Guestbook: None

# # # # #

* Posted on: Sun, Dec 7 2008 3:35 PM

* Updated: Tue, Dec 9 2008 4:45 PM

JOY: Motko, Richard [MC????] weds Theresa Lowe

http://www.newsday.com/news/local/longislandlife/

ny-lfwnhoel075952199dec07,0,1443086.story

Lowe-Motko

Theresa Lowe and Richard Motko were married Aug. 30 at St. Thomas the Apostle Church in West Hempstead. The reception was at Westbury Manor. She is an electrical systems engineer for Entergy/Indian Point Nuclear Power Plants in upstate Buchanan and is the daughter of Ivan and Denise Lowe of Hempstead. The bridegroom is a nuclear reactor engineer for Entergy/Indian Point Nuclear Power Plants and is the son of Richard and Eileen Motko of Pleasantville. The bride earned a bachelor of science degree in electrical engineering from Rensselaer Polytechnic Institute. The groom earned a master’s in mechanical engineering from Manhattan College. They live in Peekskill.

# - # - #

Motko, Richard [MC????]

# # # # #

* Posted on: Sun, Dec 7 2008 5:52 PM

MFound: MC and the 168th Street Armory

http://www.nytimes.com/2008/12/05/sports/othersports/05vecsey.html

?_r=1&adxnnl=1&ref=othersports&adxnnlx=

1228667340-iSSi+Ti0Q3H7xxi3akYhRQ

Sports of The Times

Rerun of History at Runners’ Mecca

By GEORGE VECSEY

Published: December 4, 2008

*** begin quote ***

When aging runners hear about the old 168th Street Armory, they talk about splinters the size of ice picks embedded in their shins, the red badge of courage of indoor track and field.

Dr. Norbert Sander, who has helped turn the armory in Manhattan into something of an international mecca, remembers his initiation to a banked wooden track, 11 laps to the mile.

*** and ***

At the armory, he would do odd tasks for his speedier teammates, which gave him time to observe. George Eastment, the track coach at Manhattan College, “teaching a group of runners how to run a curve.” He also remembers “a floating dice game on a blanket on the back stairs — where I learned to play craps.”

Logan later got to watch his friend at Manhattan College, Tyrone Pannell, a superb hurdler and high jumper. After graduation, Pannell joined the Marines and Logan joined the Army and both went to Vietnam, but only Logan came back alive.

“Tyrone never fell,” Logan said, recalling the old days of the wooden track. “The ham-and-eggers fell but not Tyrone.”

Most runners still have a pratfall in them — but at least the splinters are ancient and painful history.

*** end quote ***

# # # # #

* Posted on: Sun, Dec 7 2008 6:37 PM

JEmail: McEneney, Mike (MC1953) updates some missing Class Years

Dear John,

>JFound: Sweeney, Bill [MC????]

I believe that Bill is a member of the Class of 1978.

>JFound: Stoecker, Roy R. [MC????] Substratum Intake System

I believe that Roy is a member of the Class of 1965.

>JFound: Brennan, Bob [MC????]

I think that Bob may be a member of the Class of 1982 where I find a Robert T.

>Duffy, Ms Patricia A. (MC????)

I believe that Pat (nee Siudym) is a member of the Class of 1980.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

* Posted on: Mon, Dec 8 2008 8:31 AM

LINKEDIN ALERT: Parganos, Nicole (MC2001) Senior Engineer at Ecology and Environment, Inc.

REPORTING LIVE FROM THE LINKEDIN

NEWS DESK IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

http://www.linkedin.com/in/epengineer

Nicole Parganos, PE, LEED AP

Senior Engineer at Ecology & Environment, Inc.

Location Greater New York City Area

Industry Construction

LEED Accredited Professional Engineer, partner in a start-up MEP (mechanical, electrical, plumbing) consulting firm, with experience in environmental engineering including water & wastewater treatment plant design, and utility asset management. Current focus is on business development and marketing for EP Engineering, LLC.

# - # - #

Parganos, Nicole (MC2001)

# # # # #

* Posted on: Mon, Dec 8 2008 8:39 AM

MNews: Remembering Jasper football

http://www.lohud.com/apps/pbcs.dll/article?AID=2008812090367

End of college football era

By Bob Baird

Journal News Columnist • December 9, 2008

*** begin quote ***

It’s not at all unusual for a college alumnus to get mail asking for a contribution, but the letter I got in August 1965 was different.

I was weeks from stepping foot on Manhattan College’s Riverdale campus as a freshman and the letter was from fellow students, not the college itself.

That summer, students were passing up lucrative jobs to devote their time and energy to doing something that hadn’t happened at the college since the fall of 1942.

They were trying to field a football team.

This was the era of Joe Namath at Alabama, Bubba Smith at Michigan State and Mike Garrett at Southern California. Steve Spurrier was just a junior quarterback at Florida.

There was no illusion that the Jaspers, who had played in the forerunner to the Orange Bowl in the 1930s, would ever play against teams and players like those.

But students wanted football and wanted to field a club team, organized, financed and administered by students. With coaches hired by students, the Jaspers played NYU, Iona, Adelphi, Marist and St. John’s that first season. They hoped eventually to play cross-Bronx rival Fordham, which also had abandoned varsity football decades earlier.

Fordham, NYU and Georgetown had started the club craze in 1964 and a year later it was spreading from campus to campus as students collected money, hired coaches and scheduled games with other clubs. Over the next few seasons, Manhattan and Fordham would face off before crowds of about 14,000. Soon Manhattan was traveling to Scranton, Fairfield and Providence and hosting Seton Hall, Georgetown and King’s College of Pennsylvania.

There was a National Club Football Association and even national rankings and a national championship game.

That’s why it was so hard to hear a couple of weeks ago that Iona was dropping football from its sports program.

{Extraneous Deleted}

Seton Hall, a fixture on Manhattan’s club schedule, went varsity in 1973, playing in NCAA Division III until 1981, the last season it fielded a team. Fordham, too, went varsity in 1970 and by 1974, they, too, were gone from Manhattan’s schedule.

Fordham, Georgetown and Marist, all Manhattan opponents in the club era along with Iona, remain healthy varsity programs, although they, too, have had some turbulent times.

Even after Bob Byrnes became Manhattan athletic director, the former club football star for the Jaspers couldn’t make a varsity program happen in Riverdale. The club program ended at the close of the 1987 season, just months before Byrnes took over. One of the student-hired coaches from his playing days, Bill Polian, went on to other coaching and management opportunities and has been the National Football League’s Executive of the Year five times with three teams.

{Extraneous Deleted}

The college also cited the financial pressures of football, just as colleges had when students first showed an interest in the 1960s. And like the 1960s, parents thought there was another way to field a team. Several proposed lifting the financial burden from Iona, seeking to fund the program through outside sponsorships.

The college, however, opted to end the program, which has left its former players - including five from Rockland - in a lurch.

{Extraneous Deleted}

Ed Day finds fault with Iona’s decision and says it appears to him the college knew it would disband the program but went ahead recruiting a freshman class and transfers from other college programs. He says that amounts to a betrayal on the part of the college.

{Extraneous Deleted}

Reach Bob Baird at rbaird@lohud.com or 845-578-2463. His column appears Tuesday, Thursday and Sunday.

*** end quote ***

[JR: Sigh! It's all about the Benjamins. No margin; no mission. And, if you're not prepared to compromise on standards, you can't compete. Maybe it's the gooferment's fault. Why are they running "schools" that MC has to compete with? They have unlimited budgets and the power to steal from the taxpayer. How does a small private Catholic college compete? It's a miracle.]

# # # # #

* Posted on: Tue, Dec 9 2008 9:34 AM

JUpdate: Buran, Bill (MC1999) is working toward Freedom, Prosperity and Peace

REPORTING LIVE FROM THE FACEBOOK NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

http://tinyurl.com/5js67c

Buran, Bill (MC1999) is working toward Freedom, Prosperity and Peace.

*** begin quote ***

Oklahoma State Legislature Sends Message to Congress

Yesterday at 1:31pm

Hi all,

A few months old but of course the media took little attention. I ran for State Assembly in NY and this points to the quickest easiest path to restoring the Republic. Concentrating too much energy on national politics will cost too much money and take too long.

Remember the the States…the People have the power not Washington.

On June 16, 2008, the Oklahoma legislature passed Joint Resolution 1089 by a margin of 92-3. The resolution, published in its entirety below, calls for the federal government to, effective immediately, cease and desist imposing mandates that supersede its constitutional authority and violate state sovereignty under the 10th Amendment. The following resolution has been distributed among each of the parties listed per the resolution.

{Extraneous Deleted}

*** end quote ***

[JR: Jasper Bill comments are symptomatic of the time. Now that the freeloaders outnumber the workers, it's time for the workers to revolt. IMHO!]

# # # # #

* Posted on: Wed, Dec 10 2008 9:12 AM

JObit: Macey, Herbert C. [MC1962]

http://fredericksburg.com/News/FLS/2008/122008/12102008/430998

Herbert C. Macey

Date published: 12/10/2008

Herbert C. Macey, 68, of Spotsylvania County died Sunday, Dec. 7, 2008, at his residence.

Born in New York Nov. 4, 1940, he was the son of Herbert and Marie Hoffman Macey. He came to Virginia after graduating from Manhattan College in New York to work as a civil engineer for the Department of the Navy. He retired after 34 years of service to live a more leisurely life.

He leaves behind his loving wife of 40 years, Karen Macey, of Spotsylvania, and a son, Brett J. Macey, of Maryland. He also leaves behind two sisters, Marie Sigmann of New Jersey, and Barbara Goohan of New York.

No memorial service is planned at this time. Mr. Macey will be cremated and his ashes scattered on the land he loved so much.

Online condolences may be sent to the family at laurelhillfuneralhome.com.

Arrangements for the Macey family are in the care of Laurel Hill Funeral Home, 10127 Plank Road, Spotsylvania.

# - # - #

Dear John,

I believe that Herb is a member of the Class of 1962.

May He Rest In Peace.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# - # - #

Macey, Herbert C. [MC1962]

Guestbook: http://www.webfh.com/fh/obituaries/tributes.cfm?o_id=215130&fh_id=10235

# # # # #

* Posted on: Thu, Dec 11 2008 12:04 AM

* Updated: Fri, Dec 12 2008 2:44 AM

MFound: “Jasper 9 Club” (baseball)

http://manhattancollegebasketball.yuku.com/topic/1126

Join the “Jasper 9 Club” and Support the Jaspers

By joining the “Jasper 9 Club” and showing your support to the Manhattan Baseball program, your generous donation will enable us to continue to maintain a high level of success by allowing us to continually upgrade our equipment and supplement our travel budget which assists us in continuing to raise the level of our non-conference scheduling.

The generous financial support of alumni and friends of Manhattan College baseball has always been a large part of our program’s success.

ANY SIZE DONATION IS WELCOME

Membership Levels:

{Extraneous Deleted}

Please make all checks out to Manhattan College Baseball and send to:

Head Baseball Coach Kevin Leighton

Manhattan College - Draddy Gym

4513 Manhattan College Pkwy.

Riverdale, NY 10471

# # # # #

* Posted on: Thu, Dec 11 2008 8:14 PM

MFound: Dennis Day (1916-1988) was a MC Glee Club member

http://radiodaze.mypodcast.com/2008/12/Christmas_Comedy_Mix_121108-166333.html

Radio Daze

Classic Radio Programs From The 30’s, 40’s and 50’s. Featuring The Comedy of Jack Benny, George and Gracie. Great Crime Shows Like Dragnet and This is Your FBI. Great Shows that are ideal for you to download to your mp3 player for work, play or travel.

Wednesday, Dec 10, 2008

Christmas Comedy Mix 121108

*** begin quote ***

Dennis Day (May 21, 1916, New York City – June 22, 1988, Los Angeles, California), born Owen Patrick Eugene McNulty, was an Irish-American singer and radio and television personality, Also known for influencing musicians like Johnny Cash. Day was born and raised in New York City, the son of Irish immigrants. His father was a stationary engineer. Day graduated from St. Patrick’s Cathedral High School, and attended Manhattan College, where he sang in the glee club Day appeared for the first time on Jack Benny’s radio show on October 8, 1939, taking the place of another famed tenor, Kenny Baker. He remained associated with Benny’s radio and television programs until Benny’s death in 1974. He was introduced (with actress Verna Felton playing his mother) as a young (nineteen year old), naive boy singer — a character he kept through his whole career. His first song was “Goodnight My Beautiful”. Besides singing, Dennis Day was an excellent mimic. He did many imitations on the Benny program of various noted celebrities of the era, such as Ronald Colman, Jimmy Durante, and Jimmy Stewart. From 1944 through 1946, he served in the US Navy as a Lieutenant. On his return to civilian life, he continued to work with Benny while also starring his own show, A Day in the Life of Dennis Day (1946-1952). Day’s having two programs in comparison to Benny’s one was the subject of numerous jokes and gags on Benny’s show, usually revolving around Day rubbing Benny’s, and sometimes other cast members and guest stars’ noses in that fact.

*** end quote ***

# # # # #

* Posted on: Thu, Dec 11 2008 8:23 PM

JFound: Modafferi, Richard [MC1960]

http://www.htforum.nl/yabbse/index.php?topic=81006

Re: Objectieve meetmethode om verschillen in kabels, versterkers etc. aan te tonen

« Reply #11 on: November 13, 2008, 18:58:44 »

*** begin quote ***

“Biography: Richard Modafferi received his B.S.E.E. degree from Manhattan College in 1960 and his M.S. E. E. in 1965 and M.S. Computer Science in 1968 from New Jersey Institute of Technology. Richard worked for Blonder-Tongue Laboratory from 1960 to 1966 designing VHF and UHF television equipment. From 1968 to 1974 he did FM tuner design for McIntosh Laboratories including the MR-78. He has been an independent inventor-consultant since 1974. His ‘Infinite-Slope’ loudspeaker inventions are licensed to Joseph Audio of Melville, N.Y. His hobbies include vigorous exercise (X-C skiing, running, cycling), vegetarian cooking, and playing piano. “

*** end quote ***

[JR: from a Dutch site?]

Modafferi, Richard [MC1960]

# # # # #

* Posted on: Thu, Dec 11 2008 8:33 PM

JUpdate: Cacchione, Richard [MC1965B] sighted

REPORTING LIVE FROM THE UNYK NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

[JR: UNYK is an internet sync tool like Plaxo. (Perhaps, not as obnoxious?) It allows me to "lay in wait" for Jaspers to join and then alerts me to offer the "Do the Vulcan mind meld with me on UNYK?" Similar to Facebook, Linkedin, and Plaxo. There's no privacy on the internet. So, I fired off this email to our fellow Jasper. We'll see if this type of "outreach" works by making contact or is just a waste of time. Stand by for News. (with appologies to Paul Harvey!)]

Dear Cacchione, Richard [MC1965B], UNYK says we are fellow Jaspers. Care to share? Still in Peru? That’s what I have in my notes. As someone who rarely gets outside of the NY/NJ, I’m impressed. Love to get an update for Jasper Jottings. Understand if you don’t want to be connected to a loon. :-) fjohn68

[JR: I show him as "Home Address: Surco, Lima 33, Peru" but since I'm a lousy clerk, I didn't date that update. It could be as much 25 years old. Isn't Jasper Hunting fun?]

# # # # #

* Posted on: Fri, Dec 12 2008 8:03 AM

JFound: “Basile”, Tim (MC20??)

http://basilefamilyhistory.blogspot.com/2008/12/grandchildren.html

*** begin quote ***

Thursday, December 11, 2008

17 The Grandchildren

July 30th, 1988 marked the beginning of the final generation of the Basile Family with the birth of my older brother Tim. The grandchildren that came to follow were Meghan, myself, Brendan, Teddy, and Andy. Much like Joe and Jan, the parents’ generation were fortunate enough to send all of their children to private middle and junior high schools. Another aspect that followed through the generations was the Baptism and practice of Catholicism by each of the grandchildren. This example shows how certain family values are handed down through generations.

There remains a strong connection to Christian Brothers Academy in the academic careers of the grandchildren. Tim and myself have already graduated from the academy while Brendan and Teddy currently attend. Andy is attending St. Pius X school where all of the other nephews also graduated from. Meghan went to Christ the King Junior High School and then Colonie Central High school. She is currently attending the State University of New York at Oneonta. Tim is currently attending Manhattan College and I am attending St. John Fisher College. Again, a strong private and religious influence remains in the selection of schools for both generations.

All three generations of the Basiles get together for dinners at Joe and Jan’s house a couple times a month. All of the grand parents and parents eat at the dining room while the children eat at the kitchen table. Having so many family members makes it harder to have everyone in attendance at these events. The only day throughout the year when all of the Basiles are under one roof are at the Christmas dinner. The Christmas dinner is the only mandatory family function in the Basile family.

GM Should Live; Bush Plans Bailout from TARP

Dec. 13 (Bloomberg) — General Motors Corp. moved closer to a possible government rescue as the Bush administration said it may tap a bank bailout fund for financing and GM’s top executive discussed terms with administration officials.

GM Chief Executive Officer Rick Wagoner spoke by telephone with White House Chief of Staff Joshua Bolten and Treasury Secretary Henry Paulson about a short-term plan to keep the automaker solvent, a person familiar with the talks said.

The talks followed a statement by the White House that it would consider using the Troubled Asset Relief Program to help GM and Chrysler LLC following the Senate’s rejection of an aid package the night before.

“Congress has really punted the ball over to the White House,” John Bogle, founder of the $80.6 billion Vanguard 500 Index Fund, said in a Bloomberg Television interview. “That will give them temporary stopgap aid. I do not think General Motors is going to go out of business.”

Market Analysis

 

Market Behavior.  The plots of the two leading indices, the S&P 500 and the Nasdaq 100, provided for the most recent 30 business days, are supplemented by trend lines and by the 30-day moving average (in red).  The tredn lines ae obtained by regression analysis of the local highs and lows in the region shown.

The plots show clearly the ongoing recovery since the last bottom experienced 3 weeks ago.  In fact, the market has gained nearly 15% during this short time.  Note, however, the recent narrowing of the trend lines.  This usually indicates that we can expect in the very near future either a sharp increawe or a strong decline.  Our MACD analysis sugests that a decline is now more likely than contined recovery, but no one really knows.

Stepping for a moment beyond technical analysis, common sense tells us that the deep auto industry crisis is not going away any time soon.  In fact, as long as Detroit arrgantly insists on manuafcturing inferior cars - American consumers will simply continue purchasing the better Japanese models assembled in the South…  Therefore, don’t be surprised if the maarket starts another substantial decline in the next week or two.

Our Timing Systems.  We use two independent timing systems, referred to as slow and fast.  The slow system is based on conventional trend analysis, and its main ingredient is a modified MACD (Moving Average Convergence-Divergence) approach, determining and extending the trend of the most recent 30 business days.

The fast timing system is our original contribution.  It uses volume data of the most recent 15 days and provides daily forecasts – one day at a time.  It is fairly reliable for the upcoming 1-2 dys.  For both systems we update our calculations daily.  In the slow system trades are typically carried out 2-3 times a month, while in the fast system trades are performed almost every day.

The trades leading to our investment returns are carried out within the Rydex funds, providing a large variety of pairs of index funds, direct and inverse.  Changes in the direct funds are in phase with market changes, while for inverse funds they are out of phase – in fact opposed to them.  You can find a lot more about the Rydex funds in www.rydexfunds.com.

Investment Returns.  The table below compares the market and out investment returns.  All returns reported are our real time returns obtained in managed accounts.  On occasions people have stated that some of out results are “too good to be true”.  To remove any doubt we provide, upon request, fund financial statements for the timing system and period of interest.  If interested, you can drop us a note, and you will get the appropriae statement by return email.

The table is organized in two groups.  The upper 4 rows provides returns for completed periods, and the returns are provided with two decimal figures.  The lower 3 rows are for ongoing periods changing every day, and the returns are provided with one decimal figure.

As to the returns, 2007 was a decent year in the market, and both of our timing systems have outperformed the market.  As to 2008, it has been very problematic, especially the October crash, and the table is sprinkled with too many minus signs.  So far our timing systems have not handled well the market crash in the second half of 2008.

 

 

 

 

 

Nathan Jacobi, Ph.D.

Registered Investment Advisor

n.jacobi@shrago.net

Interesting Article

I came across this article by Arundhati Roy. Read on

The original link to the article: http://www.guardian.co.uk/world/2008/dec/12/mumbai-arundhati-roy

Bernie Madoff

Sterling Equities. Fund controlled by Fred Wilpon, co-owner of the NY Mets, confirms it had money with Madoff.

Palm Beach Country Club.  Source: CNBC’s David Faber

Loeb Family. Source: CNBC’s David Faber

Norman Braman. Former Philadelphia Eagles owner

Bramdean Alternatives in the U.K.  9% of portfolio.

Banque Benedict Hentsch, Geneva-based private bank, $47.5 million.

Robert Lappin Foundation in Massachusetts closed its doors today and is citing relationship to Maddoff fund. $8MM foundation plus personal holdings. Foundation supported Jewish organizations throughout North Shore of Massachusetts. (source: Jewish Journal)

BNP Paribas. “BNP Paribas’s exposure, the extent of which is not clear, may stem from BNP’s lending relationship with a fund of funds that was a big Madoff client, said people familiar with the matter. A BNP spokeswoman declined to comment.”

Englebardt family of Los Angeles. (Reader)

Stephen A. Fine, president of Biltrite Corp. (Reader)

Avram and Carol Goldberg, former owners of the Stop & Shop supermarket chain (Reader)

Helfman family of Miami. (Reader)

Saul Katz, co-owner of the New York Mets.

Irwin Kellner, of Port Washington. (Reader)

Carl and Ruth Shapiro, donors to Brandeis University, and Beth Israel Deaconess Medical Center.(Reader)

More as we get them…

See Also:

GM Moves Closer to Bailout as Wagoner Holds Talks With Bolten

General Motors Corp. moved closer to a possible government rescue yesterday as the Bush administration said it may tap a bank bailout fund for financing and GM’s top executive discussed terms with administration officials.

GM Chief Executive Officer Rick Wagoner spoke by telephone with White House Chief of Staff Joshua Bolten and Treasury Secretary Henry Paulson about a short-term plan to keep the automaker solvent, a person familiar with the talks said.

The talks followed a statement by the White House that it would consider using the Troubled Asset Relief Program to help GM and Chrysler LLC following the Senate’s rejection of an aid package the night before.

“Congress has really punted the ball over to the White House,” John Bogle, founder of the $80.6 billion Vanguard 500 Index Fund, said in a Bloomberg Television interview. “That will give them temporary stopgap aid. I do not think General Motors is going to go out of business.”

GM Chief Operating Officer Fritz Henderson also participated in yesterday’s talks. GM Chief Financial Officer Ray Young and other executives probably will work on the details with administration staffers this weekend, although any agreement isn’t likely until next week at the earliest, the person with knowledge of the matter said.

The administration is trying to keep GM and Chrysler from running out of money before the next Congress takes office Jan. 6, the person said.

Cerberus Too

Stephen Feinberg, founder of Chrysler owner Cerberus Capital Management LP, was also in talks with administration officials yesterday, people familiar with the discussions said.

Treasury spokeswoman Michele Davis didn’t immediately respond to a call seeking comment. GM spokesman Tony Cervone and White House spokesman Tony Fratto wouldn’t confirm the discussions. Chrysler spokeswoman Lori McTavish said the automaker isn’t informed of Feinberg’s schedule.

GM is reeling from almost $73 billion in losses since 2004 and a 22 percent slump in U.S. sales this year. The automaker last month said it lost $4.2 billion in the third quarter.

Chrysler has been battered by a 28 percent plunge in U.S. sales through November, the most among major automakers.

Senate Banking Committee Chairman Christopher Dodd said the Treasury Department has enough money left in its financial-rescue fund, or TARP, for an auto rescue. In addition, nine of the largest U.S. banks that received $125 billion in TARP money may also be able to help the car manufacturers, he said.

`Lot of Pockets’

“There are a lot of pockets you can go to, it seems to me, to meet this need,” Dodd said at a press conference yesterday in Washington.

Dodd said he disagreed with Fed Chairman Ben S. Bernanke, who wrote in a Dec. 5 letter to Dodd that it’s “unclear” whether carmakers have sufficient collateral to qualify for Fed loans.

House Speaker Nancy Pelosi, in a letter to President George W. Bush, said providing funds to the automakers “is the right decision” and urged him to require the same “tough accountability and shared sacrifice” from all sides in the industry as were set in a bill passed by her chamber this week.

Senator Bob Corker, a Tennessee Republican involved in failed efforts to forge a compromise with Dodd the night of Dec. 11, said providing TARP money without union commitments for restructuring and wage concessions would make the car companies “less likely” to become more competitive. Such a move would put “good money after bad,” Corker said in a Bloomberg Television interview.

Ensuring `Viability’

Neither the Treasury nor White House statements yesterday said whether any TARP funds provided would be accompanied by conditions. Paulson has insisted that any funds must include a plan ensuring “viability” for the automakers.

“Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms,” White House spokeswoman Dana Perino said yesterday. “However, given the current weakened state of the U.S. economy, we will consider other options if necessary — including use of the TARP program — to prevent a collapse of troubled automakers.”

The Treasury Department “will stand ready to prevent an imminent failure,” spokeswoman Brookly McLaughlin said in a statement. Paulson had resisted Congress’s bid to finance an industry rescue with TARP, saying the funds were intended only to bolster ailing banks.

Asked whether Bush will decide to provide the funds, Julian Zelizer, professor of history and public affairs at Princeton University in Princeton, New Jersey, cautioned that the president is willing to “defy what seems politically or strategically inevitable.”

“That said, ending his presidency with the collapse of one of the most important U.S. industries would be disastrous to his legacy and, he is well aware, potentially disastrous to the health of the economy,” Zelizer said. “While it is impossible to say he will do this, all the arrows point in this direction.”

GM dropped 18 cents, or 4.4 percent, to close at $3.94 yesterday in New York Stock Exchange composite trading, and Ford Motor Co. rose 14 cents, or 4.8 percent, to $3.04. GM plummeted as much as 37 percent earlier. Ford tumbled 27 percent.

GM shares have plunged 84 percent this year and Ford’s have dropped 55 percent. While Ford also is losing money, the automaker has said it’s not seeking short-term aid from the government.

United Auto Workers

United Auto Workers President Ron Gettelfinger endorsed emergency aid from the TARP program or the Fed, saying the automakers would be liquidated without U.S. assistance.

Job losses from an automaker failure in 2009 would total 2.5 million to 3.5 million in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 report from the Ann Arbor, Michigan-based Center for Automotive Research, which does studies for government agencies and companies.

Even with a possible new source of funds, GM and Chrysler’s default risk in the coming months “remains very high,” Standard & Poor’s credit analyst Robert Schulz said in a statement yesterday. “In addition, we remain concerned about the spillover effects of an automaker failure” on parts suppliers, he said.

GM’s 8.375 percent bonds due in July 2033 lost 2 cents to 15 cents on the dollar, according to Trace, the bond-pricing service of the Financial Industry Regulatory Authority. The yield was 57.6 percent.

Ford’s 7.45 percent bonds due in July 2031 dropped 2.9 cents to 21.5 cents on the dollar, yielding 34.7 percent, Trace data showed.

Oldsmobile Nation

 

 

He proposed government programmes for bridges, roads, broadband internet and schools as well as plans for greater energy efficiency and health spending. The National Bureau of Economic Research has said that America has now been in recession for a year.

No comments yet.

The Monster in the Mirror, Arundhati Roy

Еще макро статистика

(Source: NBER, National Bureau of Economic Research)

Census Bureau Economic Briefing Room

Comparative Unemployment Rate, 10 Countries, 1995-2008*

Comparative Unemployment Rates, Selected European Union Countries, 1995-2008*

Consumer Price Indexes, Nine Countries, 1995-2008*

Employer Costs for Employee Compensation*

Flow of Funds Accounts of the United States (Z1)

Manufacturing and Trade: Inventories and Sales (Business Inventories)

Producer Price Index (PPI)

Retail and Food Service Sales (MARTS)

Work Experience of the Population*

Commercial Paper

Economic and Financial Indicators (updated daily)

Federal Reserve Board (updated daily)

Foreign Exchange Rates

Selected Interest Rates

*Note: Annual and other releases without published, scheduled release dates are issued the following business day

Less Time for Bull

If you are fortunate enough to have a 401K and benefited from bullish investments  before the big dip you can make changes to stop these from dipping further.  I moved mine to Vanguard Retirement Savings Trust and Vanguard Total Bond Market Index Fund Invester Shares.  I have no financial experience however I know when numbers go up and down…we’ll see!

USD to Oil - will commodities take off again?

Bill Luby at Vix and More seems to be stealing all my post ideas, but I’ll go forward with this one anyway.  Damn you, Bill!

That’s the US Dollar at the top, followed by the Oil index, followed by the 100-day correlation of the two.  Almost perfect anti-correlation.  So, with that in mind, I’m watching commodities right now - and also taking a look at FXE as a way to play the dollar.  And, as Bill pointed out, I wonder if this is a strong sign of inflation reemerging due to the endless dollars we are printing to fund Bailout Nation.

Q


The father of a Lockerbie bombing victim has launched a bid to free the man convicted of carrying it out.Dr Jim Swire - who lost his daughter Flora in the 1988 atrocity - is backing the Justice for Megrahi campaign.Supporters want Abdelbaset al-Megrahi to be released from jail on compassionate grounds after it emerged he was suffering from prostate cancer.An application for the Libyan’s interim liberation was turned down by the Appeal Court in Edinburgh last month.’Common humanity’The campaign is seeking support for an application to be made to the Scottish Government for Megrahi to be freed.When appeal court judges turned down an application for bail they said they were not convinced his health condition justified his release.They said that if he responded well to palliative treatment he might well live for a number of years.Megrahi is currently in the process of making a second appeal against his conviction for the 1988 atrocity in which 270 people were killed.Mr Swire said the question of his release was one of “common humanity”.On Friday, he visited Megrahi in prison for the second time.Mr Swire said he noticed a change in Megrahi’s appearance."He has proclaimed throughout the last 15 years since he has been brought to the court that he is innocent"Dr Jim Swire”He is clearly a man who is not physically well,” he said.He paid tribute to Megrahi’s family for their loyalty, which had extended to the Libyan’s daughter deciding to get married in Barlinnie prison in Glasgow at the time her father was held there.”We need to try to put ourselves in the position of a man who is 1,000 miles away from his home country, who separated from his family whom he loves dearly and who love him dearly, and who has been told he has only months to live.”He has proclaimed throughout the last 15 years since he has been brought to the court that he is innocent.”Mr Swire, a retired GP who has long argued that Megrahi is innocent, said: “He is in a desperate human situation - put yourself into that position and see what it would be like.”Other supporters of the campaign include a Roman Catholic priest who witnessed the aftermath of the bombing.Father Patrick Keegans said Megrahi was innocent of the crime and also deserved release on compassionate grounds.Ian McKie, whose daughter Shirley, a former policewoman, accepted 750,000 from the then Scottish Executive in 2006 after a long-running legal battle over fingerprint evidence in an Ayrshire murder case, also supported the campaign.Mr McKie said his son, Stuart, was one of the first police officers on the scene in Lockerbie and has never recovered.The campaign group plan to mark the 20th anniversary of the disaster later this month with a service in the chapel of Heathrow AirportThis article is from the BBC News website. © British Broadcasting Corporation

Three couples make Strictly final
All three couples in the Strictly Come Dancing semi-final have gone through to the grand final after two hopefuls tied after the judges’ scoring.With the audience vote unable to save actor Tom Chambers from the dance-off, The BBC said it was decided the fairest option was to put all three through.Viewers were assured their votes would be included in next Saturday’s final.Presenter Lisa Snowdon and singer Rachel Stevens had tied at the top of the judges’ leader board.Stevens and Snowdon both scored 75 points with the judges after their two dances, with Snowdon achieving a perfect score on her ballroom roundThis article is from the BBC News website. © British Broadcasting Corporation

News : Antasari: KPK is Not Impeding Economic Growth

News : Antasari: KPK is Not Impeding Economic Growth

The Commission of Corruption Eradication (KPK) Chairman Antasari Azhar said KPK’s performance in corruption eradication was not hindering economic growth. “KPK assists in the creation of a fair and prosperous society,” he said in an academic speech to the 42nd Dies Natalis Universitas Pancasila at the Jakarta Convention Center, Tuesday (28/10).

Antasari disagreed with the opinion that KPK’s fierce stance made officials scared to use the budget funds that they were entitled to.

He explained that one of KPK’s aspirations was to accelerate economic growth and prosperity that was currently being encumbered by corruption.

While there may be studies claiming no direct link between corruption and economic growth, other studies suggest that the more corrupt a nation is, the higher the amount of interest paid on loans for infrastructure or that corruption creates additional burdens on the nation’s poor.

Antasari also declared that the stigma surrounding Indonesia as highly corrupt nation must change.

He reminded the audience that Indonesia still has a corruption perception index score of 2.6. This is an improvement from the previous year’s score of 2.3 in 2007.

The corruption perception index is a portrait of corruption levels in 180 nations. The score is based on surveys from a number of independent organizations. Nations are ranked from 0 (most corrupt) to 10 (least corrupt).

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December 15, 2008 Daily Highlights

MARKET REVIEW

MEDIA HIGHLIGHTS

ECONOMY HIGHLIGHTS

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Property Weekly Review: 8th – 14th December 2008

Share price performance

Hillside projects facing objections

More projects delay

Other notable property news

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15 December 2008 Newz Bits

TALKING POINT

HIGHLIGHTS

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Sydney Mongolian Students

Suljeend burtgegdej amjaagui baigaa naiz nohoddoo Suljeenii talaarh medeelliig hurgeerei.

FOR AYAD Australians - some MN Language lessons. Enjoy!

http://groups. yahoo.com/ group/mglaus/ to find someone for language exchange.

Mongolian language tutor, online resources:

AYAD Australians - Intake 20:

Shasheen will spend five months with the Mongolian National Chamber of Commerce and Industry (MNCCI); Mongolia’s peak business authority which supports private sector development in the country’s transition to a market-based economy. The assignment with the Chamber is based in Ulaanbaatar.

Shasheen’s role as Business Development Officer will involve building market maps, developing trade promotion strategies, identifying key investment areas and developing business tool kits for small to medium enterprises. Furthermore he will assist with promoting best trade practices and promoting corporate social responsibility.

While undertaking a Commerce and Economics double Degree at the University of New South Wales, Shasheen was heavily involved in many charitable and volunteer organisations, for which he was recognised as one of four state finalists for Young Australian of the Year in 2007. He has also been featured on the cover of two million Sydney White Pages directories for the theme of Young Australia – Shaping Our Future.

In his spare time Shasheen plays three instruments, writes music in a band, enjoys travelling and learning about different cultures and customs.

Tehmi will be working as a Business Development and Marketing Officer at the National Information Technology Park (NITP) of Mongolia. She will be based in Ulaanbaatar for this assignment.

NITP is a major non-profit government organisation, established in 2002 to develop Mongolia’s information technology sector. Mongolia’s IT sector has experienced unprecedented growth over the last three years and is positioned to be a key area of Mongolia’s development sector with extensive social and economic reach throughout urban and rural Mongolia. NITP works to: turn innovative ideas into products and services, develop scientific and technological databases, promote offshore software development, and introduce technological innovation into Mongolia’s social and economic sectors.

Tehmi aims to help make NITP a leading IT organisation through developing marketing and partnership plans, project proposals to support IT sector development; along with project monitoring and evaluation mechanisms. She hopes to achieve this by training NITP staff and IT incubator companies in business development and marketing.

Tehmi enjoys working with and learning from people with different backgrounds, cultures and perspectives. She also loves to travel and is looking forward to a life changing experience living and working in Ulaanbaatar.

As a Television Youth Producer for English Youth Development, Gabrielle will be working closely with Mongol National Television to help produce the second series of the English language television series Voice Box. This will focus on issues affecting young Mongolians. The series is aimed at improving the language skills of local youth and children who may not have access to English teachers.

Gabrielle has been producing at Channel 7’s breakfast show Sunrise for almost two years. Gabrielle has also recently worked on The Morning Show as a producer.

Other past ventures include stage managing touring theatre shows, hosting community radio, and performing with children.

Last year Gabrielle travelled to Thailand to work for the theatre company Makhampom. This involved teaching English to Thai children and teenagers. This sparked her interest in the English teaching arena.

Gabrielle is excited to be taking on a venture that fuses both working with children as well as television producing and hosting, in a setting so far from Australia! Gabrielle is also looking forward to the chance of exploring Mongolia for the amazing landscapes and rich history.

Sydney-d baidag Australia hun Mongol oyutnuudad tuslah bolomjtoigoo ilerhiilsen baina shuu. Mongoloos dongoj ireed baigaa AYAD Australian yum baina. AYAD Program-n tuhai hamgiin door havsargalaa. Ene email ni:

My name is Tehmi Sukhla and I have just returned from a year in Mongolia as an AYAD. I’d like to add my name to the list of Australians, living in Australia , with any past or current association with Mongolia , that would be willing to meet/socialise/ assist any Mongolian students studying in Australia . I’m based in Sydney .

Tehmi will be working as a Business Development and Marketing Officer at the National Information Technology Park (NITP) of Mongolia. She will be based in Ulaanbaatar for this assignment.

NITP is a major non-profit government organisation, established in 2002 to develop Mongolia’s information technology sector. Mongolia’s IT sector has experienced unprecedented growth over the last three years and is positioned to be a key area of Mongolia’s development sector with extensive social and economic reach throughout urban and rural Mongolia. NITP works to: turn innovative ideas into products and services, develop scientific and technological databases, promote offshore software development, and introduce technological innovation into Mongolia’s social and economic sectors.

Tehmi aims to help make NITP a leading IT organisation through developing marketing and partnership plans, project proposals to support IT sector development; along with project monitoring and evaluation mechanisms. She hopes to achieve this by training NITP staff and IT incubator companies in business development and marketing.

Tehmi enjoys working with and learning from people with different backgrounds, cultures and perspectives. She also loves to travel and is looking forward to a life changing experience living and working in Ulaanbaatar.

Tehmi is excited to learn Mongolian, to immerse herself in an ancient culture and to spend a year in the coldest capital city in the world!

———— ——— ——— ——-

Australia dahi Mongolchuud neg unshaad uzchihed gemgui yum baina. Bayarlalaa all. Enjoy!

http://erintulgatmn .blogspot. com/2008/ 11/1.html

http://erintulgatmn .blogspot.. com/2008/ 11/2-social- capital.html

Sydney Mongolian Students

Suljeend burtgegdej amjaagui baigaa naiz nohoddoo Suljeenii talaarh medeelliig hurgeerei.

FOR AYAD Australians - some MN Language lessons. Enjoy!

http://groups. yahoo.com/ group/mglaus/ to find someone for language exchange.

Mongolian language tutor, online resources:

AYAD Australians - Intake 20:

Shasheen will spend five months with the Mongolian National Chamber of Commerce and Industry (MNCCI); Mongolia’s peak business authority which supports private sector development in the country’s transition to a market-based economy. The assignment with the Chamber is based in Ulaanbaatar.

Shasheen’s role as Business Development Officer will involve building market maps, developing trade promotion strategies, identifying key investment areas and developing business tool kits for small to medium enterprises. Furthermore he will assist with promoting best trade practices and promoting corporate social responsibility.

While undertaking a Commerce and Economics double Degree at the University of New South Wales, Shasheen was heavily involved in many charitable and volunteer organisations, for which he was recognised as one of four state finalists for Young Australian of the Year in 2007. He has also been featured on the cover of two million Sydney White Pages directories for the theme of Young Australia – Shaping Our Future.

In his spare time Shasheen plays three instruments, writes music in a band, enjoys travelling and learning about different cultures and customs.

Tehmi will be working as a Business Development and Marketing Officer at the National Information Technology Park (NITP) of Mongolia. She will be based in Ulaanbaatar for this assignment.

NITP is a major non-profit government organisation, established in 2002 to develop Mongolia’s information technology sector. Mongolia’s IT sector has experienced unprecedented growth over the last three years and is positioned to be a key area of Mongolia’s development sector with extensive social and economic reach throughout urban and rural Mongolia. NITP works to: turn innovative ideas into products and services, develop scientific and technological databases, promote offshore software development, and introduce technological innovation into Mongolia’s social and economic sectors.

Tehmi aims to help make NITP a leading IT organisation through developing marketing and partnership plans, project proposals to support IT sector development; along with project monitoring and evaluation mechanisms. She hopes to achieve this by training NITP staff and IT incubator companies in business development and marketing.

Tehmi enjoys working with and learning from people with different backgrounds, cultures and perspectives. She also loves to travel and is looking forward to a life changing experience living and working in Ulaanbaatar.

As a Television Youth Producer for English Youth Development, Gabrielle will be working closely with Mongol National Television to help produce the second series of the English language television series Voice Box. This will focus on issues affecting young Mongolians. The series is aimed at improving the language skills of local youth and children who may not have access to English teachers.

Gabrielle has been producing at Channel 7’s breakfast show Sunrise for almost two years. Gabrielle has also recently worked on The Morning Show as a producer.

Other past ventures include stage managing touring theatre shows, hosting community radio, and performing with children.

Last year Gabrielle travelled to Thailand to work for the theatre company Makhampom. This involved teaching English to Thai children and teenagers. This sparked her interest in the English teaching arena.

Gabrielle is excited to be taking on a venture that fuses both working with children as well as television producing and hosting, in a setting so far from Australia! Gabrielle is also looking forward to the chance of exploring Mongolia for the amazing landscapes and rich history.

Sydney-d baidag Australia hun Mongol oyutnuudad tuslah bolomjtoigoo ilerhiilsen baina shuu. Mongoloos dongoj ireed baigaa AYAD Australian yum baina. AYAD Program-n tuhai hamgiin door havsargalaa. Ene email ni:

My name is Tehmi Sukhla and I have just returned from a year in Mongolia as an AYAD. I’d like to add my name to the list of Australians, living in Australia , with any past or current association with Mongolia , that would be willing to meet/socialise/ assist any Mongolian students studying in Australia . I’m based in Sydney .

Tehmi will be working as a Business Development and Marketing Officer at the National Information Technology Park (NITP) of Mongolia. She will be based in Ulaanbaatar for this assignment.

NITP is a major non-profit government organisation, established in 2002 to develop Mongolia’s information technology sector. Mongolia’s IT sector has experienced unprecedented growth over the last three years and is positioned to be a key area of Mongolia’s development sector with extensive social and economic reach throughout urban and rural Mongolia. NITP works to: turn innovative ideas into products and services, develop scientific and technological databases, promote offshore software development, and introduce technological innovation into Mongolia’s social and economic sectors.

Tehmi aims to help make NITP a leading IT organisation through developing marketing and partnership plans, project proposals to support IT sector development; along with project monitoring and evaluation mechanisms. She hopes to achieve this by training NITP staff and IT incubator companies in business development and marketing.

Tehmi enjoys working with and learning from people with different backgrounds, cultures and perspectives. She also loves to travel and is looking forward to a life changing experience living and working in Ulaanbaatar.

Tehmi is excited to learn Mongolian, to immerse herself in an ancient culture and to spend a year in the coldest capital city in the world!

———— ——— ——— ——-

Australia dahi Mongolchuud neg unshaad uzchihed gemgui yum baina. Bayarlalaa all. Enjoy!

http://erintulgatmn .blogspot. com/2008/ 11/1.html

http://erintulgatmn .blogspot.. com/2008/ 11/2-social- capital.html

U.S. automaker bailout package dies in Senate

A planned $14-billion US federal bailout of the Big Three carmakers died Thursday on the U.S. Senate floor after negotiations between Democrats and Republicans collapsed over a dispute about wage cuts for autoworkers.

The Senate rejected the bailout 52-35 on a procedural vote ? well short of the 60 votes needed to pass the plan.

Ahead of the vote, Democratic Senate Majority Leader Harry Reid said he was “terribly disappointed” to see several hours of unprecedented private talks in Washington with Senate Republicans, representatives from the country’s auto industry and labour groups come to naught.

“There’s too much difference between the two sides,” Reid said from the Senate floor.

Asian financial markets fell sharply Friday as news of the failure emerged, with the Nikkei and Hang Seng both down more than five per cent. Reid could only speculate on the potential fallout when North American stock markets opened.

“I dread looking at Wall Street tomorrow,” Reid said late Thursday night. “This could be a very, very bad Christmas as a result of what takes place here tonight.”

Early indications were that Wall Street would incur a steep sell-off. The Dow Jones industrial average futures contract retreated three per cent overnight from its close Thursday afternoon, suggesting the index will open significantly lower on Friday.

Earlier in the evening, Reid said a tentative deal had been reached and the Senate could vote on legislation that night, but just hours later he asked to invoke closure to end the nighttime legislative session without an agreement.

The deal stalled over the United Auto Workers’ refusal to accede to Republican demands for swift wage cuts before their current contract expires in 2011.

The House of Representatives had passed legislation on Wednesday to speed the bailout package to approval. But prospects for the Senate to pass the rescue funds dimmed early Thursday amid strong Republican opposition, despite urgent appeals by both president-elect Barack Obama and the Republican administration of President George W. Bush.

“We have reached an impasse,” said Senate Republican Leader Mitch McConnell, who came out against the legislation ? the product of a hard-fought behind-the-scenes compromise between the majority Democrats and the White House.

Bob Corker, a Tennessee Republican senator who led the closed-door talks for his party, said the two sides were “three words away, maybe two” from reaching landmark legislation that would have allowed the automakers to go forward “stronger than they have been in 40 years.”

“I think there is a way for us to get there; I still do,” Corker told the Senate.

After the vote, White House spokesman Tony Fratto said the Bush administration found it “disappointing” that lawmakers failed to act to avoid disorderly bankruptcies.

“We will evaluate our options in light of the breakdown in Congress,” Fratto said.

In Chicago, Obama told reporters that the government can’t just stand by and watch the industry collapse, saying that would have a “devastating ripple effect” throughout the economy.

Proponents of the package scrounged for the Senate votes to clear the legislation as early as Thursday afternoon. The president was lobbying for the bill, as well, arguing that the economy can’t stand massive new layoffs.

But McConnell said the measure “isn’t nearly tough enough.” The Republican Senate leader also called for a different bill ? one that would force U.S. automakers to slash wages and benefits to bring them in line with Japanese carmakers Nissan, Toyota and Honda ? in return for any federal aid.

That approach was virtually certain to be a non-starter among Democrats who count labour unions among their strongest supporters.

Many Republicans remained staunchly opposed to the bailout, and some Democrats were ill or absent from the emergency, post-election congressional session. Supporters of the bailout acknowledged that in this scenario, getting the requisite 60 votes to pass it would be very difficult.

The stalemate highlighted the difficulty of pushing another rescue package through a bailout-fatigued Congress, particularly one designed to span the administrations of a lame-duck president and his successor, even though they were united in pressing hard for its swift approval.

With files from the Associated Press

Big Three must sell case to Congress

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Credit Default Swaps: December 14, 2008 - E. Gerald Corrigan, Managing Director, Goldman, Sachs

Chairman Peterson, Ranking Minority Member Goodlatte, and members of the Committee, I appreciate the opportunity to appear before you this afternoon in order to share with you my observations on the workings of the marketplace for credit default swaps (CDS). My remarks emphasize the further steps which I believe should be taken to enhance the efficiency, resiliency and the stability of that marketplace.

Needless to say, the CDS market is widely cited as a significant contributing factor to the volatility and uncertainty that has been at the center of the financial market crisis that has gripped the U.S. and the global financial system for the last 16 months. Having said that, I want to emphasize at the outset that despite the events of the recent past, a great deal of effort has, over the past three years, been devoted to enhancing market practices in the CDS space on the part of both the public and private sectors. Accordingly, I have attached to this statement two appendices drawn from the July 27, 2005 and the August 6, 2008 Reports of the Counterparty Risk Management Policy Group (CRMPG) which contain valuable information on the subject of this hearing including an imposing list of Recommendations from the 2008 Report for further strengthening the CDS and related markets.

A number of these Recommendations have been, or are in the process of being, implemented. Indeed, I would respectfully suggest that had it not been for the improvements in market practices over the past three years, the events of recent months probably would have been even more damaging as difficult as it is to imagine such an outcome. But, we should make no mistake about the future reform agenda which remains formidable.

My written statement covers four subjects that are relevant to the purpose of the hearing as follows:

Section I: The Nature of the Credit Default Swap Instrument

In essence, the CDS is a deceptively simple financial instrument in which counterparty A (the seller of credit protection) receives a fee from counterparty B (the buyer of credit protection) in exchange for protecting counterparty B against a decline in credit worthiness or a “credit event” of a so-called “reference entity.” The reference entity may be a credit claim (a loan or a bond) against a particular company or country (a single name CDS) or it may be a basket of single names (an index CDS). The reference entity may also be a specific asset-backed security or a structured credit product such as a collateralized debt obligation (CDO).

If the creditworthiness of the reference entity declines – the buyer of protection (counterparty B in the above example) – gains and the seller of protection (counterparty A above) – loses. In the extreme case in which the reference entity experiences a “credit event” (such as a default), the buyer of protection (counterparty B) delivers the defaulted instrument to the seller of protection (counterparty A) and receives the par amount of the CDS contract. Needless to say, in a volatile financial market environment in which credit quality is falling and the risk of default is rising, the counterparty risk management process in the CDS market becomes very challenging – to put it mildly (see Section III below).

Section II: The Structure of the Credit Default Swap Market

The CDS market is comprised largely of sophisticated financial institutions. There are about 16 so-called “dealers” at the center of the CDS market. These dealers – all of which are owned and controlled by major U.S. and foreign banking institutions – play the vital role of market makers in a wide array of financial instruments including CDS. They also take proprietary positions in these instruments, in part, as a natural extension of their market making activities. While precise estimates of activity levels in the CDS market are not easy to compile, most observers would suggest that something approximating 90 percent of overall activity in the CDS market can be attributed to the dealer community. Whatever the precise number, it necessarily follows that the bilateral and multilateral counterparty risk exposures among the dealers to each other are very large.

The balance of the CDS market is comprised of several other classes of institutions including corporates, insurers (including mono-lines) and, in particular, hedge funds. As described in Appendix A, the rationale as to why individual institutions and classes of institutions choose to participate in the CDS market varies considerably across classes of institutions and over the credit cycle. At the risk of considerable oversimplification, however, the motivation for participation centers around a few key factors including (1) satisfying the needs of clients; (2) an explicit decision to be either long or short credit risk; and (3) an explicit decision to hedge credit risk.

Reflecting in part the huge structural changes in financial markets over the past decade or so and the even larger changes in the macro-economic and the macro-financial environment over the past five years, the growth of the CDS market has been explosive – and then some. Over roughly the last decade, the CDS market also experienced a radical transformation from a market that was, in large part, designed to mitigate relatively infrequent events (defaults) to a market that is dominated by trading activity in which very large trades with short durations are commonplace.

It is these patterns of trading activity that produce the headline news items about the $60 trillion plus notional size of the CDS market even as we all know that notional amounts tell us very little about risk factors for the marketplace and its participants.

Unfortunately, the industry itself contributed to the focus on the gross notional sizes of the CDS market. That is, until recently when new trades were put in place to offset existing trades the existing trades typically were not closed out, thus swelling the gross notional size of the market. In recent weeks, and months, joint public/private efforts aimed at “trade compression” have resulted in dramatic declines in the gross notional amounts of CDS outstanding. For example, information released recently indicates that trade compression efforts have eliminated the notional value of CDS outstanding by $27 trillion. Further reductions are expected in the period ahead such that even with new transactions growing rapidly, the notional amount of CDS will soon fall below $30 trillion and will trend still lower over time.

There is one other feature of the CDS market that should be highlighted; namely, while in trade count terms a significant fraction of CDS trades are straight-forward in design and structure, a relatively small number of high value trades are highly structured and highly complex. These so-called “bespoke” trades are often initiated by clients of financial intermediaries and require quite complex and unique documentation. These bespoke trades are a very important source of the value added provided by the CDS market. Thus, efforts aimed at reform must not be so rigid and mechanical so as to undercut the ability of the market to forge unique solutions to unique problems.

Section III. Risk Monitoring and Risk Management for CDS Users

With the benefit of hindsight it is quite obvious that a number of large and sophisticated financial institutions experienced shortcomings in their risk monitoring and risk management activities before and during the crisis and that some such shortcomings occurred in the CDS space. The mere presence of a small number of highly concentrated CDS risk exposures across the financial landscape tells us in unmistaken terms that some market participants were quite slow in recognizing that these exposures risked material write-downs and very sizeable collateral calls. It is also true that the more complex the reference entity (e.g., CDO’s), the more difficult it is to anticipate credit problems and the more likely it is that collateral disputes between counterparties will arise. Having said that, failures in risk monitoring and risk management were by no means limited to the CDS space in a context in which hedging opportunities made possible by the CDS surely did help many institutions to mitigate credit exposures.

All of this raises the very difficult analytical question of whether, on balance, the CDS tempered or amplified the credit crisis. While I believe that we will gravitate toward an informed answer to that question only with the passage of time, based on what we now know I see the CDS as a net plus. In saying that, I must acknowledge that the CDS and other segments of the financial markets have benefited greatly from large scale central bank and governmental interventions. It is also true that the CDS market has benefited from a handful of recently implemented critical reforms as follows:

(1) The prohibition against novation of trades without the consent of the initial counterparty;

(2) huge reductions in unsigned trade confirmations;

(3) major advances in automation covering all steps in the trade processing cycles;

(5) the agreement among the dealers on the use of a common close out methodology which, fortunately, was put in place only weeks before the Lehman bankruptcy. Had this agreement not been in place the very challenging aftermath of the Lehman bankruptcy would been an even greater blow to market confidence; and

(6) important strides have been made in increasing the transparency of the CDS market.

Turning to the subject of risk management more generally, Appendix A explains, in straight-forward terms, the nature of the risks associated with the CDS instrument. In examining the events leading up to and including the crisis it is quite clear that the very large write-downs and losses witnessed in the CDS space were importantly driven by either or both “basis” risk and “counterparty” risk.

To a considerable degree the basis risk problem arose because efforts to hedge risks did not always perform as expected due to sometimes very large disparities in the absolute and relative movements in the prices of position being hedged and the CDS designed to provide the hedge. In a few cases even the algebraic sign of the hedge was wrong; that is the price of the underlying asset and the hedging instrument actually moved in the same direction!

With regard to counterparty risk, it has been widely recognized in the press and elsewhere that highly concentrated positions at a relatively small number of institutions – particularly sellers of protection involving complex reference entities – resulted in massive collateral calls which caused large write-downs and impaired the liquidity position of the institutions in question. Even worse, there were situations in which basis risk, counterparty risk, and the embedded leverage in certain classes of structured credit products interacted with each other in ways that amplified contagion and volatility, and multiplied the size of margin calls and write-downs.

The legacy of these events in the CDS space will be with us for a long time. However, as we seek to draw lessons from these events we must proceed with care. Indeed, as discussed in the next section of this statement, I believe that the agenda for further reform in the CDS space is reasonably clear even if full implementation of the agenda will be challenging and time consuming.

Section IV: Enhanced Official Oversight

Given all that has occurred on the financial front over the past 16 months, it is only natural that this Committee, the Congress as a whole and the public at large are focused on enhanced official oversight of financial markets and institutions. Fortunately, the Memorandum of Understanding entered into by the FED, the SEC and the CFTC on November 14, 2008 regarding “Central Counterparties for Credit Default Swaps” provides something of an anchor for such focus as it applies to CDS and OTC derivatives more generally.

Guiding Principles

First; the financial industry, broadly defined, must recognize at the highest levels of management that a substantial further commitment of leadership and resources must be devoted to necessary enhancements in the efficiency, resiliency, stability and integrity of the OTC markets with specific emphasis on the CDS.

Second; in shaping the reform agenda, the regulators, legislators and market participants should exercise great care so as not to fall victim to the laws of unintended consequences. As an example, even the hint of an approach that would raise questions about the legal standing of existing contracts could materially worsen the already badly shaken confidence in financial markets and institutions.

Third; even in the face of substantial write-downs experienced by some institutions in the CDS space, we must recognize that such losses probably reflect flaws in risk management much more than they reflect flaws in the instrument.

Fourth; from the viewpoint of financial stability, whether or to what extent CDS trades occur on organized exchanges is not a matter of overriding concern so long as the details of all such trades are made available on trade date to the DTCC warehouse.

Finally; the prompt implementation of a CCP for credit default swaps will constitute a necessary, but not sufficient, condition to facilitate the orderly wind-down of seriously troubled and highly inter-connected financial institutions.

With those guiding principles in mind, I would offer the following specific suggestions as to official initiatives that would further strengthen the CDS and related OTC derivatives markets. These suggestions are all focused on measures to further mitigate systemic risk. As such they complement the CCP and bring us closer to the goals of achieving the necessary and sufficient conditions of containing systemic risk arising from these markets.

Suggestions to Mitigate Systemic Risk

First; regardless of which CCP emerges as the industry standard, the authorities must satisfy themselves that the risk mitigation features of the CCP have virtually failsafe operational and financial integrity including the capacity to absorb the default of two of its largest members. Consistent with this philosophy, I also believe that there should be a single dedicated global CCP for CDS and that any approach that co-mingles CDS settlement funds with settlement funds for other financial instruments is unwise.

Second; building on the highly effective leadership of the New York Fed and the community of domestic and international supervisors, we must sustain and strengthen the public/private cooperative efforts to ensure that the necessary steps to strengthen the industry wide infrastructure surrounding the OTC markets are implemented in a timely fashion. These necessary initiatives are outlined in Appendix B.

Third; prudential supervisors should, as a part of their regular inspections and examinations, insure that individual institutions are doing their part to insure that such institutions’ policies, practices, procedures and operating systems regarding the needed infrastructure improvements are in line with industry best practices.

Fourth; prudential supervisors should, on a case by case basis, make inquiries regarding highly concentrated positions and crowded trades and, where necessary, encourage or require individual institution to moderate the risks of such positions. On a voluntary basis, hedge funds and other unregulated financial institutions should be willing to respond to similar inquiries or face the prospects of greater direct regulation.

Finally; major market participants and their supervisors must ensure that risk monitoring, risk management and, of special importance, corporate governance practices are in line with best practices with particular emphasis on monitoring exposures and the application of rigorous valuation and price verification practices to complex transactions. Among other things, such best practices will play a constructive role in quickly resolving collateral disputes.

These five guiding principles and five suggestions to enhance official oversight of the OTC derivatives markets are, I believe, very much consistent with the spirit of the FED, SEC and CFTC Memorandum of Understanding. More importantly, they are also consistent with the broader objective of enhancing our shared vision of greater financial stability while striking a constructive and modest re-balancing of the role of marketplace and the role of public policy in fostering a more disciplined approach to financial intermediation, which of course, is essential to economic growth and rising standards of living.

* * * * * * * * * * *

The credit default swap (CDS) is the cornerstone of the credit derivatives market. A credit default swap is an agreement between two parties to exchange the credit risk of an issuer (reference entity). The buyer of the credit default swap is said to buy protection. The buyer usually pays a periodic fee and profits if the reference entity has a credit event, or if the credit worsens while the swap is outstanding. A credit event includes bankruptcy, failing to pay outstanding debt obligations or, in some CDS contracts, a restructuring of a bond or loan. Buying protection has a similar credit risk position to selling a bond short, or “going short risk.”

• The most commonly traded and therefore the most liquid tenors for credit default swap contracts are five and ten years. Historically, volumes are concentrated in the five-year maturity. One large financial intermediary estimates that 70% of the CDS volume is in this tenor, with 20% in longer maturities and 10% in shorter maturities. Liquidity across the maturity curve continues to develop, however, demonstrated by CDX indices, which are quoted in the 1, 2, 3, 4, 5, 7, and 10 year tenors.

• Standard trading sizes vary depending on the reference entity. For example, in the US, $10 million – $20 million notional is typical for investment grade credits, and $2 million – $5 million notional is typical for high yield credits. In Europe, €10 million notional is typical for investment grade credits, and €2 million – €5 million notional is typical for high yield credits.

Credit default swap indices provide investors with a single, liquid vehicle through which to take diversified long or short exposure to a specific credit market or market segment. The first index product was the High Yield Debt Index (HYDI), created by JPMorgan in 2001. Like the S&P 500 and other market benchmarks, the credit default indices reflect the performance of a basket of credits, namely a basket of single-name credit default swaps (credit default swaps on individual credits). CDS indices exist for the US investment-grade and high-yield markets, the European investment-grade and high-yield markets, the Asian markets and global emerging markets.

Unlike a perpetual index like the S&P 500, CDS indices have a fixed composition and fixed maturities. New indices with an updated basket of underlying credits are launched periodically, at least twice a year. New indices are launched in order to reflect changes in the credit market and to give the index more consistent duration and liquidity. When a new index is launched (dubbed the “on-the-run index”), the existing indices continue to trade (as “off-the-run”) and will continue to trade until maturity. The on-the-run indices tend to be more liquid than the off-the-run indices.

Probably the most important event in the CDS market in 2004 was the establishment of one credit derivative index family. The establishment of the Dow Jones CDX index family in the US and the Dow Jones iTraxx index family in Europe and Asia in the second quarter has led to increased liquidity in index products and the growth of other products (volatility, correlation) that require a standard, liquid underlying market. In DJ CDX Investment Grade and High Yield, bid/offer spreads have halved due to the liquidity benefit of having one single index family, and transaction volumes have increased.

1. Forces Driving Market Activity

Credit derivatives have been widely adopted by credit market participants as a tool for managing exposure to, or investing in, credit. The rapid growth of this market is largely attributable to the following features of credit derivatives:

1.1. Credit derivatives allow the disaggregation of credit risk from other risks inherent in traditional credit instruments

A corporate bond represents a bundle of risks including interest rate, currency (potentially) and credit risk (constituting both the risk of default and the risk of volatility in credit spreads). Before the advent of credit default swaps, the primary way for a bond investor to adjust his credit risk position was to buy or sell that bond, consequently affecting his positions across the entire bundle of risks. Credit derivatives provide the ability to independently manage default risk.

1.2. Credit derivatives provide an efficient way to short a credit

While it can be difficult to borrow corporate bonds on a term basis or enter into a short sale of a bank loan, a short position can be easily achieved by purchasing credit protection. Consequently, risk managers can short specific credits or a broad index of credits, either as a hedge of existing exposures or to profit from a negative credit view.

1.3. Credit derivatives create a market for “pure” credit risk that allows the market to transfer credit risk to the most efficient holder of risk

Credit default swaps represent the cost to assume “pure” credit risk. Bond, loan, equity and equity-linked market participants may transact in the credit default swap market. Because of this central position, the credit default swap market will often react faster than the bond or loan markets to news affecting credit prices. For example, investors buying newly issued convertible debt are exposed to the credit risk in the bond component of the convertible instrument, and may seek to hedge this risk using credit default swaps. As buyers of the convertible bond purchase protection, spreads in the CDS market widen. This spread change may occur before the pricing implications of the convertible debt are reflected in bond market spreads. However, the change in CDS spreads may cause bond spreads to widen as investors seek to maintain the value relationship between bonds and CDS. Thus, the CDS market can serve as a link between structurally separate markets. This has led to more awareness of and participation from different types of investors.

Credit derivatives provide users with various options to customize their risk profiles. Through the CDS market, investors may assume exposure to credits that do not actively trade in the cash market, customize tenor or currency exposure or benefit from relative value transactions between credit derivatives and other asset classes. With credit derivatives, investors have access to a variety of structures, such as baskets and tranches, that can be used to tailor investments to suit the investor’s desired risk/return profile. As an example, investors who purchase risk through synthetic baskets of credits may attempt to hedge this risk by purchasing single-name credit default swaps. This can be a significant driver of single-name CDS volumes.

1.5. Credit derivative transactions are confidential

As with the trading of a bond in the secondary market, the reference entity whose credit risk is being transferred is neither a party to a credit derivative transaction nor is even aware of it. This confidentiality enables risk managers to isolate and transfer credit risk discreetly, without affecting business relationships. In contrast, a loan assignment through the secondary loan market may require borrower notification and may require the participating bank to assume as much credit risk to the selling bank as to the borrower itself. Because the reference entity is not a party to the negotiation, the terms of the credit derivative transaction (tenor, seniority and compensation structure) can be customized to meet the needs of the buyer and seller, rather than the particular liquidity or term needs of a borrower.

2. Long and Short Users

The following is a brief summary of strategies employed by the key players in the credit derivatives market:

2.1. Banks and loan portfolio managers

Banks were once the primary players in the credit derivatives market. They developed the CDS market in order to reduce their risk exposure to companies to whom they lent money, thereby reducing the amount of capital needed to satisfy regulatory requirements. Banks continue to use credit derivatives for hedging both single-name and broad market credit exposure.

2.2. Market makers

In the past, market markers in the credit markets were constrained in their ability to provide liquidity because of limits on the amount of credit exposure they could have on one company or sector. The use of more efficient hedging strategies, including credit derivatives, has helped market makers trade more efficiently while employing less capital. Credit derivatives allow market makers to hold their inventory of bonds during a downturn in the credit cycle while remaining neutral in terms of credit risk. To this end, a number of dealers have integrated their CDS trading and cash trading businesses.

2.3. Hedge funds

Since their early participation in the credit derivatives market, hedge funds have continued to increase their presence and have helped to increase the variety of trading strategies in the market. While hedge fund activity was once primarily driven by convertible bond arbitrage, many funds now use credit default swaps as the most efficient method to buy and sell credit risk. Additionally, hedge funds have been the primary users of relative value trading opportunities and new products that facilitate the trading of credit spread volatility, correlation and recovery rates.

2.4. Asset managers

Asset managers have significantly increased their participation in the credit derivatives market in recent years. Asset managers are typically end users of risk that use the CDS market as a relative value tool, or to provide a structural feature they cannot find in the bond market, such as a particular maturity. Also, the ability to use the CDS market to express a bearish view is an attractive proposition for many asset managers. Prior to the availability of CDS, an asset manager would generally be flat or underweight in a credit they did not like, as most were unable to short bonds in their portfolios. Now, many asset managers may also buy credit protection as a way to take a short-term neutral stance on a credit while taking a bullish longer term view. For example, an asset manager might purchase three-year protection to hedge a ten-year bond position on an entity where the credit is under stress but is expected to perform well if it survives the next three years. Finally, the emergence of a liquid CDS index market has provided asset managers with a vehicle to efficiently express macro views on the credit markets.

2.5. Insurance companies

The participation of insurance companies in the credit default swap market can be separated into two distinct groups: (1) life insurance and property & casualty (P&C) companies and (2) monolines and reinsurers. Life insurance and P&C companies typically use credit default swaps to sell protection to enhance the return on their asset portfolio either through Replication (Synthetic Asset) Transactions (”RSATs” or the regulatory framework that allows some insurance companies to enter into credit default swaps) or credit-linked notes. Monolines and reinsurers often sell protection as a source of additional premium and to diversify their portfolios to include credit risk.

2.6. Corporations

Corporations are recent entrants to the credit derivatives market and promise to be an area of growth. Most corporations focus on the use of credit derivatives for risk management purposes, though some invest in CDS indices and structured credit products as a way to increase returns on pension assets or balance sheet cash positions.

Recent default experiences have made corporate risk managers more aware of the amount of credit exposure they have to third parties and have caused many to explore alternatives for managing this risk. Many corporate treasury and credit officers find the use of CDS appealing as an alternative to credit insurance or factoring arrangements due to the greater liquidity, transparency of pricing and structural flexibility afforded by the CDS market. Corporations are also focused on managing funding costs; to this end, many corporate treasurers monitor their own CDS spreads as a benchmark for pricing new bank and bond deals and are exploring how the CDS market can be used to hedge future issuance.

3. Risk Management Issues

The risk profile of a credit default swap is essentially equivalent to the credit risk profile of a bond or loan, with some additional risks, namely counterparty risk, basis risk, legal risk and operational risk.

3.1. Counterparty risk

Recall that in a credit event, the buyer of protection (short risk) delivers bonds of the defaulted reference entity, or other eligible assets, and receives par from the seller (long risk). Therefore, an additional risk to the protection buyer is that the protection seller may not be able to pay the full par amount upon default. This risk, referred to as counterparty credit risk, is a maximum of par less the recovery rate, in the event that both the reference entity and the counterparty default. While the likelihood of suffering this loss is remote, the magnitude of the loss given default can be material. Counterparties typically mitigate this risk through the posting of collateral (as defined in a credit support annex (CSA) to the ISDA Master Agreement) rather than through the adjustment of the price of protection.

3.2. Basis risk

If the basis is positive, then the credit default spread is greater than the bond’s spread. Positive basis occurs for technical and fundamental reasons. The technical reasons are primarily due to imperfections in the repo market for borrowing bonds. Specifically, if cash bonds could be borrowed for extended periods of time at fixed costs, then there would not be a reason for bonds to trade “expensive” relative to credit default swaps. If a positive basis situation arises, investors would borrow the bonds and sell them short, eliminating the spread discrepancy. In practice, there are significant costs and uncertainties in borrowing bonds. Therefore, if the market becomes more bearish on a credit, rather than selling bonds short, investors may buy default protection. This may cause credit default swap spreads to widen compared with bond spreads.

Another technical factor that causes positive basis is that there is, to some degree, a segmented market between bonds and credit default swaps. Regulatory, legal and other factors prevent some holders of bonds from switching between the bond and credit default swap markets. These investors are unable to sell a bond and then sell protection when the credit default swap market offers better value. Along this vein of segmented markets, sometimes there are market participants, particularly coming from the convertible bond market, who wish to short a credit (buy default swap protection) because it makes another transaction profitable. These investors may pay more for the protection than investors who are comparing the bonds and credit default swap markets. This is another manifestation of the undeveloped repo market.

A fundamental factor that creates positive basis is the cheapest-to-deliver option. A short CDS position (long risk) is short the cheapest-to-deliver option. If there is a credit event, the protection buyer (short risk) is contractually allowed to choose which bond to deliver in exchange for the notional amount. This investor will generally deliver the cheapest bond in the market. When there is a credit event, bonds at the same level of the capital structure generally trade at the same price (except for potential differences in accrued interest) as they will be treated similarly in a restructuring. Still, there is the potential for price disparity. Thus, protection sellers may expect to receive additional spread compared to bonds for bearing this risk. This would lead to CDS spreads trading wider than bond spreads and therefore contribute to positive basis. Thus, when investors invest in credit default swaps, they risk entering into a position that is relatively expensive as compared to entering into a similar risk position with bonds or loans.

3.3. Legal risk

Credit default swaps investors may face legal risk if there is a credit event and the legality of the CDS contract is challenged. Although not without specific disputes, as previously stated, ISDA’s standard contract has generally proven effective in the face of significant credit market stress. The large majority of contracts have tended to settle without disputes or litigation. As discussed in Section IV of the main CRMPG II Report, legal issues can and do arise in this market from time to time. Most of these disputes have involved contractual claims related to whether there was a credit event under the terms of the contract, the identity of the reference entity, the timeliness of notices delivered under the contract, the nature of the assets deliverable into the contract and the timeliness of the delivery of assets for settlement purposes.

3.4. Operational risk

• Credit default swaps are leveraged transactions. Unlike a transaction related to floating rate notes or corporate bonds with a similar amount of credit risk, principal amount is not exchanged upfront in a CDS. As noted above, large and/or sophisticated counterparties typically mitigate the risk of non-performance by the daily updating of collateral accounts reflecting gains or losses on positions.

• Credit default swaps are over-the-counter transactions between two parties and it is difficult to estimate the amount of default swaps which are outstanding. While the net amount of all credit default swaps is zero, as the amount of long protection positions must be equal to the short protection position, there may be market participants who are very long or short exposure to specific credits.

• In marking the value of an open credit default swap to market, investors must estimate a recovery rate. If investors deviate from industry standard recovery rates, they can calculate different values for their open contracts.

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Release here.

Economics - China Undergoes A ‘Severe’ Soft-Landing

China – As exports from China shrink dreadfully, the country can only look to its domestic-based services sector for growth over the near term. Nevertheless, a longer and deeper than expected recession in the United States may eventually send the growth of the services sector in China into a tailspin as well. If there is still no sign of bottoming out in the United States economy by 2H09, it is very likely that China would undergo a severe hard-landing and the world economy would slip into a deep recession then.

Admittedly, the export growth of China for November 08 was shockingly and depressingly low. Exports from China to the world in November 08 shrank dreadfully by 2.2% from the corresponding month in the previous year. In October 08, the y-o-y export growth of China recorded a remarkable rate of 19.2%. Given that the y-o-y import growth of China dipped sharply from 15.6% in October 08 to -17.9% in November 08, we expect exports from China to continue declining terribly over the next few months.

As exports from China shrink significantly, the country can only look to its domesticbased services sector for growth over the near term. Services account for about 40% of the China economy. Based on the y-o-y growth of retail sales in November 08, it suggests that the services sector in the country is still holding up relatively well. Retail sales in the country for November 08 expanded by 20.8% as compared to 22.0% in October 08. Be that as it may, it is clear that the growth momentum of the services sector has shown some signs of softening in recent months.

We expect that the growth of the China economy would continue to be supported by the domestic-based services sector over the near term, as the export-oriented manufacturing sector continues to slump. University of Michigan’s Consumer Sentiment Index for December 08 continues to drift at a discouragingly low level of 59.1. In November 08, it registered 55.3. This suggests that consumer spending in the United States would continue to remain sluggish at least in the near future. Given that about 15% of China’s total exports directly go to the United States, this will continue to adversely affect the manufacturing sector in the second largest economy in Asia, that is for sure. If the present recession in the United States economy turns out to be deeper and longer than expected, we may eventually see the growth of the services sector to be sent into a tailspin as well. All this will lead to a severe hard-landing in China and thus a deep recession in the world economy.

Besides a possible hard-landing in the China economy, the other risk faced by the country is depression. While we are glad that inflationary pressure in the country has eased off, the fact that it has happened too drastically raises concern that the China economy may be heading towards a state of depression next year, especially in the wake of a substantial slowdown in the world economy. The Consumer Price Index of China dipped sharply from 4.0% in October 08 to 2.4% in November 08, while the Producer Price Index of the country fell significantly from 6.6% to 2.0% during the period . Nevertheless, it is premature to ring the depression warning bell, as the two price indices still stay at a positive territory.

All things considered, we estimate that the y-o-y real GDP growth of China for 4Q08 to slow to about 7.5-8.0% from 9.0% in 3Q08. In other words, we are expecting a y-o-y real GDP growth rate of around 9.3-9.4% for China in 2008. The International Monetary Fund expects the China economy to expand at a y-o-y rate of 9.7% this year.

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Goldman and the Zio Gang Selling The USA $

Dec. 15 (Bloomberg) — The biggest foreign-exchange strategists and investors say the best may be over for the dollar after a four-month, 24 percent rally.

The currency weakened 5.9 percent measured by the trade- weighted Dollar Index after strengthening between July and November as investors bought the greenback to flee riskier assets and repay dollar-denominated loans from lenders reining in credit. Ever since peaking on Nov. 21, the dollar fell against all 16 of the most-widely traded currencies, according to data compiled by Bloomberg.

U.S. policy makers are flooding the world with an extra $8.5 trillion through 23 different plans designed to bail out the financial system and pump up the economy. The decline shows that the increased supply of money may be overwhelming investors just as the government steps up debt sales, the trade and budget deficits grow and de-leveraging by investors slows.

“The dollar will go to new lows as the U.S. attacks its currency,” said John Taylor, chairman of New York-based FX Concepts Inc., which manages about $14.5 billion of currencies.

Citigroup Inc., Goldman Sachs Group Inc., BNP Paribas SA and Bank of America Corp. predict further weakness. Last week was the first time in almost a month that consensus estimates for the dollar against the euro through 2009 fell, according to the median forecast of 47 strategists surveyed by Bloomberg.

Taylor, whose firm manages the biggest hedge fund focusing on foreign exchange, said while the dollar may strengthen next year, it will fall to a record low against the euro in 2010 and to a 13-year low of 80 per yen as soon as 2009.

The dollar fell to 90.88 yen as of 12 p.m. in Tokyo from 91.21 late in New York on Dec. 12. It declined to $1.3455 per euro from $1.3369.

‘Turning Point’

Speculation that the dollar has peaked gained steam last week as the currency plunged 4.9 percent against the euro to $1.3369, its biggest drop since Europe’s common currency was created in 1999. It weakened 1.75 percent versus the yen.

“We’re at a turning point in terms of dollar dynamics,” said Jens Nordvig, a New York-based strategist at Goldman Sachs, the biggest U.S. securities firm to convert to a bank. “The dollar shortage has been addressed and we’ll see people start to focus on other things and those are all dollar negative.”

After rising from $250 billion in September and October, dollar cash positions at U.S.-based banks have stayed at about $800 billion since Nov. 1, according to Nordvig.

A survey last month by New York-based Sanford C. Bernstein & Co. found that 63 percent of hedge-fund managers said they are about half done selling securities to reduce their use of borrowed money after financial companies cut back on credit following almost $1 trillion in writedowns and losses since the start of 2007. Twenty-three percent said they were three-quarters finished.

Yen Example

Goldman Sachs says the dollar may weaken to $1.45 per euro by the end of next year. Up until Dec. 11, the firm forecast that it would end 2009 at $1.30. The median estimate in a Bloomberg survey is for the currency to finish next year at $1.25.

Dollar bulls say it’s a mistake to bet against the currency now because Treasury yields are falling to record lows even as the government prepares to sell more than $1 trillion of debt, a sign there’s no end in sight to demand for the safest U.S. assets. They also say the yen, which typically rallies as risky assets decline, is appreciating.

“The yen’s strength falls into our theory that the risk- aversion trade is not off the table,” said Peter Rosenstreich, chief market analyst at Geneva-based currency trading firm ACM Advanced Currency Markets. “The fact that the yen continues to gain strength validates our theory in the longer term, the dollar safe-haven trade is not done yet.”

‘Bad News’

Robert Sinche, the head of global currency strategy at Bank of America in New York, the third-largest U.S. bank, says the dollar is bound to weaken because investors are starting to focus on traditional measures of value such as relative interest rates, budget deficits and trade balances.

As more loans are repaid, there is less need for dollars, forcing investors to value the currency on metrics such as relative interest rates, budget deficits and trade balances. By those measures, the greenback should weaken, according to Sinche.

“A lot of the reasons why the dollar went up are not sustainable and have started to disappear,” said Sinche, who predicts the currency will weaken to $1.44 per euro as early as March 31. “Bad news about the U.S. economy is beginning to be bad news for the dollar.”

Lower Rates

The Federal Reserve will cut its target rate for overnight loans between banks in half to 0.5 percent on Dec. 16, the lowest level since 1958, according to the median estimate of 84 economists in a Bloomberg survey. The European Central Bank’s target rate, currently 2.5 percent, will bottom in 2009 at 1.75 percent, according to a Bloomberg survey of economists, making the euro relatively more attractive.

Treasuries due in two years yield 1.49 percentage points less than German bunds of similar maturity, near the most since mid-October. Three-month bill rates fell below zero last week for the first time. Bill Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., which oversees the world’s largest bond fund, said “Treasuries have some bubble characteristics.”

“The government and the Fed cannot continue to talk about trillions of dollars of financing and expansion of the Fed’s balance sheet without the dollar going south,” Gross said in a Dec. 10 interview with Bloomberg Television

Budget Deficit

Spending to shore up the financial system caused the U.S. government’s budget deficit for the first two months of fiscal 2009 that started in October to balloon to $401.6 billion, the Treasury Department said Dec. 10.

“It’s absolutely going to get worse before it gets better,” said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado. “We’re looking at a $1 trillion deficit, and that’s before the next stimulus package. If Treasury spends all of TARP, it could be $1.2 trillion to $1.3 trillion.”

The $700 billion Troubled Assets Relief Program is one of the programs set up by the government and the Fed to try to bring the economy out of the worst recession since World War II. President-elect Barack Obama also plans a stimulus package that House Speaker Nancy Pelosi said may total $500 billion to $600 billion.

The dollar’s rally may have hurt the trade balance, and earnings of companies that depend on sales overseas. U.S. exports slid to a seven-month low in October, causing the trade deficit to swell to $57.2 billion, the Commerce Department said Dec. 11. American exports dropped 2.2 percent to $151.7 billion as foreign purchases of U.S. aircraft, automobiles, chemicals and food waned. The trade gap was projected to be $53.5 billion.

Shrinking Economy

The U.S. economy may contract 3.9 percent this quarter and 2 percent in the first three months of 2009, according to the median estimate in a Bloomberg poll.

“Rapid deterioration in the U.S. economy, coupled with the adverse effects of monetary and fiscal stimuli, do not bode well for the dollar,” Citigroup strategists Todd Elmer, Michael Hart, James McCormick and Aerin Williams wrote in a report from New York on Dec. 12. The New York-based bank “foresees short-term dollar weakness, against both Group of 10 and emerging-market currencies,” they wrote.

The Citigroup strategists predicted on Nov. 6 that the euro, which was trading at $1.2715, would rally toward $1.33.

Paris-based BNP Paribas, Europe’s third-largest bank, recommends buying the euro versus the dollar amid signs that equity markets may be stabilizing. The MSCI World Index is up 16.6 percent since falling to a 5 1/2-year low on Nov. 21, the same day the Dollar Index peaked.

‘Positive Euro Bias

“With equity markets broadly stable with a positive bias and volatility easing, we expect the euro-versus-dollar declines to be capped at the $1.28” level, a team of strategists headed by Hans-Guenter Redeker in London wrote in a report Dec. 10.

Like Goldman Sachs, London-based Barclays Plc, the U.K.’s third-biggest bank, forecasts the dollar will weaken to $1.45 per euro by the end of 2009, according to data compiled by Bloomberg. New York-based Morgan Stanley strategists Stephen Jen and Spyros Andreopoulos, who in August advised clients to buy the dollar, said in a Dec. 11 report that the currency may strengthen in the first half of 2009, before “underperforming most other currencies” as the global economy recovers.

“We’re seeing that correlation between equities and the dollar break down,” said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG, the world’s biggest currency trader, according to a 2008 Euromoney Institutional Investor Plc survey. “The fact that the dollar is weakening in this environment probably tells you a bit more focus is coming back on the fundamentals of the U.S. economy.”

Indonesian Village Corruption

Village corruption in Indonesia1

Fighting corruption in the World Bank’s

Kecamatan Development Program

Andrea Woodhouse

June 2002

The author is a World Bank consultant working on a World Bank-funded community development project in Indonesia, the Kecamatan Development Program (KDP). The views expressed in the paper are the author’s own and do not necessarily reflect the views of the World Bank or KDP.

1 A previous, unpublished version of this paper appeared under the title The Dynamics of Rural Power in Indonesia: Fighting Corruption in a

World Bank Community Development Program

T a ble of C ont e nts

TABLE OF CONTENTS I

EXECUTIVE SUMMARY II

ACKNOWLEDGEMENTS IV

INTRODUCTION 1

WHY KDP? 2

ANALYTICAL FRAMEWORK 3

DEFINITIONS 3

I. THE CONTEXT OF COMMUNITY DEVELOPMENT IN INDONESIA 7

POLITICAL CHANGE & DECENTRALIZATION 7

VILLAGE LIFE IN INDONESIA 9

II. CORRUPTION IN KDP 15

WHAT IS KDP? 15

DIFFERENT TYPES OF CORRUPTION IN KDP 18

FIGHTING CORRUPTION IN KDP: MAKING THE DESIGN OPERATIONAL 26

MODELING CORRUPTION: ANALYSIS OF A CASE IN KDP 32

III. RECOMMENDATIONS FOR IMPROVEMENT 35

POLITICAL ASSUMPTIONS 35

INCENTIVES 36

FUTURE STRATEGY 42

CONCLUDING THOUGHTS 44

ANNEX I 46

HISTORICAL BACKGROUND 46

ANNEX II 47

CORRUPTION MAP OF THE KDP PROJECT CYCLE 47

E x e c utiv e Su m m ar y

What works to limit corruption in a large, rural development project in a country with endemic corruption, a weak legal system and a history of top-down political control by a powerful state bureaucracy?

The Kecamatan Development Program (KDP) is a $370 million World Bank community-driven development project in Indonesia that funds infrastructure and small loans in over 20,000 villages nationwide.2 Its approach to combating corruption is based on an analysis of the political economy of corruption in Indonesian villages and is two-pronged. First, it aims to change the conditions that breed corruption in villages by breaking existing monopolies over information, resources, and access to justice. Second, it aims to prevent corruption in the project itself by skewing the incentives of the project structure against corrupt behavior.

At the heart of KDP’s anti-corruption approach is the principle that villagers themselves have decision- making power over planning, procurement and management of funds. Some of the concrete measures of its approach include:

simplifying financial formats so that they can be understood easily by villagers

transferring funds directly into collective village bank accounts

Although these measures have had some success, corruption in KDP persists. This paper examines where, why and how this takes place. Its findings are based on a series of in-depth, ethnographic field interviews, a review of the KDP field experience, an incentives analysis of the KDP project cycle and a survey of the existing literature on village governance in Indonesia. The paper aims to get a sense of the anatomy of corruption in KDP villages: of how the actors perceive their interests, what motivates them, what kinds of constraints they face, and what kinds of steps they take to resolve their problems. The underlying aim is to assess what kinds of anti-corruption measures are likely to succeed in a local-level project that exists in a systemically corrupt environment and whose size and breadth (20,000 villages nationwide) makes centralized control and monitoring of funds impossible. The paper use corruption also as a lens through which to view snapshots of social and political change in Indonesian villages.

The paper argues that corruption is primarily a problem of incentives, and can be fought effectively only by changing the costs and benefits attached to corrupt behavior. It claims also that local context and social norms are key to understanding how these incentives can be changed in order to reduce corruption.

The first part of the paper examines the conditions that enable corruption to flourish in Indonesian villages. Corruption in Indonesian villages is encouraged by a combination of factors. High levels of bureaucracy and red tape multiply the loci of rent-seeking in villages. A history of impunity for corruptors, combined with a legacy of oppression for whistleblowers, means that it is almost never in the interest of any individual villager to protest corruption. The Indonesian state’s administrative structure concentrates power in village elites which, combined with a weak and corrupt judicial system, impedes poor people’s access to justiceand control over decision-making. Finally, the Suharto government’s conscious strategy of de-politicizing villages, combined with the use of development funds as a means of patronage and control, has created an environment where corruption is rarely resisted.

The second part of the paper examines corruption in KDP, based on a review of the KDP field experience and an incentives analysis of the project cycle. Corruption in KDP takes several forms, including budget mark-ups, collusion, bribes and kick-backs to local officials. The analysis reveals that the elements of the project most effective in limiting corruption are transparency, community participation, and the provision of independent channels for resolving complaints. Information and local control are key elements in both preventing and fighting corruption: the most successful strategies for fighting corruption in KDP have hinged on publicizing anti-corruption activities, garnering wide local support, and using sanctions credibly. Project facilitators are also key to fighting corruption: they provide a channel of information to villagers that is independent of local government and, because they are backed by the central KDP structure, they have more protection from threats and intimidation than ordinary villagers. There is evidence also of some governance spillovers from KDP, illustrated by examples of villagers using their experience of KDP as a precedent for protesting against corruption in other projects.

The incentives analysis of the project cycle identifies the stages of the project cycle that are most vulnerable to corruption. These lie at the stages of proposal preparation (formation of false borrower groups forsmall loans); release of funds (collusion among bank account signatories to embezzle funds); and implementation (collusion and corruption in procurement). The analysis highlights several ways in which corruption in KDP could be better prevented. These include improving information dissemination; working with social sanctions to make the incentive structure less conducive to corruption; increasing incentives for KDP staff to fight corruption; instituting measures at specific stages of the project cycle intended to limit monopoly, clarify discretion, and improve accountability; and supporting the capacity of project facilitators to come up with flexible local solutions to their problems.

A c k no w le dg e m e nts

Several people gave me help and advice at all stages of the report. It is the result of their efforts as much as mine.

First of all, I would like to thank Scott Guggenheim, whose help and guidance provide the foundation for the entire paper. Second, I would like to thank Bob Klitgaard (RAND), who has continually gone far beyond the call of duty as a peer reviewer and has advised me not only on the paper itself but also on how best to make it useful. Third, I would like to thank Sarwar Lateef, who has given considerable ongoing support to the research and its wider aims.

The KDP team in Jakarta helped me at all stages. I would like to give special thanks to Ela Hasanah (KDP’s project historian and a member of the team that originally designed KDP), who collaborated with me at every stage of the research. I am grateful to Pieter Evers, who contributed an analysis of the rural judiciary in Indonesia to this paper and whose work on village governance informed many of my initial ideas. Ibnu Taufan, Susan Wong , Susanto Simanjuntak, Victor Bottini and staff from KDP’s “Handling Complaints Unit” helped identify problems, arrange fieldwork and assess field findings. Milissa Day gave me invaluable advice on fieldwork and writing.

Several people helped me with fieldwork. These include the villagers who participated in the research; my field assistant, Liebe Ibet; and local KDP field staff: Martius, Subeyang, Idrus, John Masengi, Sentot Satria and several kecamatan facilitators. The facilitators deserve special mention for helping me despite their already-overstretched workload. They are the front line for anti-corruption activities in KDP and deserve credit for their efforts to fight corruption despite the risk of threats and intimidation involved in doing so.

I am indebted to many people who read the draft and suggested improvements. These include my peer reviewers, Susan Rose-Ackerman (Yale), Robert Klitgaard (RAND), Michael Richards (World Bank) and Paul McCarthy (World Bank). They also include Surendra Agarwal, Vivi Alatas, Judith Edstrom, Ben Fisher, Cyprian Fisiy, Richard Holloway (UNDP), Kai Kaiser, Menno Pradhan, Naseer Rana, Unggul Suprayitno and Stefanie Teggemann. I would like to thank Stephen Woodhouse (Unicef) for sharing his insights on social development in Indonesia, and would like to thank David Madden and Claire Smith for their comments and ongoing support throughout the analysis.

I am grateful for having had the opportunity to present and discuss my findings with classes of students at the John F. Kennedy School of Government at Harvard University and the Center for Agrarian Studies at Yale University. I would like to thank the students themselves for their insightful comments, and would like to thank Lant Pritchett (Harvard) and Michael Dove (Yale) for inviting Scott Guggenheim and me to their classes. I am also grateful to Peter Eigen (Transparency International), who gave me the same opportunity as part of his anti-corruption course at the School of Advanced International Study (SAIS) at Johns Hopkins University.

Introdu c tion

A consensus is emerging in a large number of countries that effective poverty reduction requires a strong governance framework: accountable institutions, participatory political systems, transparency and the rule of law. Fighting corruption is an essential part of this. Corruption hampers growth; it diverts public services from the poor; and it discourages foreign investment in developing countries.3

The World Bank’s anti-corruption strategy calls for action in four key areas:

Preventing and reducing corruption in World Bank projects

Assisting countries that ask for help in reducing corruption

Incorporating concern for corruption into country analysis and lending

Contributing to the international effort to fight corruption

This report is about the first area of action: preventing and reducing corruption in World Bank projects. A first step towards this is an examination of different types of existing projects to see how corruption takes place in them, which design features work to allow it or prevent it, and what lessons can be drawn from their experiences so that future projects limit corruption instead of contributing to it.

This report supports that aim. It consists of an analysis of where, why and how corruption occurs in a large decentralized community development project in Indonesia, the Kecamatan Development Program (KDP).4 KDP is one of the first World Bank projects to make anti-corruption measures an explicit element of its design. Reviewing the analytical framework and samples of the project’s field experience gives us useful material for improving future programs that are similar in design.

The key assumption of the report is that corruption is primarily a problem of incentives, and can only be fought effectively by changing the incentive structures attached. The paper is divided broadly into three parts:

An examination of the context of community development in Indonesia

An analysis of KDP, based on field research, to see

- what kinds of corruption there are in KDP

- where the incentives in the project cycle lie for corruption

- which project design features enable or prevent corruption

- what the best strategies have been for fighting corruption in the project

Recommendations for improvement

3 On the effect of corruption on growth, see Mauro, Paulo. “Corruption and Growth,” Quarterly Journal of Economics, Aug. 1995, 110 (3), pp. 681-712. For the effect of corruption on public service delivery and foreign investment, see World Bank. Helping Countries Combat Corruption: the Role of the World Bank. Washington, DC: Poverty Reduction and Economic Management (PREM) Network, 1997, or World Bank. Helping Countries Combat Corruption: Progress at the World Bank since 1997. Washington, DC: Operational Core Services (OCS) and Poverty

Reduction and Economic Management (PREM) Network, 2000.

4 For information about KDP, see its annual report. Kecamatan Development Program. Second Annual Report 1999/2000. Kecamatan

Why KDP?

Why study KDP? Three features of KDP make it an especially interesting subject of study when thinking about how to fight corruption in development projects.

First, KDP is different from traditional development projects. It takes as its starting point the question ‘what do villagers want?’ rather than ‘what do villagers need?’, drawing on community development experience that suggests both that communities themselves are best at identifying what they need and that the results, when they do so, are more likely to be sustainable. In other words, it is demand-driven. It is also highly decentralized. Most decisions are taken not at the center but in over 900 sub-districts (kecamatan) and 20,000 villages across Indonesia.

KDP’s ‘different-ness’ makes it interesting for a few reasons. First, its size and disparateness make it impossible to control from the center. This diminishes the usefulness of traditional anti-corruption instruments, such as audits and central monitoring. Instead, KDP tries to enable villagers themselves to become agents of anti-corruption, by trying to ensure broad participation and transparency. Second, KDP is an experiment. The hypothesis, borne out by the findings of a growing body of research, is that this kind of project will work better than centralized, supply-driven projects in terms of sustainability, benefiting poor people, and—of special interest to this report—in terms of corruption.5 But we don’t really know. Such projects are fairly new for the World Bank and for Indonesia, so the sample of experience from which to draw on is limited. That is why it is important to investigate how KDP works and, more importantly, why it works the way it does.

Despite its differences, KDP is still similar enough to other development projects to provide useful cross- project comparisons. It is large, and covers an area of great geographic and cultural diversity. Like all World Bank projects, it works through government channels. Unlike bilateral or NGO projects, the funds are in the form of a loan to the Government of Indonesia (GOI), so KDP could not bypass the government completely even if it wanted to do so. And like other projects in the country, KDP is in Indonesia. The connection here is not spurious: it means that the project operates in a very specific sociological and historical context, certain features of which—such as the administrative setting—have a concrete effect on how the project can be run.

Second, KDP is in a country at a critical juncture in its history. Indonesia’s reform process is unstable. Although great changes have taken place, many of the authoritarian power structures of the Suharto-led ‘New Order’ period remain in place, and corruption is entrenched.6 The proposed reforms threaten the interests of some powerful forces in Indonesia, including those of the influential military.7 Against this background, Indonesia is trying nevertheless to push ahead with its ambitious program of reforms. KDP is at the front of this reform agenda. It is as much a governance program as a poverty alleviation program

5 For a discussion of the links between participatory, demand-driven community development approaches and sustainability, see Gross, Bruce; van Wijk, Christine; and Mukherjee, Nilanjana. Linking Sustainability with Demand, Gender and Poverty. Water and Sanitation Program:

December 2000.

7 Only about 25% of the military’s budget comes from government sources. The rest comes from off-budget activities, including businesses and protection rackets in local areas. Reforms that threaten to reduce their power thus directly threaten their material interests. For a discussion of the role of the military, see International Crisis Group. Indonesia: Keeping the Military under Control. International Crisis Group: 2000. Retrieved

and, where it works as it should, challenges elite control of village resources and decisions. The question is whether, in such a political context, a program such as KDP can itself be a significant agent of change, crystallizing nascent trends towards democracy into concrete changes in how village decisions are made. Corruption is a lens through which to view this.

Third, KDP’s network gives us a unique window onto the state of village governance in Indonesia. Although rapidly urbanizing, Indonesia is predominantly rural: most of its population live in villages. But, whereas a great deal of attention is being paid to the effect of democratization at national level, very little is known about the extent to which such changes are reflected at village level. Villages are sites of hierarchy that, institutionally, have favored the interests of the powerful. KDP works closely with village institutions and has a network of over 2000 facilitators working in over 20,000 villages across Indonesia. It thus affords us a rare inroad into seeing what is happening in these villages, yielding a rich and unusual information set about social change in Indonesia. Focusing on corruption enables us to examine issues closely related to this change, such as accountability, participation and control of resources.

This report thus has a dual purpose. large, decentralized, community-level snapshots of social transformation in

Its primary purpose is to ask how corruption can be prevented in a development project. Its subsidiary purpose is to gain interesting side Indonesia: how is it happening, and what does it look like?

A n alytic al fra m e w ork

In order to ask how corruption can be prevented in a project like KDP, this report starts with explaining what we mean by corruption and by outlining our analytical approach.

Definitions

Corruption does not consist simply of bribes in grubby envelopes, but comes in many forms. It exists when firms collude to fix prices above the market rate. It exists when civil servants demand a cut of funds ‘to process’ public projects. It exists when officials hire their relatives for jobs that others could do better. The forms of corruption are wide and various.

The World Bank uses a simple definition that covers many types of corruption: the abuse of public office for private gain.8 This kind of definition is common in the corruption literature.9 It is broad enough to encompass most types of corruption, including those that are difficult to measure, such as nepotism. However, it is focused enough to draw parameters around corruption: to distinguish, for instance, between bribery in the public sphere and gift-giving in the private sphere.10 Furthermore, by mentioning neither the law nor morality, it allows two important distinctions to be made: (a) between what is corrupt and what is illegal; (b) between what is corrupt and what is immoral. Although there may be large overlaps among these concepts, their contours are distinct and it is important to keep them analytically separate.

8World Bank, Helping Countries Combat Corruptionp. 8.

Picking the right kind of analytical approach to combating corruption is instrumentally as well as theoretically important. Many anti-corruption strategies fail. Often, this is because they do not make the right analytical distinctions and are excessively legalistic or moralistic. The anti-corruption literature suggests that such anti-corruption campaigns are unlikely to have lasting effects.11

Legalistic anti-corruption strategies attempt to combat corruption through strengthening laws or creating rules. They focus on creating a regulatory environment that tightens the loopholes for corruption. The assumption is that corruption can be fought by strengthening regulations against corrupt behavior.

Taken by itself, this assumption is flawed. Although regulations are arguably a necessary condition for fighting corruption, they are not a sufficient condition. Almost all countries have anti-corruption laws on their books, yet the incidence of corruption among countries varies widely, without correspondence to the strength or number of existing rules. Anti-corruption drives that are limited to regulations may paradoxically increase opportunities for corruption, through breeding regulations and red tape. More fundamentally, though, they fail to distinguish clearly between rules and the motivation for following rules. Fighting corruption demands focusing on motivations and opportunities, not the rules themselves.

Anti-corruption strategies couched in terms of morals fail for similar reasons. Such anti-corruption strategies talk of ‘cleaning up’ and of the return of ‘honesty’ and ‘values’ in public life. They imply that corruption would be rooted out if only corrupt officials were replaced by honest, public-spirited individuals. The problem with this is that the proper locus of morality ultimately is people, whereas corruption lies in systems. Combating corruption effectively demands regarding it as a problem of systemic rather than personal failure. When an official steals money from a development budget, her motive may simply be to send her son to a good school; and the important failure is not in her but in that her system allows her to get away with stealing. Fighting corruption sustainably demands changing the system of rewards and punishments so that stealing is no longer in her interest or anyone else’s.

With both legal and moral approaches, success is subject to circumstance; when they succeed they do so on an ad-hoc basis and with largely temporary effects. This is because they fail to recognize that corruption is a problem of incentives, not of wickedness or rules. The most important element of any sustainable anti- corruption strategy is

to change the underlying system of incentives so that agents are no longer motivated towards corrupt behavior.

This is the key premise of this report. In this kind of framework, legal actions are important, but only insofar as their enforcement changes the cost-benefit equation.

The premise contains a hidden assumption about the way people act. It assumes that people are rational and self-interested—that, given a choice, they follow whichever course of action benefits them most. The assumption, however, need not be narrow or economistic. It can be made with varying degrees of strength. A strong version of the claim might define self-interest as allegiance only to the individual self and define benefits in material terms. We make a weaker version, which may have diminished explanatory power but

which we believe captures better why people act the way they do. Here, ’self-interest’ may encompass allegiance to one’s family or peer group as well as to oneself, so that the claim can explain human behavior motivated by feelings of solidarity or social bonds. The benefits need not be calculated materially, but may include social status, power or some other intangible reward. And, although this version still implies that at some level self-interest is a universal phenomenon, it leaves room for its content to vary widely across different cultural settings.

Indeed, one assumption of this report is that social norms have a significant effect on how people perceive their interests. The practical challenge for projects wishing to minimize corruption is to understand how the social norms work in the particular context of the project and to set up the incentive systems accordingly. The way that actors in a village-level community project in Indonesia perceive their interests will differ from the way that those in a national highways project in China perceive theirs, and the effectiveness of different anti-corruption instruments will vary accordingly.

The difference, however, lies not simply in the social norms themselves, but in how they get expressed through institutions. The more grassroots and local the project, the more important the social norms and personal relationships characteristic of village institutions are likely to be. The opposite is true of a large- scale project whose participants are unknown to one another.

It is precisely for these kinds of reasons that an anti-corruption project design or strategy cannot be formed a priori. It demands instead a knowledge both of local context and of the experience of similar types of projects. Knowledge of local context is best formed with the involvement of local participants, who often know best which kinds of incentives will have relative importance.

In the framework of incentives, we can see that

Corruption exists where the benefits outweigh the costs

 The benefits may include the amount of money the agent stands to gain, the social benefits that might accrue from this money, and the increase in power that might come from the transaction

 The costs will include the severity of punishment, the monetary value of any fines, and any associated social costs.

 The calculation of benefits and costs will depend on the risk of getting caught and being held accountable. This ratio will be lower where the agent has wide discretion over the transaction—in other words, where few other agents are able to see what is happening—and where there are few checks and balances over the agent’s actions.

Methodology

The report is not a survey. It is an investigation of process. Its aim is to get a sense of the anatomy of corruption in KDP villages: of how the actors perceive their interests, what motivates them, what kinds of constraints they face, and the steps they take to resolve their problems.

With this in mind, we attempted for the first part of the analysis to reconstruct a limited number of corruption cases in different KDP locations. In each village, we tried to interview most of the people involved in the corruption case, from ordinary villagers to local government officials, ‘corruptors’ included, to see how each of the main players experienced and perceived the case. We attempted also to get the stories of those unconnected with the case. This enabled us to get a multi-layered, ‘thick’ description of what had happened. Sometimes, interviewees participated by drawing maps and social diagrams of the village.

The second major part of the research involved a review of samples of the KDP field experience and a cost-benefit analysis of the KDP project cycle. The project is too large and complex to be susceptible as a single entity to a cost-benefit analysis. To do it, therefore, we (a) broke the project cycle down into a series of discrete steps, small enough to be analyzed in terms of incentives; and (b) analyzed each step of the project cycle in terms of incentives for corruption. We did this by asking, at each stage of the project cycle:

Who are the main actors?

What are the main operations under their control?

What discretion do they have over their actions?

What interest do they have in engaging in corrupt practice?

What sanctions apply? What is the risk of being discovered?

What are the accountability mechanisms attached? Do the actors have to explain themselves?

What are the social norms attached? Do these affect how the actors will perceive their interests?

The findings were drawn from an analysis of KDP corruption cases, field research, and the views of KDP staff. In assigning weight to incentives they attempt to take into account as much as possible the views of project participants.

I. T h e c ont e x t of c o m m unity d e v elop m e nt in Indon e sia

Politic al change & de c entralization

Indonesia is in transition. At least two elements of this transition are likely to have a major impact on village life in Indonesia. One is the effect of political change. The other is decentralization.

Political change

People… aren’t really scared to report problems. They’re not scared because things have changed. Before, people used to be scared of the army, or the police. They’re not anymore.

District-level KDP consultant, Toli-Toli district, Central Sulawesi

The Indonesian political environment has changed significantly since the demise of the New Order. It has been characterized by a trend toward democratization and the strengthening of civil society, an attempt to redefine the position of the military in political life, and the devolution of power to local government. It has been characterized also by a breakdown of law and order, a rise in civil unrest, separatism, and inter- communal violence.

These changes have affected village life in Indonesia in several ways. In some places, they have served to make latent conflict overt. The New Order government placed an emphasis on order and harmonious social relations, and potential conflict was largely stifled.

Political changes at the center have altered this. Exacerbated by economic difficulties and enabled by a breakdown in the will and ability of the security apparatus to impose order, they have removed the underpinnings of an apparent stability. In its space, tensions have emerged over issues such as land, access to resources and political power—tensions manifested often in ethnic terms. What it means for these villages is that once-set relationships are in flux: old hierarchies are being redefined and cross-cut with new cleavages, leading to a shift in the way villagers perceive their respective interests.

Political reform (reformasi) has also changed the landscape. The impact of reformasi at the national level, manifested in open criticism and protest, has been significant.12 Its impact at village level is unclear. Almost no evidence has come forward to suggest what type of impact, if any, reformasi is having on political expression in villages. Anecdotal evidence from this report suggests that there has been some kind of trickle-down effect, whereby villagers have some awareness of national changes and are conscious of increased possibilities for protest.13 There thus seems to be some scope for a renewal of political expression in villages, if limited at present to a heightened optimism in people’s minds. However, whether

this changes local power dynamics remains to be seen, given that many New Order institutions remain in place at village level.

Decentralization

In January 2001, Indonesia started to devolve most functions of national government to its 362 districts (rural kabupaten and urban kotamadya). If fully implemented, this will make Indonesia one of the most decentralized countries in the world. The legal framework for decentralization makes provision for changes in village government. These changes could change quite substantially the way that Indonesian villages are run, although vagueness in the wording of the laws means that in practice there may be little change.

The spirit of the legislation points towards greater democracy at the local level: Law 22 of 1999 states that the basis for village government regulations will be “diversity, participation, real autonomy, democratization and people’s empowerment”.14 The law introduces a new village representative body, the Badan Perwakilan Desa (BPD), whose members will be elected directly by villagers. This contrasts sharply with the body it replaces, the Lembaga Musyarawah Desa (LMD), whose members were effectively appointed by the village head. Under the new system, the village head can be held accountable at BPD meetings, and the BPD has the right to ask that the village head be removed. This could dilute quite substantially the present concentration of village power in the village head.

The BPD was made… after the regional autonomy system came into place. The BPD are elected by us. That gives a greater degree of control. Now, the people have more power… the BPD system also gives us a way to resolve problems we have. There’ll be fewer problems of corruption now because we can check and control them.

Villager in Pagar Batu village, North Sumatra

However, despite their spirit, the laws provide few specific guidelines for how local empowerment will materialize. For instance, specific regulations surrounding election to, the operation of and powers of the BPD have been left unclear, so whether its formation effectively increases popular control over village government may be determined on an ad-hoc basis. The law also gives wide discretion to district governments in determining village affairs.15 This means that there could be wide variation in village government: some areas could have democratic, accountable local governments whereas others could maintain or even strengthen their hierarchical and autocratic governance structures.

The impact of decentralization on village life is thus uncertain. Village structures could become more authoritarian in some places, limiting accountability and increasing yet further the possibilities for corruption. Alternatively, they could become significantly more democratic, opening up avenues of transparency and accountability and raising the perceived costs of corrupt behavior.

14 Law 22 of 1999, cited in Antlöv, Hans. Village Governance in Indonesia – Past, Present and Future Challenges. Paper presented at the

PERCIK conference “Dynamics of Local Politics in Indonesia”: Yogyakarta, July 2000.

15 See Evers, Pieter, Resourceful Villagers, Powerless Communities (Rural Village Government in Indonesia). Jakarta: World Bank/Bappenas

Village life in Indonesia

The experience of village life and of previous village projects is a crucial factor in influencing how actors in KDP perceive their interests and rights. It affects how actors calculate the costs and benefits of corrupt behavior and affects the will and ability of villagers to protest if they suspect foul play. Thus any understanding of how to fight corruption in KDP, of what motivates its agents, and of what factors enable corruption must rest on an understanding of what life in an Indonesian village is like.

It is not an easy understanding to reach. Indonesia is diverse and so generalizations are hard to make. Yet despite this, there are some family resemblances among villages that enable a rough picture to be drawn.

A village (desa) is the lowest unit of government administration in Indonesia. Many villages came into existence only with Law 5 of 1979, which imposed uniformity in form and structure onto Indonesian communities. Beforehand, many of these were smaller and organically-formed.16 Because villages are political and not social units, their boundaries may cut across traditional boundaries of land drawn according to adat (local custom). They are divided up into hamlets (dusun), groupings that, being small and generally homogenous, are often socially more cohesive than villages. Hamlets are sometimes physically far apart from one another, and levels of communication among different hamlets vary. Sometimes one hamlet may consist of people from an ethnic group entirely different to that of another hamlet in the same village, usually because one consists of migrants from another part of Indonesia. In Java, many villages are extremely large. This limits cohesiveness and control.

A village is led by a village head (kepala desa), who is paid by the government. In rural villages, the village head is elected by villagers but ratified by the district head. In urban villages (kelurahan) the head (lurah) is appointed. Village regulations ensure that almost all power is concentrated in the village head, who is accountable not to villagers but only upwards to the district head.17 Because running for office is expensive, village heads tend to be from richer families in the village, although not, in recent years, from the traditional land-owning elite, for whom the gains to be had from the post are often not worth the effort.18 The cost of running for office places pressure on village heads to use their time in office to recoup as much money as possible.

Apart from the village head, there are a few other officials—mainly the hamlet chiefs—and a couple of village councils, which are deliberative fora for villagers to communicate their views on village issues and priorities. For the most part, though, power rests with the village head. The councils have little decision- making power and the village head and his officers tend to predominate in them19

Three aspects of Indonesian village life have an especially important effect on the workings of village corruption. The first of these is the influence of a heavy, centralized state bureaucracy, government rural policy and state administrative mechanisms upon the incentives for corruption in villages. The second is

16 Law 22 of 1999 replaces Law 5 of 1979. The preamble to the law considers that Law 5 of 1979 is ‘no longer suitable with the spirit of the 1945 Constitution and the significance to acknowledge and to respect the privileges of Regions ‘ (my italics). From Law 22 of 1999 text,

17 See Evers, Resourceful Villager, Powerless Communitiesfor details.

18 An interesting discussion about how this applies in Java can be found in Frans Hüsken’s article ‘Village Elections in Central Java: StateControl or Local Democracy?’ in Antlöv, Hans and Cederroth, Sven. Leadership on Java. Surrey, UK: Curzon Press, 1994. Hüsken studied 50 candidates for village head in 9 villages in Central Java in 1989 and found that “the traditional elite families are hardly represented…Asked why they had withdrawn, their answer was perfectly simple and straightforward: the advantages of being alurah no longer outweighed the burden of the job”.

the effect of a corrupt and inaccessible legal system upon village accountability and corruption. The third is the way in which development projects themselves have been run.

The state, politics & village corruption

Villages are institutional battlegrounds for control over people and resources. Historically, the state has given material and institutional backing to village elites in an attempt to co-opt potential opposition. State backing of some groups over others has created serious problems. One of these is that it has created the conditions for widespread corruption.

The environment in an Indonesian village is one where corruption flourishes easily and is difficult to root out. It is peculiarly embedded. To understand why, think of a stable structure locked into place by several pillars. If enough pillars are removed, the structure collapses. But removing only one or two simply distributes the load to the others.

Corruption in a village is somewhat the same. The central pillar of support is the omnipresence and omnipotence of the state. Indonesian villages are characterized by the massive presence of both the government bureaucracy and, through the ‘territorial command’ structure that matches it, the military. Almost all of an Indonesian villager’s dealings with the outside world or with government involve bureaucratic procedures of one kind or another.20 Such high levels of red tape breed opportunities for village officials to gain small—or, in the case of land transfers, large—amounts of money through embezzling funds and extorting fees for services. The participating officials have a monopoly over these procedures and have wide discretion over their actions.

The history of impunity acts as the second pillar of support, enabling village officials to exploit such rent- seeking opportunities. Village officials know that the sanctions for corruption have been few and rarely enforced. This lessens the perceived cost of corrupt behavior. For their part, villagers know that whistleblowers have few protections and low likelihood of redress. They also know that most previous attempts at fighting corruption have been futile. This increases the costs associated with an attempt to fight corruption, meaning that in most cases the strictly rational course of action for any individual villager is apathy—in other words, to do nothing. This enhances even further the culture of impunity.

[The villagers] are used to old-style bureaucrats, who are like kings, who think they are like kings, who are never wrong. And nothing will happen. In their experience, if they report problems to a bureaucrat, there will be no response, so why bother?

Civil servant, Kecamatan Palipi, North Sumatra

20 Hans Antlöv describes the multitude of paperwork required in his article ‘Village Leaders and the New Order’ in Antlöv and Cederroth, Leadership on Java. “Let me exemplify the variety of official letters by the experience of a young man, Dadang, who wanted to join the Navy.

A third pillar of support is deference and fear. The average Indonesian village is characterized by hierarchy, with a tradition of not questioning those in power. Its traditional social arrangements might not be hierarchical, as this varies across Indonesia, but it almost certainly has a hierarchical political culture. Indeed, a visitor to a village at least during the period of the New Order government might think it curiously de-politicized, with a paternalistic political culture and an emphasis on bowing to ‘consensus’—a direct result of New Order policies towards rural areas.21 Such hierarchical political relations limit popular pressure on the powerful.

Holding the structure together is an administrative setting that gives villagers few formal avenues to complain. Although elected by villagers, the village head is formally accountable only upwards to the district head. This gives him wide discretion over his actions and lowers the costs associated with corruption. Indeed, it may increase the costs associated with not acting in a corrupt way, since the village head may be put under vertical pressure to collude with his superiors. Complaints are resolved by musyawarah, a process of discussion and consensus–building. But it is the village head who in the first instance organizes the musyawarah, and only if popular pressure is extraordinarily strong does he have an incentive to pursue problems in which he or his peers are implicated.22

Rural justice & village corruption

Justice is for the rich man, the man who has power.

Villager, Kotabumi, Lampung

The failings of the formal justice system lock this structure of village corruption even further into place.23 Some of these weaknesses are peculiar to the Indonesian legal system and its particular set of problems. Others are a function less of the Indonesian system but of the special problems of rural life. Both types of weakness have a strong effect

Madoff

The manager operates a split-strike conversion strategy, which consists of the purchase of a basket of equities, the purchase of a put option and the sale of a call option. The strategy has provided relatively consistent performance for the reported period. During the months that the manager felt there were no sufficient investments to take advantage of, it invested in Treasury Bills, which protected the Fund…The strategy employed by the manager has worked well over the period.

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Mortgage Markets In Review : December 15, 2008

Day-to-day, mortgage rates priced across a very wide range, but managed to close out the week lower overall.

Mortgage rates improving on “bad news” is a break from the trading patterns of September and October.  Back then, even the slightly evidence of a recession caused mortgage rates to soar. 

So, as markets shift their attention away from fundamentals and towards the government, mortgage rates are benefiting and refinance activity is gaining steam.

But it won’t be what the Fed does that matters; it will be what the Fed says

In the 2:15 P.M. press release, Fed Chairman Ben Bernanke is expected to outline measures by which the Federal Reserve will stabilize the economy.  If markets consider the moves to be “enough”, stock markets should soar and mortgage rates should suffer.  However, there may be specific verbiage for providing mortgage relief, in which case, mortgage rates would fall.

Other noteworthy data scheduled for this week include the Cost of Living Index and Housing Starts, but neither should matter much to mortgage rates.  For now, it’s all eyes on the government.

Weight Loss For Teenagers

Losing weight is in vogue right now. What with celebrities and teen stars all losing pounds, it is not surprising that the vast majority of teeners in America are also obsessed with weight loss programs. Everyone wants to stay slim as the models that they see strutting in the catwalks.

Everyone wants to be able to dress like their idols Paris Hilton, Lindsay Lohan and Hillary Duff. Weight loss programs, however, can be really expensive. And no amount of saving your monthly allowance will be able to make you afford one. Unless of course you have a trust fund like that of the Hilton sisters!

Losing weight however need not be expensive. In fact, you can lose those additional weight and pounds without even having to shell out a lot of money. This is especially true if you do not really need to lose much. You can actually do it for free. You don’t believe me? Read on below and find some tips on how to achieve weight loss for free.

Determine how much to lose

The process of losing weight is different for different people. This is because people need to lose different amounts of weight. A weight loss program that has worked for someone who needs to lose a little over 20 pounds may not work for someone who needs to lose more than 50 pounds. The same goes with people who have the time to work out in a gym and those who opt for home exercise.

Before you determine the right program for losing weight, you have to first know just how much pounds you have to lose. To do this, consult the body mass index to know the ideal weight for your age and your height. After doing this, you will be able to plan your own weight program.

Combine diet and exercise

One of the most costly mistakes both financially and health-wise that teenagers make is to concentrate on just one aspect of dieting. This may not be good for the dieter as concentrating on just one will not balance out the weight loss.

If you diet too much, your body may suffer from the loss of nutrients and exercising too much may lead to muscle pains and body aches. It is important that you combine both of these things to achieve maximum weight loss. What is more, when both of these are combined, weight loss is more permanent and more lasting.

Slowly but surely

Crash diets often do not work in the long run. Oh, it can make you lose weight fast but because of what your body has gone through, you will gain the lost pounds just as fast. In addition, crash diets will only put your body and health in jeopardy. It is important that you give yourself enough time to lose those unwanted pounds slowly but surely. This way, you can be sure that your weigh loss will be for keeps.

Check your commitment meter

One important ingredient in a weight loss program is the hunger for weight loss. You can enroll in the most expensive weight loss program but without the determination to lose weight, your money will just go down the drain. If you have full commitment in the program, even if it is something that you have only planned yourself, you can succeed.

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Article Source: www.articlesnatch.com

TIME TO BUY PRECIOUS METALS? - DARE SOMETHING WORTHY TODAY TOO!

TIME TO BUY PRECIOUS METALS? - DARE SOMETHING WORTHY TODAY TOO!

Gold and Silver: Backwardation and Manipulation - Seeking Alpha

By: Jake Towne of Yet Another Champion Of The Constitution

If spot gold is trading at $750 and the futures market is trading at $745, that is a $5.00 per ounce risk free profit just sitting there waiting for a type of arbitrage. One could immediately sell his physical gold at the $750 price and immediately buy it at $745 in the futures market with the intent of taking delivery to meet his contractual obligations and pocket $5.00 ounce for however many ounces one wished. Buy 5 million ounces of gold at $745 and sell that same amount of gold for $750 and you have gotten yourself a cool $25 million profit less the delivery expenses, etc. Not bad. That is why such a thing does not occur very often nor does it last for long. Too many would jump on the chance for a no-risk trade of such nature. Why then are they not doing so? Antal has answered that question they are not willing to part with their gold for paper profits! That is what makes this development so noteworthy.

gold

 

 

 

Let’s look at silver: Arensberg continues:

silver

Arensberg comments that these two banks’ (cough JP Morgan Chase cough those-damn-corporate-raiders-from-the-Great-Depression cough cough) “net short positioning is equal to about 153% of the amount of deliverable silver in ALL the COMEX members’ accounts.” Sure looks like total control to me! The above is a big reason why the gold and silver markets are so tight now. Who in the right mind would enter the market to play with these giants? Again, where is their silver? So the silvers futures market is not a real “market.” More like a banker’s paradise!

Arensberg also has a section on the coin market in terms of the premium paid. Historically speaking, the premiums have been within a few percentage points of the spot value. Not anymore, gold is about 6%, and the silver premium is pretty amazing, roughly 50% over spot! Try using the law of supply and demand to explain that!

My Note: It is time to load up the applecart - Buy Gold and Silver Now!- jschulmansr

================================================

The Significance of Gold Backwardation

By Jake Towne of Nolan Chart

I’ve written a short series on what is, in my opinion, the major economic event of gold going into backwardation and what this will mean. Due to recent interest, particularly email comments, in this article I would like to further describe this event and in the next part share links to more gold and silver news on this topic with you (as well as some objective criticism of Fekete).

I think it is also important to note that I am no expert. I fully realize I could be wrong for now, or misjudge how the government forces will intervene. It is far from clear whether this backwardation will become permanent. That said, I do believe that the resistance shackling gold and silver will be eventually be overwhelmed; it’s just a question of when. In the final analysis, Gold is the world’s greatest chance at economic liberty and a world with far less war.

Let’s return to the rice example I used in an earlier article, which is traded on commodity futures markets in a similar fashion as gold and silver are today. Let’s say I absolutely must have 1000 bushels of rice 1 month from today. At the futures market, I have two options – I can buy a 1-month futures contract and take delivery right before I need it, or I can buy at the immediate market price (or spot price) and store it for a month.

Now, let’s say rice goes into backwardation. This means that the spot price is more expensive than the 1-month futures price. So, normally I would buy the futures contract since it is cheaper and the storage cost is borne by the other party. And if enough people did this, backwardation would quickly disappear. Now why would I buy at spot price?

I would buy at spot only if I feared that within a month the other party would not have any rice to deliver. Now the strange thing is that for backwardation to continue to exist, all rice traders at the market need to believe the same thing. Why?

If other traders holds surplus rice and do not need it for a month, and believe they will get delivery 1 month later, they will release this stock into the market (driving the spot price down and the futures price up) and take delivery in a month’s time, which would give a tidy basis profit (spot price minus the futures price), plus the savings of not storing the rice for a month.

So therefore, backwardation is the sign of a very tight market, and a market that will be tight for sometime into the future – either 1) current supply is very tight, 2) future supply is projected to be very tight, or 3) there is a severe distrust in counterparties – that the short positions can deliver the goods on time per the contract, or vice versa that the long positions will not have the cash.

That said, backwardation in seasonable, weather-dependent perishable commodities like rice or corn is certainly not unheard of. It even sometimes occurs with industrial commodities like lead or copper. Sometimes it can even be the natural state of the market.

However, gold futures are completely unlike these other commodity markets. Gold is mostly traded solely as a “store of value”; the jewelry or electronics or dentistry demand pales in comparison to the quantities of the yellow metal traded as a store of value (even an “anti-dollar” if you wish). In other words, gold is not a consumable market.

And here is the final piece to the above from South African Daan Joubert, quoted at lemetropolecafe.com. Gold backwardation can only mean that either “a) There are enough people so concerned about non-delivery that they will pay a large premium to get their hands on gold right now” or “b) There are no large holders of gold who have sufficient faith in the futures exchange to exploit the [backwardation].”

 

Here is an update on the backwardation in gold that started on December 2 at an annualized discount rate of 1.98% and 0.14% to spot in the December and February contracts. It continued and worsened on December 8, 9, and 10 as shown by the corresponding rates widening to 3.5% and 0.65%. It is nothing short of awesome. This is a premonition of a coming gold fever of unprecedented dimensions that will overwhelm the world as soon as its significance is fully digested by the doubting Thomases.

 

Keynesian economist John Keynes once pessimistically noted, “In the long run, we are all dead.”

I say, YES, the day when gold or silver breaks the COMEX IS death.

Death to the Keynesians for all the havoc they have wrought.

===============================================

Is The Second Great Depression Imminent?

By: Lionel Badal

Dollar Down, Gold Up

By: Dr. Duru of Dr. Duru’s One Twenty 

The first signs of fresh dollar weakness are finally showing up. The chart below (click to enlarge) shows a potential double-top in the dollar. Some technicians may prefer to call it a head-and-shoulders pattern.

It is at these kinds of critical transition points that people who want to cling to the former trend will proclaim the loudest that all is well. Dollar bulls surely believe that the fundamentals of the currency have never been better given the world’s belief that the dollar represents a safe place to park in a world of turmoil. Maybe major global governments borrow and print even faster and harder than we are doing. If that happens, I will have to like gold even more since its global supply will not increase nearly as fast as the supply of global money. Regardless, we should all know by now what results when a massive crowd jams into one side of a trade - short-term Treasuries represent the powder keg du jour.

Until recently, it has been difficult to play commodities in anticipation of reflation given prevailing downtrends. Gold has held up better than most but it too is still caught in a downtrend of lower lows and lower highs. The recent weakness in the dollar has perked gold back up, and I am sticking to it as one of my favorite places to be for 2009.

Be careful out there!

==============================================

Will We See A Big Upward Move in Gold?

By: Mark Courtenay of  Check The Markets.com

Did you know that the Federal Reserve Bank owns gold certificates? Mounting evidence suggests the Fed intervenes in and participates in the gold and silver markets on a regular basis.

Interviewed Monday last week on the “Trading Day” program of Business News Network in Canada, former Federal Reserve Governor Lyle Gramley hinted that a big upward revaluation of gold may figure heavily in the Fed’s attempt to rescue the U.S. economy.

The program’s guest host, Niall Ferguson, an author and history professor at Harvard, asked Gramley, now senior adviser at Stanford Group in Houston, about the seemingly grotesque expansion of the Fed’s balance sheet in recent months.

Ferguson asked: “I’ve heard it said that the Fed has turned into a government-owned hedge fund, leveraged at 50 to 1. Do you feel nervous about what this might actually do to the Fed’s reputation?”

Gramley replied: “I think you have to reckon with the fact that one of the Fed’s assets is gold certificates, which are priced, as I remember, at $42 an ounce, and if we were to price them at market prices, the Fed’s leverage would look a lot less than it is now.”

While valuing the U.S. government’s claimed gold reserves at today’s Comex closing price of around $822 per ounce instead of the government antique bookkeeping entry of $42.22 per ounce would indeed vastly expand the government’s monetary assets, it might not be enough to offset the liabilities and guarantees the government lately has taken on.

But the job might be done by revaluing the gold to $5,000 or $10,000 per ounce, as the British economist Peter Millar speculated two years ago might be necessary to prevent debt deflation: yet this is admittedly speculation.

What did Gramley mean by “…the Fed’s leverage”? That would suggest that the Fed not only owns “gold certificates” but also future contracts and options on futures. They might be big benefactors in a gold squeeze.

Speaking of a gold squeeze, I read another report from the Gold Anti-Trust Actioin committee (GATA) saying that the Comex is warning brokers of a December gold squeeze.

Yes, the Comex is alerting various futures firms about the potential of a squeeze on the December contract and is advising the $840 December shorts to exit their positions. That is the remaining open position.

There have been 12,636 notices of delivery. The shorts have until December 31 to make delivery. Normally they deliver early to take in cash and earn the interest. They must be delaying.

As I understand the situation, that represents about 40 percent of the gold available at the Comex, and of course someone could enter the scene late, buy February gold, and then spread into December, which would stun the shorts.

My broker friend said his back office said this sort of alert is highly unusual and that the concern is real, not only for gold, but for other commodities too, like copper and palladium, as there is a good deal of talk of taking deliveries there too. But gold is the one for which the advice to cover went out.

This is an extremely productive development and could spur the price of gold up quickly as word spreads. As we all know, buying Comex gold and silver (the cheapest way to buy precious metals) makes all the sense in the world in this financial environment.

It might be one of those “ready, get set, not yet” approaches to what an investor should do. The economic news and the relapsing into the next and possible worse phase of this credit crisis, great-recession, and deflationary mess might delay the upside potential on commodities.

But if you’re a trader (a.k.a. “gambler”) there might be a short-term pop in at least gold over the next couple of weeks…maybe spilling into January 2009 where quick profits could be made….as well as some quick and disappointing losses.

Are you an investor, a short-term gambler, or both? No matter what the answer, if you know yourself well then you know how you might respond to all this news and the rumor mill. Best of luck!

When FCX dipped back down near $16 after the suspension of their dividend I decided to pick up a few shares for a quick trade. I’m fortunate that it worked out.

I firmly believe that there will be a trading range for all the better commodity stocks and ETFs that will give us several chances to buy low and sell high over the months directly ahead. Your comments on that will be appreciated. Happy holidays to you all.

Disclosure: Long GLD, SLV, FCX, SLT.

 

All of these measures will have an impact on economies, no doubt on that. Before the end of 2009 an –artificial- recovery will take place. Good news you may think? Not at all…

What I can tell you is that one day global conventional oil will peak… I think it is going to peak very soon. The main problem here is that the existing fields, many mature fields, are declining.

Expansion becomes impossible without abundant cheap energy. So I think that the debt of the world is going bad. That speaks of a financial crisis, unseen, probably equalling the Great Depression of 1930; it’s probable we face the Second Great Depression. It would be a chain reaction, one bank would fail, and another one would fail, industries will close…

What is commonly known as Peak Oil, a decline in global oil production is about to happen: you can ignore it, fight it, but to be sure, you will not escape from it. I will not enter into the details of the Peak Oil debate, an endless one. Nevertheless, here are statements on Peak Oil held by some of the most authoritative groups:

Peak oil is at hand with low availability growth for the next 5 to 10 years. Once worldwide petroleum production peaks, geopolitics and market economics will result in even more significant price increases and security risks. To guess where this is all going to take us is would be too speculative.

The end-of-the-fossil-hydrocarbons scenario is not a doom-and-gloom picture painted by pessimistic end-of-the-world prophets, but a view of scarcity in the coming years and decades that must be taken seriously.

This is an apocalyptic scenario. In terms of industrial production, in terms of the food supply but above all in the terms of the transportation sector, we cannot continue as we now are.

As oil prices rise, it will be millions who suffer, millions of ordinary people who are just trying to get on with their lives, millions of ordinary decent people will be forced into states of anxiety, depression, fear and anger.

Voters take to new ideas, even radically new ideas when the system that they have trusted, worked with, admired and felt comfortable with falls apart.

Peak Oil may well be an important catalyst that helps us to win political power because we are the ones talking about it now.

Wake up!

================================================

The monster in the mirror

 

 

How I Got Screwed by Bernie Madoff - TIME

We didnt know it yet, but we had been playing in the Bernard Madoff Investment Securities LLC Fantasy Financial League. It began when we sold our home at the peak of the market, collected what was left from an old divorce, found other monies and then, with a combination of pleasure and trepidation, handed our bag of cash over to someone named Stanley Chais, the Los Angeles network organizer for a man named Bernard Madoff.

Of course, we never heard the name Madoff — which has a peculiarly Dickensian ring now — and had no idea how he achieved such fantastic returns over the past 40 years. All we knew was that my wifes entire family had been in the fund for decades and lived well on the returns, which ranged from 15% to 22%. It was all very secretive and tough to get into, which, looking back, was a brilliant strategy to lure suckers. Unlike the usual Ponzi mechanics, the fund even stopped investments into accounts a few years back, at least in our network. There were the usual warnings prior to investing — we all knew it was a risk, we were told to make sure we were diversified, blah-blah — but, my God, it had been going strong for so long and with such fantastic returns, we had to get in. The Securities and Exchange Commission even gave Madoff a clean bill of health several years ago, we now find out. Well, maybe not a clean bill, but it didnt shut him down either. In the topsy-turvy world of investment, we were quietly, richly safe. Until the call.

via How I Got Screwed by Bernie Madoff - TIME.

 

zyakaira notes: On the face of it the prognosis could not be simpler. The man bet on the larger index value ( Out of the Money Calls and Out of the Money Put Collars ) while he chose the stocks to select. He obviously had a few more days of losses but the strategy is one that any investor would employ at a simpler level and there are a lot of people who are finding enough to make money everyday. I think therefore the Ponzi scheme part is definitely someone just walking away with the money, without you knowing where the money is.

Weight Loss For Teenagers

&#76&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116 is in vogue &#114&#105&#103&#104&#116 &#110&#111&#119&#46 &#87&#104&#97&#116 with celebrities and teen stars all &#108&#111&#115&#105&#110&#103 &#112&#111&#117&#110&#100&#115, it is not surprising &#116&#104&#97&#116 the &#118&#97&#115&#116 majority of teeners in America are also obsessed with &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109s. Everyone &#119&#97&#110&#116&#115 to stay slim as the models &#116&#104&#97&#116 &#116&#104&#101&#121 see strutting in the catwalks.

Everyone &#119&#97&#110&#116&#115 to be &#97&#98&#108&#101 to dress &#108&#105&#107&#101 their &#105&#100&#111&#108&#115 Paris &#72&#105&#108&#116&#111&#110, &#76&#105&#110&#100&#115&#97&#121 &#76&#111&#104&#97&#110 and Hillary &#68&#117&#102&#102&#46 Weight &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109s, &#104&#111&#119&#101&#118&#101&#114, can be &#114&#101&#97&#108&#108&#121 &#101&#120&#112&#101&#110&#115&#105&#118&#101&#46 And no &#97&#109&#111&#117&#110&#116 of saving &#121&#111&#117&#114 &#109&#111&#110&#116&#104&#108&#121 &#97&#108&#108&#111&#119&#97&#110&#99&#101 &#119&#105&#108&#108 be &#97&#98&#108&#101 to &#109&#97&#107&#101 you afford &#111&#110&#101&#46 &#85&#110&#108&#101&#115&#115 of &#99&#111&#117&#114&#115&#101 you &#104&#97&#118&#101 a trust fund &#108&#105&#107&#101 &#116&#104&#97&#116 of the &#72&#105&#108&#116&#111&#110 sisters!

&#76&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116 &#104&#111&#119&#101&#118&#101&#114 &#110&#101&#101&#100 not be &#101&#120&#112&#101&#110&#115&#105&#118&#101&#46 In &#102&#97&#99&#116&#44 you can &#108&#111&#115&#101 &#116&#104&#111&#115&#101 additional &#119&#101&#105&#103&#104&#116 and &#112&#111&#117&#110&#100&#115 &#119&#105&#116&#104&#111&#117&#116 &#101&#118&#101&#110 having to &#115&#104&#101&#108&#108 out a lot of &#109&#111&#110&#101&#121&#46 &#84&#104&#105&#115 is &#101&#115&#112&#101&#99&#105&#97&#108&#108&#121 &#116&#114&#117&#101 if you do not &#114&#101&#97&#108&#108&#121 &#110&#101&#101&#100 to &#108&#111&#115&#101 &#109&#117&#99&#104&#46 You can &#97&#99&#116&#117&#97&#108&#108&#121 do it for &#102&#114&#101&#101&#46 You don’t believe me? Read on &#98&#101&#108&#111&#119 and &#102&#105&#110&#100 some &#116&#105&#112&#115 on how to achieve &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 for &#102&#114&#101&#101&#46

Determine how much to &#108&#111&#115&#101

The process of &#108&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116 is different for different &#112&#101&#111&#112&#108&#101&#46 &#84&#104&#105&#115 is because &#112&#101&#111&#112&#108&#101 &#110&#101&#101&#100 to &#108&#111&#115&#101 different &#97&#109&#111&#117&#110&#116s of &#119&#101&#105&#103&#104&#116. A &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109 &#116&#104&#97&#116 has &#119&#111&#114&#107&#101&#100 for someone who &#110&#101&#101&#100&#115 to &#108&#111&#115&#101 a little over 20 &#112&#111&#117&#110&#100&#115 may not work for someone who &#110&#101&#101&#100&#115 to &#108&#111&#115&#101 more &#116&#104&#97&#110 50 &#112&#111&#117&#110&#100&#115. The same &#103&#111&#101&#115 with &#112&#101&#111&#112&#108&#101 who &#104&#97&#118&#101 the &#116&#105&#109&#101 to work out in a gym and &#116&#104&#111&#115&#101 who opt for home &#101&#120&#101&#114&#99&#105&#115&#101.

Before you &#100&#101&#116&#101&#114&#109&#105&#110&#101 the &#114&#105&#103&#104&#116 &#112&#114&#111&#103&#114&#97&#109 for &#108&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116, you &#104&#97&#118&#101 to first &#107&#110&#111&#119 &#106&#117&#115&#116 how much &#112&#111&#117&#110&#100&#115 you &#104&#97&#118&#101 to &#108&#111&#115&#101. To do &#116&#104&#105&#115&#44 &#99&#111&#110&#115&#117&#108&#116 the &#98&#111&#100&#121 mass index to &#107&#110&#111&#119 the ideal &#119&#101&#105&#103&#104&#116 for &#121&#111&#117&#114 age and &#121&#111&#117&#114 height. &#65&#102&#116&#101&#114 &#100&#111&#105&#110&#103 &#116&#104&#105&#115&#44 you &#119&#105&#108&#108 be &#97&#98&#108&#101 to plan &#121&#111&#117&#114 own &#119&#101&#105&#103&#104&#116 &#112&#114&#111&#103&#114&#97&#109&#46

Combine diet and &#101&#120&#101&#114&#99&#105&#115&#101

One of the &#109&#111&#115&#116 &#99&#111&#115&#116&#108&#121 mistakes &#98&#111&#116&#104 &#102&#105&#110&#97&#110&#99&#105&#97&#108&#108&#121 and &#104&#101&#97&#108&#116&#104-wise &#116&#104&#97&#116 teenagers &#109&#97&#107&#101 is to concentrate on &#106&#117&#115&#116 one aspect of &#100&#105&#101&#116&#105&#110&#103&#46 &#84&#104&#105&#115 may not be good for the dieter as &#99&#111&#110&#99&#101&#110&#116&#114&#97&#116&#105&#110&#103 on &#106&#117&#115&#116 one &#119&#105&#108&#108 not &#98&#97&#108&#97&#110&#99&#101 out the &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115.

If you diet too much, &#121&#111&#117&#114 &#98&#111&#100&#121 may suffer from the &#108&#111&#115&#115 of nutrients and exercising too much may &#108&#101&#97&#100 to muscle &#112&#97&#105&#110&#115 and &#98&#111&#100&#121 aches. It is &#105&#109&#112&#111&#114&#116&#97&#110&#116 &#116&#104&#97&#116 you combine &#98&#111&#116&#104 of &#116&#104&#101&#115&#101 things to achieve maximum &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115. &#87&#104&#97&#116 is more, &#119&#104&#101&#110 &#98&#111&#116&#104 of &#116&#104&#101&#115&#101 are &#99&#111&#109&#98&#105&#110&#101&#100&#44 &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 is more permanent and more &#108&#97&#115&#116&#105&#110&#103&#46

Slowly but &#115&#117&#114&#101&#108&#121

Crash &#100&#105&#101&#116&#115 &#111&#102&#116&#101&#110 do not work in the long &#114&#117&#110&#46 Oh, it can &#109&#97&#107&#101 you &#108&#111&#115&#101 &#119&#101&#105&#103&#104&#116 &#102&#97&#115&#116 but because of what &#121&#111&#117&#114 &#98&#111&#100&#121 has gone through, you &#119&#105&#108&#108 gain the &#108&#111&#115&#116 &#112&#111&#117&#110&#100&#115 &#106&#117&#115&#116 as &#102&#97&#115&#116. In addition, crash &#100&#105&#101&#116&#115 &#119&#105&#108&#108 &#111&#110&#108&#121 put &#121&#111&#117&#114 &#98&#111&#100&#121 and &#104&#101&#97&#108&#116&#104 in &#106&#101&#111&#112&#97&#114&#100&#121&#46 It is &#105&#109&#112&#111&#114&#116&#97&#110&#116 &#116&#104&#97&#116 you give &#121&#111&#117&#114self &#101&#110&#111&#117&#103&#104 &#116&#105&#109&#101 to &#108&#111&#115&#101 &#116&#104&#111&#115&#101 unwanted &#112&#111&#117&#110&#100&#115 &#115&#108&#111&#119&#108&#121 but &#115&#117&#114&#101&#108&#121&#46 &#84&#104&#105&#115 way, you can be sure &#116&#104&#97&#116 &#121&#111&#117&#114 weigh &#108&#111&#115&#115 &#119&#105&#108&#108 be for keeps.

Check &#121&#111&#117&#114 commitment &#109&#101&#116&#101&#114

One &#105&#109&#112&#111&#114&#116&#97&#110&#116 ingredient in a &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109 is the hunger for &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115. You can enroll in the &#109&#111&#115&#116 expensive &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109 but &#119&#105&#116&#104&#111&#117&#116 the determination to &#108&#111&#115&#101 &#119&#101&#105&#103&#104&#116, &#121&#111&#117&#114 money &#119&#105&#108&#108 &#106&#117&#115&#116 go &#100&#111&#119&#110 the &#100&#114&#97&#105&#110&#46 If you &#104&#97&#118&#101 full commitment in the &#112&#114&#111&#103&#114&#97&#109, &#101&#118&#101&#110 if it is &#115&#111&#109&#101&#116&#104&#105&#110&#103 &#116&#104&#97&#116 you &#104&#97&#118&#101 &#111&#110&#108&#121 &#112&#108&#97&#110&#110&#101&#100 &#121&#111&#117&#114self, you can succeed.

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Weight Loss For Teenagers

&#76&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116 is in vogue &#114&#105&#103&#104&#116 now. What &#119&#105&#116&#104 celebrities and &#116&#101&#101&#110 &#115&#116&#97&#114&#115 all &#108&#111&#115&#105&#110&#103 &#112&#111&#117&#110&#100&#115, it is not &#115&#117&#114&#112&#114&#105&#115&#105&#110&#103 &#116&#104&#97&#116 the vast majority of &#116&#101&#101&#110ers in &#65&#109&#101&#114&#105&#99&#97 are also obsessed &#119&#105&#116&#104 &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109s. &#69&#118&#101&#114&#121&#111&#110&#101 &#119&#97&#110&#116&#115 to stay slim as the models &#116&#104&#97&#116 they see strutting in the &#99&#97&#116&#119&#97&#108&#107&#115&#46

&#69&#118&#101&#114&#121&#111&#110&#101 &#119&#97&#110&#116&#115 to be &#97&#98&#108&#101 to dress &#108&#105&#107&#101 &#116&#104&#101&#105&#114 &#105&#100&#111&#108&#115 &#80&#97&#114&#105&#115 &#72&#105&#108&#116&#111&#110&#44 &#76&#105&#110&#100&#115&#97&#121 Lohan and &#72&#105&#108&#108&#97&#114&#121 &#68&#117&#102&#102&#46 Weight &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109s, however, can be really expensive. And no amount of saving &#121&#111&#117&#114 monthly allowance &#119&#105&#108&#108 be &#97&#98&#108&#101 to &#109&#97&#107&#101 you &#97&#102&#102&#111&#114&#100 one. &#85&#110&#108&#101&#115&#115 of course you &#104&#97&#118&#101 a trust fund &#108&#105&#107&#101 &#116&#104&#97&#116 of the Hilton sisters!

&#76&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116 however &#110&#101&#101&#100 not be expensive. In &#102&#97&#99&#116&#44 you can &#108&#111&#115&#101 &#116&#104&#111&#115&#101 additional &#119&#101&#105&#103&#104&#116 and &#112&#111&#117&#110&#100&#115 &#119&#105&#116&#104out even &#104&#97&#118&#105&#110&#103 to &#115&#104&#101&#108&#108 out a lot of money. &#84&#104&#105&#115 is &#101&#115&#112&#101&#99&#105&#97&#108&#108&#121 &#116&#114&#117&#101 if you do not really &#110&#101&#101&#100 to &#108&#111&#115&#101 &#109&#117&#99&#104. You can &#97&#99&#116&#117&#97&#108&#108&#121 do it for free. You don’t &#98&#101&#108&#105&#101&#118&#101 me? Read on below and &#102&#105&#110&#100 some tips on how to &#97&#99&#104&#105&#101&#118&#101 &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 for free.

Determine how &#109&#117&#99&#104 to &#108&#111&#115&#101

The process of &#108&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116 is different for different &#112&#101&#111&#112&#108&#101&#46 &#84&#104&#105&#115 is &#98&#101&#99&#97&#117&#115&#101 &#112&#101&#111&#112&#108&#101 &#110&#101&#101&#100 to &#108&#111&#115&#101 different amounts of &#119&#101&#105&#103&#104&#116. A &#119&#101&#105&#103&#104&#116 &#108&#111&#115&#115 &#112&#114&#111&#103&#114&#97&#109 &#116&#104&#97&#116 has &#119&#111&#114&#107ed for &#115&#111&#109&#101&#111&#110&#101 who &#110&#101&#101&#100s to &#108&#111&#115&#101 a &#108&#105&#116&#116&#108&#101 over 20 &#112&#111&#117&#110&#100&#115 may not &#119&#111&#114&#107 for &#115&#111&#109&#101&#111&#110&#101 who &#110&#101&#101&#100s to &#108&#111&#115&#101 &#109&#111&#114&#101 than 50 &#112&#111&#117&#110&#100&#115. The &#115&#97&#109&#101 goes &#119&#105&#116&#104 &#112&#101&#111&#112&#108&#101 who &#104&#97&#118&#101 the &#116&#105&#109&#101 to &#119&#111&#114&#107 out in a gym and &#116&#104&#111&#115&#101 who opt for home &#101&#120&#101&#114&#99&#105&#115&#101.

Before you &#100&#101&#116&#101&#114&#109&#105&#110&#101 the &#114&#105&#103&#104&#116 &#112&#114&#111&#103&#114&#97&#109 for &#108&#111&#115&#105&#110&#103 &#119&#101&#105&#103&#104&#116, you &#104&#97&#118&#101 to first &#107&#110&#111&#119 &#106&#117&#115&#116 how &#109&#117&#99&#104 &#112&#111&#117&#110&#100&#115 you &#104&#97&#118&#101 to &#108&#111&#115&#101. To do &#116&#104&#105&#115&#44 consult the &#98&#111&#100&#121 &#109&#97&#115&#115 index to &#107&#110&#111&#119 the &#105&#100&#101&#97&#108 &#119&#101&#105&#103&#104&#116 for &#121&#111&#117&#114 age and &#121&#111&#117&#114 &#104&#101&#105&#103&#104&#116&#46 &#65&#102&#116&#101&#114 doing &#116&#104&#105&#115&#44 you &#119&#105&#108&#108 be &#97&#98&#108&#101 to plan &#121&#111&#117&#114 own &#119&#101&#105&#103&#104&#116 &#112&#114&#111&#103&#114&#97&#109.

Combine &#100&#105&#101&#116 and &#101&#120&#101&#114&#99&#105&#115&#101

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Check &#121&#111&#117&#114 &#99&#111&#109&#109&#105&#116&#109&#101&#110&#116 meter

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#1 Investment weekly - Press the press

As a final aside, I am quite sure that the people at the stock exchange who approved the introduction of the day-end auction system did not believe that the arrangements they put in place would be so blatantly abused by its participants. I shall apportion no blame on them, and would applaud any decision to halt the practice until systems can be implemented to stop the abuse. As an example: last Friday, HSBC’s share price closed at 4.00pm at HK$83.00, with the stock trading steady at that price for the last 20 trades recorded at the exchange. However, during the auction period, the average price (and therefore the final closing price) was HK$82.25 (-0.9% from the close). Worse, 4.8 million shares were put up for auction. This was equal to 25% of all shares of HSBC traded on that day. The weighted average traded price for the day was HK$83.66 (1.7% higher than the closing price). The weighted average price before the auction was HK$84.15 (2.3% above the close). Admittedly, Friday was a volatile day, with HSBC’s share price swinging 5% during the session, but it smacks of an unfair system when institutions are allowed to manipulate the largest Index component to such a degree. HKEx officials have been silent on this issue, because 1) it is in their interest that large institutions show an interest in trading Hong Kong shares because their bonuses are tied to the turnover of the stock market. If it means allowing institutional proprietary traders free rein to decide the closing price of the market, then so be it. 2) Hong Kong has positioned itself as a global financial centre. Manipulation at the end of day stock market auction is the price we have to pay to maintain this so-called status. 3) The only people that are interested in the closing price of the stock market are prop traders, so let them battle it out (this is another fine example of Hong Kong’s laissez faire attitude to governance). There are several problems with these arguments. The compensation of the overseers of the exchange should not be tied to turnover performance. There is a conflict there. Financial centre and laissez faire are dirty words right now. Clean it up before the short sellers come a riding into town again.

New Overnight Developments Abroad: Awaiting FOMC and U.S. CPI and Housing Starts

A mixed dollar sees such off by 0.8% against the kiwi, 0.7% versus the yen, 0.4% against the Swissy and 0.2% relative to the Aussie dollar but up by 0.3% against sterling and 0.2% against the euro. The Canadian dollar is unchanged.

Equities are similarly mixed. In Asia, the Nikkei lost 2.1%, and the Philippine and Indonesian bourses fell 1.3% and 1.2%. Australian stocks fell 1.0%, but India (+1.5%), China (+1.0%). Thailand (+1.9%), and Hong Kong (+0.6%) are higher. In Europe, the Dax, Cac40, and Ftse are trading 1.5%, 0.6%, and 0.3% higher.

The 10-year JGB dipped to 1.365% initially on signs that the BOJ is more inclined to ease after the poor Tankan survey results but is now unchanged on balance at 1.375%. Sovereign bond yields are lower in the United States and Europe.

Oil rebounded 1.2% to $45.02/barrel, while gold is 0.2% softer at $834.50 per ounce.

Euroland’s Flash Composite PMI reading in December fell less than forecast to 38.3 from 38.9 in November and 43.6 in October. The factory index dropped to 34.5 from 35.6, while services deteriorated to a score of 42.0 from 42.5. Germany’s Flash readings were 39.6 on the composite index, off 0.2 points, 33.5 on manufacturing, down 2.2 points, and 46.4 on services, up 1.4 points. France reported a composite PMI of 38.4, off 2.8 points, with manufacturing off 1.4 points to 35.9 and services down 4.6 points at 41.6.

France also reported a third-quarter decline in jobs of 0.2%. Jobs rose 2.1% from 3Q07, however. French consumer prices fell 0.5% in November, led by a 5.5% monthly slump in energy prices. The French CPI rose 1.9% from November 2007. Core inflation had the same yearly rate, 1.9%.

British consumer prices slid 0.1% in November, somewhat less than forecast, and posted a 4.1% on-year increase, down from 4.5% in October but twice the target of 2.0%. Core CPI edged up a tenth to 2.0%. Governor King’s letter to Chancellor of the Exchequer Darling expressed confidence that inflation would drop steeply and warned that his next mandated letter may be explaining why inflation is lower than 1%. RPI inflation fell from 4.2% in October to 3.0%, lowest in 2-1/2 years.

Portuguese consumer prices fell 0.6% in November, slimming its on-year gain to 1.4% from 2.3% in October and 2.8% in the year to November 2007.

Chinese fixed asset investment posted a slower on-year gain in November but the 26.8% rise in July-November was identical to that in the first half of 2008. China’s central bank hinted that monetary policy may be eased further before yearend.

ECB President Trichet, however, suggested that monetary policy in Euroland may not be eased further next month. Likewise, minutes from the Reserve Bank of Australia imply that the 100-bp rate cut to a 6-1/2 year low of 4.25% took into account the fact that policymakers do not have a scheduled meeting in January. It’s now time to see how the economy reacts to the extensive easing, and an emergency meeting in January to cut rates further is not anticipated.

Remarks by Bank of Japan Governor Shirakawa imply that he is more amenable to undertaking quantitative easing steps such as buying corporate bonds. The BOJ released a quarterly flow of funds survey that showed Japanese household wealth falling 5.2% between mid-year and end-Sept, the most since at least 1979.

Russian industrial output swung to a year-on-year drop of 8.7% in November from rises of 0.6% in October and 5.3% in November 2007.

European car sales fell 25.8% in the year to November. Euroland jobs fell 0.1% in the third quarter, led by drops in Spain and Portugal. Italy’s industrial lobbying group, Confindustria, expects both 2008 and 2009 to be years of recession.

Japan’s tertiary index of service sector activity unexpectedly rose in October. Despite a 0.4% gain, however, the index was 1.5% lower than a year earlier and 0.5% below its third-quarter average level.

Residential housing starts in Australia fell 10.7% in the year to 3Q08.

Japanese real wages dropped for a seventh consecutive month in October.

The Ukraine hryvnia was supported with central bank intervention. Hong Kong’s Monetary Authority sold local currency to cap the HK$’s strength.

U.S. housing starts and building permits data arrive at 13:30 GMT. Canada’s monthly manufacturing survey is due at the same hour. The FOMC decision will be broadcast at 19:15 GMT. The Fed is expected to at least halve the funds rate to 0.5%, and whisper numbers look for something more dramatic.

Brazilian retail sales dipped 0.3% in October but posted year/year growth of 10.1%.

Financial Stability Review: 12-16-08 by Lucas Papademos, Vice President of the ECB, Remarks at the press briefing (12-15-08)

My colleagues and I would like to welcome you to today’s press briefing on the occasion of the publication of the December 2008 edition of the ECB Financial Stability Review. The financial stability assessment contained in the Review has been prepared with the close involvement of the ESCB Banking Supervision Committee. It is for the most part based on information that was available up until the “cut-off” date of 28 November. The Review examines in some detail the main trends and events that characterised the euro area financial system over the past six months and it contains 14 boxes and five special feature articles that address topical financial stability issues in a more focused and analytical manner. The central objective of the ECB Financial Stability Review is to identify the main sources of risk and vulnerability to financial system stability and to provide a comprehensive assessment of the capacity of the euro area financial system to absorb adverse disturbances.

Since the publication of the previous Financial Stability Review in June 2008, the financial crisis has intensified. Banks had to absorb further asset valuation write-downs in an environment where wholesale funding costs remained elevated. At the same time, the global economic outlook deteriorated and became more uncertain, risk aversion among financial market participants surged, and the prices of most financial assets fell.

The persistent liquidity stresses in the early phases of the turmoil eventually gave way to deeper concerns about creditworthiness and the adequacy of capital buffers. Following the bankruptcy of Lehman Brothers, investors and creditors lost confidence in the ability of some financial firms to meet their obligations. As a result, many key financial firms faced mounting challenges in accessing short-term funding and capital markets, which triggered sharp drops in their stock prices. Some of the world’s largest financial institutions were affected by this adverse dynamic and a number of them were ultimately declared bankrupt, purchased by other financial institutions, or provided with government support.

Central banks and governments have taken extraordinary remedial actions, which aim at addressing liquidity stresses and strengthening capital positions, thus contributing to restoring confidence in and improving the resilience of financial systems. These measures have succeeded in stabilising the euro area banking system. Over time, as some government measures are being fully implemented, they should contribute to lowering funding costs of banks and facilitate the provision of credit to the broader economy.

Since September this year, tensions have increasingly spilled over from the financial sector to the real economy. In the euro area, a number of the downside risks to economic activity that had been previousely identified materialised. The significant weakening of economic activity could have a negative effect on borrowers’ ability to service their debt and thus on the credit risk faced by banks.

According to the December 2008 Eurosystem staff macroeconomic projections for the euro area, global economic weakness will persist in the coming quarters; thereafter we expect a gradual recovery, supported by the fall in commodity prices and assuming that the external environment improves and the financial tensions weaken (see Chart 3).

This leads me to the second part of my presentation that focuses on the main sources of risk and vulnerability that may affect the euro area financial stability outlook over the next six to twelve months.

Since mid-September, central banks have stepped up the already remarkable levels of cooperation and provided liquidity in coordinated actions. Moreover, the ECB and also other central banks have made extensive efforts to provide refinancing at longer maturities and to expand the lists of assets that are eligible as collateral in credit operations. Not least thanks to these actions, the recent weeks have seen a noticeable improvement in the euro money market. For example, in the past week, the spreads between term deposit and overnight index swap rates declined considerably, by 15 to 20 basis points along all maturities, reflecting the continued fall in the Euribor rates. The spreads fell to 80 basis points for the one-month maturity and 160 basis points for the 12-month maturity.

An interesting analysis related to the current problems in the money markets is presented in Box 7 of the Review which highlights the link between market liquidity and funding liquidity risk, on the basis of evidence from recent data. The results show that a negative relationship between high funding liquidity risk and low market liquidity was established only after the financial turmoil had erupted, while in “normal” times, there is no obvious relationship between the two measures. This supports the theoretical proposition (advanced by recent academic research) that interactions between the two measures emerge only when banks face funding constraints, that is, when shocks to banks’ funding liquidity can lead to forced asset sales and may depress asset prices, with dire consequences for market liquidity.

At the same time, however, the regulatory capital buffers of euro area LCBGs improved moderately as a consequence of additional capital raised and slower growth in risk-weighted assets (as shown in Chart 14). While this was largely due to the actions of individual banks aimed at reducing risks in their balance sheets, it also reflected, to a certain degree, the impact of the implementation of Basel II. In addition, some of the newly attracted capital came in the form of hybrid financing which is reaching prudential limits. Nevertheless, the actions that have been taken by governments and central banks since October 2008 to support the banking systems in euro area countries, despite comfortable solvency ratios, highlight the perceived fragility of the global financial markets.

Box 9 of the Review analyses alternative ways in which LCBGs can reduce leverage in the process of restoring their balance sheets. It shows that by cutting their dividend pay-out ratios, LCBGs could generate rather substantial additional capital buffers. On the other hand, if the banks decided to de-leverage mainly by shedding assets, this could imply a sharp contraction of credit to the private sector. It is therefore essential that banks use available opportunities to raise new capital, either from private sources or from the public funds provided by governments in the euro area.

The size of euro area insurers’ exposures to structured credit products differ considerable across institutions, as shown in Chart 15. In some cases, exposures to non-sub-prime structured credit products are rather large. This is a source of vulnerability in the event that the credit market problems were to affect also the valuations of prime or near-prime asset-backed securities. Since insurers can hold investments until maturity (to back liabilities), the key risks from insurers’ credit exposures are not temporary losses in value but defaults. Nevertheless, sharp downgrades of the ratings of structured credit products could force insurers to reduce their holdings or recognise impairments, which would affect their results and capital positions.

All in all, given the risks that lie ahead, banks will need to be especially watchful in ensuring that they have adequate capital and liquidity buffers in place to cushion the challenges ahead.

Thank you very much for your attention. I am now at your disposal for questions.

Pick Sectors, Not Stocks

During times of great upheaval like these, if you live and breathe the market, you can sense something happening to whole groups of stocks even before anyone has surfaced with a statistical study to prove it.  Sometime in mid-2008, many of us who actually pay attention to individual stocks began to realize that keeping up with company news had become a waste of energy and time.

Throughout the past year, the one consistent trend has been the lockstep trading of entire sectors of stocks.  On a sell-off of crude oil, for example, you could punch up the symbol of almost any stock levered to the energy complex and see a down quote.  This in and of itself is not strange.  What is out of the ordinary, however, is that all of these stocks would often be down within fractions of the same percentage at any given moment of the day.

Moreover, like stocks also began turning up and down at almost the same exact moment with the precision of a flock of Canadian geese, keeping formation regardless of individual fundamentals or valuation.  Should a large natural gas producer, for example Ultra Petroleum (UPL), be down 5.8% in a given session while a contract driller, say Pride International (PDE), is also down 5.9%?  Yes, they are both energy names, but with very different business models, and at opposite ends of the energy food chain.   On a down day for crude or natural gas,  should they both be discounted by almost exactly the same degree?  Now these are just two stocks, but what if we are talking about 100 or more energy related stocks all selling off, or rebounding in synchronistic moves that are almost perfectly correlated on a percentage basis?

Merrill Lynch recently took a look at this phenomenon and assigned actual empirical data to my observations on this type of “commoditization” within sectors.

In other words, when news hits with either positive or negative ramifications for an industry, the big money either rewards or beats up that whole sector, with less regard for the actual component companies than ever before.

I’ve got some of my own inklings as to the cause of this, including the ETF effect, which probably grows each day, as well as the recent redemption-fueled liquidations by many hedge funds (they must all own the same names…great hedging).

The author of this report, Savita Subramanian, believes that people no longer care about individual prospects or projections for companies because of how important the macro and global impact is on business these days.  “A stock’s fundamentals just aren’t as important as things like currency appreciation and global growth expectations right now,” the author explains.

Globalization isn’t going away anytime soon, so its time to come up with a plan for this macro-driven climate.

So if we have identified the pattern, how then do we use this information to our own advantage?  Well, for starters, let’s agree to stop burning hours of our lives sitting through quarterly conference calls for each company’s earnings report.  As passive minority investors, it becomes much more important to get representation in a sector we like than to be a company shareholder in this environment.  Sector funds or ETF’s may be a better bet to get that exposure through a basket approach, if the stocks are all going to move together directionally anyway.

The drawback is not owning the name that outperforms it’s group, but as the evidence tells us, it becomes less and less likely that you are missing much anyway.  On the flip side, can you imagine the disappointment of watching a group work it’s way higher and being stuck in the one stock that isn’t participating due to it’s own company-specific issues?

I see this on my screens all day, Merrill Lynch’s study or not, and so until this period passes (if it passes), I am more interested in absorbing the macro data or mood and discerning the groups or indices that could benefit or suffer, as opposed to worrying about the earnings for such-and-such company within the group.  If I tear apart balance sheets and income statements and come up with a company that is undervalued, will anyone notice?  Even if my information is right, it doesn’t seem like anyone else will care.  However, If my group or sector is in favor, why not run with the herd?  If it becomes out of favor, why not blow out the position, regardless of whether or not it’s a good company…everyone else will beat you to the punch if you do not, thus leading to better opportunities, apres le deluge.

These are the days when you either need to have a 20 year time frame or a 20 minute timeframe, and either can be extremely profitable.  In either case, owning the sector is going to give you all you need in terms of volatility, so leave the stock picking to the masochists.

Disclosure:  I do not currently own any of the stocks mentioned in this article.

CDS Contracts: 12-16-08 Thomas Book, Member of Executive Board, Eurex, Testimony before the House Committee on Agriculture (12-08-08)

I am Thomas Book, a member of the Executive Boards of Eurex and Eurex Clearing. Chairman Peterson, Ranking Member Goodlatte and Members of the Committee, I appreciate this opportunity to testify before you today and I thank the Committee for calling this hearing on the important subject of over-thecounter (“OTC”) derivatives, particularly credit default swap (“CDS”) contracts, the role that they play in the United States and international economies, and the appropriate regulatory framework going forward, particularly as it relates to clearing of CDS contracts. As a member of the Executive Boards of Eurex as well as Eurex Clearing, I have overall responsibility for the management of the clearing business.

1. Eurex and Eurex Clearing

Eurex is one of the largest derivatives exchanges in the world today and is, in fact, the largest exchange for Euro-denominated futures and options contracts. While it is headquartered in Frankfurt, Germany, Eurex has 398 members located in 22 countries around the world, including 76 in the United States. Eurex, and its subsidiary the International Securities Exchange, a stock options exchange located in New York City, is part of the Deutsche Börse Group which also includes the Frankfurt Stock Exchange and Clearstream. Eurex Clearing was formed in 1997 to function as the clearinghouse for the Eurex exchanges. [Footnote 1 - Eurex Clearing AG is a stock corporation formed and incorporated under the laws of Germany and is a wholly owned subsidiary of Eurex Frankfurt AG, a German stock corporation which is itself wholly owned by Eurex Zürich AG, a Swiss stock corporation. Eurex Zürich has two 50% parents, Deutsche Börse AG, a German stock corporation listed on the Frankfurt Stock Exchange, and the SIX Swiss Exchange. ]

Eurex Clearing exists as a separate corporate legal entity from its affiliates for which it functions as CCP and has its own board of directors. As provided under German corporate law, Eurex Clearing has an Executive Board which is responsible for the day-to-day management and operations of Eurex Clearing, and a Supervisory Board.

Eurex Clearing acts as the central counterparty (“CCP”) for all Eurex transactions and guarantees the fulfillment of all transactions in futures and options traded on Eurex. Eurex Clearing does not currently operate directly in the United States.[Footnote 2 -Eurex Clearing does, however, have an agreement with The Clearing Corporation relating to the operation of a clearing link between Germany and the United States.]

Eurex Clearing is directly connected with various national and international central securities depositories, thereby simplifying the settlement processes for its clearing members. As Europe’s largest and one of the world’s leading clearing houses, Eurex Clearing clears more than 2 billion transactions each year.

Members of Eurex Clearing are categorized as either Direct Clearing Members or General Clearing Members. General Clearing Members, which number 58 firms, are the only clearing members who may clear transactions on behalf of nonaffiliated non-clearing members and most Eurex members in the U.S. clear their trades through them. General Clearing Members must have at least €125 million (approximately $156 million) in equity capital. Credit institutions, banks, and other financial institutions that are regulated by a country in the European Union or Switzerland may become clearing members. Accordingly, Eurex Clearing has no clearing members located in the United States.

Eurex Clearing provides fully automated and straight-through post trade services for derivatives, equities, repo, and fixed income transactions with a track record of 99.99% availability of its electronic clearing platform. It also has strong financial safeguards and industry leading risk management, including in particular its unique risk functionalities and processes for derivatives such as intra-day risk margining in real-time based on actual positions and prices throughout the trading day and its integrated pre-trade risk validation functionality. It has a deep and experienced risk management team with in-depth knowledge of the latest risk models and techniques, including Value-at Risk Valuation models. Eurex Clearing has very strong lines of defense, including an overall collateral pool as of November 2008 of more than €70 billion and the highest collateral standards. It requires that overnight margin payments be made through central bank money.

Eurex Clearing has already established clearing and risk management procedures for credit futures based on iTraxx indices. These contracts were launched on Eurex in March 2007, making Eurex the first regulated market globally to offer credit derivatives. Eurex Clearing is currently working to expand its clearing services to include OTC CDS contracts that are registered in the DTCC Trade Information Warehouse. As explained more fully below, Eurex Eurex Clearing also acts as the central counterparty for and guarantees transactions on Eurex Bonds (a cash market for bonds), Eurex Repo (repurchase agreements), for equities on the Frankfurt Stock Exchange and the Irish Stock Exchange and for certain contracts executed on the European Energy Exchange. Transactions on the ISE, a wholly owned U.S. subsidiary of Eurex (through its U.S. subsidiary, U.S. Exchange Holdings, Inc.) are cleared by the Options Clearing Corporation.

Clearing believes that providing for a CCP with respect to such transactions will increase transparency in these markets, enforce strict risk controls and increase efficiency, thereby greatly reducing systemic risk for financial markets as a whole.

2. Regulation of Eurex Clearing

As required, Eurex Clearing is licensed as a CCP by the German Federal Financial Supervisory Authority (“BaFin”). In addition, on January 16, 2007, Eurex Clearing was recognized by the United Kingdom’s Financial Services Authority (“FSA”) as a Recognized Overseas Clearing House (“ROCH”), on the basis that the regulatory framework and oversight of Eurex Clearing in its home jurisdiction is comparable to that of the FSA.

The German Banking Act (“Banking Act”) provides the legal basis for the supervision of banking business, financial services and the services of a CCP. The activity of credit and financial services institutions is restricted by the Banking Act’s qualitative and quantitative general provisions. These broad, general obligations are similar to the Core Principles of the Commodity Exchange Act which apply to U.S. Derivatives Clearing Organizations (“DCOs”). A fundamental principle of the Banking Act is that supervised entities must maintain complete books and records of their activities and keep them open to supervisory authorities. BaFin approaches its supervisory role using a risk-based philosophy, adjusting the intensity of supervision depending on the nature of the institution and the type and scale of the financial services provided.

BaFin may grant a clearing license subject to conditions consistent with the Banking Act’s general provisions and may limit the scope of the license to certain types of business. When licensing an institution, BaFin issues guidelines to the institution with respect to capital adequacy and risk management and subsequently, it monitors compliance with the conditions for granting the license.

The Banking Act requires that a CCP must have in place suitable arrangements for managing, monitoring and controlling risks and appropriate arrangements by means of which its financial situation can be accurately gauged at all times. In addition a CCP must have a proper business organization, an appropriate internal control system and adequate security precautions for the deployment of electronic data processing. Furthermore, the institution must ensure that the records of executed business transactions permit full and unbroken supervision by BaFin for its area of responsibility.

BaFin has the authority to take various sovereign measures in carrying out its supervisory responsibilities. Among other things, BaFin may issue orders to a CCP and its Executive Board to stop or prevent breaches of regulatory provisions or to prevent or overcome undesirable developments that could endanger the safety of the assets entrusted to the institution or that could impair the proper conduct of the Cap’s banking or financial services business. BaFin may also impose sanctions to enforce compliance. BaFin has the authority to remove members of the Executive Board of an institution or, ultimately, to withdraw the institution’s authorization to do business.

In addition, the German Federal Bank (“Deutsche Bundesbank”) coordinates and cooperates, with BaFin, the primary regulator, in the supervision of Eurex Clearing. Deutsche Bundesbank plays an important role in virtually all areas of financial services and banking supervision, including the supervision of Eurex Clearing. Under the Banking Act, Deutsche Bundesbank exercises continuing supervision over such institutions, including evaluating auditors’ reports, annual financial statements and other documents and auditing banking operations. Deutsche Bundesbank also assesses the adequacy of capital and risk management procedures and examines market risk models and systems. Deutsche Bundesbank adheres to the guidelines issued by BaFin. As appropriate, Deutsche Bundesbank also plays an important role in crisis management.

Both supervisory authorities use a risk-based approach to oversight. Under this risk-based approach, the supervisory authority must review the supervised institutions’ risk management at least once a year, to evaluate current and potential risks and, in so doing, to take account of the scale and importance of the risks for the institution and of the importance of the institution for the financial system. Institutions classified as of systemic importance, including Eurex Clearing, are subject to intensified supervision by both supervisory authorities.

3. Benefits of CCP Clearing for CDS Transactions

In previous hearings [Footnote 3 3 To Review the Role of Credit Derivatives in the U.S. Economy: Hearing before the HouseCommittee on Agriculture,110th Cong, 2d Sess. (October 15, 2008 ) and To Review the Role ofCredit Derivatives in the U.S. Economy: Hearing before the House Committee on Agriculture,110th Cong, 2d Sess. (November 20, 2008).] this Committee heard witnesses express concerns about the role that credit derivatives have played in the recent market turmoil. In this regard, witnesses cited the difficulties experienced by CDS contract writers that did not have adequate collateral to support their positions,[Footnote 4 To Review the Role of Credit Derivatives in the U.S. Economy: Hearing before the House Committee on Agriculture,110th Cong, 2d Sess. (October 15, 2008 ) (statement of Robert Pickel, CEO, International Swaps and Derivatives Association, at p. 3).] the lack of transparency with respect to such transactions,[Footnote 5 Id. (statement of Erik Sirri, Director of Trading and Markets, U.S. Securities and Exchange Commission, at p. 6).] the operational weaknesses in the current market structure,[Footnote 6 Id. (statement of Walter Lukken, Acting Chairman, U.S. Commodity Futures Trading Commission, at p.3).] and the systemic risk arising from these transactions and from interconnections between the market for CDS transactions and other markets.[Footnote 7 Id.(statement of Erik Sirri,at p.2).]

Eurex Clearing, like many of the witnesses before this Committee, believes that CCP services for CDS contracts will address the concerns identified before this Committee with respect to counterparty risk, lack of transparency regarding exposures and the sufficiency of risk coverage and operational weaknesses, thereby ameliorating systemic risk for the financial market. Given the huge exposure in CDS contracts and the systemic relevance of CDS clearing services in mitigating these concerns, a robust, proven clearing house is required to act as the central counterparty to these trades. First, clearing of OTC CDS contracts by a CCP will reduce risk. The specific risks of CDS contracts with contingent liabilities that arise only upon the default of the contract’s reference entity and the dual risks of a default of the reference entity and the subsequent default of the protection writer before settlement, require an independent, neutral and strongly collateralized CCP with a proven risk management capability.

Specifically, multilateral netting by the CCP would reduce the huge bilateral credit exposures arising from the current market structure. A central clearing house replaces multiple bilateral credit risks with the standard and transparent credit risk of the CCP. Moreover, and perhaps most critically, a CCP provides post-default backing, and by mutualising potential counterparty default risk, central counterparty clearing will ameliorate one of the most glaring systemic risks raised by the current market turmoil. Mutualising counterparty risk results in enhanced certainty with respect to legal enforceability and lines of defense in case of a default by a clearing member.

Second, clearing of OTC CDS contracts by a CCP will increase the transparency of position risk. Valuation of the risk of the netted positions is made by the CCP, an independent and market neutral party. The CCP requires that this risk be collateralized under a fully transparent and robust framework. Moreover, the collateralization framework, which includes daily mark-to-market of risk, provides an early warning mechanism with respect to the overall ability of parties to carry the risk of their positions.

Finally, central counterparty clearing addresses current operational weaknesses through standardized, straight-through processing. In this regard, multilateral netting of transactions reduces the complexity of back office processes and the number of fails and the CCP will simplify trade assignments. Novation and netting procedures are already an integral and proven service of Eurex Clearing. Eurex Clearing believes that offering these services, which have a proven track record with respect to listed derivatives, will bring significant benefits to the OTC market in CDS transactions and, for the reasons discussed above, reduce systemic risk to the financial market and increase market integrity.

4. Description of Eurex Clearing’s initiative for CDS clearing

Eurex Clearing’s new clearing service for OTC CDS contracts will address a significant part of global trades that exist bilaterally today and are registered in the DTCC Trade Information Warehouse, with the first priority on CDS index contracts. Highlights of this clearing service are:

Product scope includes iTraxx® and CDX® indices, to be followed by iTraxx/CDX tranches and single name CDS

Link with DTCC’s DerivServ Trade Information Warehouse, ensuring full compatibility with existing CDS backoffice infrastructure and allowing automated backloading of existing transactions

Credit event handling and settlement based on ISDA dispute resolution language and auction results

Segregated guarantee fund for CDS to avoid commingling of risks and a separate clearing license

Product specific, asymmetric margining concept designed especially to address CDS risk profile, and

CDS risk management operated by Eurex Clearing with open access to eligible credit institutions; a separate entity to share governance and control with respect to product scope will be established.

Position keeping, separated for clearing members and their customers

Daily position valuation

Performance guarantees, and

5. Suggestions for future regulatory proposals

The Commodity Futures Modernization Act of 2000 (“CFMA”) provides a successful template for any future regulatory enhancements to address the concerns raised during the hearings before this Committee. For example, Section 112 of the CFMA added a new provision establishing the regulatory oversight that would apply to a clearing house operating as a Multilateral Clearing Organization (“MCO”) with respect to OTC derivatives transactions. It authorizes: 1) banks; 2) clearing agencies registered under the Securities Exchange Act of 1934; 3) DCOs registered under the Commodity Exchange Act; and 4) clearing organizations supervised by a foreign financial regulator that a U.S. financial regulator has determined satisfies appropriate standards, to operate as an MCO.

The market in OTC CDS transactions is global in scope, with roughly half of all traded volumes deriving from Europe. Eurex Clearing believes that any regulatory proposal must be measured against the effect that it might have on the global nature of the market and should take into account the following factors:

Does the regulatory proposal recognize, and is it premised on, cross border regulatory cooperation to avoid “regulatory arbitrage”?

Does it take into account global regulatory standards and business practices?

Does it provide an appropriate level of flexibility in implementation?

Does it erect artificial legal barriers or does it encourage competition?

The Core Principles for U.S. DCOs found in section 5b of the Commodity Exchange Act lend themselves to comparison to the regulatory regimes that apply in other national jurisdictions in a way that prescriptive regulatory provisions can not. By way of example, the Core Principles for DCOs are broadly consistent with the recommendations for CCPs of the International Organization of Securities Commissions and the Bank for International Settlements.[Footnote 9 Compare section 5b of the Commodity Exchange Act, 7 U.S.C. §7b and “Recommendations for Central Counterparties,” Report of the Committee on Payment and Settlement Systems, Technical Committee of the International Organization of Securities Commissions, (“CCP Report”) http://www.iosco.org/library/pubdocs/pdf/IOSCOPD176.pdf.] Moreover, many of the broad requirements in the Banking Act parallel Core Principles which apply to U.S. DCOs. Of course, coupled with broad international acceptance of appropriate regulatory standards must be robust arrangements for cooperation by international regulatory authorities and a ready framework for information sharing.[Footnote 10 In addition to the broad acceptance by international regulators of the IOSCO recommendations in the CCP Report, many regulatory authorities, including the U.S. CFTC, U.S. SEC and BaFin are signatories to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange Of Information.]

The current framework, incorporated in Section 112 of the CFMA is based upon broadly accepted regulatory standards and permits reliance by U.S. regulatory authorities on those standards being enforced by the regulatory authority of the CCP’s home jurisdiction. It provides a sound regulatory foundation for clearing of OTC CDS transactions in a global market. Eurex Clearing strongly believes that there are unmistakable benefits, even for U.S. market participants, to having a European clearing solution serving the global market, as currently being implemented by Eurex Clearing for the CDS market. A large percentage of international trading is priced in Euro and access to a European CCP facilitates these transactions. In this respect, many U.S. market participants seek to diversify their portfolios through exposure to European-based securities and trade CDS related to them. Moreover, a large percentage - perhaps a third - of the global trading in CDS focuses on the credit of sovereign European governments and European businesses the economics of which are driven primarily by local, contemporaneous European market developments. For example, corporate actions which may directly affect the values of such CDS occur, by and large, during the European business day. Furthermore, because the determination of credit events underlying CDS, particularly those referring to the restructuring, is subject to practices specific to the jurisdiction of the reference entity, ISDA’s European offices would likely make determinations about what constitutes a credit event for a CDS with a European reference entity.

Moreover, Eurex Clearing believes that financial surveillance as well as market surveillance is crucial to the clearinghouse’s proper supervision and that these functions are enhanced by knowledgeable experts who have access to upto-date information and are operating in real time along with the reference markets, thereby providing enhanced protection for all market participants. For these reasons, global participants in the European CDS market, which includes a sizable number of U.S. participants, will benefit from access to a European OTC CCP.

In addition, CCPs that serve global markets, if permitted under this framework to operate in the U.S. as MCOs, stand to offer U.S. markets the benefits of increased competition. This has the potential to offer U.S. market participants with alternative methods of doing business and access to clearing services for innovative products that may not otherwise be available. In this regard, as noted above, Eurex was the first exchange to list credit futures contracts when it listed futures on Euro-denominated iTraxx CDS indexes. Accordingly, if Congress determines to enact regulatory enhancements, it should consider clarifying any perceived legal uncertainty with respect to the operation of the legal framework and whether other legal requirements apply to certain CDS transactions and not others. Such clarity would facilitate both domestic and non-U.S. CCPs with understanding and complying with the legal requirements.

6. Conclusion

Eurex Clearing supports fully appropriate regulatory oversight of listed and OTC derivatives. Eurex Clearing understands the importance of public confidence in these markets and is committed to the utmost level of cooperation with the regulatory authorities of those nations that have an interest in our clearing operations. In this regard, we appreciate the opportunity to work with the U.S. regulatory authorities with respect to our plans to offer central clearing services for CDS transactions. Eurex Clearing would note that the U.S. financial market regulators have been inclusive, cooperative and open. Eurex Clearing also believes that the existing treatment of CCPs that are subject to oversight by a non-U.S. regulatory authority that satisfies appropriate regulatory standards is the right framework and we urge Congress to maintain and extend that approach in any future regulatory proposal, particularly proposals to address any perceived legal uncertainty with respect to the law which may apply to clearing of CDS transactions. Finally, Eurex Clearing is honored to have been invited to present its views to this Committee and appreciates the opportunity to discuss these critically important issues. I am happy to answer your questions.

Daily Interest Rate Opinion-late version

The reaction in the markets was favorable for stocks and bonds. The Dow closed up 360 points while the Nasdaq closed up 81 points. Despite those gains, the bond market did well also, currently up 47/32, which will likely improve this afternoon’s mortgage rates by approximately .375 of a discount point.

The Labor Department gave us this week’s most important economic news with the release of November’s Consumer Price Index (CPI). They reported that the overall index reading fell 1.7% last month. This was a larger drop than was expected and the lar gest monthly decline since February 1947, indicating that prices for energy are still falling rapidly. The core data reading, that excludes volatile food and energy prices, was unchanged last month. Analysts were expecting to see a slight increase in the core reading. This means that prices at the consumer level of the economy were lower than expected, which is good news for bonds and mortgage rates because falling prices means inflation is not really a threat.

November’s Housing Starts was also posted this morning and also showed a record low. It revealed a decline in starts of new homes of nearly 19% and a drop of 15% in permits for new construction starts. This means that the housing sector is still weakening and appears to be well off a “bottom” that people are trying to predict.

There is no relevant economic news scheduled for release tomorrow, so look for today’s events to carry into tomorrow’s trading. The next piece of relevant economic da ta will be November’s Leading Economic Indicators (LEI) late Thursday morning.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Float if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Vanguard is first mega fund company to turn the corner on redemptiuons

Vanguard’s lead in stopping the bleed of redemptions is no fluke. Ever since it was founded by index investing icon John Bogle, the fund company has attracted advisers and investors who seek to reap the gains of the capital markets by staying invested in broadly diversified international asset classes with low-cost and transparent vehicles.

Market timers and stock pickers are out of place at Vanguard get togethers, so their panic, frustration, and fatalism in tough times do not get much of a hearing.

As the first to turn around the grim redemption figures from the market meltdowm, Vanguard is living up to its name:

Vanguard:

Vanguard Leads the Way for Fund Companies

Investors slowed their redemptions but still took out a net $41 billion in November following a gargantuan $111 billion in October redemptions, according to flow estimates from Morningstar Market Intelligence.

Vanguard was one of the few big fund companies to move back into the black with net inflows of $2.1 billion, compared with net outflows of $5 billion in October. The firm’s Treasury funds likely helped as they remained strong amid a flight to quality. Others enjoying nice modest inflows were John Hancock, Eaton Vance, FPA, and TIAA-CREF.

Among the giant shops, Fidelity shed $3 billion, but that’s a big improvement from the $18 billion in net outflows from October. However, giant American had the greatest net outflows to the tune of $7 billion, compared with net outflows of $16 billion in October.

Making Money on Smog

I apologize for not posting in a week. I realize one needs to keep the copy flowing to keep the readers coming. But, I’ve been under the weather, flu-like symptoms with a sore throat. It’s funny, you really don’t think about the air or your breathing until it’s labored with a sore throat or out-of-breath lungs. But the fact is, we spend all our time in the air. Like fish swimming in the sea, our bodies exist surrounded by the air. And the air can mess you up, through heavy wind, rain or snow. But sometimes it’s the little stuff; the stuff in the air you breathe in and out every day. Some of that stuff, like carbon, is poison and can kill you

So, I found it a nice coincidence that as I spend my days contemplating the texture of the air on my throat more than usual, Xshares Advisors launched the first of its new family of ETFs, the AirShares EU Carbon Allowances Fund (NYSE Arca: ASO). Xshares says it’s the “first U.S. traded product that provides exposure to the fast growing carbon market by holding European Union Allowances futures contracts.”

True, but it’s not the first to track the European carbon market. Barclay’s came out with the iPath Global Carbon ETN, an exchange-traded note in June. It tracks the Barclays Capital Global Carbon Index Total Return, which measures the performance of the most liquid carbon-related credit plans. These are the European Union Emission Trading Scheme or EU ETS Phase II and Kyoto Protocol’s Clean Development Mechanism. But it hasn’t been a big hit. Since ETNs are unsecured debt instruments, not funds, investors have been shying away because of the credit risk. While Barclays seems solid, credit risk left investors in Lehman’s ETN holding in line to collect pennies on the dollar. Well, that and the fact, the fund is down 41% since its inception.

AirShares EU Carbon Allowances Fund is an interesting product very different from the ETN. Still, it’s not a true fund regulated by the Investment Company Act of 1940, the SEC regulation that governs mutual funds and ETFs. It’s an exchange-traded vehicle, but it doesn’t track an index. Rather, it’s a commodity pool, like most of the commodity ETVs, such as USO. Commodity pools are regulated under the securities acts of 1933 and 1934.

This one tracks the performance of a basket of exchange-traded futures contracts of European Union Allowances (EUAs) for carbon. A EUA is an entitlement to emit the equivalent of one metric ton of carbon dioxide into the air under the European Union Greenhouse Gas Emissions Trading Scheme (EU ETS).

The fund’s initial portfolio holds unleveraged long positions in ICE Futures (Intercontinental Futures Exchange) or European Climate Exchange Carbon Financial Instrument Futures Contracts (ECX CFI Futures Contracts). Each contract provides for delivery of 1000 EUAs at a specified price, says Xshares. These contracts will expire each December in the years 2009 through 2012.

Like any other futures contracts, in order to keep a position in the market, the fund will need to roll over the contracts. This means as the expiration approaches, the fund sells the contract and buys the next future in line. This rolling over process increases transaction costs. The fund charges an expense ratio of 0.85%, compared to 0.75% for GRN. The rolling process can also result in contango or backwardation. I wrote a good explanation of how contango can affect an exchange-traded commodity pool when the first oil ETF came out in Contango and Cash.

The monster in the mirror

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. Like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “Bad Guys” he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

But November isn’t September, 2008 isn’t 2001, Pakistan isn’t Afghanistan and India isn’t America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It’s odd how in the last week of November thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara – one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you may not have heard that ordinary people too died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness. The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of India Shining and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish centre.

We’re told one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company I think) said “Hungry, kya?” (Hungry eh?). It then, with the best of intentions I’m sure, informed its readers that on the international hunger index, India ranked below Sudan and Somalia. But of course this isn’t that war. That one’s still being fought in the Dalit bastis of our villages, on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet. So maybe, like everyone else, we should deal with the one that is.

There is a fierce, unforgiving fault-line that runs through the contemporary discourse on terrorism. On one side (let’s call it Side A) are those who see terrorism, especially “Islamist” terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit and has nothing to do with the world around it, nothing to do with history, geography or economics. Therefore, Side A says, to try and place it in a political context, or even try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that though nothing can ever excuse or justify terrorism, it exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed, who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias and Democracy and believes that jihad should be waged until Islam, his Islam, rules the world. Among the things he said are: “There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera): “We didn’t spare a single Muslim shop, we set everything on fire … we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.”

(Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently in Kandhamal in Orissa, Christians were the target of two and a half months of violence which left more than 40 dead. Forty thousand people have been driven from their homes, half of who now live in refugee camps.)

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jehad with his twisted, fiery sermons. On December 11 the UN imposed sanctions on the Jammat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest. Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide he left the VHP to join the Shiv Sena. Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat. So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata.

Suhel Seth, a TV impresario and corporate spokesperson, recently said: “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted. The RSS has 45,000 branches, its own range of charities and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister AB Vajpayee, current leader of the opposition LK Advani, and a host of other senior politicians, bureaucrats and police and intelligence officers.

If that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organisations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

In this nuclear subcontinent that context is partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes and families, was drawn virtually overnight. It was Britain’s final, parting kick to us. Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India left their homes with nothing but the clothes on their backs.

Each of those people carries and passes down a story of unimaginable pain, hate, horror but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives. Pakistan, the Land of the Pure, became an Islamic Republic, and then, very quickly a corrupt, violent military state, openly intolerant of other faiths. India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990 they were ready to make a bid for power. In 1992 Hindu mobs exhorted by LK Advani stormed the Babri Masjid and demolished it. By 1998 the BJP was in power at the centre. The US war on terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy. This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism in the subcontinent and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and LK Advani of the Rashtriya Swayam Sevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express and the 2007 bombing of the Samjhauta Express, the government of India announced that it has “incontrovertible” evidence that the Lashkar-e-Taiba backed by Pakistan’s ISI was behind the Mumbai strikes. The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies the Lashkar operates in India through an organisation called the Indian Mujahideen. Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy. Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously. In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. Neither will war. (Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighbouring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.)

Thanks largely to the part it was forced to play as America’s ally first in its war in support of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening towards civil war. As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistan army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to.

Certainly it did not expect them to come calling in heart of the Homeland on September 11. So once again, Afghanistan had to be violently remade. Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders. Nobody, least of all the Pakistan government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs and the maniacs who believe that Islam will, or should, rule the world is mostly the detritus of two Afghan wars. Their ire rains down on the Pakistan government and Pakistani civilians as much, if not more than it does on India.

If at this point India decides to go to war perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before. If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbours. It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front. The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary. Over three days and three nights we watched in disbelief as a small group of very young men armed with guns and gadgets exposed the powerlessness of the police, the elite National Security Guard and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this they indiscriminately massacred unarmed people, in railway stations, hospitals and luxury hotels, unmindful of their class, caste, religion or nationality. (Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.) But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill – and be killed – mesmerised their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news. Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.) Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people and inflict as much damage as they could before they were killed themselves. They left us completely bewildered. When we say “nothing can justify terrorism”, what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it’s precious. So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself Imran Babar. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror emails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir. “You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for? Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don’t figure in their calculations except as collateral damage. It has always been a part of and often even the aim of terrorist strategy to exacerbate a bad situation in order to expose hidden faultlines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project. A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theatre, spectacle and symbolism, and today, the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the attack was being condemned by TV anchors, the effectiveness of the terror strikes were being magnified a thousandfold by TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid. Instead we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed (is it alright for the poor to remain unprotected?). We had people suggest that the government step down and each state in India be handed over to a separate corporation. We had the death of former prime minster VP Singh, the hero of Dalits and lower castes and villain of Upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir, give us his version of George Bush’s famous “Why they hate us” speech. His analysis of why religious bigots, both Hindu and Muslim hate Mumbai: “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.” His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.” Didn’t George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and leftwing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army and virtually asking for a police state. It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid television flashcards like the Police are Good Politicians are Bad/Chief Executives are Good Chief Ministers are Bad/Army is Good Government is Bad/ India is Good Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically, this regression into intellectual infancy comes at a time when people in India were beginning to see that in the business of terrorism, victims and perpetrators sometimes exchange roles. It’s an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation. Eventually the courts acquitted two out of the four accused, including SAR Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him but was then convicted for a fresh, comparatively minor offence. The supreme court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.” Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19 this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur and Ahmedabad in 2008. An assistant commissioner of Police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists” known and rewarded for having summarily executed several “terrorists”. There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics and activists all of whom demanded a judicial inquiry into the incident. In response, the BJP and LK Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying it was “suicidal” and calling them “anti-national”. Of course there has been no inquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the CBI said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted 2kg of RDX and two pistols on them and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir). Ali and Qamar who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS) that was investigating the September 2008 Malegaon blasts arrested a Hindu preacher Sadhvi Pragya, a self-styled God man Swami Dayanand Pande and Lt Col Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu Nationalist organizations including a Hindu Supremacist group called Abhinav Bharat. The Shiv Sena, the BJP and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists”. LK Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On the November 25 newspapers reported that the ATS was investigating the high profile VHP Chief Pravin Togadia’s possible role in the Malegaon blasts. The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai Attacks. The chances are that the new chief whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

So according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police. This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world and yet refuses to ratify the International Covenant on Torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the Underworld and the Encounter Specialists virtually does not exist.

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them? There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse. If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US army is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire. (Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?) Hundreds of thousands people including thousands of American soldiers have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S allies/agents (including India) and U.S interests in the rest of the world has increased dramatically since 9/11. George Bush, the man who led the US response to 9/11 is a despised figure not just internationally, but also by his own people. Who can possibly claim that the United States is winning the war on terror?

Homeland Security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland. We have a hostile nuclear weapons state that is slowly spinning out of control as a neighbour, we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalise, end up as a threat not just to India, but to the whole world. If ten men can hold off the NSG commandos, and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix. Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go. Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain (it would be naïve to say end) terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says Justice, the other Civil War. There’s no third sign and there’s no going back. Choose.

European Car Sales Plummet!!

 

By Marco Bertacche

Dec. 16 (Bloomberg) — European car sales fell 26 percent in November, the biggest monthly drop since 1999, as a global recession and tighter credit hurt purchases and people shunned vehicles made by bankruptcy-threatened General Motors Corp.

Registrations declined to 932,537 from 1.26 million a year earlier, the Brussels-based European Automobile Manufacturers’ Association said in a statement today. Sales slumped 39 percent at GM and 56 percent at Chrysler LLC after the U.S. companies told Congress they were running out of cash. Volkswagen AG fared best among major automakers, with deliveries down 16 percent.

European business and consumer confidence fell to a 15-year low in November as advanced economies suffered their first simultaneous recession in more than 60 years. The U.K. and Spain had the steepest drops among major markets, with East European sales also weaker. Eleven-month registrations slid 7.1 percent, accelerating from a 5.4 percent decline through October.

“The contraction is spreading all over Europe,” said Michael Tyndall, an auto-industry specialist at Nomura Securities in London. “On GM there’s a negative aspect in terms of sentiment, but also the car-financing side didn’t help.”

GM Squeezed

The drop marked the seventh consecutive monthly decline. GM’s European sales slipped to 76,383 vehicles, with the Saab brand falling 46 percent. The Detroit-based company’s market share shrank to 8.1 percent from 9.7 percent. Numbers were worse at Chrysler, with just 3,623 autos sold and the market share contracting to 0.4 percent from 0.7 percent.

“Talk of bankruptcy at GM wouldn’t have helped sales,” said Georg Stuerzer, an auto-industry analyst at UniCredit in Munich.

U.S. President George W. Bush may use money from the $700 billion bank bailout fund to keep GM and Chrysler out of bankruptcy after the Senate failed to reach a compromise on $14 billion in aid. Sales at Ford Motor Co., which isn’t directly seeking a handout, declined only 20 percent and its market share improved to 10.4 percent, buoyed by a new version of the Fiesta small car that the company plans to introduce worldwide.

Wolfsburg, Germany-based Volkswagen remains Europe’s biggest automaker with a 22.7 percent market share, up from 20.1 percent. The Audi brand was one of only three to increase November sales. The others were Renault SA’s Dacia unit, which helped limit the company’s sales decline to 20 percent, and luxury automaker Jaguar, owned by India’s Tata Motors Ltd.

“The positive surprise came from Audi,” said Nomura’s Tyndall. “It’s a sign that when you have access to finance, like VW had last week, you have a clear competitive advantage.” The company asked for loan guarantees through the Germany’s Financial Market Stabilization Fund, spokesman Dietmar Kupisch said Dec. 9.

Land Rover Drops

Registrations of other upscale brands fell. Tata’s Land Rover marque suffered a 55 percent drop, second only to Chrysler, and sales slumped 31 percent at Munich-based Bayerische Motoren Werke AG, the No. 1 maker of luxury cars.

Toyota Motor Corp. of Japan, vying with GM to become the world’s biggest automaker, had a 34 percent decline in European deliveries, including a 44 percent drop at the Lexus brand.

All western European states except Finland recorded a decline, with an average drop of 26 percent in the 15 countries that were members of the EU before May 2004 plus Iceland, Norway and Switzerland. Deliveries in the 10 east-European nations that have joined the EU since 2004 fell 23 percent.

Spain suffered a 50 percent drop and the U.K. one of 37 percent. The Italian market contracted by 30 percent, Germany by 18 percent and France by 14 percent.

‘In Freefall’

“Consumer spending is in freefall and that’s hurting non- primary and luxury goods like cars,” Alessandro Capuano, a trader with IG Markets in London, told Bloomberg Television. “Spain and U.K. are worst hit, but the U.K. could come out of recession earlier thanks to its aggressive monetary policy. We’re negative on the industry for the next six months.”

Slumping markets and planned limits on carbon-dioxide emissions have prompted Europe’s carmakers to call for 40 billion euros ($55 billion) in low-interest loans.

The European Union has proposed 200 billion euros of measures to try to bolster growth, though no region-wide plan for carmakers has yet emerged. France has pledged 1 billion euros of low-interest loans to automakers’ financing units, of which 779 million euros has already been paid out, President Nicolas Sarkozy said yesterday.

The nine-member Bloomberg Europe Autos Index rose 0.5 percent. VW closed up 0.3 percent at 307.26 euros and BMW added 0.8 percent to 22.18 euros. In the U.S., GM was trading up 3.4 percent at $4.22 as of 2:28 p.m. in New York as Bush said in an interview airing on CNN that he was “considering all options” for bailing the company out. Ford was down 0.9 percent at $3.15.

Mortgage Market Update 12/16/2008 FED DAY

It’s Fed Day again, with the Federal reserve releasing their interest rate decision and their policy statement.  Expectations point towards a .5% to a .75% drop in the Fed Funds Rate, which currently stands at 1%.  The report has historically been a strong market mover, but this is not a normal trading environment so it will be interesting to see how traders react to the report. 

Consumer Prices fell by -1.7%, which is the most on record and follows the 1% drop we saw in October.  The Consurmer Price Index (CPI) increased only 1.1%.  In addition, Housing Starts and Building Permits were reported at the lowest they have ever been since the record began 61 years ago.  These reports indicate very low inflation readings, and in fact support the view that deflation is our biggest concern.  Bonds are reacting favorably to the news, though it does not spell good things for our economy. 

Mortgage Backed Securities are currently up on the day at +6bp.  Interestingly, PIMCO (the largest bond fund in the world) announced that it is aggressively buying MBS.  This will help bonds weather much of this afternoon’s Fed Report should it contain any unfriendly bond news.   Bond prices have been continually held down by those very tough layers of resistance at $102.59 and at $102.65, which will take a very strong run to break.  For now we are maintaining our floating stance, but we will be anxiously awaiting the Fed Report as that may point us towards locking on the previous week’s gains.  Stay tuned.

U.S. Stock-Index Futures Rise on Rate-Cut Speculation; GE Gains

U.S. stock-index futures advanced on speculation the Federal Reserve will cut its main interest rate to a record low and channel credit to businesses and consumers to halt the worst recession in a quarter century.

General Electric Co., the world’s biggest maker of power- generation equipment, climbed 2.1 percent and Microsoft Corp., the largest software company, added 1.3 percent as traders bet the Fed will cut its benchmark rate to as low as 0.25 percent. General Motors Corp. rose on optimism the Treasury may adopt a plan to save the car industry, while Goldman Sachs Group Inc. gained 1.9 percent even after posting a wider-than-estimated fourth-quarter loss.

Standard & Poor’s 500 Index futures expiring in March added 1 percent to 880.6 at 9 a.m. in New York. Dow Jones Industrial Average futures gained 61 points, or 0.7 percent, to 8,642 and Nasdaq 100 Index futures increased 0.7 percent to 1,203.5.

The Fed’s Open Market Committee will announce its decision on interest rates and monetary policy at around 2:15 p.m. in Washington. The announcement comes after the first simultaneous recessions in the U.S., Europe and Japan since World War II dragged the S&P 500 down almost 45 percent from its 2007 record.

“There won’t be a negative surprise,” said Jacques Porta, a fund manager at Ofi Patrimoine in Paris, which oversees $615 million. “What will be interesting and very important is the discourse. Bernanke has given signals that he will innovate in terms of monetary policy since there isn’t much room left for further rate cuts.”

U.S. stocks fell yesterday, wiping out last week’s gains, after manufacturing showed a worsening economy that analysts said will hurt earnings.

Consumer Prices Slide

The cost of living in the U.S. fell in November by 1.7 percent, the most since record-keeping began in 1947, the Labor Department said. Excluding food and energy, so-called core prices were unchanged from a month earlier.

GE climbed 2.1 percent, while Microsoft added 25 cents to $19.29.

GM, the biggest U.S. automaker, added 2.7 percent to $4.19. The Treasury may adopt a plan that would let a car czar or the Treasury Secretary force GM and Chrysler LLC into bankruptcy if the automakers don’t show they can survive without government aid, a U.S. senator said.

GM and Chrysler would be required to submit viability plans by March 31 or lose any further U.S. support, Carl Levin, a Democrat from Michigan, told reporters in Detroit. The Treasury plan would resemble a measure passed by the U.S. House last week that was rejected by the Senate.

Goldman’s First Loss

Goldman added $1.94 to $68.40. The loss of $4.97 a share in the three months ended Nov. 28 was the company’s first quarterly deficit since going public in 1999. It compared with net income of $3.22 billion, or $7.01, in the same period a year earlier, the New York-based company said. The average estimate of 18 analysts surveyed by Bloomberg was for a loss of $3.73 per share.

Some fertilizer companies rallied after the shares were upgraded to “buy” at Merrill Lynch & Co., which said “fundamentals are nearing a bottom.”

Potash Corp. of Saskatchewan Inc., the world’s largest crop-nutrient producer, rallied 4.5 percent to $72.35. Mosaic Co., the world’s largest producer of phosphates, gained 5.1 percent to $33.06, while Terra Industries Inc., the biggest U.S. maker of liquid-nitrogen fertilizer, added 7.5 percent to $15.83. Intrepid Potash Inc., the largest producer of the crop nutrient in the U.S., rose 8.5 percent to $20.25.

Best Buy Forecast

Best Buy Co. climbed 9 percent to $25.59 after affirming its full-year earnings forecast and reporting third-quarter profit, excluding some items, of 35 cents a share, beating the average analyst estimate by 49 percent. The U.S. consumer electronics chain also said it’s offering voluntary severance packages to almost all workers as part of a “significant” cost-cutting plan.

Exxon Mobil Corp., the world’s biggest publicly traded oil company, advanced 40 cents to $80.35. Crude oil rose, erasing earlier losses, after Venezuela’s oil minister said OPEC will reduce production by at least 1 million barrels a day in an effort to stem the 70 percent plunge in prices from July’s record.

Gilead Sciences Inc., the leading maker of AIDS treatments, climbed 2 percent to $45.27. Merrill Lynch & Co. raised its recommendation on the stock to “buy” from “neutral.”

The S&P 500 is poised for its worst year since the Great Depression after losses and writedowns at the biggest global financial companies reached almost $1 trillion and earnings at U.S. companies dropped for five straight quarters, matching the longest streak on record.

Kimiko Nelson

 

Basic Attributes :

 

 

 

 

 

Warren Buffet

Warren Buffett was born in Omaha, Nebraska on 30th August 1930, to Leila (Stahl) and Howard Buffett. As the son of a local stockbroker, it is likely that he was exposed to markets at a very young age.

Mr. Buffett married Susan Thompson in 1952. They had three children, Susie, Howard, and Peter. The couple began living separately in 1977, although they remained married until her death in July 2004. Their daughter Susie lives in Omaha and does charitable work through the Susan A. Buffett Foundation and is a national board member of Girls, Inc.

In 2006, he sponsored a bridge match for the Buffett Cup. Modeled on the Ryder Cup in golf, held immediately before it, and in the same city, a team of twelve bridge players from the United States took on twelve Europeans in the event.

Buffett has described himself as agnostic when it comes to religious beliefs.

Employment:

1943: (13 years old)

1945: (15 years old)

1949: (19 years old)

1950: (20 years old)

1951: (21 years old)

1952: (22 years old)

1953: (23 years old)

1954: (24 years old)

1956: (26 years old)

1957: (27 years old)

1958: (28 years old)

1959: (29 years old)

1960: (30 years old)

1961: (31 years old)

1962: (32 years old)

1965: (35 years old)

1966: (36 years old)

1967: (37 years old)

1969: (39 years old)

1970: (40 years old)

1973: (43 years old)

1974: (44 years old)

1977: (47 years old)

1979: (49 years old)

1987: (57 years old)

1988: (58 years old)

1990: (60 years old)

1999: (69 years old)

2002: (72 years old)

2004: (73 years old)

2006: (75 years old)

2007: (76 years old)

2008: (77 years old)

The following quotation from 1988, respectively, highlights Warren Buffett’s thoughts on his wealth and why he long planned to re-allocate it:

“I don’t have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It’s like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don’t do that though. I don’t use very many of those claim checks. There’s nothing material I want very much. And I’m going to give virtually all of those claim checks to charity when my wife and I die. (Lowe 1997:165–166)

In addition to suggestions of mistiming, questions have been raised as to the wisdom in keeping some of Berkshire’s major holdings including The Coca-Cola Company (NYSE:KO) which in 1998 peaked at $86. Mr. Buffett discussed the difficulties of knowing when to sell in the company’s 2004 annual report: “That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged

Sumber : http://en.wikipedia.org/wiki/Warren_Buffet

The Monster In The Mirror

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Testing JPA, Hibernate, JoSQL and Lucene

Queries with JPA :

In memory query with JoSQL :

In memory query with Lucene :

Stocks headed for a retreat

Stocks headed for a retreat

NEW YORK (CNNMoney.com) — U.S. stock futures tumbled Wednesday as investors caught their breath after the previous session’s rally, and Morgan Stanley reported a staggering loss.

At 8:20 a.m. ET, Dow Jones industrial average, Standard & Poor’s 500 and Nasdaq 100 futures were sharply lower.

Futures measure current index values against perceived future performance and offer an indication of how markets will open when trading begins in New York.

Wall Street roared Tuesday after the Federal Reserve announced a record cut to short-term interest rates. The Dow surged 4.2%, the S&P 500 soared 5.1% and the Nasdaq composite rallied 5.4%.

Morgan Stanley: Wall Street firm Morgan Stanley (MS, Fortune 500) reported a loss of $2.3 billion for the fourth quarter, which was much worse than expected.

A consensus of analysts surveyed by Thomson Reuters had expected a loss of $300 million.

Morgan Stanley CEO John Mack blamed “unprecedented turmoil” in the financial services industry.

On Tuesday, Goldman Sachs (GS, Fortune 500) posted a deeper-than-expected quarterly loss of $2.1 billion, or $4.97 a share.

Fed meeting: On Tuesday, stocks advanced after the Fed lowered the federal funds rate to a targeted rage of between zero and 0.25% - the lowest level on record.

Investors cheered signs that the central bank is willing to do whatever is necessary in order to jolt the economy. Art Hogan, chief market strategist at Jefferies & Co., said that Tuesday’s rally was a “a clear celebration that we’ve got an aggressive Fed” following the interest rate cut.

But on Wednesday the stock futures have slumped as investors realize “the economic data stream is going to continue to be negative,” said Hogan. “The morning after [the rally] gives us a reason to ask why the Fed was so aggressive and the answer to this question is difficult to swallow.”

Apple: Chief executive Steve Jobs will not deliver the keynote address at Macworld 2009, Apple (AAPL, Fortune 500) announced after U.S. markets closed Tuesday.

The announcement is likely to raise questions once again about the health of Jobs, who struggled earlier this year with complications from surgery performed in 2004 to remove a tumor from his pancreas.

World markets: Global markets were mixed. Asian shares advanced, taking a cue from Wall Street’s rally. European indexes were mixed.

Oil and money: Oil prices fell 58 cents to $43.02 as investors waited for word from OPEC about proposed production cuts. The U.S. dollar fell versus the yen and the euro, but rose against the British pound.

Source

My Gemara Book

It’s ready to go to print!

My over 165-page Gemara workbook, which employs my unique approach to building the skills of learning how to read Gemara in the learning of two separate sugyot (from masechtot Shabbat and Bava Batra) has been brought to the printers, and I’m happy to accept orders for those interested in purchasing a copy of this highly praised instruction manual.

Upon request, I will e-mail a sampling of pages to afford those who are as yet unfamiliar with my approach the opportunity to get a taste of exactly how the system works and, for those already familiar with the system, an understanding of how the workbook is used. (Note: These are just random samples and do not follow one particular idea or lesson all the way through).

The workbook comes spiral-bound, the most educationally advantageous format for using this work; the over 165 pages include the elucidation of over 30 repeated structures and words, linear translations of the text, clear explanations of the Gemara’s content, practice texts for simultaneous punctuating, chapter-review questions and a comprehensive index for easy reference.

I am now taking advance orders (so that I can notify the printer as to approximate numbers and present him with the funds to accomplish it):

The cost is only NIS 50, plus shipping and handling.

Upon receiving the confirmation of your order request, I will send you an e-mail with a Paypal link to facilitate a quick and easy payment and, with the printing only taking 2 days, (according to the printer) you will be able to start learning quickly.

Do not let this fabulous opportunity - for individual or group learning - pass you by!

If you have any questions or desire further information, please do not hesitate to contact me.

Go well,

Jonathan Bailey

Can Islamic banking turn global financial crisis around?

id="blog-title">Islamic Banking & Finance Network

id="tagline">This blog explores the concept of Islamic Finance around the globe.

A Questionable Strategy

In our travels, we’re running into a lot of people who are advocating that investors recognize all their portfolio losses whether they can use them in 2008 or not. 

I conferred with Al Cappelloni, the director of the tax practice at my parent company, Vitale Caturano & C0., the largest regional accounting firm in New England.  We concluded that, in many cases, this is a flawed strategy.  Certainly, investors should consider recognizing portfolio losses if they can use them this year to offset realized gains and to offset income to the $3,000 limitation.  But taking losses with the sole intention of generating a loss carryforward (”banking” losses) may not be the best strategy for investors.

To a large degree, investors will reap the benefits of losses whether they are taken or not.  A cost basis above current price means that, going forward, the gains will be sheltered up to the basis.  Consider a hypothetical situation of an investor who has owned IBM for over a year at $100/share when the current market price for IBM is $80, an unrealized loss of $20.  Assume that the same investor has no realized gains to offset and has maximized his ability to use capital losses against income.  

   1)If  IBM goes back to $100 and the investor sells, he will have no tax liability.  

   2) Consider a loss-harvesting alternative: the investor sells today, recognizes the loss which is carried into the next year, buys IBM back 31 days later (assumed at unchanged price of $80/share), enjoys the rebound to $100 share and sells.  The investor now has a $20 gain which is offset by the $20 loss, so also no tax liability.

On the face of it, it would seem that the investor should be indifferent to harvesting unneeded losses or standing pat.  However, the example does not incorporate transaction costs.   It also assumes that this investor will be able to repurchase his security at the same price.  Both of these are unrealistic — even in fee-based accounts, there is some trading cost in selling and repurchasing a security, although it is generally small.  More troubling is the risk of being out of the market, or if a proxy is used to stay in the market (an index fund, for example), the risk of not being in the optimal portfolio.  In the current environment, this is a particularly large consideration since maximizing the recognition of losses might require selling out all of an investor’s positions.

In addition, the loss-recognition strategy will restart the holding period for the security owned, making that security vulnerable to the higher short-term gains rates should it be sold for investment reasons within a year.   Consider again, the above hypothetical IBM holding, but in this instance IBM quickly rebounds to 110 and is then sold.  In scenario 1 above,  the investor will have a long term capital gain of $10/share.  In scenario 2, the investor will have a $30 short-term gain, offset by a $20 long term loss, netting out to a $10 short term gain.  In this case, the investor is clearly disadvantaged by having ”banked” losses as his gains are now subject to the higher short-term capital gains tax rates. 

There is another problem with the take-all-losses strategy, an issue more subtle yet potentially more important.  When investors carry forward unused capital losses, they are forced to use them against any recognized future gains.  With a new administration entering Washington that has expressed an interest in raising capital gains, there may well be an advantage to timing the use of losses.  For example, if in 2009 I were to believe that the maximum capital gains tax rate would increase in 2010, I might choose to pay taxes on recognized 2009 gains and postpone realizing losses until they are of greater value under a new tax regime.  Investors who excessively recognize losses this year will be denied this flexibility.

There are some situations where banking losses makes sense.  For example, if an investor knows with some certainty that he will be generating short term capital gains in future years.  Going back to our IBM example, the investor might want to bank losses in IBM, after 31 days return to that security the long term (so if sold it will qualify for long-term tax rates) and have the losses available for use against future short term realized gains.   However, this is indeed an unusual situation — consistent short-term treatment is more commonly associated with certain alternative investments or non-traditional trading strategies rather than long-term investment approaches.  It is difficult to  imagine having sufficient confidence in the ability of such vehicles to produce consistent gains as to influence the loss-realization decision.   However, even with such confidence it is unlikely that the optimal course would be to bank all available losses.  

One could also envision a scenario where it would be advantageous to bank losses before they disappear.  However, given the current state of most portfolios, it seems likely that investors will have some time in 2009 and beyond to make those calculations.  At the end of the day, there are few cases where banking all unneeded losses is optimal.  The belief that this is a risk- and cost-free strategy is misguided.  There is indeed a downside to such transactions, and these are risks without any real offsetting benefits.

So why is this take-all-losses strategy being promoted?  It was possibly born in the days when financial advisors operated largely on commissions — December was typically the top revenue month for brokerage firms on the strength of loss recognition transactions - more losses recognized, more transactions, more revenue.   Even in our fee-based world, I think there’s a desire of many advisors to try to demonstrate some value to their clients in an otherwise dismal year.  From the narrow viewpoint of the investment advisors, it is quicker and simpler to take all available losses rather than coordinate with a client’s tax advisor.  Finally, there may also be a desire to “reset the clock” psychologically and not have securities showing on the statement with large losses. 

There’s a saying in poker that is often applied to investing:  you can play your hand or you can play the bank, but you can’t play both.  Investors should focus on holding the best portfolio to fit their risk tolerance and financial goals.   Poorly conceived tax strategies needlessly disrupt this focus.

Project Humanbeingsfirst Index

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Caroline Kennedy

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Fed cuts short-term rates to the bone

Next up: More purchases of mortgage debt

The Federal Reserve slashed short-term interest rates today to nearly zero, bringing to an end a 15-month campaign of rate reductions intended to encourage borrowing and stimulate economic growth.

With further cuts no longer possible, members of the Fed’s open market committee promised to continue to “employ all available tools” to support financial markets and stimulate the economy, including purchases of mortgage-backed securities and other debt.

In cutting the target for the federal funds overnight rate to a never-before-seen low — between zero and 0.25 percent — the committee acknowledged that as weak as the economy is, it’s likely to stay at “exceptionally low levels … for some time.”

While some critics of the Fed’s monetary policy worried that slashing interest rates would spark inflation and devalue the dollar, those concerns were overridden by the worsening financial crisis and its impact on the economy. In understated fashion, the Fed’s open market committee noted in a statement that “inflationary pressures have diminished appreciably.”

The Department of Labor today reported that the U.S. consumer price index fell by a seasonally adjusted 1.7 percent in November, the biggest drop since 1947. Falling energy prices, especially gasoline, drove the decline — the index was virtually unchanged when energy prices were excluded.

Although the Fed can no longer make money available more cheaply, it can still provide liquidity through “quantitative easing” — debt purchases that will further swell the Fed’s $2 trillion balance sheet.

In coming quarters, the Fed will purchase “large quantities” of debt and mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae to provide support to the mortgage and housing markets, the committee said.

The announcement of that program helped bring mortgage rates down by 1 percent (see story), and the Fed stands ready to expand its purchases of agency debt and mortgage-backed securities “as conditions warrant.”

401(k) losses? Get your money back !!!

Face it. When it comes right down to it, there are only two ways to beef up the balance in your 401(k): earn more on your investments or save more money. Unfortunately, as the past year has proved - wait, make that the past decade - you can’t count on the whole “earning more” thing to bail you out.

The only part of the equation you can control is the amount you contribute to your plan. How much more would you have to save to get back to even, then get your account growing again? To figure that out, you’ll first need to open the most recent 401(k) statement that you buried in your desk and assess the damage (you might want to pour a stiff drink first). Then determine the percentage of your income that you’ll need to save going forward to meet your retirement goal, The sure fire way to accomplish this is to see a financial advisor you trust hopefully they won’t charge you for the advice, but if they do it’ll be worht it in the long run.

The number that you come up with may be, well, challenging. But frankly, you probably weren’t saving enough anyway - the typical 401(k) investor kicks in just 7% of salary, far less than the 10% to 15% that financial advisers commonly recommend. Granted, coming up with the extra cash may be tough these days, but push yourself to do what you can. Ease the sting by timing the increase to when you get a raise, commission or bonus. Even small amounts will add up over time.

For years financial advisers have wondered what it would take to convince starry-eyed workers that company stock is a dangerous investment. Maybe it will be this financial crisis, which is bringing corporation after corporation to its knees: Bear Stearns, Lehman Brothers and Merrill Lynch, to name a few.

So wake up - bad things can happen to good companies, even yours. And if they do, you face a double whammy, since you could lose your job and your nest egg at the same time. Do not, repeat do not, invest more than 10% of your portfolio in your company’s stock. Better yet, hold zero.

Fortunately, workers have been slowly backing away from their employer’s shares. Pension reforms passed in 2006 eased restrictions on selling company stock, allowing workers with three years of service to do so. Just 58% of 401(k) participants now hold company stock vs. 64% in 2003, a 2007 Fidelity study found.

But too many employees are still overdosing on the stuff. Vanguard reports that a third of eligible workers have 20% or more of their 401(k) in their employer’s shares. And older employees, who have the most to lose, are the worst offenders: 43% of workers over age 60 have more than 20% of their 401(k) assets in company shares vs. just 28% of those under age 30.

So start trimming those shares if you haven’t already.

There is one and only one surefire way to boost the return on your 401(k): reduce your investment expenses. Cut your fees by one percentage point and you automatically add one point to your results.

But keeping your costs low can be hard to do, since not all 401(k) fees are fully disclosed; you may have no clue what your plan charges. That might be changing. The Labor Department recently released proposals that would require plans to provide more info on fees. And Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee, is calling for even more stringent fee disclosure, as well as a rule requiring plans to offer lowcost options, including index funds. Says Miller: “We need to make sure that the assets of hard-working people are not eroded by high-cost plans.”

No need to wait for Congress to act on these reforms, however. In the meantime you can reduce your expenses immediately by sticking with low-cost funds. Most large 401(k) plans offer at least one or two index funds, which typically charge rock-bottom fees. You may also have access to institutional funds, such as collective investment trusts or separate accounts, which tend to run lean.

Over time even small differences in expenses add up. For example, invest $10,000 in the Vanguard S&P 500 index fund, which levies an expense ratio of 0.15%, and you’ll have $45,595 after 20 years, assuming an 8% annualized return and after paying $447 in fees. By contrast, if you invest $10,000 in Homestead Stock Index, which charges 0.64%, you would have only $41,010 after paying $2,812 in fees.

If you were hoping to retire in the next year or two, by now you’re probably rethinking your plans. After all, there’s not a lot of time left to make up your recent losses.

But before you cancel that retirement cruise, consider another option. If you’re willing to skip cost-of-living increases in your withdrawals for a few years after you leave the work force, you just might be able to exit on schedule after all.

The no-raise strategy helps ensure you won’t run out of money during retirement because you end up pulling out less when your portfolio’s value is low, leaving more assets in your account to grow as the market rebounds. Exactly how much it helps depends on the size of your nest egg when you leave your job and how fast the economy recovers.

In general, the less you have socked away and the more slowly the market bounces back, the bigger the boost you’ll get from giving up that inflation raise. On a $1 million portfolio, for instance, the strategy modestly increases the odds that your money will last throughout your retirement, from 87% to 95%. And on a $700,000 account the change is dramatic: The chances that your money won’t run out rise from 56% to 80% if there’s a quick rebound and from 21% to 47% if the recovery is slow, says Christine Fahlund, senior financial planner at T. Rowe Price.

You can improve those odds further by working part time. Granted, taking a dip in income or working at a part-time job may not match your idea of a dream retirement. But in tough economic times like these, it may well be the next best thing.

Leveraging a Wiki for Research Advice

Folks who hear about the new family history research advice wiki at wiki.familysearch.org want to know two things. First, What is a wiki? And second, How will the wiki deliver more of the genealogical research advice I need?

What is a wiki?

Wiki. A short, sweet, strange word whose form matches its meaning — a Web site you can edit without being a programmer. A site where average people like you and me can write things to help other people. A place where we can share information and even collaborate on articles that make us each look smarter than we are alone. A paradise for people who seek information. A wiki community can deliver and revise more research advice information for more users in more languages.

Challenges in the traditional approach

To see the potential of FamilySearch Wiki, it helps to explore the challenges an organization faces in offering free research advice worldwide when they try to do it the traditional way. Prior to the creation of the wiki, five barriers challenged our organization’s potential to provide genealogical research advice worldwide. The first is that publishing research advice for every part of the world is an enormous task. Our publications – paper and digital – covered only about half the world’s countries. Latin America, Africa, the Middle East, the Pacific Islands, and Asia were not fully covered. Somehow, we needed to find a way to cover more of the world.

The second challenge we faced in offering research advice worldwide is that the number and variety of our writers’ assignments prevented us from revising our content rapidly. Many of our publications – including paper research outlines and Research Guidance — were five to ten years old. In a world where new genealogical records are released online every day, we needed a way to revise content faster.

In order to provide research advice for more areas and revise that content faster, we would need more authors. As big as the FamilySearch organization is, our mandate sometimes seemed overwhelming. We simply didn’t have enough employees to do the job. And given budget constraints, we needed to find a new source of authors outside our employee pool.

FamilySearch had a fourth challenge related to the second: the process of adding content to FamilySearch.org was relatively slow and complex. Research Guidance was essentially a static project that had not been enhanced since 2001. The process of updating our research outlines was also slow. Approvals, meetings, stylistic guidance, editing reviews, rewrites, budgeted funds, and programmer time were all needed to change anything on our Web site. If we wanted our content to remain relevant, we needed a way to speed up the writing and publication process from months to minutes.

Finally, we had a challenge in languages. Although there is no shortage of language experts at FamilySearch, we generally published research advice only in English. So if we published a research outline for a Latin American country, we did it in English. This made sense when most of our customer base was English speakers, but that was changing rapidly. We needed to offer content in many more languages.

Possible solution: a community model

Faced with these five challenges, FamilySearch leaders began to ask some questions. In review, we needed a research advice solution that would allow us to cover more of the world, revise content faster, engage more authors, quicken the publication process, and provide content in more languages. Looking around, we noticed that content-rich Web sites were achieving these aims with a “Web 2.0” approach – one in which corporations teamed with volunteer communities to write content.

Many eyeballs make any bug shallow

Perhaps the best example of a content-rich Web 2.0 site is WikiPedia. It is obviously popular – number nine on the Internet – but studies also show that its information rivals the accuracy of Encyclopedia Britannica and the journal Nature. But writers are only human. Mistakes do happen, so it’s also good to know that when people post erroneous information on Wikipedia, it tends to be corrected quickly. The idea behind the success of Web 2.0 sites is best described by a mantra of the volunteer community that developed Linux: “Many eyeballs make any bug shallow.” The idea turns the traditional method of programming and content publishing on its head: Instead of employing just a select few professionals to develop a product, open the development process to a wider group including the volunteer community. If you attract enough volunteers, they will feed off each other to innovate faster, notice and correct errors faster, and thus quicken the pace at which the product is improved. This theory has been proven with open-source software like Linux and Firefox, as well as Web 2.0 content sites like Wikipedia.

Milestones: the current state of the wiki

So FamilySearch aims to leverage the power of the worldwide genealogical community to revise research advice faster, cover more of the world, engage more writers, quicken the publication process, and deliver content in more languages. These are big challenges, so it will take time. Even WikiPedia took years to grow into the powerhouse it is today. Although the wiki will take time to arrive at its projected destination, it is on the right track and has reached some important milestones:

“Now I know where I can publish”

Probably the biggest victory of FamilySearch Wiki is the way it empowers writers to quickly publish helpful content for others. Jimmy Parker, retired manager of the Family History Library, probably said it best. When he heard about FamilySearch Wiki, he said “This is great. I have three file cabinets full of information I’ve always wanted to publish. Now I know where I can do it.” Professionals and volunteers find that publishing research advice on the wiki is fast and easy. In five minutes, you can add information that other genealogists can use immediately. Contributors get instant gratification, and users get the free genealogical advice they need. This focus on rapid, community-based authoring is why FamilySearch Wiki is already starting to deliver research advice faster, in more languages, to more of the world.

The Road…Less Traveled: An Analysis of Vehicle Miles Traveled Trends in the U.S.

The Wall Street Journal’s Ana Campoy reports:

As politicians debate how to break the nation’s addiction to foreign oil and curb its global-warming emissions, laypeople are already setting an example: They’re cutting back on driving.

That’s not just because they were shocked into conserving when gasoline prices surpassed $4 a gallon earlier this year, points out a new study by the Brookings Institution titled “The Road… Less Traveled.”

U.S. drivers began pushing the brakes four years ago — well before gas prices began shooting up. But it was 2007 when, for the first time, the number of miles traveled in the U.S. actually fell compared with the prior year.

That’s because, at this point, there are relatively few people eligible to drive who aren’t doing so already. The growing use of public transit and the sprouting of shopping centers in residential areas are also helping, the study says. These are changes the authors don’t expect will be reversed in coming years, even if gas prices keep falling.

The drop in miles driven will likely force the massive reorganization of transportation policy that experts say is badly needed, but that policy makers have so far skirted.

For starters, Congress will have to figure out how to make up for the shortfall in gasoline - tax revenue, which is used to fund transportation projects, as people use less of the fuel. Short-term, Brookings says, lawmakers should raise gas taxes, and while they’re at it, they should index them to inflation so that they rise along with overall prices. In the long-term, the study suggests a carbon tax. [WSJ Environmental Capital]

The McKinsey Quarterly Special Feature

Chinese Government In Rare Open Rebuke Of USA..

Well oil is being manipulated down to punish russia and iran, just like it was manipulated up as OPEC pumped like never before. Unfoturnately it will take several more months to get a good technical read on OPECs cuts. Oil can be an indirect inflation generator or deflator as it flow into virtually every product. Monetary aggregates say the USA has massive monetary inflation it is just stored in UST bills by the Chinese and others.

What would get the USA economy moving was for one year, giving every home buyer a 2ok tax rebate check, if they could come up some kind of matching down payment to buy a home, as long as they did not own a home in the say the last year or a second home. And a notice that once home prices had stablized the tax rebate program would end.

Right now everyone is watching the banks squeeze credit and sit on their money. The USA is not exporting redeflation, its is exporting depinflation. Depressionary inflation.

China has plenty of dough to kick start its economy. The baltic frieght rate has collapsed as the Chinese had too much inventory in stock for o9 and the Rothschilds banker crowd in London which controls the Baltic Freight Exchange refusing credit to shipppers.

With just a few well chosen bankers you can squeeze credit in one shape or another. Oil has been cut way beyond the expected demand decrease next year. This is more Goldman Sachs ’squeezing’.

=======================================================

 

BEIJING, Dec. 17 — Recently productivity in the United States rose more than forecast, while labor costs increased less than anticipated. Usually, that is a good sign. But these are no ordinary times. More than 1.5 million jobs have already been lost this year, and there is worse to come.

    In the next few weeks, aggregate demand will decline significantly in relation to supply. Companies are reducing capacity feverishly in housing markets, durables, the car industry, and in others. As the U.S. negative demand shock spreads internationally, it will reinforce the worldwide downturn.

    The writing is on the wall. Historically, world trade has been driven by the decline of transportation costs and tariffs. However, the Doha Round collapsed this summer, while the Baltic Dry Index (BDI), a barometer of global trade, has fallen 93 percent. Even the price of oil has plunged from 150 U.S. dollars to less than $50. In the past, cheap oil was a blessing; today, it reflects the decline of world trade - for the first time in 30 years.

    The U.S. economy entered a recession in December last year. Although the official confirmation came recently, the facts have been known since summer last year. After the housing bubble and the credit squeeze, Dow Jones has declined by 40-45 percent from its peak.

    In the 1970s, the energy crisis pushed the world economy into stagflation; in other words, slow growth plus inflation. Today, U.S. recession is pushing the world economy toward redeflation, or recession plus deflation.

    The severity of this crisis is now comparable to the explosive threats - the mix of recessionary forces and deflationary pressures - that were seen last right before the Great Depression in the 1930s.

    How did we get here?

    The global financial crisis does not originate just from the US subprime mortgage crisis. It stems from the 1980s, when deregulation of financial markets contributed eventually to the savings and loan debacle, and the 1990s, which provided a powerful catalyst to US productivity and growth but also gave rise to low interest rates and the explosive growth of the unregulated derivatives - or the “financial weapons of mass destruction”, as the investor Warren Buffett called them.

    After the collapse of the tech bubble in the early 21st century, the economy needed a stimulus. However, the Bush administration’s tax cuts did not benefit the U.S.

    As fiscal policy stepped aside, monetary policy had to step in. The Federal Reserve (Fed) responded by flooding the economy with liquidity. In the past, that might have contributed to the growth. After the burst of the Internet bubble, however, excess funds were not put to productive use, but flew into the next big bubble - the housing market.

    The original objective of the subprime market seemed well-founded - to ensure that home ownership was not just the privilege of the few, but the promise of the many. Similarly, securitization was hardly something negative; it made markets more efficient and contributed to consumer welfare. And so it was with the Internet, which facilitated and globalized these efficiencies.

    Still, in the early 21st century, deregulation, securitization and Internet-driven transactions led to massive distortions, while giving rise to an unregulated and shadowy world of finance.

    Low interest rates and easy access to funds encouraged reckless lending, which led to the subprime mortgages that allowed home buyers to be afforded mortgage for a house they were never qualified for and would never be able to pay off. Behind the facade, bankers were talking cynically about Ninja-loans (no income, no jobs, no assets).

    Initially, the subprime mortgage crisis was a US problem. In a less globalized world, it might have remained so. However, it was disguised into derivatives that were misunderstood as “safe”, as investment banks sliced and packaged the risks worldwide, which then spread - like a pandemic.

    Soon thereafter the multi-billion dollar write-offs ensued as some of the world’s largest investment banks, from Bear Stearns to Lehman Brothers, had to acknowledge that the derivatives they were holding proved almost worthless.

    The subprime mortgage crisis morphed into a credit squeeze as these assets then forced the banks to deleverage quickly. Soon the crisis finally affected inter-bank lending worldwide and morphed into a global financial crisis. By mid-October, the world financial system was - as the International Monetary Fund chief Dominique Strauss-Kahn, noted - “on the brink of a meltdown”.

    Through decisive, coordinated and international action, the meltdown was averted after the world’s industrial leaders convened in Washington. Although these G7 nations still govern the world economy, growth is primarily now in the large emerging economies and oil producing nations.

    The initiative thus shifted to these G20 nations, while French President Nicolas Sarkozy outlined the need for Bretton Woods II. But much has changed since 1944, when the international financial architecture was created for the postwar era.

    After World War II, the Bretton Woods conference was prepared for months and led by the U.S., which, at the time, accounted for half of the world GDP and was the world’s greatest creditor. Ironically, last month, the G20 conference in Washington lasted two days and was hosted by the U.S., which now accounts for only 23 percent of the world GDP and is the world’s largest debtor.

    The participants agreed to cooperate, and formulated lofty objectives and will meet again in April next year. However, the markets live in real time and will not wait. Despite multiple massive bailouts worldwide, policymakers have failed to get credit flowing and to prop up spending.

    In Washington, Obama is putting together a large stimulus plan, which is rumored to amount to 4-5 percent of the U.S. GDP, or 600-700 billion dollars. The capital provision is perceived as necessary to restore the ability of banks to lend and unfreeze the credit markets. The goal is to stimulate consumption, which accounts for more than 70 percent of the U.S. GDP.

    Indeed, rising consumer demand for goods and services has been a key element of U.S. economic growth. But its current level is unsustainable.

    Between the 1960s and 1990s, personal spending, adjusted for inflation, tracked the overall growth of the economy. During the past decade, that pattern has changed.

    Before the onset of recession in December last year, the 10-year growth rate for consumption was 3.6 percent, versus GDP growth of 2.9 percent for the same period. This difference represents an enormous gap. Between 2001 and last year, the extra spending amounted to about 3 trillion dollars. Much of that money was spent in the housing market.

    Global growth has been driven by the U.S. consumers who have been living beyond their means, and by banks that are now falling apart. The past level of U.S. consumption is no longer sustainable.

    Typically, the impact has been felt first on imports, which is now exporting the U.S. redeflation worldwide - while causing the demise of export-driven growth.

    The ongoing worldwide recession is not the result of cyclical fluctuations. It reflects the structural transition of the world economy - from global growth driven by U.S. consumption to a new kind of growth driven by multipolar economies.

    In the past, global growth had been too dependent on one nation; in the future, it will be more diversified and less risky. But the transition is wrought with peril.

Markets jump after Fed cuts interest rate to lowest level ever

The U.S. Federal Reserve has cut the country’s federal funds interest rate by three-quarters of a percentage point to a target range of zero to 0.25 per cent.

That is the lowest level on record in the United States for the rate, which is the price that banks charge each other for loans. U.S. commercial banks are now expected to lower the prime rate, the key rate for many loans to consumers. It’s currently four per cent.

The cut sparked jumps in stock markets and a drop in the U.S. dollar against other currencies.

In announcing the cut Tuesday, the Fed said U.S. labour and market conditions, consumer spending, business investment and industrial production are all falling.

“Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.”

The economy is so bad that the rock-bottom rate is likely to continue for some time, the central bank said.

It also promised to use “all available tools” to get the U.S. economy moving. As it said previously, it will buy large quantities of debt and mortgage-backed securities to support to the mortgage and housing markets.

It’s also considering buying longer-term bonds to push down long-term interest rates.

The Fed move prompted a surge in stock markets. In New York, the Dow Jones industrial average surged 4.2 per cent, gaining 359.61 points to 8,924.14. It had been up less than 100 points before the announcement.

The S&P/TSX composite index rose 3.1 per cent, adding 262.28 points to 8,724.11.

The U.S. dollar fell against other currencies, including the loonie, which closed up 2.02 cents at 83.21 cents US.

While the Fed was worried about inflation earlier this year, those concerns have eased with falling commodity prices and the economy’s weaker prospects.

The U.S. Labour Department reported that inflation in November fell a record 1.7 per cent, the biggest drop since seasonally adjusted statistics were introduced in 1947. The drop in oil prices drove the decline.

Some economists believe the Fed’s cut was affected by the inflation figure, because the prospect of deflation poses a profound threat to the economy.

The Fed cut was announced by its monetary policy committee after a two-day meeting to consider its response to what some are calling the worst U.S. economic conditions since the 1930s.

Many economists believed the Fed would cut interest rates in half on Tuesday to 0.5 per cent to spur the economy, but some wanted a more aggressive 0.75 percentage point cut.

Last week, the Bank of Canada cut its overnight rate by three-quarters of a percentage point, bringing it down to 1.5 per cent, a 50-year low.

Q&A: Interest rate cuts won’t have immediate impact

FOMC Cuts Rates To Target Zero

(This should be interesting for Prime? Credit and Money is NOW Cheep. Didn’t we do this in 2001-2003?)

As always if you are thinking of Refinancing or Purchasing feel free to contact me for your No Obligation Mortgage Plan William Doom, CMPS Your Mortgage Planner. (1.888.271.3437 x7)

FOMC Cuts Rates To Target Zero

(This should be interesting for Prime? Credit and Money is NOW Cheep. Didn’t we do this in 2001-2003?)

As always if you are thinking of Refinancing or Purchasing feel free to contact me for your No Obligation Mortgage Plan William Doom, CMPS Your Mortgage Planner. (1.888.271.3437 x7)

World wide transportation and trade sink farther into deep freeze

World wide transportation and trade sink farther into deep freeze

Chinese officials were shocked this week to learn that exports in November had fallen 10.4% from the previous month, and were down 2.2% from November of last year.

Even more dramatic, Chinese imports were down an astounding 18%.

These figures illuminate the rapid collapse of the Chinese economy. But more than that, they illuminate the rapid collapse of the entire worldwide trade and transportation mechanism.

Increasingly, for several years, the Chinese economy has been the epicenter of the world’s transportation and trade, importing much of the world’s mined copper, iron ore, lead and zinc. For example, until recently, China consumed a quarter of the world’s copper. China would import parts and other intermediate goods from other Asian countries in the region, and would use all of these imported goods in their own factories, manufacturing finished products for export to America and Europe.

To many people, the biggest shock of all is the 90% collapse of the Baltic Dry Index in the last six months or so, as shown on the adjacent chart.

The Baltic Dry Index is a measure of shipping costs for cargoes in “capesize” vessels — vessels that are too large to fit through the Suez or Panama canals, and so must go around the Cape of Good Hope or Cape Horn. These vessels transport the huge cargoes of copper, iron ore and other commodities that China has been importing.

Most analysts realized that the BDI was in a bubble, and that the bubble would have to fall, but none of these analysts were expecting the fall of over 90%, from a high of around 11,700 to it’s current value of 691.

Analysts had expected it to fall to its previous average, around the 3,000 to 4,000 level. But what we’re seeing is the Law of Mean Reversion in action. Some people have written to me, questioning whether the Law of Mean Reversion is a “real law.” The 90%+ collapse of the BDI is an example. Instead of falling to its previous average, the BDI has fallen well below, and will probably not return to its previous average for several years.

Incidentally, the chart above contains a secret. It shows how the price of copper has also collapsed, but only to its previous average. By the Law of Mean Reversion, the price of copper is going to fall much farther.

The chain reaction spreads far and wide. Rio Tinto, the second largest mining firm in the world, will cut 14,000 jobs. As one company after another tanks and lays people off, more companies are forced to do the same.

Last month, I quoted an interview with Simon Rose, CEO Dahlman-Rose, an expert on international shipping and trade.

On Thursday, Rose appeared again on Bloomberg tv, bringing with him a photo of a Singapore golf course. Here’s my transcription of most of the interview, in which he explains that the importance of the picture is not the golf course, but what’s in the background:

There are two things to look at. There are letters of credit, which were a major problem the last time we spoke, a month ago, and they’re starting to loosen up a little bit. You can more products slightly more readily.

But the larger issue is project finance — big projects that require steel, require concrete. The financing just isn’t there. The financing market is still frozen for these large projects. And until we see that start to loosen, these stimulus packages, the dollars being talked about have to be spent. …

There’s about $500 billion worth of new builds [of new ships] on order, $250 billion of capital roughly has been committed against those new builds. A lot of that capital is being taken off the table by banks, if they can — they’re just scrounging for the money themselves. The $250 [billion] that’s not committed probably won’t get committed.

So it’s a real mess right now, and the problem from a ship owner’s perspective is, you thought you had a loan, a commitment from a bank, is it really a commitment, can they take delivery of a $150 million ship that might be worth a fraction of that today - does that stress the credit agreement that you have with the bank. It’s just an absolute mess.

This is an industry that is in absolute chaos, and it’s in chaos not because of anything that the ship owners or the mineral people or the steel mills could foresee. They were absolutely blindsided by this.”

Companies around the world have been blindsided.

And the problems aren’t just hurting Asia. The same things are happening to American domestic firms, as companies in industries ranging from trucking to railroads to ocean shipping are scaling back sharply. According to one analyst, 2008 “is going to be the worst year for transportation demand in 30 years.”

Beyond the transportation industry, a variety of economic indicators are showing results that haven’t been seen in decades.

Most people believe that interest rates can never go below zero. Why would you ever pay someone to let him loan you some money?

But negative interest rates became a reality last week in the sale of Treasury bills.

When the Treasury Dept. auctions off Treasury bills, investors can bid on them, essentially as a very safe investment. When the T-bills expire (say, after 3 or 6 months), the investors redeem them to get their money back, plus interest. The amount of money they get back is always the same, and so the interest rate (or “yield”) depends on the price they initially paid for them. The higher the price at auction, the lower the yield.

In “normal” times, the yield is a little higher than the overnight Fed Funds rate, which is currently set at 1%.

On Tuesday, interest rates went negative. Specifically, the Treasury sold $27 billion of 3-month T-bills with a negative yield: -0.01%. $30 billion of 4-week T-bills were sold at 0% yield. This is the first time that this has happened since 1929.

This is a measure of the increasing “risk aversion” of investors. People (like CNBC anchors) who are fantasizing that someone in Washington will wave a magic wand and make the credit crisis disappear should understand what’s going on. Investors are so unwilling to invest or lend money that they’re actually paying the US Treasury to hold their money for them. It’s like putting your money into a safe deposit box, where you get no interest but also pay for the box.

As I’ve said many times, what’s important to Generational Dynamics is changes in attitude and behavior of large masses of people. In the past year, we’ve seen enormous changes in risk aversion among investors, going from a willingness to invest in the stupidest things to a reluctance to invest in anything that carries any risk at all.

That’s why it’s interesting, from the point of view of Generational Dynamics, that we’re seeing more and more speculation of the the possibility of a default by the US Government.

The reason for this increased concern is the exponential growth of public debt. I first posted an earlier version of the following graph in a 2004 article.

Here’s an updated version of a graph that shows public debt as a percentage of GDP. (The vertical bars indicate times of recession.)

As you can see, public debt has been growing steadily since the early 1950s. But if you look closely, you’ll see that public debt was beginning to level off in the early 1990s. But then, in 1995, it turned sharply upward, and has been increasing ever since.

Of course, 1995 was the beginning of the dot-com bubble, and it was also the point in time when the risk-averse survivors of the Great Depression all retired or died, leaving behind the Boomers to run things, and increase debt to uncontrolled levels. In the 2000s, the Gen-Xers joined in the fun, and now the public debt is streaking into the stratosphere, with no sign of stopping.

In the early days of this web site, I would get comments like the following: “How can you ever be wrong? If there’s no stock market crash, then all you have to say is that it’s still coming. You can never be wrong.”

My response was: “I’ll be happy to admit I was wrong when the exponential growth of balance of payments deficit and public debt begin to level off and start falling. Unless that happens, a stock market crash is coming with absolute certainty.”

Now, many years later, the balance of payments deficit and public debt are still growing exponentially, with no sign of stopping, and no hope of stopping them.

A forum member has pointed out a a recent video interview of 80 year old former Goldman Sachs Chairman John Whitehead.

Whitehead lists a number of problems the country has, each of which will require multi-trillion dollars of expense: the social security and medicare bankruptcy, universal health insurance, infrastructure (all our bridges and roads were build 50+ years ago), energy independence, global warming, foreclosures, credit card defaults, etc.

Nobody’s talking about cutting any of these programs or any expenses, which means that public debt will continue to grow exponentially, until something makes it stop.

Stein’s Law: If something cannot go on forever, then it won’t.

You can listen to the clowns in Washington, including President-elect Obama, and you won’t hear a peep about cutting expenses to reduce the level of public debt. Just the opposite — all they talk about is spending as much money as possible. (See “One, Two, Three … Infinity.”) I really have to laugh when I hear any of these clowns talk about this stuff.

In fact, my mind was totally boggled in one of the Sunday morning news shows when I heard one political pundit say — and I’m not joking — “This financial crisis presents a historic opportunity for Obama, because the ideological Republicans won’t be able to stop him from spending money on a variety of new programs,” referring to list of problems similar to Whitehead’s above.

Can you believe this? This is what passes for “analysis” on these shows. These journalists, politicians and pundits are the stupidest bunch of clowns imaginable. And later, when the crisis comes, they’ll all be saying, “Gawrsh — nobody could have seen THAT coming.”

Whitehead sees it coming. He was a teenager during the Great Depression, and in the video he concludes that the current financial crisis will be “a worse depression than the one in the 1930s.” No kidding!”

As I’m writing this, there’s a segment on CBS’s 60 Minutes, with the title, “A Second Mortgage Disaster On The Horizon?”

Apparently the clever geniuses at CBS news have just discovered about adjustable rate mortgages (ARMs). These are mortgages that were approved at very low “teaser” interest rates, sometimes as low as 1%. The great mass of these ARMs are going to reset in 2009 and 2010, and a homeowner’s $1000 a month mortgage will suddenly go to $4000 a month.

Well, I’ve writing about these mortgages for several years now, and so have a lot of bloggers.

When you listen to the 60 Minutes segment, you hear the anchor, Scott Pelley, use that gee-whiz tone of voice when he says stuff like, “Wow! I didn’t know that was going to happen.” Well, it’s nice that the geniuses at CBS News finally caught on to what a lot of people were talking about years ago.

The title of this article is “World wide transportation and trade sink farther into deep freeze.” I started this article by painting a picture of increasing destitution around the world, as factories and stores close, and people become jobless and homeless.

During the last two years, many people were speculating about a US recession, and there was a big debate at all the big economics conferences and among television economists about “decoupling.” According to this theory, other countries’ economies had “decoupled” from America’s economy, so that a US recession would have no noticeable effect on other economies.

This is one of those ideas that only a complete moron (or a mainstream economist) could possibly believe, or even consider.

What’s actually happened is that America and China, two civilizations that have always been almost completely foreign to one another, are now locked together, arm in arm, in a death spiral downward that will leave both countries, and all of their neighbors, economically devastated.

From the point of view of Generational Dynamics, there is still one more “shoe to drop” — a massive, worldwide generational panic and crash. I’ve described many times what I expect to see happen; here’s a summary: An elemental force of nature, where millions or even tens of millions of Boomers and Generation-Xers in countries around the world, never having seen anything like this before, and not having believed it was even possible, suddenly try to sell everything in a mass panic. This will bring down computer systems for hours, perhaps even for a day or two, as people watch tv in glazed horror as their life savings disappear.

I sometimes laugh when I hear a Generation-Xer complain about how much his life sucks, or how miserable it’s been. Most Xers have never had a tough day in their lives, or worked a hard day in their lives. They have no idea how easy their lives have been.

All of that is about to change. With transportation and trade going into a deep freeze around the world, the earth is grinding to a halt.

And from the point of view of Generational Dynamics, once the earth has ground to a halt, only one thing can get it moving again: A massive world war, a Clash of Civilizations, the greatest war in history.

Gymboree vs. Little Gym

The rains started this week, so I decided to take my toddler to a trial class at both Gymboree and the Little Gym. Ideally, I’d like to find a great indoor activity that will help my daughter burn off some of her energy no matter what the weather is like.

After attending a class at both businesses, I have a pretty clear cut opinion: The Little Gym is a fantastic use of time and money. Gymboree is a big pass.

First, I found both businesses to be pretty pricey - the class cost is between $20 - $25, depending on whether or not you factor in the “membership fee,” and how many payments you make. The classes are about 45 minutes long for the toddler age group.

THE LITTLE GYM:

Barring the price, I have to say, I was significantly impressed by the Little Gym. If we have the funds, I would love to bring my daughter here regularly. The class was well paced with great instruction. There were brief periods of focus where the toddlers listened to the teacher and followed his lead. These mini-lessons were interspersed with free time to try the new skill, or use the equipment (double bars, balance beams, “high beams” (with guide rails on each side), etc. This method was fantastic, as it held the toddlers’ interest for a time, then gave them space to integrate what they’d just learned. The curriculum was really well founded - the children learn new ways to use their bodies, but also learn about sharing the equipment, building confidence that they can do new things, face fears… There are limitless benefits to putting a young child in this environment under gentle and skilled instruction.

The teacher, David, was pitch-perfect. He was able to engage the interest of each child, without being over-exciting or intimidating. He was very skilled at teaching different gymnastics moves and I felt that this was someone who had actually been trained to hold his position (unlike at Gymboree).

The room had great equipment and was nicely laid out with open space for plenty of children and the entire floor space was covered in clean, padded gym mats. Compared to Gymboree, the space felt light, airy and clean. My only complaint about the overall space is that there was a television in the front entryway. I’m sure during busy times of day, the lobby can be crowded and the TV helps keep energetic kids mellow while they wait for their class, but, I HATE having my children exposed to TV, especially at a business that promotes the value of physical fitness.

To me, the price point still seems high. I’d prefer it be somewhere between $15 - $17. Having said that, however, I would gladly join and try this out for a “semester” session and see if I’m as impressed at the end as I am at the beginning.

GYMBOREE:

The instructor didn’t seem that skilled. She mostly followed an index-card list of things to do and didn’t attempt to genuinely connect with her “students.” She seemed more like a gum-popping teenage babysitter who can’t wait for the parents to leave so she can turn on soap operas and ignore the kids instead of a teacher genuinely interested in her job and believing in what she’s doing.

For example, there was a girl in the class who was very shy and the “teacher” didn’t do anything to try to bolster her confidence or to integrate her into the lesson.

Also, the class was themed on “cookies” which was unimpressive to me. This is a class for two year olds - my daughter doesn’t regularly eat sugar, and I’m not that thrilled with having a class themed on chocolate chip cookies. What about something more nutritious? This loose theme was a little ridiculous, honestly. First the kids “pretend” put plastic hockey-puck type discs into an “oven,” then they used toy rollers to pretend-roll the discs, which is not the order you would go in if you were really cooking. Next, the kids were supposed to pretend they were cookies and dunking themselves in milk by jumping into an inner tube. I think the imagination aspect was little stretched here. I don’t think a single child in the room understood they were “cookies” while they were jumping.

The room was a little cramped. There was lots of equipment, but it all seemed a little piled closely and a little haphazardly. There was a lot of equipment in there that wasn’t intended for the day’s lesson, but it served as a cluttered distraction for the kids from what they were supposed to be doing. In addition, the class used these red discs and they seemed fairly dirty. They were simply returned to a bin after the class. These discs were supposed to have been “cookies,” so, naturally, a number of kids had put them in their mouths. This was REALLY unsanitary.

Finally, at the end of the class, all of the children were supposed to give a kiss to this puppet, Jimbo. These are toddlers… All it takes is one snotty kid and the whole group could get sick. Sure, there’s a sign on the door about making sure your kid isn’t sick when they attend the class, but a lot of times, people can be contagious a day or more before they actually feel sick.

I found the general sanitation conditions of the class to be poor, the instruction unskilled and the actual curriculum to be ludicrous. While the class was a success from the perspective that my daughter loved being around other little ones and really enjoyed the group activity aspect, I would have felt totally ripped off if I’d paid for this.

Roger Biduk - No Direction on Wall Street

Roger Biduk writes:

Bernie Madoff

Many pages of internet speculation have been devoted to the question of “Could Bernie Madoff really have acted alone?”

The volume of statements, transactions, etc. all argue against him acting alone. And obviously Bernie himself wasn’t staying up all night licking stamps and inserting bogus, customized, client statements into envelopes. But could he really have been the only one who understood the scheme which was taking place?

Hopefully at some point we’ll find out. But for now, I’d like to make the case that he could have been acting alone. And it may have been easier than it might seem to the uninitiated. Let’s start by looking at an example of his client statements, helpfully provided by the NY Times’ excellent DealBook site:

http://dealbook.blogs.nytimes.com/2008/12/15/a-look-at-madoffs-trading-records/

Wow, you might say, that’s a lot of work to generate that many fake trades, have them all add up, printed out, mailed to clients, etc. I agree. However, as it so often does, technology provides a solution: back testing.

When a hedge fund, money manager, or even sophisticated private investor, wants to test a new strategy, a common method is to test the strategy out against historical data. There are numerous commercial packages available to do this, and given that Madoff Securities had a large broker-dealer operation, along with at least one legitimate proprietary trading desk, it’s almost a certainty that they had back testing software available, either their own proprietary software or commercial packages, or both. Furthermore, they had up to the millisecond data available– not that he needed that accuracy, since in the statement provided by Dealbook, all the trades take place on only two days!

Now, I don’t know Mr Madoff’s level of computer literacy, but I’d wager he’s at least at the sophisticated end user level. All he would need to do is point and click to set up a back testing package for his basic strategy (buying large-cap shares, then buying put options and selling call options against the S&P 100 index). A simple adjustment to the parameters would allow him to generate all the trades he needed for a given month, and he could tweak the return to be whatever, more or less, he wanted. If the stocks were down, he would tweak the return to make more on the puts– and likewise, if it were up, he would make more on the calls and the stocks themselves. With the benefit of hindsight, it’s easy. I doubt if it would take more than an hour, if that, once the process was set up. And he only needed to spend that hour once a month.

At that point, he simply prints out the trades– which would aggregate to the total amount of money under management. He can hand the trade report off to the clerical staff, who doesn’t know that these are not legitimate trades– he could even explain that these are “in house” confirms. The clerical staff enters the trades into their performance and account reporting software, which allocates the amounts to various clients and generates reports in exactly the same manner as a legitimate hedge fund would.

The performance reporting software would track the aggregate amount of money under management, again just like a legitimate hedge fund.

So could he have done it by himself? I believe so, especially if his staff wasn’t too inquisitive. Did he? I guess we’ll see.

Black Swan

Crude trading at $25. S&P 500 falls 50% to 500. China’s GDP growth falls to zero. EURUSD falls to 0.95. Italy could leave the ERM. If Saxo Bank’s 10 outrageous claims for the year ahead transpire, economic conditions will worsen dramatically in 2009. “The good thing is, overall, we predict 2009 will be a turning point because it can’t get much worse,” says Chief Economist David Karsbøl.

The Copenhagen‐based online trading and investment specialist’s predictions are an annual attempt to predict rare but high-impact ‘black swan’ events that are beyond the realm of normal market expectations. Compiled as part of the bank’s 2009 Outlook, the thought exercise this year presents a dismal view of the global financial landscape.

Saxo Bank’s Outrageous Claims for 2009:

• There will be severe social unrest in Iran as lower oil prices mean that the government will not be able to uphold the supply of basic necessities.

• Crude will trade at $25 as demand slows due to the worst global economic contraction since the Great Depression.

• S&P will hit 500 in 2009 because of falling earnings, vaporizing housing equity and increased cost of funds in the corporate sector.

• The EU is likely to crack down on excessive government budget deficits in several member states, and Italy could live up to previous threats and leave the ERM completely.

• Chinese GDP growth drops to zero. The export driven sectors in the Chinese economy will be hurt significantly by the free‐fall economic activity in the Global Trade and especially of the US.

• Pre‐In’s First Out. Several of the Eastern European currencies currently pegged or semi‐pegged to the EUR will be under increasing pressure due to capital outflows in 2009.

• Reuters/ Jefferies CRB Index to drop to 30% to 150. The Commodity bubble is bursting, with speculative excesses so large they have skewed the demand and supply statistics.

• 2009 will see the first Asian currencies to be pegged to CNY. Asian economies will increasingly look towards China to find new trade partners and scale down their hitherto US‐centric agenda.

“In a year when markets and economies have fluctuated more widely than ever before nothing seems out of the ordinary or impossible. We believe that 2009 will be equally unpredictable and therefore have made ten outrageous predictions largely focusing and what might happen to global indices and currencies. The good thing is, overall, we predict 2009 will be a turning point because it can’t get much worse,” says Karsbøl.

“In 2008 the S&P 500 has fallen well over 25% below its 1182 high of 2007, world oil prices got close to the predicted high of $175, and UK growth has turned negative. Who knows which of our 2009 forecasts will prove to be right, but judging by previous years some of them most certainly will,” he adds.

Source: Bobsguide, 18.12.2008

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Muirhouse deputation to Edinburgh City Council meeting

About seventy people attended the Edinburgh City Council meeting today in protest of the “Un-”Fairer Scotland Fund, which would hit North Edinburgh hardest with over 50% reduction in funds in Muirhouse alone. Amongst the groups and initiatives threatened with closure are brandnew buildings costing millions - which are now left with no funding to staff and open the resources like the Muirhouse Millenium Community Centre and the North Edinburgh Arts Centre. The North Edinburgh News, which has been running in this area for over 30 years is threatened with closure as the funding cuts of about 75% of the previous amounts would mean staff can not anymore paid.

Malcolm Chisholm, Member of the Scottish Parliament, opened the deputations with the remark, that the Forth ward sees the worst funding cuts in the 17 years he has been a representative for the area. He said that many of the projects grew out of activism of recognising a need in this area, like North Edinburgh Childcare. He warned that should these funding cuts go through, it would mean that other council services would need to pick up the pieces. He sounded astonished, that Edinburgh Council was the only council in Scotland who did not use the Scottish Index on allocating the funding, but a new “Edinburgh Index” which meant drastic funding cuts of 37% a year.

Dave Pickering, community representative to the Forth Partnership, pointed out that the cuts in the Forth area amounted to £700 000 (sevenhundredthousand pounds) and that seventeen projects are affected. He pointed out that the Local Neighbourhood Partnership gave reassurance at the start but that the promises of fair funding allocation never happened. He pointed out that the funding cuts are hitting the most vulnerable people in the community and that the Fairer Scotland Fund is penalising the poorest communities with the most deprivation in Edinburgh.

A user and representative of the Black Community Development Project talked about how the cuts are unfairly targetting the local ethnic minority people with a community of twothousandfivehundred residents. She asked: “Who will continue to address our needs?” and talked about how the BCDP was helping her and her family when they became vistims of racist abuse. She also called for the Fairer Scotland Fund to be more transparently and more equally distributed.

Nina Davies, a reader of the North Edinburgh News, stressed that as a self-employed professional the NEN is a vital link to the community. The funding cuts would close-down a community paper with a 30-year-old history.

Georg Pitcher from the Edinburgh Community Activist Representatives Network stressed that the Councillors would have a moral choice today. He reminded the Councillors that people placed their trust in them and that they should make a decision for the People and not their Party. He called for the Councillors to get a better understanding of the people who they serve.

A representative of the Pilton Youth Community Group stated that her organisation was the only organisation which provides an early intervention for under 12-year-old and that the speed of the drastic funding cuts being implemented meant that it was impossible to get additional funding as there was not enough time given to their project.

The Member of the Westminster Parliament for Edinburgh North and Leith, Mark Lazarowicz, called for options to make it possible for the projects to continue. He warned about the interconnections which were not yet considered by the funding cuts; like the cutbacks to funding youth projects will result in that teenagers and young people will have nothing to do and that will have consequences.

Roy Douglas, chair of the Muirhouse and Salvesen Community Council stated that the these cuts will effect the most vulnerable. He stressed that Muirhouse and Niddrie were found in a recent research by Glasgow University to be the most deprived communities in the city - with Niddrie receiving no reduction whatsoever in its funding allocation whilst Muirhouse suffered a reduction of more than 50% in the grant money which was aimed originally at tackling poverty and social exclusion. He stated that our community would look pretty much like 25 years ago - with empty boarded-up houses and broken street lighting, parks and green spaces neglected. He asked the Councillors to work with us and not against us, and reminded the SNP that Nicola Sturgeon declared her support for community led regeneration and called for Councillors not to endorse the axe blow.

The deputations finished off with Councillors given a 15 minutes period to ask questions. Councillors Lesley Hinds and Cammy Day supported the deputations and called on the Edinburgh Council to avoid the cuts. A banner was dropped and calls from the public gallery demanded that Elaine Morris resign as a Councillor for the Forth ward and as the chair of the Forth Partnership and as the convenor of the FSF Finance Group which implemented the cuts.

India test-fires BrahMos supersonic missile.The National Investigation Agency (NIA) Bill and the Unlawful Activities (Prevention) Amendment (UAPA) Bill Passed to DELETE Mass Movements and resistance whatsoever!Antulay Rightly Points out the ATS Mystery! India

The bills were introduced in the wake of the dastardly Mumbai strikes. Earlier, anti-terror laws like the Terrorist and Disruptive Activities (Prevention) Act (TADA) and prevention of Terrorist Activities Act (POTA) had to be scrapped after allegations of misuse.

The 26/11 attacks have left the nation shell-shocked. The government has to ensure that such attacks never recur and the common man does not have to exist in an atmosphere of fear and insecurity. India needs tough laws against terrorism like in the US and the UK. But anti-terror laws should not be in violation of human rights. So will the government be able to maintain the delicate balance between tough laws and fairness in tackling terror?

India’s lower house of parliament has passed legislation creating a national anti-terror agency resembling the United States’ Federal Bureau of Investigation, FBI.

Lawmakers Wednesday passed several tougher anti-terrorism laws, including one that would allow police to hold suspects for up to 180 days - double the current limit.

The laws would also allow authorities to restrict the finances of suspected terrorists.

The measures now move to India’s upper house of parliament for final approval.

India’s state security agencies came under severe scrutiny last month after failing to detect the attacks on Mumbai that killed more than 170 people.

U.S., British and Indian officials say there is clear evidence that the attackers received training from terrorist camps inside Pakistan.

Pakistani President Asif Ali Zardari today said in a televised interview that there is still no conclusive evidence to support that claim.

But Mr. Zardari said his country is prepared to act if authorities find adequate evidence of any Pakistani involvement.

On Monday, India said its peace process with Pakistan has been put on hold since the attacks.

Pakistan’s foreign minister said today he regrets the halt and hopes relations between the two nations will recover.

Foreign Minister Shah Mehmood Qureshi said he is “confident that we will overcome this hiccup” and optimistic that dialogue will resume.

Seeking to dampen persistent media speculation a retaliatory strike is in the works against Pakistan, India’s defense minister is declaring no military action is being planned. But he warns Islamabad to act against terrorists on its soil, if it wants normal relations with India.  

A.K. Antony says war is not an option, as a response to the terror attack on Mumbai.

Antony spoke to reporters in the capital who asked him about troop deployments on the border and reported preparations for military action with Pakistan, against whom India has gone to war three times in 60 years.

“We are not planning any military action,” he said.

The defense minister is also denying India plans to end the five-year ceasefire, along the military control line that marks the disputed India-Pakistan boundary in the former princely state, Jammu and Kashmir.

The gunmen who laid siege to Mumbai have been linked to the Pakistani-based Lashkar-e-Taiba, which has led a violent struggle against Indian rule in Kashmir.

Antony says Pakistan must act against those responsible for the Mumbai attack and root out terrorists operating on its soil.

“Unless Pakistan shows sincerity, whatever they are saying, through their actions, one thing is sure - that there is no question of things as usual,” he said.

Antony made his remarks to reporters following a ceremony to mark the 37th anniversary of India’s military victory over Pakistan, which led to the creation of Bangladesh.  

Pakistani Prime Minister Yousuf Raza Gilani, speaking to the national assembly in Islamabad Monday, said the country’s armed forces are “fully prepared and alert.”

Gilani says Pakistan does not want war, but, if aggression is imposed on the country, it will defend itself.

Amid the current tension following the Mumbai attacks, the United States and other countries have shuttled top government and military officials between India and Pakistan, hoping to persuade them to avoid military confrontation.

Last month’s 60-hour attack on Mumbai by ten radical Islamic gunmen left more than 170 people dead and injured nearly 300 others.

 

 

 

Commonwealth of Independent States

North and South America

Africa

Asia

League of Arab States

Organization of the Islamic Conference

The government first attempted to use the law against illegal street vendors who violently resisted removal by the police. These charges did not result in convictions.

HI.

 

Palash Biswas

 

 

The monster in the mirror

An intresting article by Arundhati Roy

Azam Amir Kasab, the face of the Mumbai attacks. Photograph: Reuters

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. Like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “Bad Guys” he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

But November isn’t September, 2008 isn’t 2001, Pakistan isn’t Afghanistan and India isn’t America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It’s odd how in the last week of November thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara – one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you may not have heard that ordinary people too died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness. The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of India Shining and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish centre.

We’re told one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company I think) said “Hungry, kya?” (Hungry eh?). It then, with the best of intentions I’m sure, informed its readers that on the international hunger index, India ranked below Sudan and Somalia. But of course this isn’t that war. That one’s still being fought in the Dalit bastis of our villages, on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet. So maybe, like everyone else, we should deal with the one that is.

There is a fierce, unforgiving fault-line that runs through the contemporary discourse on terrorism. On one side (let’s call it Side A) are those who see terrorism, especially “Islamist” terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit and has nothing to do with the world around it, nothing to do with history, geography or economics. Therefore, Side A says, to try and place it in a political context, or even try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that though nothing can ever excuse or justify terrorism, it exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed, who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias and Democracy and believes that jihad should be waged until Islam, his Islam, rules the world. Among the things he said are: “There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera): “We didn’t spare a single Muslim shop, we set everything on fire … we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.”

(Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently in Kandhamal in Orissa, Christians were the target of two and a half months of violence which left more than 40 dead. Forty thousand people have been driven from their homes, half of who now live in refugee camps.)

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jehad with his twisted, fiery sermons. On December 11 the UN imposed sanctions on the Jammat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest. Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide he left the VHP to join the Shiv Sena. Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat. So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata.

Suhel Seth, a TV impresario and corporate spokesperson, recently said: “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted. The RSS has 45,000 branches, its own range of charities and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister AB Vajpayee, current leader of the opposition LK Advani, and a host of other senior politicians, bureaucrats and police and intelligence officers.

If that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organisations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

In this nuclear subcontinent that context is partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes and families, was drawn virtually overnight. It was Britain’s final, parting kick to us. Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India left their homes with nothing but the clothes on their backs.

Each of those people carries and passes down a story of unimaginable pain, hate, horror but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives. Pakistan, the Land of the Pure, became an Islamic Republic, and then, very quickly a corrupt, violent military state, openly intolerant of other faiths. India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990 they were ready to make a bid for power. In 1992 Hindu mobs exhorted by LK Advani stormed the Babri Masjid and demolished it. By 1998 the BJP was in power at the centre. The US war on terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy. This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism in the subcontinent and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and LK Advani of the Rashtriya Swayam Sevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express and the 2007 bombing of the Samjhauta Express, the government of India announced that it has “incontrovertible” evidence that the Lashkar-e-Taiba backed by Pakistan’s ISI was behind the Mumbai strikes. The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies the Lashkar operates in India through an organisation called the Indian Mujahideen. Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy. Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously. In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. Neither will war. (Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighbouring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.)

Thanks largely to the part it was forced to play as America’s ally first in its war in support of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening towards civil war. As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistan army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to.

Certainly it did not expect them to come calling in heart of the Homeland on September 11. So once again, Afghanistan had to be violently remade. Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders. Nobody, least of all the Pakistan government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs and the maniacs who believe that Islam will, or should, rule the world is mostly the detritus of two Afghan wars. Their ire rains down on the Pakistan government and Pakistani civilians as much, if not more than it does on India.

If at this point India decides to go to war perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before. If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbours. It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front. The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary. Over three days and three nights we watched in disbelief as a small group of very young men armed with guns and gadgets exposed the powerlessness of the police, the elite National Security Guard and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this they indiscriminately massacred unarmed people, in railway stations, hospitals and luxury hotels, unmindful of their class, caste, religion or nationality. (Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.) But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill – and be killed – mesmerised their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news. Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.) Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people and inflict as much damage as they could before they were killed themselves. They left us completely bewildered. When we say “nothing can justify terrorism”, what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it’s precious. So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself Imran Babar. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror emails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir. “You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for? Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don’t figure in their calculations except as collateral damage. It has always been a part of and often even the aim of terrorist strategy to exacerbate a bad situation in order to expose hidden faultlines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project. A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theatre, spectacle and symbolism, and today, the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the attack was being condemned by TV anchors, the effectiveness of the terror strikes were being magnified a thousandfold by TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid. Instead we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed (is it alright for the poor to remain unprotected?). We had people suggest that the government step down and each state in India be handed over to a separate corporation. We had the death of former prime minster VP Singh, the hero of Dalits and lower castes and villain of Upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir, give us his version of George Bush’s famous “Why they hate us” speech. His analysis of why religious bigots, both Hindu and Muslim hate Mumbai: “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.” His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.” Didn’t George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and leftwing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army and virtually asking for a police state. It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid television flashcards like the Police are Good Politicians are Bad/Chief Executives are Good Chief Ministers are Bad/Army is Good Government is Bad/ India is Good Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically, this regression into intellectual infancy comes at a time when people in India were beginning to see that in the business of terrorism, victims and perpetrators sometimes exchange roles. It’s an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation. Eventually the courts acquitted two out of the four accused, including SAR Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him but was then convicted for a fresh, comparatively minor offence. The supreme court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.” Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19 this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur and Ahmedabad in 2008. An assistant commissioner of Police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists” known and rewarded for having summarily executed several “terrorists”. There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics and activists all of whom demanded a judicial inquiry into the incident. In response, the BJP and LK Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying it was “suicidal” and calling them “anti-national”. Of course there has been no inquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the CBI said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted 2kg of RDX and two pistols on them and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir). Ali and Qamar who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS) that was investigating the September 2008 Malegaon blasts arrested a Hindu preacher Sadhvi Pragya, a self-styled God man Swami Dayanand Pande and Lt Col Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu Nationalist organizations including a Hindu Supremacist group called Abhinav Bharat. The Shiv Sena, the BJP and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists”. LK Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On the November 25 newspapers reported that the ATS was investigating the high profile VHP Chief Pravin Togadia’s possible role in the Malegaon blasts. The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai Attacks. The chances are that the new chief whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

So according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police. This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world and yet refuses to ratify the International Covenant on Torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the Underworld and the Encounter Specialists virtually does not exist.

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them? There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse. If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US army is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire. (Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?) Hundreds of thousands people including thousands of American soldiers have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S allies/agents (including India) and U.S interests in the rest of the world has increased dramatically since 9/11. George Bush, the man who led the US response to 9/11 is a despised figure not just internationally, but also by his own people. Who can possibly claim that the United States is winning the war on terror?

Homeland Security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland. We have a hostile nuclear weapons state that is slowly spinning out of control as a neighbour, we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalise, end up as a threat not just to India, but to the whole world. If ten men can hold off the NSG commandos, and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix. Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go. Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain (it would be naïve to say end) terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says Justice, the other Civil War. There’s no third sign and there’s no going back. Choose.

This Week at Trinity (updated 12/18)

What’s Happening at Trinity UMC, in Disputanta, VA

Each Sunday during Advent, join us for a special message series: “And you shall name him____ - Names for the Christ Child.”

Be sure to mark your calendar for our Christmas Eve Service at 8pm. This is a warm gathering that includes candlelight, communion and the singing of traditional hymns. We’ll also be adoring the Christ child by supporting Stop Hunger Now’s Operation Sharehouse and United Methodist Family Services.

On Sunday, 12/21 Trinity will offer a “Blue Christmas” Service. This is an opportunity for those who are dealing with loss or struggles to honestly worship, name their losses, share communion, and find comfort from God during this season that can be so hard for many people.

The CHRISTMAS TREE IN THE NARTHEX needs to be decorated with angels! Please consider donating a memorial or honorarium to someone who has been an angel to you. For every $10, we will hang an angel on the tree. Because of the needs right here in our own area, the United Methodist Women will donate all contributions this year to the Prince George Churches Outreach Food Bank and Clothes Closet. Please complete a green form and give to Cindy Young or place in the offering plate. Checks should be made payable to “Ann Holman Circle UMW.” Many thanks and God bless!!!

Trinity’s Youth Group , Jesus and Me, , they will be Christmas Caroling on Sunday the 21st and will have a Birthday Party for Jesus. Please see Betsy Smith for more information.

Opportunity to Serve. Trinity has been involved with a rebuilding project of a home recently damaged by a tornado in the Emporia area and in a local home in need of a new roof. If you are interested in serving in this project, please contact a mission area leader Lori O’Kennon.

Our UMW circles are broke again! Keep up their tradition or empting their treasury for mission.  This year they have donated time, goods, and funds (almost $2500) to the  PG food pantry,  Henry Fork Ctr. Jackson Field Home, the Salvation Army and others.

Inspiring!  Informative!  Insightful!  Humorous! Subscribe to the Virginia Advocate, the official newsmagazine or the Virginia Conference of The United Methodist Church.  The Advocate serves as your monthly resource to:  local church stories of faith and discipleship, practical ideas for ministry, training events for all ages, mission opportunities around the world, and news relevant for today’s United Methodists.  A 1 year subscription is ONLY $15.  See Mitzie Albert to subscribe or receive more details.

We’re planning to break another record. Our New Goal for School Kits is over 300 and we’re well on our way.  Taking advantage of back to school savings, we currently have material for at least 300 kits.  However, we need your help in covering the cost for these supplies.  If you would like to contribute, please Make your check to Trinity UMC and mark your check with “School Kits”.

Flowers! If you are placing flowers on the altar and would like a special announcement in Trinity In Ministry, please contact Julie Brockwell with the wording.

Write someone special. Trinity’s UMW are selling note cards depicting an sketch of the church (prior to 1968), a pack of ten cards costs $10. Proceeds go to our mission work, both locally and globally.

Keep them coming. Donations of used Upper Room, Pockets, Guideposts  and Devozine devotionals; Bibles; and other spiritual material are encouraged. These are distributed to the residents of Poplar Springs Hospital and Poplar West Youth Development Center. A collection basket is under the hallway information table.

Free CareNotes are available to help. People dealing with difficult situations are looking for concise, easy-to-read guidance and support. Care Notes are available at each information table to provide help for you or someone you are concerned about. Please feel free to pick one up or share it with a friend. Trinity’s

Prayer Ministry: Each week, groups and individuals from our congregation pray for the concerns of our community and world as part of our life together.  If you would like to request prayer and be added to our prayer list, you can email your concern to prayer@trinitydisputanta.org.  Requests can also be made at church using the prayer cards in the pews and return in the offering plate.  If you have a concern that should remain private or you would like prayer or counseling, please contact Pastor Bert directly at 804.991.2299.  Urgent situations needing prayer, will be forwarded to our phone and email prayer chains.

Mr. T says, “I pity the fool that doesn’t use T-Mail.“An initiative of our care and nurture team, T-mail provides a mail folder for every family connected with Trinity.  You can find your T-Mail in the work room at the post office entrance of the church.  Folders for church leaders can also be found there along with index cards for you to drop a not to someone special.  We are still in start up on this, so please forgive any omissions or spelling errors (it’s unintentional).

Fed Cuts Key Rate to a Record Low

By EDMUND L. ANDREWS and JACKIE CALMES

WASHINGTON — The Federal Reserve entered a new era on Tuesday, lowering its benchmark interest rate virtually to zero and declaring that it would now fight the recession by pumping out vast amounts of money to businesses and consumers through an expanding array of new lending programs.

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Going further than expected, the central bank cut its target for the overnight federal funds rate to a range of zero to 0.25 percent and brought the United States to the zero-rate policies that Japan used for years in its own fight against deflation.

Though important as a historic milestone, the move to an interest rate of zero from 1 percent is largely symbolic. The funds rate, which affects what banks charge for lending their reserves to each other, had already fallen to nearly zero in recent days because banks have been so reluctant to do business.

Of much greater practical importance, the Fed bluntly announced that it would print as much money as necessary to revive the frozen credit markets and fight what is shaping up as the nation’s worst economic downturn since World War II.

In effect, the Fed is stepping in as a substitute for banks and other lenders and acting more like a bank itself. “The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth,” it said. Those tools include buying “large quantities” of mortgage-related bonds, longer-term Treasury bonds, corporate debt and even consumer loans.

The move came as President-elect Barack Obama summoned his economic team to a four-hour meeting in Chicago to map out plans for an enormous economic stimulus measure that could cost anywhere from $600 billion to $1 trillion over the next two years.

The two huge economic stimulus programs, one from the Fed and one from the White House and Congress, set the stage for a powerful but potentially risky partnership between Mr. Obama and the Fed’s Republican chairman, Ben S. Bernanke.

“We are running out of the traditional ammunition that’s used in a recession, which is to lower interest rates,” Mr. Obama said at a news conference Tuesday. “It is critical that the other branches of government step up, and that’s why the economic recovery plan is so essential.”

Financial markets were electrified by the Fed action. The Dow Jones industrial average jumped 4.2 percent, or 359.61 points, to close at 8,924.14.

Investors rushed to buy long-term Treasury bonds. Yields on 10-year Treasuries, which have traditionally served as a guide for mortgage rates, plunged immediately after the announcement to 2.26 percent, their lowest level in decades, from 2.51 percent earlier in the day.

Yields on investment-grade corporate bonds edged down to 7.215 percent on Tuesday, from 7.355 on Monday. Yields on riskier high-yielding corporate bonds remained in the stratosphere at 22.493 percent, almost unchanged from 22.732 on Monday.

By contrast, the dollar dropped sharply against the euro and other major currencies for the second consecutive day — a sign that currency markets were nervous about a flood of newly printed dollars. Some analysts predict that the Treasury will have to sell $2 trillion worth of new securities over the next year to finance its existing budget deficit, a new stimulus program and to refinance about $600 billion worth of maturing government debt.

For the moment, Mr. Obama and Mr. Bernanke appear to be on the same page, though that could abruptly change if the economy starts to revive. Fed officials have already assumed that Congress will pass a major spending program to stimulate the economy, and they are counting on it to contribute to economic growth next year.

In more normal times, the Fed might easily start raising interest rates in reaction to a huge new spending program, out of concern about rising inflation.

But data on Tuesday provided new evidence that the biggest threat to prices right now was not inflation but deflation.

The federal government reported on Tuesday that the Consumer Price Index fell 1.7 percent in November, the steepest monthly drop since the government began tracking prices in 1947. The decline was largely driven by the recent plunge in energy prices, but even the so-called core inflation rate, which excludes the volatile food and energy sectors, was essentially zero.

Mr. Obama’s goal is to have a package ready when the new Congress convenes on Jan. 6. His hope is that the House and Senate, with their bigger Democratic majorities, can agree quickly on a plan for Mr. Obama to sign into law soon after he is sworn into office two weeks later.

The Fed, in a statement accompanying its rate decision, acknowledged that the recession was more severe than officials had thought at their last meeting in October.

“Over all, the outlook for economic activity has weakened further,” the central bank said.

“Labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment and industrial production have declined.”

The central bank added: “The committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.”

With fewer than 10 days until Christmas, retailers from Saks Fifth Avenue to Wal-Mart have been slashing prices to draw in consumers, who have sharply reduced their spending over the last six months. On Tuesday, Banana Republic offered customers $50 off on any purchases that total $125. The clothing retailer DKNY offered customers $50 off any purchase totaling $250.

Ian Shepherdson, an analyst at High Frequency Economics, said falling energy prices were likely to bring the year-over-year rate of inflation to below zero in January.

The Fed has already announced or outlined a range of unorthodox new tools that it can use to keep stimulating the economy once the federal funds rate effectively reaches zero. On Tuesday, Fed officials said they stood ready to expand them or create new ones to relieve bottlenecks in the credit markets.

All of the tools involve borrowing by the Fed, which amounts to printing money in vast new quantities, a process the Fed has already started. Since September, the Fed’s balance sheet has ballooned from about $900 billion to more than $2 trillion as it has created money and lent it out. As soon as the Fed completes its plans to buy mortgage-backed debt and consumer debt, the balance sheet will be up to about $3 trillion.

“At some point, and without knowing the timing, the Fed is going to have to destroy all that money it is creating,” said Alan Blinder, a professor of economics at Princeton and a former vice chairman of the Federal Reserve.

“Right now, the crisis is created by the huge demand by banks for hoarding cash. The Fed is providing cash, and the banks want to hoard it. When things start returning to normal, the banks will want to start lending it out. If that much money is left in the monetary base, it would be extremely inflationary.”

Vikas Bajaj contributed reporting from New York.

Crisis blows £250m hole in university funding

The universities of Cambridge and Oxford, whose endowments were valued at £907m and £680m respectively in July, are understood to be the biggest losers. Cambridge’s fund plummeted £84m in the year up to July - before the credit crunch began to really bite - prompting fears that the worst is yet to come.

The plunging value of the funds comes as universities face unprecedented hikes in their wage and fuel bills alongside squeezed public funding. One senior vice-chancellor warned that the cutback in government spending on universities would be the worst in 25 years.

The survey of the 20 members of the Russell group of research-intensive universities showed nearly all have already lost millions in the downturn. All but three gave a measure of the performance of their funds. The losses declared so far add up to £190m with most institutions acknowledging there are more to come.

Phil Harding, chair of the British Universities Finance Directors Group, said: “It has undoubtedly got worse as the last six months have progressed. Finance directors are getting more and more concerned about how deep the impact is going to be and how prolonged.”

Universities are separately predicting severe funding cuts next year as the government shifts spending to deal with the fallout of the recession. A pay deal for lecturers promised to meet the retail price index for this year, which is unexpectedly high and adding to their woes.

The Russell group’s director general, Wendy Piatt, said: “Russell Group universities are less reliant on endowments than US institutions and we derive our income from a variety of sources. Nevertheless, we will be subject to some extremely difficult economic conditions with income streams under threat, costs increasing and international competition escalating … our research-led institutions have a crucial role to play in helping the UK survive the economic downturn and stimulate a recovery.”

Source: The Guardian

Read the full article

U.S. Property Prices Still Plummeting

id="desc">Market Outlook, Distressed Properties, Investment Opportunities, Bulk Deals

The U.S. economy is expected to stall as the recession worsens, providing no relief to the housing market as demand for homes continues to fall and prices follow accordingly. House prices continue to plummet, despite multi-billion government bail-out packages for the financial market.

In the year to end-Q3 2008 there was a 16.6 percent y-o-y drop in U.S. property prices (-20.8 percent in real terms), according to the S&P/Case-Shiller® national house price index. The ten major cities composite index (SPCS-10) plunged by a larger 18.6 percent. The broader 20-city home price index (SPCS-20) dropped 17.4 percent.

A more muted picture of the downturn comes from the purchase-only house price index of the Office of Federal Housing Enterprise Oversight (OFHEO), which reports average price of single-family homes falling only 4 percent during the year to end-Q3 2008, or 8.8 percent inflation-adjusted.

The median price of existing homes was $183,300 in October 2008, down 11.3 percent on a year earlier (the largest drop since 1968), according to the National Association of Realtors (NAR).

The subprime mortgage problems began as far back as 2006.

Since then, the crisis has spread to the financial market. As mortgage delinquencies and foreclosures rose, banks and other financial institutions wrote off substantial losses. The crisis of confidence spread to the entire economy, leading to a credit freeze, rising unemployment and low consumer confidence.

The crisis has spared very few financial institutions. American Insurance Group, the world’s largest insurer, has been partly nationalised. Mortgage giants Fannie Mae and Freddie Mac were nationalised. Several financial institutions were either allowed to collapse or sold to competitors through government-sponsored deals. Leading banks were given financial support through the Troubled Asset Relief Program (TARP). The government has also implemented economic stimulus packages, whose effects remain to be seen.

The end of the economic and financial meltdown is nowhere in sight. House prices are expected to fall until end-2010 or mid-2011.

Consensus as to the causes of the recent crisis is still lacking. Our best guess is that the crisis was caused by:

House price bubbles in many areas were stocked by reckless lending by banks and other mortgage companies. The eventual result was a financial meltdown, causing an economic crisis unparalleled since the Great Depression.

Change we can believe in

Unfreezing the credit market and restoring economic confidence are high on the list of the priorities of new president-elect Barack Obama.

Although Barack Obama, elected on Nov 4, will not take office until Jan. 20, 2009, he is already filling the leadership vacuum left by a lame duck president.

In addition, Obama has announced a two-year economic aid plan which includes massive spending, new tax cuts and the creation of around 2.5 million jobs (estimated to cost $1.1 trillion). He has said that if the current administration will not do it, he will pursue the plan as soon as he takes office.

“The consensus is this that we have to do whatever it takes to get this economy moving again, that we have to—we’re going to have to spend money now to stimulate the economy,” said President-elect Obama.

Recession blues

The U.S. fell into recession in December 2007, officially announced by the National Bureau of Economic Research (NBER) on December 1, 2008.

NBER defines recession as a significant decline in economic activity which lasts for more than a few months. It looks at broad economic measures (GDP, gross domestic income, real personal income, employment, real manufacturing sales, wholesale-retail sales and factory output) to determine if the economy is already in recession.

“The committee determined that the decline in economic activity in 2008 met the standard for a recession,” NBER said. “All evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion,” it adds.

Real GDP contracted 0.5 percent during the year to end-Q3 2008, according to U.S. Commerce Department. The U.S. economy is expected to contract well into 2009.

“The U.S. recession is set to get worse—a lot worse—in the next couple of quarters,” writes Nariman Behravesh, chief economist at the IHS Global Insight.

Unemployment rose to 6.5 percent in October 2008, the highest level since March 1994, from 4.6 percent in 2007. Unemployment in the U.S. is expected to rise to 7.6 percent by Q3 2009.

Real gross domestic purchases by U.S. residents dropped 1.3 percent in Q3 2008, according to Bureau of Economic Analysis (BEA).

In the face of collapsing demand, consumer prices fell 1 percent in October 2008, the steepest decline since 1947, according to the U.S. Labor Department. In 2007, inflation was 2.9 percent. Inflation is expected to be around 4.2 percent in 2008 and will stabilize to 1.8 percent in 2009.

The higher they rose, the deeper they fell

Coastal and/or sunny cities have experienced the biggest property prices drops.

Of the 20 cities in the index, Dallas (-2.7 percent) and Charlotte (-3.5 percent) saw the lowest house price declines.

The Pacific Division, especially California, registered the highest house price declines, according to the purchase-only HPI from OFHEO. Average single family house prices plunged 20.5 percent in September 2008 from a year earlier.

The West South Central Division has been least affected by the crisis, with house prices rising 0.51 percent over the same period.

Areas that experienced the biggest house price gains during the past decade also registered the biggest declines when the bubble finally burst. House price growth from 1996 to 2006 was highest in Los Angeles (264 percent), San Diego (232 percent), Miami (219 percent) and San Francisco (209 percent), using the S&P/Case-Shiller® monthly house price indices.

Sales and supply are plummeting

Sales of new one-family houses dropped 33.1 percent in the year to September 2008 to 464,000 units (seasonally adjusted), according to the U.S. Census Bureau and the Department of Housing and Urban Development.

The Northeast Region registered the highest decline of -65.1 percent from a year earlier. The West Region (-37.9) and Midwest Region (37.5 percent) followed, while the South Region (-23.8 percent) had the lowest drop in home sales.

Total privately-owned housing units completed fell to 1,043,000 in October 2008; 25.6 percent down from a year earlier, according to the U.S. Central Bureau. Single-family housing completions were 760,000, 7.7 percent below the September 2008 figures.

Permits to build new homes, an indicator of future activity, fell to a 48-yr low at 708,000 in October 2008; 40.1 percent down from a year ago. Privately-owned housing starts dropped 38 percent to 791,000 (seasonally-adjusted).

Interest rates and the crisis

From a high of 16 percent in the early 1980s, mortgage rates have been below 10 percent for the entire 1990s. The Fed funds rate, the key rate used as basis for most mortgages, was at historic lows from 2002 to 2004 – notably, at 1 percent from June 2003 to May 2004. The average interest rate for 30-year fixed rate mortgages (FRM) was 5.8 percent while the average rate for 1-year adjustable rate mortgages (ARM) was 4.05 percent from 2003 to 2005.

As a direct result, from 1996 to 2006 house prices rose more than 200 percent in major cities like Los Angeles, San Diego, Miami and San Francisco, using the SPCS-20 Index.

However in early 2006, the Fed, headed by newly-appointed Chairman Ben Bernarke, raised interest rates to contain the inflationary pressures caused by higher energy and commodity prices.

Households with ARMs were immediately affected. More than 30 percent of loans were ARMs in 2004-2005. Many households, especially subprime borrowers, defaulted on their amortization, and foreclosures rose.

In Q2 2008, there are around 739,714 properties with foreclosure filings in the U.S., up 121.4 percent from a year earlier. Nevada (146.8 percent), California (197.8 percent) and Arizona (272.3 percent) had the highest foreclosure rates, based on RealtyTrac’s reports. In 2007, around 1.3 million residential properties were subject to foreclosure, up 79 percent from 2006.

In response, the Fed frantically lowered interest rates. The key interest rate was reduced three times in 2007, from 5.25 percent in August (its level since June 2006) to 4.25 percent in December. In January 2008, the rate was slashed twice to 3 percent in response to the stock market turmoil. In March 2008, the Fed cut key rates by another 75 basis points, bringing them down to 2.25 percent. On April 13, the fed funds rate was 2 percent. In October, the Fed cut the key rate in 2 steps to 1 percent.

Despite the interest rate cuts, mortgage rates barely changed due, to the credit freeze imposed by lending institutions. Interest rates for 30-year FRMs even rose slightly to 6.2 percent in Oct 2008 from 6.1 percent in Dec 2007. One year ARMs moved from 5.5 percent in Dec 2006 to 5.21 percent in Oct 2008.

Mortgage markets and the crisis

In the early 2000s the U.S. mortgage market expanded rapidly, as mortgages were made available to individuals with low credit ratings (referred to as sub-prime mortgages), . Some were offered with little or no collateral.

Ninja loans (‘No Income, No Job, (and) No Asset’) became common during the bubble’s height. Poor lending practices allowed these loans to be approved without proper verification that the applicant was reasonably likely to adhere to the loan payment terms.

The mortgage market grew sharply from 65 percent of GDP in 1998 to 106 percent of GDP in 2007.

In Q1 2007, the estimated value of subprime mortgages was around $1.3 trillion. 2.5 percent of all mortgages were in foreclosure by Q1 2008; 50 percent of which were subprime mortgages.

About half of the total outstanding mortgages in the U.S. were owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac), U.S. government-sponsored enterprises (GSEs) that function as the biggest intermediaries in the U.S. secondary mortgage market.

In the first half of 2008, it became evident that these GSEs would be unable to handle the growing delinquency rates. In September 2008, the government placed the two GSEs into conservatorship, and will infuse up to $200 billion in additional capital to Freddie Mac and Fannie Mae.

Sluggish rental market

The U.S. rental market has grown only sluggishly during the past decade. Median asking rents rose by only 48 percent from 1997 to 2007, based on the figures from the U.S. Census Bureau.

In Q3 2008, median asking rent rose by 8.45 percent to $719 from a year earlier. Vacancies for rental houses rose slightly in Q3 2008 to 9.9 percent (from 9.8 percent in Q3 2007).

Help is on the way

The U.S. government’ actions to infuse to stimulate the ailing financial and housing markets include:

A bleak medium-term

The U.S. housing market has not yet reached bottom. “We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices,” says Joshua Shapiro, chief domestic economist at the research firm MFR.

Nearly half of all home sales were foreclosed properties by October.

“Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,” says Lawrence Yun, National Association of Realtors (NAR) chief economist.

House prices will only stabilize when the inventory of unsold houses, now at 10-months supply, is brought back to normal levels.

In addition, we need an economic recovery, and the unfreezing of credit, before things return to normal.

Homeowners Are Rushing To Refinance as Rates Fall

Homeowners around the country are scrambling to refinance their mortgages at the lowest rates since the early 1960s as the economy staggers through what’s likely to be the worst recession in decades.

The latest jobs data from the government showed that new claims for unemployment benefits dropped last week but remain near a 26-year high.

The Federal Reserve, aiming to free up lending and jolt the economy back to life, on Tuesday cut the federal funds rate from 1 percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments.

“This is beautiful, oh my gosh!” said Patti Mazzara, a mortgage broker in the Minneapolis suburb of Edina, who was surprised when she looked up rates and found them well below 5 percent, down at least three-quarters of a percentage point from earlier in the week.

“This is a whole new game now. Hopefully it’s going to give people some relief.” The national average rate on 30-year, fixed mortgages was 5.06 percent on Wednesday, according to financial publisher HSH Associates—the lowest since the 1960s and down from 5.3 percent Tuesday.

Reform for Wall Street, and others

So in a previous rant, I boldly claimed to have some ideas which might help us avoid the sorts of financial blow ups we keep getting. Again, I reiterate my disclaimer that these ideas are not supposed to be perfect, or even the best ideas. They are not even my ideas, in so far as other people suggested and talked about them long before I thought of them. But they are ideas which make a lot of sense to me.

One favourite idea of mine is to limit pay - ALL pay, whether they be benefits, bonuses, or whatever - for bankers and people involved in similar activities. I want to point out now that I am not completely ignoring all the microeconomic problems in pay limits. I am simply assuming (as I have no data to support my hypothesis) that the net benefits to society of such a move will outweigh any inefficiencies resulting from pay limits, and that most of the costs will fall on the bankers. I can live with that.

I am also only suggesting them for certain professions. Is that unfair? Perhaps. But then nobody is holding a gun to these Wall Street types saying they have to trade bonds for a living; I do not propose pay limits for bus drivers, if that helps.

And I’ve heard all the inane bleating about how such measure would be ineffective, or be harmful to the economy, and I say “RUBBISH”! What would happen if bankers were paid less? God forbid that MBA students might actually go into engineering, or medicine, or some other human endeavour with tangible benefits for humanity.

There is money enough in the world to fund the great human endeavours and this fairy tale that MBA’s need millions in pay to make this happen, and that they are the only ones who can make this happen, is nonsense. In reality, most of the people doing this work know that they are lucky to have such easy jobs paying a living wage, less ones that pay such fortunes.

Most of the so-called “hardship” involved in such work is in unnecessarily working long hours (you’re getting paid $5 million; your firm really couldn’t use some of that to hire someone else to take some of your load?), and having to work next to some of the most unpleasant human beings in existence day in, day out.

As for the harm to the economy from not having such clever people work in finance, I would suggest that the opposite is true. Activities leading to losses which wipe out a firm’s profits for the past 20 years is the result of greedy people who think they are so clever.

Let me put it another way. One of the most important, and well-paid, activities in finance can be in managing investments. Yet, data shows that very, very few people ever manage to beat market indices in performance. And from what I can tell, almost nobody is able to maintain above average gains for an extended period of time. The reason Warren Buffett is so famous is that he is an extremely rare exception to this rule.

As John Bogle, the founder of Vanguard, has repeatedly observed, this suggests that most investment managers are not worth their fees. In fact, most of these supposedly clever people should be paying you to invest your money: you’d actually be better off having less clever people managing index funds.

A less radical, although I suspect also less effective, way to limit such stupidity on Wall Street, would be to bar limited liability for these firms and individuals. We could create a new form of business entity, or require that banks, investment companies, etc. be partnerships, with no limited liability. If the managers of these firms are made personally liable for losses, and their pensions are tied to the future business of their firms, they are more likely to think twice about acting so foolishly.

Unfortunately, even this more limited suggestion is too radical for those in power. Wall Street does not have any significant partnerships left, and I suspect there are no firms left without limited liability. Even public accounting firms, which claim to require partnerships - and that all partners be accountants - precisely because of the discipline that unlimited liability bring to their work, have been busy trying to limit that liability.

It’s telling to see the response of the accountants to the Enron scandal, and the understanding, if not outright sympathy, of many in business to this response. After Enron, accountants demanded even more limited liability protections, so that “the whole firm does not go down because of a few rotten apples”, and blamed the whole thing on David Duncan and others.

They seem to miss the fact that the system of unlimited personal liability is there precisely for such scenarios. There will always be rotten apples. (Although I think that Duncan was less rotten and more a scapegoat for a rotten system.)

By making all the other partners, and indeed the entire firm, liable for the doings of the few rotten apples, it creates an incentive for their colleagues, who are the people best placed to spot the rotten apples, to police them. By limiting liability, these people have less at stake in ensuring that the public are protected from their work.

I agree that there are dangers that people could be discouraged from entering such professions. People point to public accounting as a prime example of ever decreasing interest from college students. As an accountant, however, I posit that the lack of interest in that profession has very little to do with unlimited liability, which is only relevant if you stick around long enough to make partner.

It has more to do with the fact that the profession is deeply unappealing for other reasons. Such as uncompetitive pay, the working hours which are unsociable, and having to work for deeply unpleasant people. As is often the case, the excuses are mere smoke screens for the real reasons, which those in power don’t want to publicise.

If unlimited liability, as a form of self-regulation, for a profession which is supposed to regulate other businesses is too harsh, is there any real regulation that is acceptable?

There will still be a financial market without effective regulation. And there will still be players in such a market. But sooner or later, it will be nothing more than a high-stakes poker game. And like a real poker game, it will be played mostly by pros, and most incautious amateurs who dare to play will be fleeced.

And true supporters of the financial system will recognise that this too costs us in market inefficiencies. Much more, I suspect, than limiting banker pay or unlimited liabilities.

Borrowers rushing to refinance loans as rates drop

By ALAN ZIBEL – 18 hours ago

WASHINGTON (AP) — Homeowners around the country are scrambling to refinance their mortgages at the lowest rates since the early 1960s as the economy staggers through what’s likely to be the worst recession in decades.

Mortgage brokers are already reporting a surge of calls from borrowers trying to take advantage of the Federal Reserve’s extraordinary actions this week.

The central bank, aiming to free up lending and jolt the economy back to life, on Tuesday cut the federal funds rate from 1 percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments.

On Wednesday, some mortgage brokers were quoting mortgage rates of close to 4.5 percent for people with strong credit and hefty down payments.

“This is beautiful, oh my gosh!” said Patti Mazzara, a mortgage broker in the Minneapolis suburb of Edina, who was surprised when she looked up rates and found them well below 5 percent, down at least three-quarters of a percentage point from earlier in the week. “This is a whole new game now. Hopefully it’s going to give people some relief.”

The national average rate on 30-year, fixed mortgages was 5.06 percent on Wednesday, according to financial publisher HSH Associates — the lowest since the 1960s and down from 5.3 percent Tuesday.

It was the best news in months for anyone looking to lock in a 30-year, fixed-rate mortgage. But it was not expected to be a cure-all, and borrowers already in danger of foreclosure probably won’t be able to take advantage.

“It’s a call to action for homeowners looking to get out of adjustable-rate mortgages,” said Greg McBride, senior financial analyst at Bankrate.com. “Unfortunately, it’s not an equal-opportunity party.”

Analysts say the Fed’s moves to buy up mortgage debt are designed to reduce the an unusually large difference, or spread, between mortgage rates and yields on government debt.

In recent years, there has been about a 1.8 percentage point difference between the yield on a 10-year Treasury note and 30-year mortgage rates, but gap currently hovers around 3 percentage points.

Falling interest rates mean Americans could suddenly find billions of extra dollars in their pockets at a time when consumers have sharply cut back on spending amid rising unemployment and declining household wealth. But many experts believe that the interest rate cuts alone won’t be enough to jump-start the economy.

“It’s a tall order to get (people) to go out and spend again,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “That’s why you also need a stimulus.”

President-elect Barack Obama’s advisers are currently contemplating an economic recovery plan that could cost as much as $1 trillion over two years.

Meanwhile, government data to be released Thursday is expected to show that new claims for unemployment benefits dropped last week but remain near a 26-year high, and a monthly forecast of economic activity is forecast to fall for the second straight month in November, in two signs of a deepening recession.

The Labor Department’s tally of initial jobless benefit claims for the week ending Dec. 13 is expected to drop by 15,000 to a seasonally adjusted level of 558,000, according to a survey of Wall Street economists by Thomson Reuters.

Last week, the government said claims jumped by almost 50,000 to 573,000, the highest level since 1982, though the labor force has grown by about half since then.

Later in the morning, the New York-based Conference Board’s index of leading economic indicators is expected to fall 0.5 percent, according to the consensus estimate of economists surveyed by Thomson Reuters. The index posted a 0.8 percent decline in October.

The index is designed to forecast economic activity in the next three to six months based on 10 economic components, including stock prices, building permits and initial claims for unemployment benefits. And Freddie Mac, the mortgage company, is also scheduled to release its weekly survey of mortgage rates Thursday.

Wall Street stocks finished moderately lower Wednesday, as further signs of economic deterioration dampened investors’ earlier enthusiasm about the Fed’s record interest rate cut.

Stocks declined in the early going after a larger-than-expected loss from Morgan Stanley offered fresh evidence of the sizable obstacles the battered financial industry still faces. The company posted a loss of $2.37 billion, or $2.34 per share, for the fiscal fourth quarter. The report came a day after rival Goldman Sachs Group Inc. posted its first quarterly loss since going public in 1999.

AP Business Writers Sara Lepro, Martin Crutsinger and Ellen Simon contributed to this report.

FOREIGN INHERITANCE DIPLOMATIC COMPENSATION PAYMENT $1.8M

DATE: 28th NOV 2008.

ATTN: CONCERNED BENEFICIARY.

ALLOCATED DIPLOMATIC COMPENSATION PAYMENT/TRANSFER OF $ 1.8 MILLION.

After a careful verification on your contract/Inheritance file through our central computer monitoring index as mandated by the presidency, I discovered that it shall take a long process for your payment to be released due to some abnormalities detected in your contract file, during the secret verification process. I realized that you have spent so much money in trying to actualize your goal of been paid which did not even reflect in your file, but I have an offer that might interest you which will at least sustain you financially pending when you receive your contract payment. This offer arose from the Federal Government reserve vault under my care. It is a total sum of us$ 1.800, 000.00 (One million eight hundred thousand United States dollars only), which will be shared between you and I in the ratio of 60%-40%.

This amount is not from your contract or inheritance sum or has any thing related to your contract payment, rather it is a left over from the allocated sum used in paying local and foreign contractors and it is directly under my custody. I am offering you this because I have seen that you are a committed beneficiary and your contract/inheritance funds will not be released on time until all the abnormalities are rectified.

The only thing needed for this us$1.8 million to be swiftly wired into your account under 24 hours is a bank account, which is different from what you already have in your inheritance file which we shall legally accredited / normalize at the Federal High Court of Justice as a diplomatic account in accordance to the rules and regulation of the Federal Government’s Financial act as amended by fund-in-transit act of 2000. Already all modalities are in place to register this transaction as a diplomatic compensation payment.

I am going to take care of the transfer charges

Be adequately informed that this is not a contract/inheritance payment therefore there will be no bureaucracy or misfortune. You are not going to pay any transfer charges or Taxes because I am going to pay for the transfer charges and all the taxes in this wire transfer,The registeration fee as a Diplomatic compensation payment will be taking care by you with only small amount of Money and that will be all for the transfer to be accomplished.

Please note that if you desire to accomplish this transaction with me, just reach me immediately on the above telephone and fax numbers or my email addresses furnishing me with your updated bank account your personal phone and fax numbers and just be rest assured that this transaction will take us just 72 hours to be consummated provided you are committed to work with me.

Sincere wishes and best regards,

————=_492FC468.E5DDA6F5–

Scam of the day

Death toll tops 1,100 from Zimbabwe cholera

HARARE

The death toll from a cholera epidemic in Zimbabwe has soared to 1,111, the United Nations said on Thursday, adding to pressure for a quick solution to the crisis in the southern African country.

South African ruling African National Congress leader Jacob Zuma ruled out military intervention and backed a diplomatic push as the way to end political deadlock and prevent a total collapse of the once relatively prosperous nation.

U.S. Assistant Secretary of State for African affairs Jendayi Frazer also backed a political rather than military solution but was far from hopeful about talks between President Robert Mugabe and the opposition on forming a unity government.

“We certainly think that the power sharing deal is on life support, it’s close to dead,” Frazer said in Mozambique.

That cast doubt on comments from South African President Kgalema Motlanthe that he hoped for agreement this week.

The latest cholera figures from the U.N. Office for the Coordination of Humanitarian Affairs (OCHA) in Geneva included a new outbreak in Chegutu Urban, west of Harare, where more than 378 cases and 121 deaths were recorded, it said in a statement.

It added that more than 20,580 people had been affected by cholera since August.

The spread of the disease, which causes severe diarrhoea and dehydration and is normally easy to treat, has increased international pressure on Mugabe. Western countries have renewed calls on the veteran leader to step down.

Prominent figures, including Kenyan Prime Minister Raila Odinga and Nobel peace laureate and South African Archbishop Desmond Tutu, have called for Mugabe to go or for peacekeeping troops to be sent to Zimbabwe.

When asked in an interview with South Africa’s 702 Talk Radio whether he favoured sending troops to Zimbabwe, ANC leader Zuma said: “No. Why military intervention when there is no war? We should be pressurising them to see the light.”

MEDIATION

South Africa’s ANC-led government, however, has continued to back the regional SADC group’s efforts to mediate an end to the crisis. Former South African President Thabo Mbeki is leading the mediation of the power-sharing talks.

Mugabe, 84, agreed to share power with opposition leader Morgan Tsvangirai in September, raising hopes that a unity government could reverse the country’s economic meltdown and rebuild basic services.

Inflation in Zimbabwe has spiralled out of control. Prices are doubling every 24 hours and unemployment is above 80 percent. Millions have fled to South Africa and neighbouring countries is search of work and food.

South African President Motlanthe announced on Wednesday that Zimbabwe’s neighbours would launch an urgent humanitarian campaign. Motlanthe’s spokesman, Thabo Masebe, said on Thursday it would focus on agricultural aid and would be non-partisan to ensure it could not be used as a political weapon.

The amount of the aid had yet to be finalised and was likely to depend on how much countries could give, he said.

Negotiations between Mugabe’s ZANU-PF party and opposition leader Morgan Tsvangirai’s Movement for Democratic Change are deadlocked over who should control key ministries, and there are growing fears the agreement will unravel and lead to violence.

Tsvangirai defeated Mugabe in a March presidential election but without an absolute majority. He pulled out of the run-off in June, saying scores of his supporters had been killed.

The opposition says attacks have picked up again. They say more than 20 people have been abducted from their homes and offices in the past two weeks. The government has denied the accusations.

Source

December 12 2008

MSF/Doctors without Boarders, has seen more than 11,000 patients since August in Zimbabwe’s worst cholera outbreak in years and has opened dozens of cholera treatment centres throughout the country. Cases have been found in nearly all provinces. More than 500 national and international MSF staff members are working to identify new cases and to treat patients in need of care.

December 12 2008

Children play with stagnant raw sewage at the Machipisa suburb in Harare November 28, 2008. Fast-spreading cholera is “the tip of the iceberg” of what stands to be a major health crisis in Zimbabwe, United Nations agencies said on Friday. Nearly 400 Zimbabweans have died from the disease. (REUTERS/Philimon Bulawayo (ZIMBABWE))

HARARE, Zimbabwe

CARE is ramping up food aid and sanitation programs in Zimbabwe as part of the international effort to combat one of the worst cholera outbreaks the world has seen in recent years. The humanitarian organization also is calling on the public to help. As little as $10 could save a life. That’s what it takes to provide a household with a bar of soap, a water container and two months worth of aqua-tabs for water purification.

The epidemic has already killed more than 780 people and infected at least 16,400. Almost half the country’s population will be dependant on food aid by January, humanitarian officials project. Unfortunately, because they require large gatherings, food distributions are a perfect conduit for the spread of cholera. So CARE, one of the World Food Program’s largest partners in Zimbabwe, is providing sanitation training and improved access to water, too, in an effort to serve at least 900,000 people.

In the longer term, if CARE can raise sufficient funds, it will launch a program to develop a secure supply of clean water. CARE needs $750,000 to carry out its preventative education program and a plan to drill new wells in water-starved communities. Drilling one borehole alone costs approximately $25,000.

“If we do not secure the water supply for these people in the long term,” Chiesa said, “the country will be looking at another outbreak next year, and the year after that, and so on.”

Source

Save the Children, )

“Also, the percentage of people who are dying having contracted cholera in the first place is way higher than normal for this disease, in some areas. With even the most basic health care on hand, you would expect to see a death rate of only one or two percent. In some areas of Zimbabwe a third of those who have contracted the infection are dying.”

Ms Pounds added that said that the crisis was almost certainly worsening. “Reliable figures are hard to come by, but there is much evidence out there that this crisis is growing, not diminishing, especially as we know there are many people can’t get to cholera centres. Given that this is a disease spread by unclean water and exacerbated by hunger which weakens victims, this problem has clearly not gone away. Water and health services have collapsed and more than half the 10 million population needs emergency food aid. This deadly disease will continue to spread unless we get more money and more resources to halt the contamination and treat victims promptly.”

Save the Children urged the international community to listen to aid agencies working in Zimbabwe and to Zimbabweans themselves living with the horror of hunger and cholera. “It is ordinary families who are bearing the brunt of this crisis, and it is to them the world must listen,” said Ms Pounds. “They should listen to the mothers whose babies have died, and to the children waiting outside health clinics to see if their mothers or fathers will come out alive. That’s the reality here.”

Save the Children’s 200-strong team in Zimbabwe is helping to provide drugs to treat cholera and educating communities how to avoid infection, as well as providing food so that safe cholera treatment camps can be set up to prevent further contamination.

Notes to Editors

The humanitarian crisis in Zimbabwe has now reached unprecedented proportions. A cholera epidemic is already crippling the country, which has killed over 775 people.

Up to 5.1 million people will be in need of food aid to survive by the end of the year, over half the country’s population. One in 10 children in Zimbabwe die before the age of five, although with rocketing rates of malnutrition and disease, the child mortality rate will also rise.

Save the Children’s 200-strong team in Zimbabwe is helping to provide drugs to treat cholera and educating communities how to avoid infection, as well as providing food so that safe cholera treatment camps can be set up to prevent further contamination.

The aid organisation is feeding close to 700,000 people and helping families prepare for the future by distributing seed, small livestock and helping to set up vegetable gardens. Save the Children has worked in Zimbabwe for 25 years.

Source

2008The death toll from a cholera epidemic in Zimbabwe has soared to 1,111, the United Nations said on Thursday, adding to pressure for a quick solution to the crisis in the southern African country.

Below are some details of Zimbabwe’s decline in figures:

* INFLATION

Inflation reached 231 million percent a year in July, the latest month for which a figure has been announced. Economists think it is now much higher and say prices are doubling daily.

* GDP

Gross domestic product has fallen every year since 2000, down 10.4 percent in 2003 alone. The IMF estimated that the economy shrank 6.1 percent in 2007.

Per capita GDP was estimated at $200 in 2007, from nearer $900 in 1990. Zimbabwe has the world’s fastest shrinking economy for a country not at war, according to the World Bank.

* INCOME

An estimated 83 percent of the population was living on below $2 a day by 2005. Since then, the situation has only worsened.

* EXPORTS

Exports averaged 33.5 percent of GDP between 1997 and 2001. UBS forecast this would decline to 9.9 percent in 2007.

* AGRICULTURE

Once the breadbasket of southern Africa, Zimbabwe now needs to import maize. The U.N. agricultural production index for Zimbabwe fell from nearly 107 in 2000 to just over 74 in 2005.

Official figures show maize production at 800,000 tonnes last season against national demand of 2 million tonnes.

* GOLD

Gold output, which accounts for a third of export earnings, hit a low of 125 kg in October, from a peak of 2,400 kg, as the economic crisis forced mines to close.

* UNEMPLOYMENT

Unemployment is estimated at over 90 percent. Well over 3 million Zimbabweans are thought to have fled, mostly to South Africa, in search of work and food.

* AID

Aid agencies say 5 million people — almost half the population — might need food aid by early 2009.

* IMF ARREARS

Zimbabwe fell into arrears with the International Monetary Fund in 2001. In February 2008, it owed $88 million, of which nearly $80 million has been in arrears for three years or more. While Zimbabwe has averted expulsion, the IMF has suspended financial and technical assistance.

* LIFE EXPECTANCY

Average life expectancy fell from 63 years in 1990 to 40.9 years in 2005, according to U.N. figures.

The mortality rate for children under five rose to 132 deaths per 1,000 in 2005 from 76 deaths in 1990.

* CHOLERA

The official death toll from a cholera epidemic since August is at least 1,111 with over 20,581 infected, according to the U.N. Office for the Coordination of Humanitarian Affairs in Zimbabwe.

* HIV/AIDS

In 2007, HIV prevalence was 15.6 percent among adults aged 15 to 49 — the fourth highest in the world. It causes the death of about 3,200 people per week in the country of 13.3 million.

HIV prevalence among pregnant women at clinics actually fell from 26 percent in 2002 to 18 in 2006, but some put that down to high mortality and emigration rather than prevention measures.

* ANTHRAX

Save the Children said this month that an anthrax outbreak in the south west had killed three people and could wipe out at least 60,000 livestock.

Source

They left out Sanctions of course. Which has enhanced Zimbabwe’s problem substantially.

WALL ST TUMBLES AFTER S

ETF/CEF Discussion: Another day another selloff. Broken record again as we move onward to the end of the year. We may see more as tax loss selling picks up. As for RSI it continues to like income, muni-bond, and short oil & gas funds. I cannot agree more with its picks, however the muni funds have taken quite a hi in recent months, so treat them as “falling knife” candidates, that should show some evidence of price recovery before jumping on them.

New Overnight Developments Abroad: Bank of Japan Easing Steps Surpassed Expectations

The yen strengthened 0.4% against the dollar and much more versus the euro in spite of Bank of Japan actions.

The dollar advanced 1.8% against the euro, 1.7% versus the Canadian dollar and Swiss franc, 1.5% against the kiwi, 0.5% against the Aussie dollar and 0.2% relative to sterling.

Asian stocks closed mixed. Nikkei -0.9%. Hang Seng -2.4%. Thailand -1.0%. Vietnam +0.6%. China +0.3%. South Korea +0.4%. Australia +1.0%.

European stocks are trading lower by 2.0% in Britain, 1.5% in France and 1.1% in Germany. Today is a quadruple witching hour for equities.

Sovereign bond yields are broadly lower. The 10-year JGB touched 1.21%, lowest since July 2005, but recovered to 1.235%, down 2.5 basis points net.

Oil hit yet another low is is off 1.4% on balance at $35.71/barrel. Gold relapsed 2.5% to $838.90 per ounce.

The Bank of Japan Policy Board deliberated for 5 hours, 6 minutes of 2 days and then cut its overnight money target by 20 basis points to 0.1% (by a vote of 7-1 with Noda dissenting). The Lombard rate was sliced to 0.3% from 0.5%. The BOJ upped its monthly outright purchases of government bonds to Y 1.4 trillion from 1.2 trillion yen and broadened the range of JGB’s it will purchase. The central bank will also buy commercial paper outright to alleviate a corporate credit crunch and will consider other ways of pumping funds into the money market. Governor Shirakawa left the door open to more easing if necessary but denied that today’s actions constitute a return to quantitative easing.

The Bank of Japan also reduced its economic assessment, saying that exports are decreasing, domestic demand is weaker, profits are declining, employment and income are worsening, financial conditions have deteriorated sharply, CPI inflation is poised to moderate, and it “will likely take some time” for the necessary conditions for recovery to be satisfied.

Japan’s government is projecting no growth next fiscal year. Prime Minister Aso called the BOJ actions “timely.”

Ukraine’s overnight refinancing rate was hiked to 22% from 18%, and the unsecured deposit rate was raised 500 basis points to 25%. These steps engineered a 10% rebound in the beleaguered hryvnia to 8.25/$.

Vietnam cut its base rate by 150 basis points to 8.5%, lowest since 8.25% over the 26 months to Feb 2008. The rate previously had been cut in four increments of 100 bps each from a peak of 14% in mid-October.

Denmark cut its key 1-week CD and lending rates by 50 basis points to 3.75%.

Japan’s all-industry index fell 0.5% in October and by 2.5% from a year earlier. Industrial output sank 2.5%, but construction (0.9%) and services (0.4%) rose.

British consumer confidence recovered a bit further to -33 in December from -35 in November and -39 last July. The better-than-anticipated result reflects a psychological lift from the cut in VAT taxes.

INSEE of France projects negative French GDP growth of 0.8% in the present quarter and a continuing contraction in each of the next two quarters. This downward revision follows announced results that business sentiment dropped 6 points in December to 73, lowest since June 1993 and down from 91 as recently as September.

German producer price inflation fell to 5.3% in November from 7.8% in October. The non-energy PPI index slid to 2.1% from 2.9%. The monthly drop of 1.5% in all producer prices was 50% greater than expected.

Turkish consumer confidence sagged to 68.88 in November from 74.24 in October.

China raised taxes on the consumption of a wide variety of energies.

Canadian CPI inflation fell to 2.0% from 2.6% last month. Core dropped to 1.7% from 2.4%.

Asian stock markets higher - DAWN Group


By Ian PollockPersonal finance reporter, BBC NewsThousands of parents are paying claims management firms to reclaim a now defunct tax-allowance, even though they could do it themselves.The attraction is that anyone who is actually due tax will be sent up to either 529 or 1,048, depending on when a child was born.Back-dated claims for the old Children’s Tax Credit must be made by 31 January 2009.Anyone can do this by contacting the HM Revenue & Customs themselves.”It is a sad reflection on HMRC that it has failed to get out the information that it is sitting on tax to hand out,” said John Andrews of the Low Incomes Tax Reform Group (LITRG).”I think it would be good for HMRC to publicise the fact that the last opportunity to claim this allowance is the end of January 2009.”Claims firmsOne claims management firm, The Entitlements Agency Ltd, says some people get nowhere with an approach to the HMRC."I have received 500 to 600 [claims] a week and I have written 50,000 in repayment cheques so far"David BrennanThe agency was set up by David Brennan, using a website - taxcredits.org.uk - to advertise his services.His pitch to potential customers is that he will handle claims on their behalf for the complicated tax allowance called the Children’s Tax Credit.This was targeted at basic rate tax payers with children and existed for just two years between 2001 and 2003 before being replaced by the current tax credits system.Mr Brennan says there are lots of potential customers.”We have 6,000 claims in the system and they have boomed in the last couple of weeks,” he said.”I have received 500 to 600 a week and I have written 50,000 in repayment cheques so far,” he added.Forms and chargesMr Brennan’s business is one of a plethora of similar ones who advertise online. He set up his business earlier this year and is registered at Companies House, with the Information Commissioner, and with the Ministry of Justice as a claims handling service.Despite all this, the Revenue takes a dim view, arguing that anyone can download its form 11 CTC from the HMRC website, fill it in, and send it off.”People don’t even need to use the form,” said a Revenue spokesman.”They can just send us a letter with their address and national insurance number.”It thinks most people received the benefit of the children’s tax allowance the first time round anyway and said it was “very unlikely” a repayment would be due for 2002-03.MisleadingMr Brennan makes it clear he deducts 94 plus VAT from any successful claim he processes, plus any interest that HMRC may refund the claimant."We get lots of people coming to us for our help after trying to claim from the Revenue directly"David BrennanAnd he acknowledged that about 75% of claims have been unsuccessful because the claimant either received the money when it was first on offer, or was never eligible in the first place.Some aspects of his website may raise some eyebrows.•The banner heading on the front page copies the style of a letter from HMRC, which may give the casual reader the impression the website has official support.•The site might give some readers the impression it is an official government agency by calling itself, on its front page, The Entitlements Agency, rather than The Entitlements Agency Ltd, which is its full name.•The website’s front page fails to name the relevant tax allowance (children’s tax credit) which it is inviting people to reclaim using its service.•It inaccurately claims that this tax relief was “never advertised” by the Inland Revenue.Helping peopleWhen Mr Brennan was questioned by the BBC he admitted that some of the wording on his website might need to be changed."We are monitoring the activities of these agencies very carefully "HMRC spokesman”I need to check and change that,” he said.”I may change that sentence to ‘poorly publicised’,” he added.But he defended the basic message of his business - that unclaimed tax is available which some people just do not know about.”A lot of people say they have never seen any publicity about this allowance,” he said.”We get lots of people coming to us for our help after trying to claim from the Revenue directly.”Personal detailsThe site invites potential claimants to sign a form appointing the business as an authorised agent to deal with HMRC.But this means in future all letters about your tax affairs, not just this claim, will be sent to the Agency, until you cancel the arrangement.”There must be 30 or 40 tax refund companies that do the same - it is standard procedure,” said Mr Brennan, although he said he had no desire to represent a customer once their claim had been settled.He also asks people to reveal a large amount of personal information, which could potentially expose them to identity fraud if it was lost.Among the details are names, date of birth, national insurance number, current address, phone numbers, children’s names, and tax code for 2002/03.”All that information is needed to make the claim,” Mr Brennan said.The Revenue said it was keeping a careful eye on tax reclaim agencies.”[We want to] ensure that no Crown copyright is being infringed and that no incorrect information is being provided which could lead customers to believe an entitlement exists when there is none,” said a spokesman.”Where we have any concerns about the accuracy or competency of 2002/03 child tax credit claims we have already spoken directly to a number of agents offering this reclaim service,” he added.
Source: news.bbc.co.uk

Rwanda tribunal to issue verdict
By Peter GresteBBC East Africa correspondentAn international tribunal is due to issue its verdict on the man accused of masterminding Rwanda’s 1994 genocide. Theoneste Bagosora is charged with leading a committee of Hutu extremists that plotted the massacre of Tutsi tribesmen and moderate Hutus. Mr Bagosora was cabinet director in Rwanda’s defence ministry at the time. Rwanda’s genocide left more than 800,000 people dead within the space of just 100 days - the most efficient slaughter in modern history. According to the indictment at the International Criminal Tribunal for Rwanda (ICTR), Mr Bagosora and three former senior military officers all conspired to “work out a plan with intent to exterminate the civilian Tutsi population and eliminate members of the opposition”. Tools of genocideProsecutors at the tribunal, which is being held in Arusha, Tanzania, say the group began their planning as far back as 1990. The following year, they helped draft a document circulated within the army, that described Tutsis as “the principle enemy”. Mr Bagosora, 67, is also allegedly responsible for organising the Interahamwe - the Hutu self-defence units that ultimately led the killings. He is also charged with distributing the arms and machetes that became the chief tools of the genocide. Mr Bagosora’s lawyer has challenged the very basis for the case, arguing prosecutors failed to prove the slaughter was organised and therefore failed to prove that it met the legal definition of “genocide”. If he is found guilty, it will be the first time the Rwanda tribunal has convicted anyone of actually organising the killingsThis article is from the BBC News website. © British Broadcasting Corporation
Source: news.bbc.co.uk

Climate outcome ‘hangs on coal’
By Jonathan AmosScience reporter, BBC News, San FranciscoIf growth in carbon dioxide emissions is to be constrained and even reversed then the world cannot afford a coal renaissance, scientists have said.Some commentators have argued that falling reserves of oil and gas will automatically limit CO2’s rise.But at an American Geophysical Union meeting, researchers said reserves of coal dwarfed those of other fuels.It was even possible oil’s demise could trigger an acceleration in emissions through more coal use, they added.”We can replace oil with liquid fuels derived from coal,” said Ken Caldeira from the Carnegie Institution at Stanford University in California.”But these liquid fuels emit even more carbon dioxide than oil, so the end of oil can mean an increase in coal and even more carbon dioxide emissions to the atmosphere, and even more rapid onset of dangerous climate change.”"There is more than enough coal and other fossil fuels to push us past the threshold beyond which we would not want to go"Dr Pushker KharechaProfessor Caldeira’s group has used climate and carbon cycle models to look at how future emissions and temperature projections would be altered by different fuel strategies.The team tried to work out the maximum effects that would arise from replacing oil either entirely with coal-based liquid substitutes or entirely with renewable energy sources.The assessment found that if coal-derived liquids are adopted, the Earth would achieve a 2C rise in temperature from pre-industrial times (a figure sometimes quoted as being a desirable ceiling to stay beneath in order to avoid “dangerous climate change”) by 2042. This is three years faster than a business as usual future with oil.If the renewables strategy is adopted, the 2C figure is not reached until 2056.”Clearly, to address the climate issue we have to address the coal issue,” Professor Caldeira told BBC News.His assessment was shared by Pushker Kharecha from Nasa’s Goddard Institute for Space Studies (Giss).”We cannot move into things like coal-to-liquids and unconventional fossil fuels such as methane hydrates, tar sands, oil shale and so forth,” he said.”If they become large-scale substitutes for oil and gas, that would worsen things because they are much dirtier than oil and gas because they produce more emissions per unit energy delivered.”Reserve judgementDr Kharecha presented details of recent research from the US, UK and France looking at the feasibility of not only constraining the growth of CO2 emissions but actually reducing its concentration in the atmosphere to 350 parts per million by volume (it is currently up at about 385ppmv).The group found it was possible, but only with a prompt moratorium on new coal use that does not capture CO2, and a phase out of existing coal emissions by 2030.Reforestation together with improved agricultural practices could help draw down CO2.”Efficiency and conservation have huge potential to offset emissions in the near term,” Dr Kharecha told BBC News.”And then in the mid-term and long-term we can focus on moving to alternatives such as renewable energies, and possibly a balanced look at nuclear because it does provide many benefits in addition to the numerous problems that it poses.”A new analysis presented here puts the total available global coal reserves at 662 billion tonnes.The figure is substantially lower than the ones used in assessments by the Intergovernmental Panel on Climate Change (IPCC) to gauge possible future emissions scenarios.”This is a radically different number from what is conventionally assumed,” said Professor David Rutledge from the California Institute of Technology, who led the analysis.”The IPCC assumes that about five times as much coal is available for burning.”But the scientists at this meeting said that if burnt, even this smaller amount of coal would radically alter the climate unless all the emissions were captured and stored.”There is far more than enough currently useable coal and other fossil fuels to push us past the threshold beyond which we would not want to go with the climate,” Dr Kharecha said.Jonathan.Amos-INTERNET@bbc.co.uk
Source: news.bbc.co.uk


HONG KONG, Dec 18: Asian stocks saw modest gains on Thursday as investors watched out for interest rate cuts, with Japan looking poised to slash its rate near zero to tackle a sharp economic downturn, dealers said. Tokyo rose 0.64 per cent, Hong Kong
Source: www.dawn.com

Sensex recovers, up 108 points - MSN India
Mumbai: After a weak opening, stock markets rebounced to trade higher with the Bombay Stock Exchange benchmark Sensex rising by over 108 points at 1100 hours after shares of realty, consumer durables and metal sectors recovered on funds buying. The
Source: news.in.msn.com

Flat start for equities; realty extends gains - Times of India
National Stock Exchange’s benchmark Nifty was up 1.45 points to 3062.25. Bombay Stock Exchange’s 30-share Sensex rose just 1.25 points to 100077.58 from Thursday’s close. “We are seeing a ‘channelled’ upmove in the Nifty but the oscillators are
Source: timesofindia.indiatimes.com

Sri Lanka stock exchange revises liquid Milanka index - Lanka Business Online
Dec 19, 2008 (LBO) - Sri Lanka’s stock exchange has included the Hayleys conglomerate in its liquid Milanka Price Index (MPI) from January 2 for the first half of next year and dropped market heavyweight Sri Lanka Telecom. The Colombo Stock Exchange
Source: www.lankabusinessonline.com

ASM International and Tokyo Electron Sign Licensing Agreement for - Market Wire
BILTHOVEN, NETHERLANDS–(Marketwire - December 19, 2008) - ASM International N.V. (Nasdaq: ASMI and Euronext Amsterdam: ASM) announced today that ASMI and Tokyo Electron Limited (Tokyo Stock Exchange - 1st Section: 8035) have signed a licensing
Source: www.marketwire.com

End of post. . . . . . . . . . . . . . . .. . . . .

December 19, 2008 Daily Highlights

MARKET REVIEW

MEDIA HIGHLIGHTS

ECONOMY HIGHLIGHTS

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

December 17, 2008 Daily Highlights

MARKET REVIEW

MEDIA HIGHLIGHTS

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Finding Your Growth Engine!

If you have a Number, then you have a mountain to climb …

To do that, you’ll need to find the kind of transport that will carry you there … I call that Your Growth Engine:

It’s what carries you TO Your Number - a Number that then allows you to live your Life’s Purpose!

Even if you think you know what you are going to do (or, perhaps you are already doing it) - by that, I mean you know what work you are going to do; what business you are going to open; what stocks you are going to buy - still try this exercise … you will be surprised by the new avenues that open up for you!

Here are the steps; they’re easy - and, I hope, a fun way to see out 2008 …

1. Start by reviewing your Required Annual Compound Growth Rate

… no matter what your CGR, you’ll need to find a ‘growth engine’ to drive it; this table (reprinted from that post) will tell you what your ‘growth engine’ NEEDS to be i.e. at a minimum (you can always choose a higher one, and overshoot your Number - IF you want to take on the additional risk):

- if your ‘Growth Engine’ is investing in CD’s / Bonds / Index Funds (e.g. via your 401k) / or solely real-estate you’ll still need a job, preferably a job that you enjoy to provide the funds you need to invest; this exercise will help you find the ideal job/vocation for you.

- if your ‘Growth Engine’ is investing in individual stocks, this exercise will help you identify individual companies / industries that you should be investing in because you have some ‘affinity’ with them already, or will more likely enjoy researching them to gain the knowledge to confidently invest.

- if your ‘Growth Engine’ is a business, then you will need to know what type of business to start; this exercise should help you identify where your strengths/interests lie, hence what type of business is most likely to ‘fire you up’. 

2. Next, I suggest that you go back and review the questions that you asked yourself to help you fire up your creativity when you first started looking at Your Life’s Purpose; in case you want to redo them (or you can’t find your notes) here are those 10 Questions again:

3. OK, now that you are (hopefully) creatively ‘fired up’ and Your Life’s Purpose is back at the forefront of your mind, it’s time to Take Inventory:

a) Take a blank sheet of paper, turn it sideways (landscape) and write down the following column headings:

EARN (i.e. how do you make money, or WANT to make money: past/present/future?)

SPEND (i.e. how do you spend money, or WANT to spend your money: past/present/future?)

ABILITY (i.e. what are you good at? what do you wish you were good at? what sparks your creative juices? what do you enjoy?)

DO (i.e. what are your hobbies? qualifications? jobs (unless already listed under ‘earn’)? what would you WANT to do, even for ‘free’?)

b) Under EACH of the above headings, write 4 to 6 one/two/three word answers (eg teacher; clothing; writing; wood-working; etc.); let the ideas flow and take as much/little time as you need

c) Once you’ve completed the above, take another sheet of paper and write the following numbers across the page (landscape, again): 4, 3, and 2. Now, under each, transfer your answers from the first sheet of paper, as follows:

4: Write the items (if any) that appear (at least in some sort of similar/related form) across all four columns in the previous list; you may not have any.

3: Write the items (if any) that appear across exactly three columns in the previous list; you may have only one or two, if any.

2: Write the items (if any) that appear across exactly two columns in the previous list; you will likely have a few.

These, starting with them 4, then 3, then columns are where you will you find your most fertile business/investing ground

d) Also, try combining your your answers(especially those that combine a future WANT with an ABILITY talents.

That’s it … try this out, see what it throws up!

Remember: your list may not be totally aligned with your Life’s Purpose … what we are looking for is the ‘growth engine’ that will get you to your Number … THEN you will be able to work on your Life’s Purpose!

Enjoy your Xmas and I’ll ’see’ you back early in the New Year!

[AJC: I'm taking a short break while our 7MITs - and, you, I hope - work on these exercises...]

OREO For 12 19 08

OREO For 12 19 08

The monster in the mirror: Arundhati Roy provides a reality check

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. Like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “Bad Guys” he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

But November isn’t September, 2008 isn’t 2001, Pakistan isn’t Afghanistan and India isn’t America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It’s odd how in the last week of November thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara – one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you may not have heard that ordinary people too died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness. The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of India Shining and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish centre._

We’re told one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company I think) said “Hungry, kya?” (Hungry eh?). It then, with the best of intentions I’m sure, informed its readers that on the international hunger index, India ranked below Sudan and Somalia. But of course this isn’t that war. That one’s still being fought in the Dalit bastis of our villages, on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet. So maybe, like everyone else, we should deal with the one that is.

There is a fierce, unforgiving fault-line that runs through the contemporary discourse on terrorism. On one side (let’s call it Side A) are those who see terrorism, especially “Islamist” terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit and has nothing to do with the world around it, nothing to do with history, geography or economics. Therefore, Side A says, to try and place it in a political context, or even try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that though nothing can ever excuse or justify terrorism, it exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed, who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias and Democracy and believes that jihad should be waged until Islam, his Islam, rules the world. Among the things he said are: “There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera): “We didn’t spare a single Muslim shop, we set everything on fire … we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.”

(Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently in Kandhamal in Orissa, Christians were the target of two and a half months of violence which left more than 40 dead. Forty thousand people have been driven from their homes, half of who now live in refugee camps.)

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jehad with his twisted, fiery sermons. On December 11 the UN imposed sanctions on the Jammat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest. Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide he left the VHP to join the Shiv Sena. Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat. So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata.

Suhel Seth, a TV impresario and corporate spokesperson, recently said: “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted. The RSS has 45,000 branches, its own range of charities and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister AB Vajpayee, current leader of the opposition LK Advani, and a host of other senior politicians, bureaucrats and police and intelligence officers.

If that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organisations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

In this nuclear subcontinent that context is partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes and families, was drawn virtually overnight. It was Britain’s final, parting kick to us. Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India left their homes with nothing but the clothes on their backs.

Each of those people carries and passes down a story of unimaginable pain, hate, horror but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives. Pakistan, the Land of the Pure, became an Islamic Republic, and then, very quickly a corrupt, violent military state, openly intolerant of other faiths. India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990 they were ready to make a bid for power. In 1992 Hindu mobs exhorted by LK Advani stormed the Babri Masjid and demolished it. By 1998 the BJP was in power at the centre. The US war on terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy. This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism in the subcontinent and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and LK Advani of the Rashtriya Swayam Sevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express and the 2007 bombing of the Samjhauta Express, the government of India announced that it has “incontrovertible” evidence that the Lashkar-e-Taiba backed by Pakistan’s ISI was behind the Mumbai strikes. The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies the Lashkar operates in India through an organisation called the Indian Mujahideen. Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy. Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously. In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. Neither will war. (Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighbouring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.)

Thanks largely to the part it was forced to play as America’s ally first in its war in support of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening towards civil war. As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistan army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to.

Certainly it did not expect them to come calling in heart of the Homeland on September 11. So once again, Afghanistan had to be violently remade. Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders. Nobody, least of all the Pakistan government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs and the maniacs who believe that Islam will, or should, rule the world is mostly the detritus of two Afghan wars. Their ire rains down on the Pakistan government and Pakistani civilians as much, if not more than it does on India.

If at this point India decides to go to war perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before. If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbours. It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front. The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary. Over three days and three nights we watched in disbelief as a small group of very young men armed with guns and gadgets exposed the powerlessness of the police, the elite National Security Guard and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this they indiscriminately massacred unarmed people, in railway stations, hospitals and luxury hotels, unmindful of their class, caste, religion or nationality. (Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.) But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill – and be killed – mesmerised their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news. Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.) Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people and inflict as much damage as they could before they were killed themselves. They left us completely bewildered. When we say “nothing can justify terrorism”, what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it’s precious. So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself Imran Babar. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror emails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir. “You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for? Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don’t figure in their calculations except as collateral damage. It has always been a part of and often even the aim of terrorist strategy to exacerbate a bad situation in order to expose hidden faultlines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project. A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theatre, spectacle and symbolism, and today, the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the attack was being condemned by TV anchors, the effectiveness of the terror strikes were being magnified a thousandfold by TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid. Instead we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed (is it alright for the poor to remain unprotected?). We had people suggest that the government step down and each state in India be handed over to a separate corporation. We had the death of former prime minster VP Singh, the hero of Dalits and lower castes and villain of Upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir, give us his version of George Bush’s famous “Why they hate us” speech. His analysis of why religious bigots, both Hindu and Muslim hate Mumbai: “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.” His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.” Didn’t George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and leftwing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army and virtually asking for a police state. It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid television flashcards like the Police are Good Politicians are Bad/Chief Executives are Good Chief Ministers are Bad/Army is Good Government is Bad/ India is Good Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically, this regression into intellectual infancy comes at a time when people in India were beginning to see that in the business of terrorism, victims and perpetrators sometimes exchange roles. It’s an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation. Eventually the courts acquitted two out of the four accused, including SAR Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him but was then convicted for a fresh, comparatively minor offence. The supreme court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.” Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19 this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur and Ahmedabad in 2008. An assistant commissioner of Police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists” known and rewarded for having summarily executed several “terrorists”. There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics and activists all of whom demanded a judicial inquiry into the incident. In response, the BJP and LK Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying it was “suicidal” and calling them “anti-national”. Of course there has been no inquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the CBI said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted 2kg of RDX and two pistols on them and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir). Ali and Qamar who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS) that was investigating the September 2008 Malegaon blasts arrested a Hindu preacher Sadhvi Pragya, a self-styled God man Swami Dayanand Pande and Lt Col Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu Nationalist organizations including a Hindu Supremacist group called Abhinav Bharat. The Shiv Sena, the BJP and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists”. LK Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On the November 25 newspapers reported that the ATS was investigating the high profile VHP Chief Pravin Togadia’s possible role in the Malegaon blasts. The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai Attacks. The chances are that the new chief whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

While the Sangh Parivar does not seem to have come to a final decision over whether or not it is anti-national and suicidal to question the police, Arnab Goswami, anchorperson of Times Now television, has stepped up to the plate. He has taken to naming, demonising and openly heckling people who have dared to question the integrity of the police and armed forces. My name and the name of the well-known lawyer Prashant Bhushan have come up several times. At one point, while interviewing a former police officer, Arnab Goswami turned to camera: “Arundhati Roy and Prashant Bhushan,” he said, “I hope you are watching this. We think you are disgusting.” For a TV anchor to do this in an atmosphere as charged and as frenzied as the one that prevails today, amounts to incitement as well as threat, and would probably in different circumstances have cost a journalist his or her job.

So according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police. This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world and yet refuses to ratify the International Covenant on Torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the Underworld and the Encounter Specialists virtually does not exist.

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them? There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse. If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US army is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire. (Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?) Hundreds of thousands people including thousands of American soldiers have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S allies/agents (including India) and U.S interests in the rest of the world has increased dramatically since 9/11. George Bush, the man who led the US response to 9/11 is a despised figure not just internationally, but also by his own people. Who can possibly claim that the United States is winning the war on terror?

Homeland Security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland. We have a hostile nuclear weapons state that is slowly spinning out of control as a neighbour, we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalise, end up as a threat not just to India, but to the whole world. If ten men can hold off the NSG commandos, and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix. Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go. Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain (it would be naïve to say end) terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says Justice, the other Civil War. There’s no third sign and there’s no going back. Choose.

Source: http://www.guardian.co.uk/world/2008/dec/12/mumbai-arundhati-roy

Blue C Discusses 360 ROI Process to Gain Marketing Success in Challenging Economic Times

The Blue C 360 ROI process for sales generation and business development uses multiple marketing vehicles in concert to achieve a better result than could be obtained by using a single vehicle delivering traditional static advertising, couponing, a trade show or even a standalone e-mail campaign.

The 360 ROI process is designed to fully engage the audience and is created based on the preferences, buying criteria and media habits of the consumers. Rather than blasting the market with messaging Blue C finds ways to deliver segment-specific content at the right time and the right place and often with vehicles often of their choosing. Readiness is key to messaging receptivity so we deliver largely based on the customers terms.

Our 360 process is based on the building blocks of strategic planning and purpose-built tactical applications designed to overcome the four critical challenges facing marketers today:

(1) Understanding the market from a 360 degree perspective, taking into account customers, company, competition and strategic partner constituents.

(2) Overcoming organizational dysfunction - most marketing departments are compartmentalized into functional silos that discourage collaboration around the customer and encourage a competition for internal marketing funds.

(3) The challenge of understanding the multiple media vehicles required to successfully reach a target audience.

(4) Understanding how to integrate campaign elements into an efficient interlocking web of ongoing message development, media execution, lead generation, customer relations, and strategic creative deployment 

Blue C Advertising has developed a methodical approach to these challenges with the 360 ROI process and has successfully deployed it for numerous clients in a variety of industries.

That approach has the following components:

• Clearly identifying and segmenting the target audience. Different audiences respond differently to various marketing vehicles, our first step is to identify and profile each of the segments and their respective touch points and other influencing factors usually captured in a “Voice of the Customer”.

• Defining the marketing objective of the campaign. Consumers respond differently to various media vehicles, early recognition and planning is part of the resolution to this, but integrating that paradigm into the marketing objectives really helps facilitate the choice of the proper vehicles.

• Identifying the attitudes and behaviors of the target audience and any barriers preventing the transition from those currently held to those we seek to create.

• Listing and qualifying the available marketing options using a ‘cascading choices’ approach based on the best available qualitative and quantitative data. Each segment will have multiple valid touchpoints, we prioritize efforts based on the vehicle or messaging with the highest predictive index then integrate others to the point of diminishing returns.

• Balancing and prioritizing the various internal client demands (corporate, departmental, etc.) against opportunities and challenges of the marketplace and optimizing for maximum efficiency and impact.

• Modeling the 360 ROI planning choices uses advanced multivariate statistical techniques only when the data will support it, a simplified version is employed in situations where some ambiguity, lack of data or uncontrollable variability is present.

• Applying historically successful models from previous 360 ROI programs. This is a nueral process. We learn from every execution and apply that to following campaigns. In this way we continuously adjust for changes in the marketplace.

Using the Blue C 360 ROI process helps bring clarity and responsiveness to successful marketing planning, especially when it is conducted with multi-functional marketing teams and integrates all relevant marketing vehicle options. The processis ultimately enabled by a robust situation assessment and communication on the “Voice of the Customer” level. Results don’t just occur, they are created.

Mortgage Rates Move Lower During Week On Fed Comments And Weak Economic Data

 

In a unanimous vote, the Fed cut the target Fed Funds rate from 1.00% to a range between 0.00% and 0.25%. The 75 basis point cut was larger than the consensus forecast for a 50 basis point cut. According to the statement, the Fed will employ “all available tools” to stimulate economic growth. Most notable for the mortgage industry, the Fed mentioned the option of expanding the purchase of large quantities of mortgage-backed securities. Mortgage rates generally move based on changing levels of demand for mortgage investments. Immediately following the release of the statement, mortgage rates dropped due to this expected increase in demand.

 

In the housing sector, November Housing Starts fell -19% to a record low. Building Permits, a leading indicator, showed a similar decline. The slowdown in the building of new homes will help reduce the inventory of unsold homes on the market.

 

 

Obama

Both Barack Obama and Hillary Clinton were students of the Saul Alinsky method of tactical manuvering.  I must say they must have been at the “front of the class.”

Not everyone likes Dick Morris, BUT his book “Fleeced” has been predicting exactly what has been happening in America, yet they have been busy discounting everything he speaks about. 

Will these predictions come true?

We will see a Recession like no other.  It will get worse in 2009.  Obama has even increased government and he hasn’t even taken office yet.  Obama has even announced his economic “package” will cost ONE TRILLION dollars.  Hello, America….where will he get this money?

One company, Dynergy, has even put before its shareholders a vote to move their bank account from Bermuda to Swiss banks.  Those corporations with accounts in Bermuda WILL move their capital to Switzerland.  President Bush allowed companies to do this in his term; Obama will probably try to void this as one of his Executive Orders his first one hundred days in office. 

So “in the front” of what Obama will tell America is that the ECONOMY is a #1 top project.  Next he will tell America that the “War on Terror” is the other OBJECT out in front alongside the economy. So therefore America will focus only on these two things.

Now behind the “scenes”:

Unemployment numbers will encourage the “National Civilian Service” project.  Americans between the ages of 18 and 42 will report for “Civilian” duty.  Rahm Emanuel speaks of this in his book “The Plan” and with encouragement of the bill in Congress by Charlie Rangel, this will be passed quickly and efficiently in the Congress before America even catches wind of this. Obama even spoke about this “off script” at the Colorado rally during the election.  This is to be as large as and funded as well as the American military.

Then Congress will enact a bill that seizes all 401 k Retirement accounts and covert them the “Government Retirement Accounts” or GRA’s.  This is already being  proposed and discussed in Congress.  Employers will have to put in “x” amount of dollars per employee, then the employee will have to put in a mandatory 5% of their wages to this account, forcing them to “save.”  The returns on your retirement funds……a fixed 3%.  This is in Emanuel’s book as the “National Retirement Service.”

Communities will be turned into “Cooperatives”.  The schools will convert to “Charter schools” or unionized schools; funded by corporations to teach specific trades to students. Renaissance 2010 follows this guide.   Brach’s candy company is already doing this in Chicago through their Schools.  That is why Arne Duncan was selected as the Secretary of Education.  Our children will be taught “specific” worker necessities for the area of their “community cooperative.”  Arne Duncan went into the lower performing schools, shut them down and then opened them back up as “Charter Schools.”  Austin Polytechnic is a unionized Chicago school that is connected to Carl Davidson, a Marxist/Maoist that is teaching specific “computer skills.”  Teachers there do basic teaching alongside a consultant experienced  in the manufacturing industry. “Small schools” teaching manufacturing and technical classes.  Wasn’t Bill Ayers connected to or came up with the ideals of a “small school” system? Didn’t Ayers call them “small school workshops”?

“Universal Healthcare/Socialized Medicine” will crash and burn.  Not enough money for this project.  Doesn’t work in Canada or France.  It will sputter, but end up like Hillary’s Universal Health plan in the 90’s.  There will be a decline in the amount of medical students entering the field.  Once they “get wind” that they will be learning a specified practice for the good of the government, they will avoid going into the medical field.  The computerized medical records is just the government being able to “keep track” of you.  Those disabled and chronically ill: will there be a “cap” on the services you request?  What ever happened to “privacy” in your medical history?  Will the healthcare privacy laws currently in place be recinded and everyone will know your “business”?

If Obama needs Americans to back his next “plan” will he reiterate his NLP and use the trigger of his right index finger touching his right thumb “on screen” to get the masses to back his “plan”? 

Will George Soros’ “Open Border/Society Plan” come to fruition?  After all Napolitano, the Governor of Arizons who can’t even control the borders of her own state is now in charge of Homeland Security.  Soros’ funneled and “bundled” MILLIONS into Obama’s campaign.  Remember Obama was able to gather over 700 MILLION dollars into his campaign.  The Soros family has donated $250,000.00 to Obama’s inauguration committee.  George Soros’ dream is “open borders” a free for all across the borders between Mexico and Canada.  Free drugs for everyone; if you kill yourself with an overdose….you are just dumb.  Free love, free abortions, no guns or weapons allowed.  George Soros; the man that nearly bankrupted the London Bank, is currently wanted in France for financial dealings, tried to bankrupt the Asian markets, yet NO ONE in America has investigated him for the manipulation of our own markets and the funneling of MILLIONS in “questionable” donations to Barack Obama’s campaign.  The “Shadow Party” and the Democracy Alliance started by Soros and Hillary Clinton in Saul Alinsky fashion.  The Cloward-Piven strategy…..bankrupt America to ease the change from Capitalism to Socialism without a fight.  America: Are you getting this yet?

MSM’s paid off or threatened by ACORN, Moveon.org, Huffington Post, Daily KOS, Netroots Nation, Democracy NOW, etc.  Journalism certainly died; there are only a handfull of muckrackers still out there.  The “Fairness Doctrine” will pass in Congress in the first one hundred days.  They will shut down any radio stations or televised news media that conflicts with “the message.”  Americans will only see and hear what our “New” government wants them to. 

Socialism tactics taught through the Gamaliel Foundation.  Churches at the forefront that are part of the Cloward-Piven strategy.  “Social justice” and “Social economics (redistribution of wealth)” is part of their main platform. 

Will Patriots for America and Democracy go “underground”?  Forced to form a network of those carrying pitchforks and torches to keep abreast of the forcing of Socialism on America?  Will there be another Civil War on America’s horizon?  Will Americans “get it”?  Or will America only focus on the two mesmerizing problems of the economy and terrorism while the Socialists in the background continue to work the Cloward-Piven strategy until they finalize their plan?

Time will tell.

Record Low for 30-year Fixed Rate

Average 30-year 5.19%

December 18, 2008

By SAM GARCIA

The 30-year fixed-rate mortgage tumbled to its lowest level on record, while the 15-year fell below five percent. Low rates kept refinance activity strong.

The 30-year fixed-rate mortgage averaged 5.19% for the week ending today, dropping 28 basis points from a week earlier, Freddie Mac reported in its latest weekly survey of 125 thrifts, commercial banks and mortgage lenders. A year ago, the 30-year averaged 6.14%.

Freddie said the 30-year is at the lowest level ever since it launched the Primary Mortgage Market Survey in 1971.

In its December economic outlook released yesterday, Freddie projected that the 30-year would average 5.7% during the first-quarter 2009 and climb to 6.2% by the fourth quarter.

In Freddie’s latest weekly survey, the Southwest had the lowest 30-year average: 5.09%. The 30-year was highest in the Northeast, where it averaged 5.28%.

The average 15-year fixed-rate fell 28 BPS to 4.92%.

“The decline was supported by the Federal Reserve announcement on Dec. 16, when it cut the federal funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant,” Freddie Chief Economist Frank Nothaft said in the survey.

Fixed-mortgage rates move with the 10-year Treasury yield, which was 2.059% early today. A week ago, the 10-year yielded 2.644%. The 59 BPS decline suggests mortgage rates have further to fall as a result of Treasury activity during the past day.

More than two-thirds of Bankrate.com’s panelists in its mortgage rate trend survey for the week Dec. 18 to Dec. 24 projected rates will drop more than 2 BPS during the next 35 to 45 days. Another 23% expected an increase in mortgages rates, while 8% predicted no change.

The five-year Treasury-indexed hybrid adjustable-rate mortgage declined 0.22% to 5.60% — higher than the 30-year fixed rate, according to Freddie’s survey.

At 4.94%, the one-year Treasury-indexed ARM improved from 5.09 a week earlier, Freddie reported. The 1-year ARM’s underlying index, the yield on the 1-year Treasury, was 0.45% yesterday, lower than 0.49 seven days prior, data from the Department of the Treasury indicated.

Another ARM index, the six-month London Interbank Offered Rate, was 2.17% as of yesterday, according to Bankrate.com. LIBOR, which is the index on many subprime ARMs, was 2.53% the prior week.

Variable-rate loans accounted for just 1% of total loan applications reported by the Mortgage Bankers Association for the week ended Dec. 12, unchanged from the prior week.

MBA said overall loan applications in its Mortgage Applications Survey were a seasonally adjusted 3% higher than the prior week, bringing the Market Composite Index to 841.4.

Refinance applications were up 7% from last week, bringing the refinance share to 77% from 74% the prior week. Freddie’s forecast calls for refinances to account for 45% of applications each quarter of next year.

Zillow.com said data it collected indicated refinance applications during the first half of this month were up 230% from the first half of November.

Purchase applications fell 7%, however, while applications for government loan programs were unchanged, MBA’s report said.

Daily Forex Report: 19 December 2008

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RISK AVERSION SPARKS USD DEMAND

Overview

The dollar extended its impressive rebound supported by Bank of Japan rate cut, concerns about recession risk in Europe, and falling commodity prices. S&P downgrade of 12 financial companies adds to concern about global economy and financial markets. The BOJ cut rates to 0.1% from 0.3% and the Bank of Japan governor warned that the yen rise is hurting the Japanese economy. The dollar’s recovery is also attributed to technical buying as the euro failed near 50% retracement of the years range in Thursday’s trade. Traders short the dollar scrambled to lock-in profits thinking the dollar’s recent sell off was too much too fast .Thin trading year end trading conditions contribute to exaggeration of recent forex price moves. Pressure on energy prices and the CRB added to the dollars recovery. The US government announced a 17.4 billion bailout for the US auto industry. The money will come from TARP funds. The dollar extended its gains on news of the bailout. President Bush said the Chapter 11 would not likely work at this time and he had no choice but to agree to a bailout. Severe weather across the Midwest is heading for the East Coast limiting trading activity Friday as trading desk close early. This week’s forex price action suggests market focus is once again shifting back to risk aversion and global economic risks. If this is true the dollar may extend its recovery against the euro and the yen is likely to remain well supported on breaks.

JPY

The yen traded mixed as the BOJ announced a rate cut. BOJ cut rates 0.20% to 0.1%. The rate cut was widely expected. The BOJ also pledged to continue to add liquidity and will increase purchase of government bonds by ¥200 million. BOJ officials expressed concern about the strength of the yen and the outlook for the global economy. The BOJ rate is viewed as a sign of continuing concern about the global economic outlook. Japan’s October all industry index posted a modest improvement minus 0.5%, reading of minus 0.8% of a percent was expected. The report had little impact on the trade. BOJ rate cut is unlikely to derail the Uptrend for the yen. The BOJ has limited room further ease and concerns about the global economic outlook will discourage Japanese investor outflows. The yen has rallied sharply in the last three months up 17% against the dollar. Japanese officials have expressed concern about the yen’s rise. The trade is debating whether the BOJ will take action and intervene to try to slow the yen’s rise. Intervention could have substantial short-term impact because of current thin trading conditions in the forex markets. Intervention is unlikely to change the underlying uptrend for the yen. EUR-JPY came of sharply from overnight Highs 128.23 with the euro pressured by a spike in risk aversion and fresh ECB rate cut speculation. Look for USD /JPY to range 8815 -9095.

EUR

The euro traded sharply lower pressured by a return of risk aversion as global equity markets and commodity prices decline. Today’s EU economic data intensifies concern about recession risk in Europe. German producer prices dropped the most in 60 years and French business confidence hit a 15 year low. These reports revive ECB rate cut speculation and sparked liquidation of the euro. French national statistics office INSEE forecasts that the French economy will contract by 0.8 % and fall into recession in early 2009. Declining German producer prices and INSEE forecast of recession for France intensifies speculation that the ECB will be lowering interest rates in January. ECB rate cut speculation will limit euro rallies. The euro was also pressured by report from UBS and Barclays that the euro is likely to decline 10% over the next three months pressured by safe haven flows to the dollar and economic weakness in Europe. The euro also remains vulnerable to concerns about rising economic risks in Eastern Europe and Russia. The Russian ruble fell to a record low this week against the euro. If the ruble continues to fall it may discourage capital flows to Europe and the euro. Look for EUR/ USD to range 13640 14080.

GBP

The outlook for sterling remains negative. UK GFK consumer confidence posted a mild improvement to -33, a reading of -39 was expected. The improvement came on the heels of yesterday’s report on the surprise rise in UK retail sales. Despite these reports UK economy is expected to continue to contract and Bank of England is likely to cut rates in early 2009. Sterling remains vulnerable to concerns about the UK economic outlook and speculation the Bank of England may follow the Fed and elect to shift policy to quantitative ease. There is one  European bank forecasting that BOE will cut rates 100 basis points at the January 8 th policy meeting and move to zero policy as early as the February meeting. EUR/GBP rallied to a record high above 95 early this week, and is trading near 9300 pressured by profit-taking. The decline in EUR/GBP helped to stabilize sterling above the 1.4800 level. Look for sterling to range 1.4810 with resistance at 1.5360.

CAD

The Canadian dollar traded sharply lower pressured by declining CRB and increased concern about the global economy. S&P downgrade of 12 financial companies added pressure to the Canada on concern that the global financial crisis will continue. Canada’s October unemployment claims rose 0.7. The report had limited impact on CAD trade. Canada’s November CPI came out -0.3% of a percent with core CPI up in unexpected 0.7% percent. The rise in Canadian CPI clouds the outlook for Bank of Canada monetary policy and could generate speculation of less aggressive rate cuts from the Bank of Canada. CAD price direction remains closely tied to CRB and equities. Look for USD CAD to range 11920 and 12425.

AUD

AUD/USD traded lower pressured by weaker commodities and broad dollar gains against the euro. Concern about the global economy sparked selling of commodities and energy prices. OPEC oil production cuts failed to boost crude prices and interest rate cuts by the Fed and the Bank of Japan keep the trades focus on global economic risk .The announcement of the US auto bail out sparked a modest rebound in the CRB and brought a little bit of buying interest in AUD/USD.AUD/USD has held up fairly well in light of the dollars sharp rebound against the euro partly due to this week’s release of RBA policy minutes. The RBA policy minutes suggested that aggressive rate cuts may not be forthcoming. The AUD is likely to continue to track the direction of equities and commodity prices. Monday, Australian November motor vehicle sales for November are due for release expected -0.5%.

Michael Malpede: Daily forex news and commentary

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New Overnight Developments Abroad: Bank of Japan Easing Steps Surpassed Expectations

The yen strengthened 0.4% against the dollar and much more versus the euro in spite of Bank of Japan actions.

The dollar advanced 1.8% against the euro, 1.7% versus the Canadian dollar and Swiss franc, 1.5% against the kiwi, 0.5% against the Aussie dollar and 0.2% relative to sterling.

Asian stocks closed mixed. Nikkei -0.9%. Hang Seng -2.4%. Thailand -1.0%. Vietnam +0.6%. China +0.3%. South Korea +0.4%. Australia +1.0%.

European stocks are trading lower by 2.0% in Britain, 1.5% in France and 1.1% in Germany. Today is a quadruple witching hour for equities.

Sovereign bond yields are broadly lower. The 10-year JGB touched 1.21%, lowest since July 2005, but recovered to 1.235%, down 2.5 basis points net.

Oil hit yet another low is is off 1.4% on balance at $35.71/barrel. Gold relapsed 2.5% to $838.90 per ounce.

The Bank of Japan Policy Board deliberated for 5 hours, 6 minutes of 2 days and then cut its overnight money target by 20 basis points to 0.1% (by a vote of 7-1 with Noda dissenting). The Lombard rate was sliced to 0.3% from 0.5%. The BOJ upped its monthly outright purchases of government bonds to Y 1.4 trillion from 1.2 trillion yen and broadened the range of JGB’s it will purchase. The central bank will also buy commercial paper outright to alleviate a corporate credit crunch and will consider other ways of pumping funds into the money market. Governor Shirakawa left the door open to more easing if necessary but denied that today’s actions constitute a return to quantitative easing.

The Bank of Japan also reduced its economic assessment, saying that exports are decreasing, domestic demand is weaker, profits are declining, employment and income are worsening, financial conditions have deteriorated sharply, CPI inflation is poised to moderate, and it “will likely take some time” for the necessary conditions for recovery to be satisfied.

Japan’s government is projecting no growth next fiscal year. Prime Minister Aso called the BOJ actions “timely.”

Ukraine’s overnight refinancing rate was hiked to 22% from 18%, and the unsecured deposit rate was raised 500 basis points to 25%. These steps engineered a 10% rebound in the beleaguered hryvnia to 8.25/$.

Vietnam cut its base rate by 150 basis points to 8.5%, lowest since 8.25% over the 26 months to Feb 2008. The rate previously had been cut in four increments of 100 bps each from a peak of 14% in mid-October.

Denmark cut its key 1-week CD and lending rates by 50 basis points to 3.75%.

Japan’s all-industry index fell 0.5% in October and by 2.5% from a year earlier. Industrial output sank 2.5%, but construction (0.9%) and services (0.4%) rose.

British consumer confidence recovered a bit further to -33 in December from -35 in November and -39 last July. The better-than-anticipated result reflects a psychological lift from the cut in VAT taxes.

INSEE of France projects negative French GDP growth of 0.8% in the present quarter and a continuing contraction in each of the next two quarters. This downward revision follows announced results that business sentiment dropped 6 points in December to 73, lowest since June 1993 and down from 91 as recently as September.

German producer price inflation fell to 5.3% in November from 7.8% in October. The non-energy PPI index slid to 2.1% from 2.9%. The monthly drop of 1.5% in all producer prices was 50% greater than expected.

Turkish consumer confidence sagged to 68.88 in November from 74.24 in October.

China raised taxes on the consumption of a wide variety of energies.

Canadian CPI inflation fell to 2.0% from 2.6% last month. Core dropped to 1.7% from 2.4%.

Globalization

 

 

 

The Crown Jewel of India

Investors should aggregation reservations aweigh of President Bush’s activate to Bharat since Bharat could rattling substantially be the enthusiastic Samson mart of the 21st century. Unlike China, it is a functional ism with attitude for concept rights and the conception of law. Many of its citizens hit arts as their autochthonous language. It also has more modern business markets than China, and a have mart ingrained in 1870 that has 6,000 publicly-traded companies.

In 1991, the land had set external mercantilism reserves, today it has $150 billion. In 1991, it had digit state-owned airline, today it has octad clannish airlines. And in 1991, Bharat shapely and oversubscribed exclusive 100,000 automobiles, in 2005 it was a million.

It is a rattling immature commonwealth with 80% of its accumulation baritone 45 and - this is awful - 25% of every grouping 25 and baritone in the concern springy in this digit country! Its Citizens are frugal with money to pay with a 28% money evaluate to hold top investment. Consumer direction is apace decent acquirable and supplying a 30% period process in outlay with retail income totaling $200 1000000000 terminal year. India’s frugalness has been chugging along in the 7-8% ontogeny arrange and it is the exclusive super frugalness due to acquire faster in the incoming fivesome eld than the terminal fivesome years.

India’s expanse aggregation has launched 12 serial rockets without incident and it place the world’s prototypal realistic function equipment into itinerary early this year. It has embellish a near associate of the United States fresh language a accumulation accord and placing a Brobdingnagian visit with Boeing patch considering acquire modern F-16 and F-18 fighters.

And don’t block ground President Bush, no bounteous traveler, is headlike to India: to filler brawny bi-lateral ties in both the section and advertizement arena.

For trusty Bharat has its challenges: bounteous have needs, preventative flushed enter and a way for the polity to secure on to super state-owned enterprises to name a few. Still, compared to China, Bharat does not intend such tending eliminate for the outsourcing supply and is – for today – mostly baritone the radiolocation concealment of modify whatever worldly investors. India’s 30 consort Bombay Sensitive Index (Sensex) finger was digit of the strongest markets terminal assemblage and this assemblage poor the 10,000 barrier.

An battleful endeavor would be Rediff.com Bharat Ltd. (REDF NASDAQ), an Amerindic subject company. It operates an cyberspace vena that provides news, weather, sports, and recreation information. It also offers an e-commerce marketplace, e-mail, chitchat rooms, and wireless services. In the terminal digit weeks it has fallen from $31 to $24 on onerous trading volume. Some intend to it as the Google of Bharat so check this digit intimately for an entry point.

For whatever investors, a meliorate deciding is the every defy Matthews Bharat no-load shared money (MINDX) which is up 8% this year. Matthews, an continent specialist, launched this money terminal October.

Next month, when the media prominence turns to the President’s journeying of India, sharp investors module be backwards at bag enjoying the returns.

Delfeld has 20 eld of orbicular assets undergo including stints in Hong Kong, Sydney and Yeddo and served on the Executive Board of the continent Development Bank in Manila. He was also a consultant to the U.S. Treasury and the U.S. legislature on planetary finance and is a editorialist on orbicular finance for Forbes aggregation magazine.

Anderson Cooper 360: Blog Archive - Financial Dispatch: Lifeline for GM

President Bush this morning announced a rescue plan for General Motors and Chrysler. The two automakers will get $13.4 billion in short-term financing almost immediately and an additional $4 billion will be potentially made available in February.

The money will come from the $700 billion fund set aside to bailout Wall Street firms and banks in October. The loans are three-year loans — but the money will have to be repaid immediately if the firms do not show themselves to be viable by March 31. The automakers must meet a number of conditions, including accepting limits on executive compensation and eliminating perks such as corporate jets. They must also allow the government to examine their books and the government will have the power to block any large transactions. Ford is not part of this bailout.

Chrysler will shut down all vehicle production in the United States starting after the last shift today for at least a month. General Motors is idling 30% of its North American manufacturing capacity during the first quarter of 2009. And Ford is adding a week to its normal two-week seasonal shutdown at a number of its plants. Temporary plant shutdowns give automakers the chance to stop making cars and sell off the ones that are still sitting around. But in Chrysler’s case, the benefit comes from the money it saves on day-to-day costs.

Stocks on Wall Street opened higher as investors look over the details of the auto bailout and prepared for market volatility caused by what’s known as quadruple witching. “Quadruple witching,” which occurs four times a year, is the simultaneous expiration of market index futures, market index options, stock options and stock futures. As investors rush to unwind their positions, stocks have the potential to be extremely volatile.

Nearly 3 months after the founder of its parent company was arrested on fraud charges, Polaroid filed for bankruptcy. The 70-year-old company that invented “instant film” photography said it made the filing to “facilitate” its financial restructuring. Federal prosecutors have accused Tom Petters, founder of the Petters Group which has owned Polaroid since 2005, of leading a more than $2 billion fraud at the company.

It seems like everyone these days wants a piece of the $700B dollar bailout bill. And if you ride your bike to work, you’re entitled to one. Buried within the bailout legislation is a $20 per month tax break for bicycle commuters. Biking to work got a lot more popular this summer when gas prices surged. Now that gas is relatively cheap again and the weather is turning colder, it’s hard to say whether the trend will continue. But even if you do bike to work, getting your hands on the money might not be easy. Very few companies are ready to implement the biking benefit, even though it goes into effect on January 1st. That’s today’s Energy Fix.

Cash-strapped consumers got some welcome news Thursday when regulators voted to rein in controversial credit card practices. But they’ll have to wait another year and a half to get relief as the new rules won’t take effect until July 1, 2010. The new regulations mark an end to double-cycle billing, which averages out the balance from two previous bills.

That means that consumers who carry a balance will no longer get hit with retroactive interest on their previous month’s bill. And credit card companies will no longer be able to raise the interest rates on pre-existing credit card balances unless a payment is over 30 days late. Consumers will also be given a reasonable amount of time to make payments, and payments will be applied to higher-rate balances first, to reduce interest penalties and fees.

Gas prices rose 0.3 cents to $1.673 a gallon. The current national average is now $2.441 below the record high price of $4.114 that AAA reported on July 17, 2008. 2 states have regular unleaded gas prices of $2 and higher. 48 states and the District of Columbia have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.648). The cheapest gas prices are in Utah ($1.486).

And oil prices are hovering around $35 a barrel. Oil has dropped 25% this week, hitting the lowest point since April 2004.

Finally, I’m glad Bush came across on something for the auto makers; I just hope the constraints and requirements are taken seriously - I don’t understand one thing though - if the company cannot prove it is viable by March 31st it said the loan had to be paid back immediately - by March 31st don’t you think the whole loan will have been spent and there won’t be anything to pay it back with if the company is truly not viable??

I like the credit card bill - too bad it won’t come into effect earlier. I like the part especially where payments will go towards higher interest balances first. I don’t plan on using much credit anymore but the items in the bill are good to have just in case.

Gas here in Birmingham is still lower than the national average at about 1.50 a gallon according to my daughter who filled up her car yesterday. It would be nice if the price of gas would stay low but I know better than to pin much hope on that one.

I really wonder what is going to happen if the unions do not give into the wage consession requirement? Since the Dems are going to be in control then, the unions will probably just get a slap on the wrist. Wha cant we let these companies fail? The government let the airlines fail, the let banks fail (12 in Georgia so far), the let small business fail, so again why cant we let the Big three fail? And don’t give me any of the too big to fail rhetoric.

I welcome the credit card changes too. I have put my own freeze on all credit card usage in my home. No dough, no buy. I dont understand why changes take so long to go into effect ? 2010? We will have declared a “depression” by then, wont we?

As a UAW household, I am grateful for the LOAN Bush has offered. I’m not sure if it will have the desired result, but I think it’s important to try to keep as many American companies afloat as we can. God knows, we help every other country.

One day we will look back on this period, as the point that our leaders drove the U.S. economy into long-term economic crisis. ALL of these government bailouts are insane. Free markets will not work if there is no downside to poor management, leadership and strategy, whether on Wall Street or Main Street. The monetary policies we are pursuing are incredibly short-term, just look at the precipitous decline of the dollar against the Euro yesterday to see the impact of these policies. Bush, Paulsen, Obama, Congress… are all wrong on this, and one day future generations will look back and remember who it was that made the decisions that sent our deficit plummeting beyond the $1 trillion mark while simultaneously devaluing the Dollar… all to save greedy Wall Street executives and incompetent automotive firms… Sad days for future generations of Americans who will end up being asked to pay the bill for this short-term thinking!

Why is Ford not part of this deal?

Would you keep pouring water into a glass that leaks ? Of course not, you would stop pouring water, fix the leak, and then start repouring. So, why not let the big three go into chapter 11, reorganize, then move foward.. There is fear mongoring that 3 million people will be out of work if this happens, but, the truth is, 3 million people will be out work if we don’t..

This is a horrible idea for Gen X and younger Americans. The long term consequences of this and other bail-outs has made an economic depression inevitable. In the last 40 years, America has seen a stratification of wealth which mirrors the wealth distribution in third world countries, outsourcing, the acceptance of at least 20 million illegal workers, run-away spending, unstable interest rates, wantonly irresponsible borrowing and a war so expensive, unnecessary and unjustifiable it rivals Vietnam.

The responsible thing to do would be to let the US economy hit rock bottom while the people who drove there can be alive when the Country learns from it’s mistakes. Instead, we are going to watch baby boomers pass the buck and let younger people pay for the bliss their ignorance afforded them.

Treasury Secretary Henry Paulson that got the blank check of $700 billion used half and many of the CEOs helped themselves to bonuses.He said $350 billion was going to go to the next group after President-elect Obama is in office.Ones were saying that the money for the loan of the Big 3 can be taken out of that and now that Bush said he was going to help them all of a sudden today,on Friday that Congress will need to release the last half of the $700 billion rescue fund because the first $350 billion has been committed. Paulson has yet to tell who received what and how much and which places of business stayed and others failed.Anderson this is the guy you should keep honest and questions should be answered.

It appears once again that the colossal failure know as Paulson, has failed to realize that he is not extending a lifeline to the automotive industry but rather an exhaust pipe for the worthless executives to take a drag on.

Maybe a little strategic thought like having Ford solely make trucks; GM solely make hybrids; and Chrysler economy cars?

Hacks one and all.

Why is Ford not part of this deal?

Ford is apparently more solvent than Crysler and GM.

People who are whining about free markets need to consider this - some portion of the situation the car makers find themselves in is caused by the global credit crisis. That is, while they undoubtedly made bad business decisions, in a healthier economy, they might have easily survived them and come out on the other side stronger and more secure.

It is unconscionable to bail out financial companies who create nothing tangible while refusing to help manufacturers who actually have a physical product that people would buy if someone would give them a loan.

Where is this money coming from ? I don’t think we have enough gold in Fort Knox to back it up!!!! I bet the stock market will really crash now. Whatcha think? What are they thinking?

I think it’s important to save the auto industry.

BUT…The UAW is either in denial or can’t let go of it’s culture of greed. Taking another pay cut would still make them higher paid than most middle class workers, not to mention their incredible benefits.

There are thousands of people out of work and unable to find work who would love to work for the “lower wages” comparable to other auto workers. They need to get it in their heads…either make sacrifices like the rest of us and have a job, or hold out for more money and have no job. Greed is the main cause of all of our economic problems.

What a way to continue to bankrupt our economy. When will these bad decisions and handouts stop? I have a very hard time imagining a secure future in America. We continue to see more job losses, failing healthcare, money being borrowed from other countries in exponential amounts, the rich getting richer and the poor getting poorer……it’s just one crises after another, and it worsens daily.

I weep for the children of the future in this county, because they have to inherit this nasty mess. What a legacy we’ve given them huh?

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Madoff - Split Strike Strategy

Market commentary that looks beyond the last price

ALL IN THE FAMILY VI

But it turns out, the Madoff crimes predated the undoing of all the post-1929 collapse regulations.

 

Um, the SEC must be investigated.  Mary Schapiro should be thoroughly investigated and then hopefully, sent to jail like all the others in this little drama.  Cox gets put in the Big Box, too.  Now, how on earth can the SEC staff make decisions on their own about not auditing someone?  Eh?  Who was bribed?  Who slept with whom?  Who made under the table deals?  Who went to the same Synagogues? 

 

Since 99% of this mess was confined strictly to the Jewish sectors of the financial/government/regulatory realm, we have to have snoopy outsiders investigate this interlocking community and how it interfaces with regulators!  True, the con artists, gnomes and pirates all share a philosophical ideology that no one should have any rules, regulations or laws.  They want Dodge City Wild, Wild Invest.  

 

The many ‘modern’ financial instruments that a host of irresponsible geniuses created were all pitched towards doing one thing: creating money out of thin air coupled with protecting the fees and follies of the creators so they could get very, very rich while doing absolutely nothing good.  So, using all of these ‘tools’, the merry gnome community ended up dumping amazing amounts of unsustainable debts on top of everything in sight.  

 

The last paragraph of this Forbes story is particularly amusing to me:  so, Forbes thinks we should distinguish between the Fed and the Treasury?  HAHAHA.  The Treasury has been hijacked by criminals and we see how great they have been: the Treasury is nothing but trillions of dollars in debts.  And a small pile of gold at Fort Knox.  I suspect, much of which is now ’swapped’ so the US people don’t own it at all.  

 

This ‘liquidity’ is all about debts.  And the guys who created the complete collapse of not only our entire banking system but our entire government, our entire economy and perhaps, our very nation, itself—they used the Federal Reserve to do this to us.  Ergo: the Fed, which is a PRIVATE corporation, should be NATIONALIZED.  And then Congress should go back to what they were supposed to do: regulate the currency and make banking rules and laws.  Not the Federal Reserve.

 

They epitomize  the utter foolishness of letting bankers regulate themselves.  Ever since the Fed took over our banking system, inflation took off.  And it was supposed to prevent bubbles and crashes.  Yet, we have these like clockwork.  And deep in the center of these bubbles is always the Federal Reserve handing out excessive loans.  Right off the bat, they lent epic amounts to Europe so the empires there could ravage each other.

 

Madoff Misconduct Said to Date Back to 1970s as Client List Reached 4,000

(Bloomberg) — U.S. regulators, trying to unravel the breadth of Bernard Madoff’s alleged $50 billion fraud, have found evidence of misconduct stretching back to at least the 1970s, two people familiar with the inquiry said.

Do we seriously think that someone named ‘Wilson’ or ‘Martinez’ could have walked into the Exchange and open SECRET accounts and then run a Ponzi scheme?  Of course not easily!  This requires a social stage where such secret, unregistered and unregulated stuff is protected by others.  It is hard to make deals with people if you are not part of the social scene.  And once a group gets a grip on things, they shun outsiders and protect each other.  

 

This must be investigated.  Someone has to look into the social relationships as well as sexual relations of the people at the heart of our financial systems.  The Madoff affair certainly has torn aside the veil of secrecy that has cloaked Wall Street.  But it must go much further: the Jewish community must take responsibility for what has happened there.  Just like, they must face the serious charges that they have diverted much of our foreign aid to Israeli Jews even while our budget is collapsing.  Just like the tax evasions that are eating up our government finances have to be examined in light of this group effort to short-change the US while enriching Jews in Israel.

 

The importance of this business is obvious: our own government is cutting finances at home or running up trillions of dollars in future obligations we Americans must pay, eventually.  The inability of Congress to even discuss fixing our budget problems or taxing the wealthy Wall Street community is very directly tied into the interlocked families which control our national economic systems.  Eventually, enraged Americans who are not Jewish will attack the entire Jewish community.

 

So the time to clean house is here and now.  Instead of wondering why the SEC mysteriously lets a top Jewish financier run amok, we should relentlessly discover the actual process whereby this happened.  This means, the people who enabled this to happen have to be hunted down and examined.  Why did they punt for Madoff in the first place?

 

Bloomberg.com: Worldwide

In its 1992 lawsuit, the SEC claimed accountants Frank Avellino and Michael Bienes began raising money in 1962 and placing it with Madoff while promising investors returns of 13.5 percent to 20 percent, according to court documents obtained by Bloomberg. As of October 1992, their firm, Avellino & Bienes, had issued $441 million in unregistered notes to 3,200 people and entities, court papers say. They invested solely with Madoff, who opened his business in 1960.

So, a previous ‘funnel’ who existed only to take money from people and move it into Madoff’s criminal operation were investigated and forced to return these funds!  Yet, in the news, we hear of many such similar organizations, all of whom, it appears, were run by Jewish con men, all of these are now collapsing, going bankrupt or being shut down by the authorities.  They existed only to fleece people via fees while simply funneling money to Madoff.

 

Yet, 16 years ago, this didn’t trigger an intense investigation of Madoff.  He was certainly very protected.

 

WSJ: Wall Street Mystery Features a Big Board Rival (Madoff: 12/16/92)

Here’s a tantalizing Wall Street mystery:

The exact same lawyer, Ira Sorkin, represented the two criminals in the above story back in 1992.  He is representing the crew who are criminals today in the Madoff business.

In yesterday’s story, I explained how Mr. Madoff pretended he had this miraculous bank of computers that magically beat human market experts.  But in 1992, he had other explanations for his miraculous profits.  He always had some sort of incredible system at work.  Which is always very vague.

This story from 1992 makes it crystal clear that investigators should have gone after Madoff with greatest severity.  But they did not.  This is because he had protection, Mafia-style protection: buying politicians and corrupting the system so it would look the other way.

Here is yet another warning sign that this was an elaborate pyramid scheme!  More and more guys who were ‘in the know’ and who socialized with Madoff would buy each other’s shares!  So each group would launch a new ‘business’ which had only one function: to buy an earlier level of the pyramid.  So the third parties to join bought the shares of the previous parties who then fed the money to Madoff after taking their own cut.  This can go on forever as we see with the long, long list of hedge funds and organizations that had only one function: to buy something that was a Madoff fund. 

 

SEC News Digest, 11-23-1993

ORDER.OF PElUfARENT INJUNCTION AND CIVIL PENALTIES ENTERED AGAINST TELFRAIIASSOCIATES LTD. ,TELFRAN ASSOCIATES COllP., STEVEN KENDELOV AND EDVAllD GLANTZ

The Commission announced that the Honorable John E. Sprizzo, District Judge for theSouthern District of New York, permanently enjoined Telfran Associates Ltd. (TelfranLtd.). Telfran Associates Corp. (Telfran Corp.), Steven Mendelow (Mendelow) and EdwardGlantz (Glantz), by consent, from further violations of Sections 5(a) and 5(c) of theSecurities Act of 1933 and Section 7 of the Investment Company Act of 1940.

TelfranLtd. agreed to pay a civil penalty of $250,000, and Mendelow and Glantz each agreedto pay civil penalties of $50,000.The Commission’Scomplaint alleged that from 1989 through November 1992, thedefendants sold unregistered securities to the public and operated as an unregistered investment company. The complaint further alleged that the defendants sold investorsnotes which paid an interest rate of approximately 15\.

The complaint alleged thatthe defendants used investors’ monies to purchase notes from Avellino & Bienes, who invested the money with a broker-dealer.The complaint alleged that as of November16, 1992. Telfran Ltd. had more than 800 investors and had raised in excess of $88million through the sale of its unregistered securities.[SEC v. Telfran AssociatesLtd., Telfran Associates Corp., Steven Mendelov and Edward Glantz, 92 Civ. 8564, JES,SDNY] (La-1388l)

Madoff is the ‘broker-dealer’ mentioned in the last paragraph here.    Note how the third level of this pyramid scheme raised over $88 million dollars while doing virtually nothing.  800 people were drawn into this scam.  Madoff certainly was one slippery fish swimming in endless pools of money, wasn’t he?

 

J. Ezra Merkin relationship map - Muckety.com

J. Ezra Merkin relationship map

Like he fellow Jewish buddy, Madoff, Merkin is in the middle of a spiderweb of power.  Note how he is also part of the GMAC mess.  General Motors had to sell off that business and obviously, it fell into the hands of con men.

 

OCTOBER 2005:  What’s Bigger Than Cisco, Coke, Or McDonald’s?

His first finance job was as a novice trader at Drexel Burnham. But he soon moved on to Gruntal & Co., where he worked on the same floor as Steven A. Cohen, now a hedge-fund star who runs SAC Capital Advisors LLC. By 1992, when he was 32, Feinberg wanted to strike out on his own and teamed with co-founder Richter, who ran his own brokerage firm.

They named their firm Cerberus, for the ferocious three-headed dog that guards the gates of Hades in Greek mythology. Feinberg liked the idea that one of the dog’s heads was always on watch, just as his firm would guard its clients’ investments around the clock, says J. Ezra Merkin, managing partner of hedge-fund firm Gabriel Capital Group. Merkin — whose clients included university endowments and wealthy New York families — became Feinberg’s partner in a number of funds and deals. “I thought he would be able to move from passively investing in securities to building a business and actively managing companies,” says Merkin.

Cerberus was launched by Jewish Mafia guys who, according to this old article that basically admires and praises these con men, Feinberg of Cerberus was actively involved in ‘deals’ with Gabriel Capital Group’s owner and con artist, Mr. Merkin!  So is Cerberus going to be thoroughly investigated?  The talk in Congress for bailing out Chrysler Motors is all about Cerberus getting some profits out of that deal.  I say, they should get nothing.

 

Spotlight turns on Merkin in Madoff scheme | International | Jerusalem Post

This article from Israel is ridiculous.  Merkin was NOT conned by Madoff.  He knew he was scamming people because the sole reason his hedge fund existed was to funnel money into Madoff’s pyramid scheme.  Note that Merkin, like all criminals, didn’t want anyone seeing his books, poking around in his deals or knowing anything.  He was secretive.  They all are!  Ergo: he was operating a criminal con job.

 

Unlikely Player Pulled Into Madoff Swirl - NYTimes.com

Former colleagues in the regulatory world and professional adversaries described Mr. Swanson as a straight arrow, earnest by-the-book Midwesterner who worked long hours and received excellent job evaluations. Several said they always saw him act aggressively but fairly in his years at the commission and that they never saw any evidence of him favoring any company, including Madoff Securities.

“I remember him as a very hard-working, dedicated and smart guy,” said Joseph Lombard, a former market regulation counsel to Arthur Levitt Jr. when he was the S.E.C. chairman in the 1990s. “You have people at the agency, like anyplace, who are more or less committed to the enterprise. Eric was all in. He believed in the ability of regulation to make markets better. He was an advocate of aggressive action against people who had fallen short.”

This article seeks to protect someone who should have had a faint idea, what was going on.  This ‘investigator’ didn’t know what his wife was doing?  Boy, is he in for a world of hurt when she really decides to go off and screw around!  She, of course, even when supposedly in a position of authority in her father’s scam business, claims to be stupid an innocent.

 

Ah, all these highly educated, sharp people who pride themselves on being on top of things, when caught, suddenly are the dumbest people on earth!  Didn’t know a thing!  Straight arrows who marry into Mafia families!  HAHAHA.  The Godfather is a good movie.  A must-see.  

 

Another clue as to why we must thoroughly investigate the gangsters and the regulators is the top paragraph:  the guy Mr. Swanson investigated right before joining this branch of the Jewish Mafia was one of Madoff’s closest friends!  Did the guy go to jail?  Since I don’t know the name, I can’t look it up!  

 

Madoff Exploited the Jews - WSJ.com

The Madoff tale is striking in part because it is like stealing from family. Yet frauds that prey on people who share bonds of religion or ethnicity, who travel in the same circles, are quite common. Two years ago the Securities and Exchange Commission issued a warning about “affinity fraud.” The SEC ticked off a series of examples of schemes that were directed at members of a community: Armenian-Americans, Baptist Church members, Jehovah’s Witnesses, African-American church groups, Korean-Americans. In each case, the perpetrator relied on the fact that being from the same community provided a reason to trust the sales pitch, to believe it was plausible that someone from the same background would give you a deal that, if offered by someone without such ties, would sound too good to be true….

The SEC’s failure to pursue complaints about Mr. Madoff over the past decade wasn’t the result of inadequate regulations but of disbelief that someone so well entrenched in the industry — a former Nasdaq chairman and SEC adviser — was capable of committing such a callous crime.

Mr. Cass is dean emeritus of Boston University School of Law, president of Cass & Associates, and chairman of the Center for the Rule of Law.

Ah, protecting the tribe!  Good job, Mr. Cass!  Why have any rules?  After all, there will always be con men!  And this IDIOT is a professor of LAW????  I looked up some stuff about this criminal lawyer.  He worked on NAFTA.  Gads.  Ack.

 

For a lawyer to say, ‘Well, you know, people MURDER so why punish them?  We can’t stop MURDERS by passing laws so why bother?  You go and trust someone and then they shoot you dead!  So what’s the big deal, buddy?’  Gads.  I suppose, he hunts quail with Cheney.  Blames victims for being shot in the face?  How DARE this idiot claim, we should prevent obvious frauds?  Eh?

 

This is exactly what is wrong with many powerful Jews.  Mr. Cass is in a position of responsibility, yet he counsels that we do nothing in the teeth of criminal frauds just because it was a Jew doing it!  This story illustrates the limits of the present laws that allowed Jewish con men to operate with near-total impunity.  And it can be fixed.  But not by Mary Schapiro who, I bet, thinks exactly like this Jewish lawyer: ‘WHO GIVES A FUCK?  WE WON’T FIX THIS…NAYAYAYAY.’   I think that Boston University should fire this creep.

 

Rude awakening for Spielberg as DreamWorks runs short of cash - News, Films - The Independent

He is impossibly rich, uniquely powerful and boasts a copper-bottomed CV that includes dozens of the most influential blockbusters of modern times. But even Steven Spielberg’s career is stalling in the apocalyptic face of the global credit crunch.

So, Spielberg is ‘impossibly rich’ but has to beg for money to make movies?  What the hell is wrong with our world?  Why do movies cost so much?  Most of them are infantile with huge loads of special effects while the dialogue is barely above first grade level?  Tintin is a lightly-drawn comix from Belgium which was cute in the 1950’s, I read these stories back then.  But to make a monster-expensive movie about this is plain crazy.  I hope it is never made.

 

Way too many rich people are not rich.  They are all overextended and utterly reckless and making stupid things that are useless or just plain stupid.  Then, when things fail, they say, ‘We were too stupid to know what we were doing.’  Stupid is as stupid does.  Gads. Have they no pride?

 

The Dreyfuss affair: actor sues father for $4m - Americas, World - The Independent

Richard Dreyfuss, who played Vice-President Dick Cheney in the recent George Bush biopic W, is at the centre of a real-life drama after deciding to sue his father and uncle over a personal loan he claims was never repaid.

So, papa ripped off his famous son?  HAHAHA.  All in the family!  And papa was a lawyer?  Good grief.  And the lawyer landlord can’t figure out the finances of a building?  Good grief, again!  Where do these dummies get their law degrees?  HAHAHA.  Good grief. 

 

Now, here is a little story of a non-Jewish rip off artist just to show us that ANYONE can be a rip off artist, OK?

Billionaires’ Ski Club Stiffs Montana Florists, Blacksmiths After Collapse

(Bloomberg) — Builders, florists and blacksmiths are counting their losses along with financiers and hedge-fund managers in the bankruptcy of theYellowstone Club, a private ski-and-golf enclave in the Montana Rockies.

A lot of ‘rich’ people are really dead beats juggling loans.  When the wonderful Aladdin’s lamp, the Japanese Carry Trade abruptly began to unwind last July, 2007, a lot of people with a lot of short-term debts ended up underwater.  This is one such organization.  Mr. Blixseth sold shares and then dumped debt on his enterprise.  Sounds like a classic Cerberus tactic!  HAHAHA.  Well, he got caught when the liquidity that was hosing the planet, stopped.

 

2003—Executive Golfer- Tim Blixseth

Blixseth took Eichler’s counsel to heart. He decided to use his wits to make money. He felt he could become a successful entrepreneur, at 18, and nobody could stop him. Hollywood would have to wait.

He was amused saying: “I’ll never forget my first real transaction. I scoured the want ads for items on sale and saw one advertising three donkeys for $25 each.

“I thought three donkeys for $75 was cheap. So, I borrowed a pickup from my brother-in-law and drove out to see the guy. We closed a deal for $75. But, I agreed to buy the donkeys only if they could be loaded into my pickup. We pushed them as hard as we could. They would not budge…. I was determined…. They were stubborn…. We had a battle. Finally, we had to get a motor-driven winch to lift them off the ground, one at a time, and place them onto the truck. They were three very unhappy donkeys.

“I took them to my brother-in-law’s pasture to stay until I could resell them. I tripled the price to $75 each, ran an ad in the paper, and got a call the very next day. The buyer came over to see the donkeys. He loved them, and agreed to pay $225 under the condition they would load into his truck.

“I thought, ‘Oh, my God!’

“The buyer swung his truck near the donkeys. I gloomily walked behind the truck, steeled myself for a battle, lowered the truck’s tailgate, and got the surprise of my life—all three donkeys, easily and quickly, jumped right up and into the guy’s truck unassisted!”

My, my, Mr. Blixseth is so folky!  HAHAHA.  I have had many large mammals: horse, oxen, sheep.  When I put sheep in my truck, I had to have a roof over their heads or they would jump out.  On top of that, the maximum number of sheep in a large truck that was 8′x5′ was six.  Donkeys are the same size as ponies.  Ponies are not that small.  They are much bigger than sheep.

 

Putting ONE donkey in the back of a truck is ridiculous since the sides of the truck are not very much higher than the donkey’s knees!  They just hop out again.  Secondly, it is IMPOSSIBLE to put in three.  Just impossible.  So, before this scam artist went bankrupt and is now in deep trouble, several years ago he was making up stories about donkeys.  

 

Another thing: large mammals hate being transported.  Getting any of these guys to go in and out of trailers [I NEVER ever heard of anyone transporting them in the back of a truck!] is tricky, nasty and often, dangerous.  And you need a ramp, even for the sheep.  They never ‘jump in’.  

 

The Publisher’s Page - Tim Blixseth

“They seized my assets, I lost everything, and had to go bankrupt.

This clown was a dead beat in the past.  Just like Donald Trump.  An astonishing number of the dead beats in trouble today are previous dead beats who got in trouble in the past!  Why on earth would anyone trust someone like this guy?  And the story here!  He claims, the tycoons deliberately lost money so they would bury him?  That is plain silly.  

 

So the end of this story is, a bunch of high-flying executives got fleeced by this lying, bankrupt bastard.  It is rather funny, actually.  I bet Mr. Cass would sigh and say, ‘Buyer beware!  Why have courts and laws protecting buyers if people will cheat them, anyway?’

 

Mother of Palin daughter’s boyfriend arrested 

And last of all: amoral stupidity is in all social and religious groups.  I would suggest, some of the most pathetic losers are born again Christians.  They seem to be the easiest people to swindle or con.  Palin presented her community as the ‘real’ America that was wholesome and good.  With her wretched family as a prime example of good Americans.

 

Wasilla sounds more like Twin Peaks.  The Meth capital of Alaska.  And this reminds me of that con woman, Palin: she is very skinny and talks nonstop.  While her eyes dart all over the place.  She nearly talks backwards.  She reminds me of speed freaks.   

 

They are all crazy!  And they want to rule us.  Or at least, cheat us.  And in the process, are cheating each other, screwing up everything and driving not only themselves and their friends into bankruptcy but are driving our nation into bankruptcy!  Arrest them all.

 

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ALL IN THE FAMILY VI

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But it turns out, the Madoff crimes predated the undoing of all the post-1929 collapse regulations.

 

Um, the SEC must be investigated.  Mary Schapiro should be thoroughly investigated and then hopefully, sent to jail like all the others in this little drama.  Cox gets put in the Big Box, too.  Now, how on earth can the SEC staff make decisions on their own about not auditing someone?  Eh?  Who was bribed?  Who slept with whom?  Who made under the table deals?  Who went to the same Synagogues? 

 

Since 99% of this mess was confined strictly to the Jewish sectors of the financial/government/regulatory realm, we have to have snoopy outsiders investigate this interlocking community and how it interfaces with regulators!  True, the con artists, gnomes and pirates all share a philosophical ideology that no one should have any rules, regulations or laws.  They want Dodge City Wild, Wild Invest.  

 

The many ‘modern’ financial instruments that a host of irresponsible geniuses created were all pitched towards doing one thing: creating money out of thin air coupled with protecting the fees and follies of the creators so they could get very, very rich while doing absolutely nothing good.  So, using all of these ‘tools’, the merry gnome community ended up dumping amazing amounts of unsustainable debts on top of everything in sight.  

 

The last paragraph of this Forbes story is particularly amusing to me:  so, Forbes thinks we should distinguish between the Fed and the Treasury?  HAHAHA.  The Treasury has been hijacked by criminals and we see how great they have been: the Treasury is nothing but trillions of dollars in debts.  And a small pile of gold at Fort Knox.  I suspect, much of which is now ’swapped’ so the US people don’t own it at all.  

 

This ‘liquidity’ is all about debts.  And the guys who created the complete collapse of not only our entire banking system but our entire government, our entire economy and perhaps, our very nation, itself—they used the Federal Reserve to do this to us.  Ergo: the Fed, which is a PRIVATE corporation, should be NATIONALIZED.  And then Congress should go back to what they were supposed to do: regulate the currency and make banking rules and laws.  Not the Federal Reserve.

 

They epitomize  the utter foolishness of letting bankers regulate themselves.  Ever since the Fed took over our banking system, inflation took off.  And it was supposed to prevent bubbles and crashes.  Yet, we have these like clockwork.  And deep in the center of these bubbles is always the Federal Reserve handing out excessive loans.  Right off the bat, they lent epic amounts to Europe so the empires there could ravage each other.

 

Madoff Misconduct Said to Date Back to 1970s as Client List Reached 4,000

(Bloomberg) — U.S. regulators, trying to unravel the breadth of Bernard Madoff’s alleged $50 billion fraud, have found evidence of misconduct stretching back to at least the 1970s, two people familiar with the inquiry said.

Do we seriously think that someone named ‘Wilson’ or ‘Martinez’ could have walked into the Exchange and open SECRET accounts and then run a Ponzi scheme?  Of course not easily!  This requires a social stage where such secret, unregistered and unregulated stuff is protected by others.  It is hard to make deals with people if you are not part of the social scene.  And once a group gets a grip on things, they shun outsiders and protect each other.  

 

This must be investigated.  Someone has to look into the social relationships as well as sexual relations of the people at the heart of our financial systems.  The Madoff affair certainly has torn aside the veil of secrecy that has cloaked Wall Street.  But it must go much further: the Jewish community must take responsibility for what has happened there.  Just like, they must face the serious charges that they have diverted much of our foreign aid to Israeli Jews even while our budget is collapsing.  Just like the tax evasions that are eating up our government finances have to be examined in light of this group effort to short-change the US while enriching Jews in Israel.

 

The importance of this business is obvious: our own government is cutting finances at home or running up trillions of dollars in future obligations we Americans must pay, eventually.  The inability of Congress to even discuss fixing our budget problems or taxing the wealthy Wall Street community is very directly tied into the interlocked families which control our national economic systems.  Eventually, enraged Americans who are not Jewish will attack the entire Jewish community.

 

So the time to clean house is here and now.  Instead of wondering why the SEC mysteriously lets a top Jewish financier run amok, we should relentlessly discover the actual process whereby this happened.  This means, the people who enabled this to happen have to be hunted down and examined.  Why did they punt for Madoff in the first place?

 

Bloomberg.com: Worldwide

In its 1992 lawsuit, the SEC claimed accountants Frank Avellino and Michael Bienes began raising money in 1962 and placing it with Madoff while promising investors returns of 13.5 percent to 20 percent, according to court documents obtained by Bloomberg. As of October 1992, their firm, Avellino & Bienes, had issued $441 million in unregistered notes to 3,200 people and entities, court papers say. They invested solely with Madoff, who opened his business in 1960.

So, a previous ‘funnel’ who existed only to take money from people and move it into Madoff’s criminal operation were investigated and forced to return these funds!  Yet, in the news, we hear of many such similar organizations, all of whom, it appears, were run by Jewish con men, all of these are now collapsing, going bankrupt or being shut down by the authorities.  They existed only to fleece people via fees while simply funneling money to Madoff.

 

Yet, 16 years ago, this didn’t trigger an intense investigation of Madoff.  He was certainly very protected.

 

WSJ: Wall Street Mystery Features a Big Board Rival (Madoff: 12/16/92)

Here’s a tantalizing Wall Street mystery:

The exact same lawyer, Ira Sorkin, represented the two criminals in the above story back in 1992.  He is representing the crew who are criminals today in the Madoff business.

In yesterday’s story, I explained how Mr. Madoff pretended he had this miraculous bank of computers that magically beat human market experts.  But in 1992, he had other explanations for his miraculous profits.  He always had some sort of incredible system at work.  Which is always very vague.

This story from 1992 makes it crystal clear that investigators should have gone after Madoff with greatest severity.  But they did not.  This is because he had protection, Mafia-style protection: buying politicians and corrupting the system so it would look the other way.

Here is yet another warning sign that this was an elaborate pyramid scheme!  More and more guys who were ‘in the know’ and who socialized with Madoff would buy each other’s shares!  So each group would launch a new ‘business’ which had only one function: to buy an earlier level of the pyramid.  So the third parties to join bought the shares of the previous parties who then fed the money to Madoff after taking their own cut.  This can go on forever as we see with the long, long list of hedge funds and organizations that had only one function: to buy something that was a Madoff fund. 

 

SEC News Digest, 11-23-1993

ORDER.OF PElUfARENT INJUNCTION AND CIVIL PENALTIES ENTERED AGAINST TELFRAIIASSOCIATES LTD. ,TELFRAN ASSOCIATES COllP., STEVEN KENDELOV AND EDVAllD GLANTZ

The Commission announced that the Honorable John E. Sprizzo, District Judge for theSouthern District of New York, permanently enjoined Telfran Associates Ltd. (TelfranLtd.). Telfran Associates Corp. (Telfran Corp.), Steven Mendelow (Mendelow) and EdwardGlantz (Glantz), by consent, from further violations of Sections 5(a) and 5(c) of theSecurities Act of 1933 and Section 7 of the Investment Company Act of 1940.

TelfranLtd. agreed to pay a civil penalty of $250,000, and Mendelow and Glantz each agreedto pay civil penalties of $50,000.The Commission’Scomplaint alleged that from 1989 through November 1992, thedefendants sold unregistered securities to the public and operated as an unregistered investment company. The complaint further alleged that the defendants sold investorsnotes which paid an interest rate of approximately 15\.

The complaint alleged thatthe defendants used investors’ monies to purchase notes from Avellino & Bienes, who invested the money with a broker-dealer.The complaint alleged that as of November16, 1992. Telfran Ltd. had more than 800 investors and had raised in excess of $88million through the sale of its unregistered securities.[SEC v. Telfran AssociatesLtd., Telfran Associates Corp., Steven Mendelov and Edward Glantz, 92 Civ. 8564, JES,SDNY] (La-1388l)

Madoff is the ‘broker-dealer’ mentioned in the last paragraph here.    Note how the third level of this pyramid scheme raised over $88 million dollars while doing virtually nothing.  800 people were drawn into this scam.  Madoff certainly was one slippery fish swimming in endless pools of money, wasn’t he?

 

J. Ezra Merkin relationship map - Muckety.com

Like he fellow Jewish buddy, Madoff, Merkin is in the middle of a spiderweb of power.  Note how he is also part of the GMAC mess.  General Motors had to sell off that business and obviously, it fell into the hands of con men.

 

OCTOBER 2005:  What’s Bigger Than Cisco, Coke, Or McDonald’s?

His first finance job was as a novice trader at Drexel Burnham. But he soon moved on to Gruntal & Co., where he worked on the same floor as Steven A. Cohen, now a hedge-fund star who runs SAC Capital Advisors LLC. By 1992, when he was 32, Feinberg wanted to strike out on his own and teamed with co-founder Richter, who ran his own brokerage firm.

They named their firm Cerberus, for the ferocious three-headed dog that guards the gates of Hades in Greek mythology. Feinberg liked the idea that one of the dog’s heads was always on watch, just as his firm would guard its clients’ investments around the clock, says J. Ezra Merkin, managing partner of hedge-fund firm Gabriel Capital Group. Merkin — whose clients included university endowments and wealthy New York families — became Feinberg’s partner in a number of funds and deals. “I thought he would be able to move from passively investing in securities to building a business and actively managing companies,” says Merkin.

Cerberus was launched by Jewish Mafia guys who, according to this old article that basically admires and praises these con men, Feinberg of Cerberus was actively involved in ‘deals’ with Gabriel Capital Group’s owner and con artist, Mr. Merkin!  So is Cerberus going to be thoroughly investigated?  The talk in Congress for bailing out Chrysler Motors is all about Cerberus getting some profits out of that deal.  I say, they should get nothing.

 

Spotlight turns on Merkin in Madoff scheme | International | Jerusalem Post

This article from Israel is ridiculous.  Merkin was NOT conned by Madoff.  He knew he was scamming people because the sole reason his hedge fund existed was to funnel money into Madoff’s pyramid scheme.  Note that Merkin, like all criminals, didn’t want anyone seeing his books, poking around in his deals or knowing anything.  He was secretive.  They all are!  Ergo: he was operating a criminal con job.

 

Unlikely Player Pulled Into Madoff Swirl - NYTimes.com

Former colleagues in the regulatory world and professional adversaries described Mr. Swanson as a straight arrow, earnest by-the-book Midwesterner who worked long hours and received excellent job evaluations. Several said they always saw him act aggressively but fairly in his years at the commission and that they never saw any evidence of him favoring any company, including Madoff Securities.

“I remember him as a very hard-working, dedicated and smart guy,” said Joseph Lombard, a former market regulation counsel to Arthur Levitt Jr. when he was the S.E.C. chairman in the 1990s. “You have people at the agency, like anyplace, who are more or less committed to the enterprise. Eric was all in. He believed in the ability of regulation to make markets better. He was an advocate of aggressive action against people who had fallen short.”

This article seeks to protect someone who should have had a faint idea, what was going on.  This ‘investigator’ didn’t know what his wife was doing?  Boy, is he in for a world of hurt when she really decides to go off and screw around!  She, of course, even when supposedly in a position of authority in her father’s scam business, claims to be stupid an innocent.

 

Ah, all these highly educated, sharp people who pride themselves on being on top of things, when caught, suddenly are the dumbest people on earth!  Didn’t know a thing!  Straight arrows who marry into Mafia families!  HAHAHA.  The Godfather is a good movie.  A must-see.  

 

Another clue as to why we must thoroughly investigate the gangsters and the regulators is the top paragraph:  the guy Mr. Swanson investigated right before joining this branch of the Jewish Mafia was one of Madoff’s closest friends!  Did the guy go to jail?  Since I don’t know the name, I can’t look it up!  

 

Madoff Exploited the Jews - WSJ.com

The Madoff tale is striking in part because it is like stealing from family. Yet frauds that prey on people who share bonds of religion or ethnicity, who travel in the same circles, are quite common. Two years ago the Securities and Exchange Commission issued a warning about “affinity fraud.” The SEC ticked off a series of examples of schemes that were directed at members of a community: Armenian-Americans, Baptist Church members, Jehovah’s Witnesses, African-American church groups, Korean-Americans. In each case, the perpetrator relied on the fact that being from the same community provided a reason to trust the sales pitch, to believe it was plausible that someone from the same background would give you a deal that, if offered by someone without such ties, would sound too good to be true….

The SEC’s failure to pursue complaints about Mr. Madoff over the past decade wasn’t the result of inadequate regulations but of disbelief that someone so well entrenched in the industry — a former Nasdaq chairman and SEC adviser — was capable of committing such a callous crime.

Mr. Cass is dean emeritus of Boston University School of Law, president of Cass & Associates, and chairman of the Center for the Rule of Law.

Ah, protecting the tribe!  Good job, Mr. Cass!  Why have any rules?  After all, there will always be con men!  And this IDIOT is a professor of LAW????  I looked up some stuff about this criminal lawyer.  He worked on NAFTA.  Gads.  Ack.

 

For a lawyer to say, ‘Well, you know, people MURDER so why punish them?  We can’t stop MURDERS by passing laws so why bother?  You go and trust someone and then they shoot you dead!  So what’s the big deal, buddy?’  Gads.  I suppose, he hunts quail with Cheney.  Blames victims for being shot in the face?  How DARE this idiot claim, we should prevent obvious frauds?  Eh?

 

This is exactly what is wrong with many powerful Jews.  Mr. Cass is in a position of responsibility, yet he counsels that we do nothing in the teeth of criminal frauds just because it was a Jew doing it!  This story illustrates the limits of the present laws that allowed Jewish con men to operate with near-total impunity.  And it can be fixed.  But not by Mary Schapiro who, I bet, thinks exactly like this Jewish lawyer: ‘WHO GIVES A FUCK?  WE WON’T FIX THIS…NAYAYAYAY.’   I think that Boston University should fire this creep.

 

Rude awakening for Spielberg as DreamWorks runs short of cash - News, Films - The Independent

He is impossibly rich, uniquely powerful and boasts a copper-bottomed CV that includes dozens of the most influential blockbusters of modern times. But even Steven Spielberg’s career is stalling in the apocalyptic face of the global credit crunch.

So, Spielberg is ‘impossibly rich’ but has to beg for money to make movies?  What the hell is wrong with our world?  Why do movies cost so much?  Most of them are infantile with huge loads of special effects while the dialogue is barely above first grade level?  Tintin is a lightly-drawn comix from Belgium which was cute in the 1950’s, I read these stories back then.  But to make a monster-expensive movie about this is plain crazy.  I hope it is never made.

 

Way too many rich people are not rich.  They are all overextended and utterly reckless and making stupid things that are useless or just plain stupid.  Then, when things fail, they say, ‘We were too stupid to know what we were doing.’  Stupid is as stupid does.  Gads. Have they no pride?

 

The Dreyfuss affair: actor sues father for $4m - Americas, World - The Independent

Richard Dreyfuss, who played Vice-President Dick Cheney in the recent George Bush biopic W, is at the centre of a real-life drama after deciding to sue his father and uncle over a personal loan he claims was never repaid.

So, papa ripped off his famous son?  HAHAHA.  All in the family!  And papa was a lawyer?  Good grief.  And the lawyer landlord can’t figure out the finances of a building?  Good grief, again!  Where do these dummies get their law degrees?  HAHAHA.  Good grief. 

 

Now, here is a little story of a non-Jewish rip off artist just to show us that ANYONE can be a rip off artist, OK?

Billionaires’ Ski Club Stiffs Montana Florists, Blacksmiths After Collapse

(Bloomberg) — Builders, florists and blacksmiths are counting their losses along with financiers and hedge-fund managers in the bankruptcy of theYellowstone Club, a private ski-and-golf enclave in the Montana Rockies.

A lot of ‘rich’ people are really dead beats juggling loans.  When the wonderful Aladdin’s lamp, the Japanese Carry Trade abruptly began to unwind last July, 2007, a lot of people with a lot of short-term debts ended up underwater.  This is one such organization.  Mr. Blixseth sold shares and then dumped debt on his enterprise.  Sounds like a classic Cerberus tactic!  HAHAHA.  Well, he got caught when the liquidity that was hosing the planet, stopped.

 

2003—Executive Golfer- Tim Blixseth

Blixseth took Eichler’s counsel to heart. He decided to use his wits to make money. He felt he could become a successful entrepreneur, at 18, and nobody could stop him. Hollywood would have to wait.

He was amused saying: “I’ll never forget my first real transaction. I scoured the want ads for items on sale and saw one advertising three donkeys for $25 each.

“I thought three donkeys for $75 was cheap. So, I borrowed a pickup from my brother-in-law and drove out to see the guy. We closed a deal for $75. But, I agreed to buy the donkeys only if they could be loaded into my pickup. We pushed them as hard as we could. They would not budge…. I was determined…. They were stubborn…. We had a battle. Finally, we had to get a motor-driven winch to lift them off the ground, one at a time, and place them onto the truck. They were three very unhappy donkeys.

“I took them to my brother-in-law’s pasture to stay until I could resell them. I tripled the price to $75 each, ran an ad in the paper, and got a call the very next day. The buyer came over to see the donkeys. He loved them, and agreed to pay $225 under the condition they would load into his truck.

“I thought, ‘Oh, my God!’

“The buyer swung his truck near the donkeys. I gloomily walked behind the truck, steeled myself for a battle, lowered the truck’s tailgate, and got the surprise of my life—all three donkeys, easily and quickly, jumped right up and into the guy’s truck unassisted!”

My, my, Mr. Blixseth is so folky!  HAHAHA.  I have had many large mammals: horse, oxen, sheep.  When I put sheep in my truck, I had to have a roof over their heads or they would jump out.  On top of that, the maximum number of sheep in a large truck that was 8′x5′ was six.  Donkeys are the same size as ponies.  Ponies are not that small.  They are much bigger than sheep.

 

Putting ONE donkey in the back of a truck is ridiculous since the sides of the truck are not very much higher than the donkey’s knees!  They just hop out again.  Secondly, it is IMPOSSIBLE to put in three.  Just impossible.  So, before this scam artist went bankrupt and is now in deep trouble, several years ago he was making up stories about donkeys.  

 

Another thing: large mammals hate being transported.  Getting any of these guys to go in and out of trailers [I NEVER ever heard of anyone transporting them in the back of a truck!] is tricky, nasty and often, dangerous.  And you need a ramp, even for the sheep.  They never ‘jump in’.  

 

The Publisher’s Page - Tim Blixseth

“They seized my assets, I lost everything, and had to go bankrupt.

This clown was a dead beat in the past.  Just like Donald Trump.  An astonishing number of the dead beats in trouble today are previous dead beats who got in trouble in the past!  Why on earth would anyone trust someone like this guy?  And the story here!  He claims, the tycoons deliberately lost money so they would bury him?  That is plain silly.  

 

So the end of this story is, a bunch of high-flying executives got fleeced by this lying, bankrupt bastard.  It is rather funny, actually.  I bet Mr. Cass would sigh and say, ‘Buyer beware!  Why have courts and laws protecting buyers if people will cheat them, anyway?’

 

Mother of Palin daughter’s boyfriend arrested 

And last of all: amoral stupidity is in all social and religious groups.  I would suggest, some of the most pathetic losers are born again Christians.  They seem to be the easiest people to swindle or con.  Palin presented her community as the ‘real’ America that was wholesome and good.  With her wretched family as a prime example of good Americans.

 

Wasilla sounds more like Twin Peaks.  The Meth capital of Alaska.  And this reminds me of that con woman, Palin: she is very skinny and talks nonstop.  While her eyes dart all over the place.  She nearly talks backwards.  She reminds me of speed freaks.   

 

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The Economy, Etc. - Rhyme or Reason?

Well… here we are near the end of 2008.  A year that saw incredible happenings… not unlike many previous years.  Except… that this year was a turning point of sorts.

We saw the average real estate person, to the real estate expert, finally admit that the housing market was collapsing with no end in sight.  We saw the paper denominated money markets take a quantum leap into the basement as the “ones in charge” finally admitted that indeed, something was “a bit amiss!”  Ha!

As of this moment, the commodities market… the stalwart last port in a storm haven, took a brutal beating at the hands of ruthless manipulators.  Silver is still at about 50% of where it was last March 17th.  Gold is down at least 25% (but amazingly toying with the fact that it sometimes closes above platinum… which has hardly ever happened in recent history).  Palladium is dropping almost off the earth and rhodium, the mainstay of the car catalytic converter industry and fanatical nutritional supplement sector, has occasionally closed lower than gold and is around or below $1,000 per ounce… some remember the recent past when this metal was in the area of several thousands per ounce!

The market indicators are all askew.  The Dow is the favorite plaything of the power elite and even though it is suffering, it still refuses (read - “not allowed”) to dive off the final cliff into financial oblivion.  The NASDAQ is surviving around record lows… just because it can… and nobody cares at the moment.  The Transportations Index has been unceremoniously deleted from the Kitco Charts…  no one seems to know why.  Maybe it is akin to the almost total disappearance of the M3 Money Index.  Some experts figure the Transportations Index to be just as important as the hushed-up M3, especially when analyzed with the movements of the Bond Market.  Oh, well.

Another very “supposed” key indicator is the Dollar Index.  When it was solid and above 80 points, way over a year ago, many experts agreed that if it went below 80, it would be free fall time.  Well, over a year ago, it did just that and continued until recently, its descent to the 71 point range.  However, just as all the other indexes and markets went nuts, so did the Dollar Index, and it climbed recently to the upper 80’s… only to drop back into the high 70’s a few days ago.

Oil… Black Gold… Texas Tea.  We are now in the mid-thirties from an incredible $147 a barrel not too long ago.  Who worked this out!?  At the rate it is falling, you will be paid to fill up your SUV at the pump.  No?  Okay… the obvious conclusion is that the price, as with all commodities… is heavily manipulated.  You can expect the price of oil, some day in the near future to shoot skyward so fast, it will make your head spin.  You will be left by the roadside with your bankrupt credit cards and fist full of worthless dollars, wondering how you are going to get to the almost empty store to beg for some food for your family that is sitting, hovering over a fireplace, burning your Walmart furniture to try and keep from freezing.  

“What is going on?”  This is the key question that must cross the minds of even the most financially uninvolved person.  The whole world is being turned upside down, not only financially, but politically and socially as well.

Unfortunately, all the factors are interrelated.  The blatant battle by the various power elite groups is, and has been going on for decades.  Their desire is to control the world’s population by every means possible.  Financial control is an obvious method.  I paraphrase, as I often do, and cannot overdo, the infamous words of Rothschild… “Give me the power to control a nation’s currency and I care not who makes the laws.”  Pretty scary?  Yes!  Being done?  Read the even the most Conservative papers and you will see the whole scenario unfolding right before your very eyes.

What can be done?  Probably nothing.  That is a horrible realization… but one that is the most likely outcome of what is happening.

We have a new President-elect.  If you follow even some of what is going on in the change over period between administrations, you will see that the people that Obama is surrounding himself with are war hawks, financial mis-planners, hangers-on, and political hacks, etc. from previous administrations.  That IS scary.

From the fact that Obama is a Wall Street and power elite player… he received 80% of his campaign funds from Wall Street sources… to the fact that he will willingly take us into Afghanistan… (read - Korea, Vietnam, Iraq)… it is no wonder that many who voted for change did not realize that there was NO major candidate dedicated to REAL and POSITIVE change.  Sad, but true.  Very sad, but true.

Talk about hacks… The “experts” that spew out their nonsense on all media… TV, radio, print… do nothing more than confuse the facts.  I believe that a great deal of this is intentional or at least greatly appreciated by the power elite.  Experts speak, using the alphabet soup names of all types of financial tools, methods, etc., thus making it near impossible to decipher what they are talking about.  Another favorite method is using words that people in the financial and political fields don’t even agree on the meaning of.  “Spread,” “leveraging,” “longs,” “shorts…”  and the list is endless!

My favorite, and one that if you don’t know much about it now… you eventually will!   It  is “Derivatives.”  I have studied them for years and not until recently did I find a somewhat satisfactory explanation of what they were and HOW THEY WORKED!  I even wrote a post  on my web site - Silverrockstheworld.com (entitled “Derivative Meltdown!!!”), explaining in VERY simple terms the uses and ABUSES of this kind of financial nonsense.

The fact that the worldwide exposure to them is over $1 QUADRILLION (that’s 1,000 TRILLIONS!), and they are based on futures agreements of which 90% unbelievably expire WORTHLESS!  The total GDP of the ENTIRE world is $50 trillion.  That makes derivatives a loosing game of about 20 to 1!  Worried yet?  No?  You should be shaking in you shoes!

Ever hear the names COMEX and CFTC?  You may have, or if they have their way, you will not.  They are the government assigned watchdog agencies for the commodities markets.  Do they do their job?  NO!  But then again, for who?  If you mean you and me, they are sinister and corrupt entities from the word go.  But, for the power elite, they are the golden boys of commodity manipulation.  Something that the world may (hopefully not), pay very dearly for.

As almost a final peg in the silliness board of the financial collapse, is the fact that just a few days ago there was a mad dash by investors to purchase 30 year Treasuries.  The stupidity of this was that the rate of interest was effectively zero and people were actually getting no return on their investment and just letting the government keep their money for thirty years!  Thirty years?!  No interest?!?  What about the possibilities of havoc that inflation would play on a dumb move like that?  What about the possibilities in six months?  Three months?  The whole thing is totally preposterous and yet par for the course!  

An obvious solution at the very least, would be to invest in tangible silver of any kind.  A move that alas, mainly due to the gross price manipulation, will be an investment that all will want when none is available.

When you think about the big picture… it is very likely that down to the most poverty stricken third world nation, every country has at least one Super Secret Intelligence Agency.  Who their collective loyalties are to is anyone’s guess.  This makes the entire mix of various power elite groups and their henchmen quite difficult to put a handle on… let alone their past, present and future plans.

Again, what can be done?  As mentioned, ANY paper denominated investments are most likely to become worthless when and how the power elite see fit.  The flight to tangible commodities is the ONLY real answer, but no one has money to spare to buy items such as silver, even at its present  rock bottom price.  This is also very sad, but true.

 The collective people of the world are in a mess.  With economies failing, food becoming scarce, social unrest rearing its ugly head… what could possibly be the answer?

I guess other than buying an amount of silver that you can afford and squirrel away, there is not much to be done.  That is my best answer at present.  Also, if you are so moved, you should pray to your God and ask for divine intervention… because if you follow what is going on and are not a stooge of the popular culture that the power elite media feeds us, you will realize that our options to have a planet that is free, just and loving gets further from the realms of possibility.

When Consumers Get Depressed

What happened to the global economy and what we can do about it

The Return of Depression Economics, by Paul Krugman, is certain to be one of the most gifted books this holiday season; that’s what happens when you combine a Nobel Prize with a massive economic crisis and book with the word “depression” in the title. Here’s another reason to buy it for someone, as I found out: it’s so short you can read it in a couple of hours before wrapping it up.

The title of the book refers broadly to the recurrence of a need to deal with Depression-style economic threats, a theme that originally (in the 1999 edition) referred to the emerging markets crisis of 1997-98 and and the stagnation in Japan caused by the collapse of their housing bubble at the beginning of the 1990s. More particularly, however, it refers to the problems brought on by a collapse in economic demand - “insufficient private spending to make use of the available productive capacity,” as Krugman puts it. And it seems clear that that’s where we are today. The Case-Shiller index of housing prices reached its peak in real terms sometime in 2006, but the economy continued to grow until the end of 2007, even as housing prices fell significantly. Although the negative wealth effect of falling housing must have had some effect, people still wanted to spend. When the severe phase of the crisis began in September 2008, it was widely described as a credit crunch, meaning that reductions in the supply of credit were making it difficult for borrowers to get the money they needed, either for investment or consumption. Today, however, as Simon has said before, falling demand for credit may be just as big a problem. People just don’t want to borrow money any more, and if that’s the case, then increasing the supply of credit (by funneling cash into banks) will have only a limited effect, as we’ve seen. This is what Krugman finds most worrying about the current situation: the “loss of policy traction,” in which even dramatic moves by the Fed have only a limited impact ont he real economy.

He doesn’t quite come out and say it in so many words, but a lot of Krugman’s story has to do with what might be called psychology. He describes how economic crises may be the product of poor governmental policies and weak economic fundamentals - or they may be entirely the product of panics that have the very real effect of destroying wealth and setting countries back for years. Seen from this perspective, the scale of the current crisis may not have any proportional relationship to the fundamental flaws of our economy (or the global economy). It may simply reflect the fact that the scale, liquidity, and leverage of the global financial system have made it possible for panics to have much greater damage than they did in the past. (I know we’re still not dealing with anything on the scale of the Great Depression, but while the financial system was simpler then, it also had a simpler flaw - the lack of deposit insurance - and a simpler mistake - the failure to expand monetary policy in response to the downturn.)

The fact that you are reading this blog probably means that you would not learn a lot about the current crisis from Krugman’s book (especially if you’ve already read his article in The New York Review of Books), but you might learn something about the crisis of the 1990s, and the dynamics of currency crises. In 1997-98, multiple unrelated emerging market countries suffered panics and currency crises, and the response of “Washington” (the U.S. and the IMF) was to demand fiscal austerity - higher interest rates, lower government spending, higher taxes - in exchange for bailout loans. Now, of course, when large parts of wealthy country economies need to be bailed out, few people are calling for austerity; in the U.S., liberals and (most) conservatives differ only on whether the deficit should be increased through government spending or through tax cuts. Ten years ago, perhaps the austerity argument was defensible: in order for countries to gain credibility (and be able to pay back their loans), they needed to improve their government balance sheets. And at the time, the U.S. could be confident that reduced purchasing power in Thailand, South Korea, and Russia would have little effect on our economy. Today, however, the entire world is facing a steep downturn, and an economic stimulus will be most effective if it is roughly coordinated across countries, including emerging markets. So far the IMF appears to be using a gentler hand than last time, although so far most countries are attempting to steer clear unless absolutely necessary. The fact is that preventing an economic collapse in emerging markets will be an important of our recovery this time, both because of the importance of foreign trade and because of the amount of cross-border investment (think about the massive inflows into international stock funds in the past ten years).

In any case, it’s a quick read, and for those who are nervous about Krugman’s politics they make only a very brief entry near the end.

December 19, 2008 at 11:18 pm

Ways To Find Money Streams

In this article, I am going to discover how to find different money streams with different amount of investment. I believe most of the internet marketers start with little or no money at all. So the first two ways will be popular among the new internet marketers. With little or more money to invest, marketers will move to the second method to actually gain money faster. The last method is much to the final stage of the internet marketer and it require a lot of time and efforts. It also requires some investments. Let’s delay no more. Here’s the different money streams that you can find online.

1) Doing surveys, reading ads.

Required investment : None Personally, I have tried numerous reading ads program. You basically cannot survive just by reading ads. But for the start, it’s good to get some free money. Just try to sign up for 5-10 programs and read ads for one month. It should be able to get some funds for your next stage of internet marketing. With 10 bucks earn from each program, you can get 50 - 100 bucks. Remember, it’s not for surviving. It’s just for funding raising for your next stage of internet marketing. There are some programs that you can join and some that you need to avoid. But basically, you just need to read ads for the first month.

2) Affiliate Marketing.

Required Investment : 50 - 100 USD This is the second stage for internet marketers and most of the marketers are kinda contented to stay in this stage. Also, there are marketers whom directly go into this stage before the first stage. This is because they are willing to invest a little amount for faster success. The little amount is just 50 USD and it can be easily achieved. However, it is almost the killer step for internet marketers if they just go into this stage directly. Simply, there are too much things to learn about the internet marketing world. Doing affiliate Marketing, there are different steps that you need to follow in order. It is discuss as follows. Step 1 - Research Researching about the product is the beginning of the affiliate marketing. The research will be focus on the demand and supply. Let’s take weight loss diet as an example. We need to check on the demand first before we check on the supplies. First, go to a website called, overture. This is the website where they will generate how much volume are there for a keyword. Input the keyword into the website and it will generate how much people has search for that keyword phrase. If the volume is profitable, then we will continue to search for supply. Supplies can be found in affiliate websites like CJ and ClickBank. If there is sufficient supplies and demand, we will proceed to the next step. Analysis.

Step 2 - Analysis

Analysis the product whether is it profitable. If the profit that you get for each sale of the product, is less than 15 USD, I will suggest that you look for another product. Unless you are very sure that the product will sell alot. And after analysing the scale of profit, we need to understand the competition. Simply key in the keyword you have into google and see how much return hits it got. If it’s more than 100,000, then I will suggest not to go ahead anymore. It’s a fierce competition that you will be facing if you continue. If it’s under 5,000, it still can be a profitable market for you. After understanding the scale of profit and the competition, the next step will be implementation.

Step 3 - Implementation

This step is often the most tedious step of all. Most marketers want to avoid this step but without this step, all your research before, will be going into the drain. Implementations can come in different form. Depending on how much are you going to invest. One of the best method, is to buy a domain and hosting. Yahoo! Web Hosting is one good suggestion for this. Why buy a domain and web hosting? This is because you will have all the flexibility that a website can have. Imagine getting those free web hosting. When your visitors are reading about your weight loss website and suddenly, Mickey Mouse came out as advertisement. It will tell the visitor how professional is the website. After getting the domain and hosting, you need to create a website. Yes, do not worry. There are tools in Yahoo! to help you to build the website. Also, you need to plan before building your website. It has to be SEO. SEO(Search Engine Optimization) is the step that helps you and your website to be index by the search engine. I will cover SEO in future as it is a very big topic. Next step is known as Testing

Step 4 - Testing

After implementation you need to do testing. Whether is the web successful or not. It can be easily done by creating 2 similar websites but to different links. Of course, the websites need to target different keywords. Let’s say, the first website targets “weight loss” and the other targets “weight loss diet”. In this way, you will know which one is better and which one needs improvement. Once changes are required, it will trigger the Implementation steps again. Remember Implementation and Testing steps comes in hand by hand. Here, I have covered the steps that affiliate marketers are doing. If you can do these all correctly, the payback is very high. But it will take several months before it can finally come into fruition. One good example for affiliate marketing is Affiliate Rockstar Status Review

3) Information Seller.

Required Investment : 100 - 1000USD This is the final stage of Internet Marketing. The Information Seller. As what its name has suggested, they sell information. This stage requires alot of efforts, research, and experience. Efforts needed to analysis data, manipulate data, and implement strategies. Research is needed to find information beyond information. Experience is needed to implement the whole system into the internet marketing world. The information seller writes ebooks that are on demand. They normally write ebooks with their own experience or interest. In this way, they will be better as they have personal encounters before. While they are writing the ebook, they will need to research more regarding the field they are writing. This leads to more researching. After completing the ebook, they will be uploading it to the affiliate marketplace, like clickbank and cj, and start selling it online. They, themselves, will be applying some internet marketing strategies to kickstart their ebook. And after that, they will rely more to the affiliates to help them promote their ebook.

The Mumbai attacks have been dubbed ‘India’s 9/11′, and there are calls for a 9/11-style response, including an attack on Pakistan. Instead, the country must fight terrorism with justice, or face civil war.

 

12 December 2008

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. Like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “Bad Guys” he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

But November isn’t September, 2008 isn’t 2001, Pakistan isn’t Afghanistan and India isn’t America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It’s odd how in the last week of November thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara – one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you may not have heard that ordinary people too died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness. The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of India Shining and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish centre.

We’re told one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company I think) said “Hungry, kya?” (Hungry eh?). It then, with the best of intentions I’m sure, informed its readers that on the international hunger index, India ranked below Sudan and Somalia. But of course this isn’t that war. That one’s still being fought in the Dalit bastis of our villages, on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet. So maybe, like everyone else, we should deal with the one that is.

There is a fierce, unforgiving fault-line that runs through the contemporary discourse on terrorism. On one side (let’s call it Side A) are those who see terrorism, especially “Islamist” terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit and has nothing to do with the world around it, nothing to do with history, geography or economics. Therefore, Side A says, to try and place it in a political context, or even try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that though nothing can ever excuse or justify terrorism, it exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed, who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias and Democracy and believes that jihad should be waged until Islam, his Islam, rules the world. Among the things he said are: “There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera): “We didn’t spare a single Muslim shop, we set everything on fire … we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.”

(Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently in Kandhamal in Orissa, Christians were the target of two and a half months of violence which left more than 40 dead. Forty thousand people have been driven from their homes, half of who now live in refugee camps.)

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jehad with his twisted, fiery sermons. On December 11 the UN imposed sanctions on the Jammat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest. Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide he left the VHP to join the Shiv Sena. Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat. So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata.

Suhel Seth, a TV impresario and corporate spokesperson, recently said: “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted. The RSS has 45,000 branches, its own range of charities and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister AB Vajpayee, current leader of the opposition LK Advani, and a host of other senior politicians, bureaucrats and police and intelligence officers.

If that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organisations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

In this nuclear subcontinent that context is partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes and families, was drawn virtually overnight. It was Britain’s final, parting kick to us. Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India left their homes with nothing but the clothes on their backs.

Each of those people carries and passes down a story of unimaginable pain, hate, horror but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives. Pakistan, the Land of the Pure, became an Islamic Republic, and then, very quickly a corrupt, violent military state, openly intolerant of other faiths. India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990 they were ready to make a bid for power. In 1992 Hindu mobs exhorted by LK Advani stormed the Babri Masjid and demolished it. By 1998 the BJP was in power at the centre. The US war on terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy. This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism in the subcontinent and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and LK Advani of the Rashtriya Swayam Sevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express and the 2007 bombing of the Samjhauta Express, the government of India announced that it has “incontrovertible” evidence that the Lashkar-e-Taiba backed by Pakistan’s ISI was behind the Mumbai strikes. The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies the Lashkar operates in India through an organisation called the Indian Mujahideen. Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy. Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously. In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. Neither will war. (Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighbouring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.)

Thanks largely to the part it was forced to play as America’s ally first in its war insupport of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening towards civil war. As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistan army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to.

Certainly it did not expect them to come calling in heart of the Homeland on September 11. So once again, Afghanistan had to be violently remade. Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders. Nobody, least of all the Pakistan government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs and the maniacs who believe that Islam will, or should, rule the world is mostly the detritus of two Afghan wars. Their ire rains down on the Pakistan government and Pakistani civilians as much, if not more than it does on India.

If at this point India decides to go to war perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before. If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbours. It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country byinviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front. The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary. Over three days and three nights we watched in disbelief as a small group of very young men armed with guns and gadgets exposed the powerlessness of the police, the elite National Security Guard and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this they indiscriminately massacred unarmed people, in railway stations, hospitals and luxury hotels, unmindful of their class, caste, religion or nationality. (Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.) But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill – and be killed – mesmerised their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news. Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.) Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people and inflict as much damage as they could before they were killed themselves. They left us completely bewildered. When we say “nothing can justify terrorism”, what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it’s precious. So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself Imran Babar. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror emails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir. “You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for? Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don’t figure in their calculations except as collateral damage. It has always been a part of and often even the aim of terrorist strategy to exacerbate a bad situation in order to expose hidden faultlines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project. A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theatre, spectacle and symbolism, and today, the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the attack was being condemned by TV anchors, the effectiveness of the terror strikes were being magnified a thousandfold by TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid. Instead we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed (is it alright for the poor to remain unprotected?). We had people suggest that the government step down and each state in India be handed over to a separate corporation. We had the death of former prime minster VP Singh, the hero of Dalits and lower castes and villain of Upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir, give us his version of George Bush’s famous “Why they hate us” speech. His analysis of why religious bigots, both Hindu and Muslim hate Mumbai: “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.” His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.” Didn’t George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and leftwing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army and virtually asking for a police state. It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid television flashcards like the Police are Good Politicians are Bad/Chief Executives are Good Chief Ministers are Bad/Army is Good Government is Bad/ India is Good Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically, this regression into intellectual infancy comes at a time when people in India were beginning to see that in the business of terrorism, victims and perpetrators sometimes exchange roles. It’s an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation. Eventually the courts acquitted two out of the four accused, including SAR Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him but was then convicted for a fresh, comparatively minor offence. The supreme court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.” Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19 this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur and Ahmedabad in 2008. An assistant commissioner of Police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists” known and rewarded for having summarily executed several “terrorists”. There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics and activists all of whom demanded a judicial inquiry into the incident. In response, the BJP and LK Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying it was “suicidal” and calling them “anti-national”. Of course there has been no inquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the CBI said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted 2kg of RDX and two pistols on them and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir). Ali and Qamar who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS) that was investigating the September 2008 Malegaon blasts arrested a Hindu preacher Sadhvi Pragya, a self-styled God man Swami Dayanand Pande and Lt Col Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu Nationalist organizations including a Hindu Supremacist group called Abhinav Bharat. The Shiv Sena, the BJP and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists”. LK Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On the November 25 newspapers reported that the ATS was investigating the high profile VHP Chief Pravin Togadia’s possible role in the Malegaon blasts. The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai Attacks. The chances are that the new chief whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

While the Sangh Parivar does not seem to have come to a final decision over whether or not it is anti-national and suicidal to question the police, Arnab Goswami, anchorperson of Times Now television, has stepped up to the plate. He has taken to naming, demonising and openly heckling people who have dared to question the integrity of the police and armed forces. My name and the name of the well-known lawyer Prashant Bhushan have come up several times. At one point, while interviewing a former police officer, Arnab Goswami turned to camera: “Arundhati Royand Prashant Bhushan,” he said, “I hope you are watching this. We think you are disgusting.” For a TV anchor to do this in an atmosphere as charged and as frenzied as the one that prevails today, amounts to incitement as well as threat, and would probably in different circumstances have cost a journalist his or her job.

So according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police. This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world and yet refuses to ratify the International Covenant on Torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the Underworld and the Encounter Specialists virtually does not exist.

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them? There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse. If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US army is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire. (Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?) Hundreds of thousands people including thousands of American soldiers have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S allies/agents (including India) and U.S interests in the rest of the world has increased dramatically since 9/11. George Bush, the man who led the US response to 9/11 is a despised figure not just internationally, but also by his own people. Who can possibly claim that the United States is winning the war on terror?

Homeland Security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland. We have a hostile nuclear weapons state that is slowly spinning out of control as a neighbour, we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalise, end up as a threat not just to India, but to the whole world. If ten men can hold off the NSG commandos, and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix. Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go. Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain (it would be naïve to say end) terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says Justice, the other Civil War. There’s no third sign and there’s no going back. Choose.

 

* * * * *

Federal Reserve sets stage for Weimar-style Hyperinflation

Stores Using Survival Tactics, Look Past Holidays

NEW YORK (AP) — Retailers are accelerating their use of survival tactics — slashing prices further and pulling merchandise off shelves to send to liquidators — as the number of holiday shopping days dwindles. But January and beyond look scarier for even relatively healthy merchants as the passing of the holidays give shoppers no reason at all to spend.

According to the AP.

What’s worse, the industry expects a rise in returns after the holidays as shoppers seek to convert their unwanted gifts to much-needed cash as they struggle with rising layoffs, tightening credit and shrinking retirement funds.

Many retailers are in panic mode as they try to liquidate inventory in a season that’s expected to show the first drop in sales in nearly 40 years. For this last weekend before Christmas, Sears stores are offering up to 70 percent off on fine jewelry and up to 60 percent off on outerwear, while Macy’s is dangling early morning discounts of up to 75 percent. J.C. Penney is featuring 300 early morning specials on items from pajamas to handbags.

But a major winter storm cutting across the country could make shoppers just stay home.

“The retailers are doing everything possible to be lean and clean by the end of Christmas, because the shoppers are not going to be there” in January, said New York-based retail consultant Walter Loeb. “This is more about survival.”

But the casualties from the holidays are rising. Circuit City Stores Inc. and KB Toys Inc. have filed for Chapter 11 bankruptcy protection in recent weeks. Finlay Fine Jewelry Corp., which operates stores such as Bailey Banks & Biddle, warned Wednesday that it may not have enough cash to finance its operations through the end of its fiscal year on Jan. 31, and may have to “significantly curtail” its business or pursue other options.

Kerri Reed, 34, a Lyndhurst, N.J., hairdresser who was outside Macy’s flagship store in Manhattan on Wednesday with her husband, a police officer, and their two boys, 8 and 11, said she finished her shopping and doesn’t plan to go back after Christmas. Reed says she and her husband have secure jobs, but she’s worried about the overall economy.

“It’s a done deal. I covered my bases,” said Reed, who said she bought for fewer people this year, spending $2,000 instead of last year’s $3,000.

In a sign of how grim the future looks for consumer spending, even fairly healthy companies are making big shifts in their plans in order to respond to the deteriorating climate. Best Buy Co. Inc. announced Tuesday that it will slash capital expenditures by half in 2009 and will offer voluntary severance packages to virtually all its 4,000 corporate employees. The nation’s largest consumer electronics chain also said its third-quarter profits skidded 77 percent.

“We believe that the environment for consumer spending is likely to get worse before it gets better,” said Brad Anderson, chief executive of Best Buy — which has seen little benefit so far from the bankruptcy of Circuit City, its largest rival, which is closing more than 150 of its approximately 700 U.S. stores by Dec. 31.

Children’s clothing chain Gymboree Corp. is cutting salaries by up to 10 percent for senior management and corporate staff to prepare for what it believes will be a deepening spending slump. It expects that earnings for 2009 will be below the current fiscal year.

“Consumer demand is much less than most of us understood even in September,” said Richard D. Hastings, a strategist with Global Hunter Securities, who expects total retail sales will fall as much as 8 percent for the November through January period. Even with recent moves to cut inventory and slow store expansion, he said retailers are finding that their assets — stores and inventory — are “out of whack.”

Hastings doesn’t think the spending malaise will hit bottom until the second half of 2010 as mounting layoffs depress sales even further next year.

Michael P. Niemira, chief economist at the International Council of Shopping Centers, expects same-store sales will fall as much as 1 percent for the November and December period, but fears the decline could even be steeper. Same-store sales are sales at stores open at least a year and are a key indicator of a retailer’s health. That would be the worst performance for the holidays since at least 1969 when the index began, Niemira said.

The only holiday period that came even close was 2002, which posted a meager 0.5 percent same-store sales gain.

Both he and Hastings declined to offer sales forecasts for next year, given so much economic uncertainty.

“It’s just not clear where the bottom is,” Niemira said. “It depends on when we get our hands around the financial crisis.”

In a sign of their distress, merchants from department stores to discounters are turning to liquidators to unload everything from iPods and jewelry to apparel.

Liquidity Services Inc., which auctions surplus goods from stores and manufacturers to dollar stores and small resellers, said it averaged about 1,250 auctions per day in the past week, up 30 percent from a year ago. CEO Bill Angrick expects to maintain that pace through at least New Year’s Day.

“Stores are taking daily pulse checks and are pulling merchandise from the shelves,” Angrick said. “They would rather have the cash to fund their operating needs in the post-holiday season.” Retailers can get up to 80 percent of wholesale costs, which is often half the retail price.

Ten

Ten “outrageous” predictions for 2009 from Saxo Bank

How many will come true?

Copenhagen-based Saxo Bank has provided the following list of “rare but high impact” predictions. Here they are, with my comments:

I agree, but this is hardly a big deal. Iran is facing a growing generation gap, as well as numerous internal problems. However, Iran’s stock markets are doing much better than stock markets in other countries.

I agree that it will at least be close. This is an interesting one.

Oil was selling for $147 per barrel just a few months ago, boosted by China’s seemingly unending thirst for every drop of oil it could get. By the Law of Mean Reversion, the price of oil had to crash, and remain low for years, and that seems to be happening now.

There’s an amusing twist to this situation. You may recall that last summer, many ideological pundits were blaming the high oil prices on “speculators.” As I explained at the time, that was impossible, since there was no evidence of hoarding oil, and it would be necessary for millions of barrels of oil to be hoarded to make any real difference in price.

Well, the amusing twist is that speculators are trying to hoard oil today. Here’s the story:

The host of very large crude carriers (VLCCs) are camped out at various locations across the globe including: the U.S. Gulf of Mexico, the North Sea, in India and also in Malaysia. Royal Dutch Shell, BP and Koch Industries are among the companies thought to be stock-piling reserves in hope of a Christmas bonus, if OPEC price cuts send prices rising once again.

More sensational – yet unconfirmed – reports have estimated that there are in the region of 300 vessels floating, like sitting ducks, outside of the port of Fujairah in the United Arab Emirates alone.

In addition several state oil companies, from countries such as Iran, are thought to be behind the surplus storage activity. The speculation has stemmed from three of Iran’s supertankers: Noah, Dena, and Manah, having all been at, or near, the country’s Kharg Island loading facility since before the beginning of December – according to AISLive ship-tracking data. …

The increased activity in tanker markets, according to Jens Martin Jensen (acting Managing Director and Chief Executive Officer of Frontline), can be directly attributed to the oil market’s contango structure –where near-term futures contracts are cheaper than contracts further into the future. Such an upward sloping forward curve provides producers with the incentive to sit upon crude supplies so to secure higher anticipated returns in the future.”

So what the pundits were claiming the speculators were doing last spring is actually what the speculators are doing today, hoping that the price of oil will go back up. But the speculators are failing.

The real reason for the fall in the price of oil and other commodities is the collapse of world wide transportation and trade, and that’s related to the rapid collapse of the Chinese economy.

The price of oil is still plummeting, and may reach $25 per barrel, as the Saxo Bank predicts.

Let’s go on to the next prediction:

As I’ve been saying since 2002, Generational Dynamics predicts a stock market fall to the Dow 3000-4000 range, or lower, since the stock market has been overpriced by 200% until recently. However, the timing (end of 2009) cannot be predicted.

This is a political prediction, reflecting the weakness of Italy’s economy.

In 2004, I posted an article on how euro zone countries could withdraw from the euro, and return to their national currencies, based on a report by JP Morgan. As far as I know, that mechanism still holds today.

For the last couple of years, the Australian dollar versus Japanese yen exchange rate was about AU$1 = 100 yen. Starting in August of this year, the Australian dollar started collapsing, and is now at 60 yen. The Saxo Bank prediction is 40 yen.

Australia’s problems are related to the falling commodities prices and, once again, that’s related to the collapse of worldwide transportation and trade. In particular, Australian firm Rio Tinto, the second largest mining firm in the world, is laying off 14,000 workers.

The exchange rate reached almost $1.60 per euro last year. Since then, the dollar strengthened to $1.25 per euro, and has weakened again to $1.40 per euro. The Saxo Bank prediction is that the dollar will strengthen further against the euro.

This is counter-intuitive to a lot of pundits, who have been predicting inflation or hyperinflation for the dollar.

Generational Dynamics is able to make broad predictions based on generational trends, but specific exchange rate predictions are not possible.

Several months ago, I wrote “What’s coming next: Understanding the deflationary spiral,” in which I explained what’s going on with currencies, and why the dollar and the yen were getting stronger, while the euro was getting weaker.

Pundits have been predicting that the US dollar would experience inflation or even hyperinflation (like the Weimar republic experience,) but that has never made any sense, because of the collapse of the credit bubble.

The dollar and the yen have, in fact, been strengthening against other currencies (the yen more than the dollar), which is what we’d expect from the trend prediction. The Saxo Bank prediction says that the trend prediction will continue.

The rapid collapse of the Chinese economy makes this prediction almost a sure bet.

Eastern European countries are highly dependent on Russia for energy.

Commodities prices are falling rapidly.

Putting any long-term faith in China’s economy is definitely counter-trend. China’s economy is collapsing rapidly, and will continue to do so.

Furthermore, China is becoming increasingly politically unstable, and is approaching a civil war.

In the end, the ten “outrageous” Saxo Bank predictions aren’t really all that outrageous (except for the last), since most of them generally follow trends predicted by Generational Dynamics for years.

(Comments: For reader comments, questions and discussion, as well as more frequent updates on this subject, see the Financial Topics thread of the Generational Dynamics forum. Read the entire thread for discussions on how to protect your money.)

FLASH BACK 18 MONTHS @ MASTERS OF FINANCIAL MARKET

Here is my proposal how we can be the market beaters:-

Concluding my thoughts by the famous saying TOUGH TIME NEVER LAST BUT TOUGH PEOPLE LIKE US DOO…and emerge as a winner. 

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There are four criteria required for stocks to be considered: high predictability based on earnings variance and quality, recent history of a dividend increase (higher than it was 12 months ago), a dividend yield advantage versus their respective benchmark, and relatively high overall quantitative scores (based on value, growth, momemtum and predictability).

Within the S&P/TSX composite index, the stable, above-average dividend yielders are Telus Corp. (TU), TransCanada Corp. (TRP), Fortis Inc. (FRTSF.PK), Shaw Communications Inc. (SJR), Enbridge Inc. (ENB), Rogers Communications Inc. (RCI), Saputo Inc. (SAPIF.PK) and ATCO Ltd. (ATCO)

Twenty names made the cut among Russell 1000 stocks, including Verizon Communications Inc. (VZ), Coca-Cola Co. (KO), Kellogg Co. (K), Johnson & Johnson (JNJ), Hasbro Inc. (HAS), Norfolk Southern Corp. (NSC) and Abbott Laboratories (AT). Full : http://tinyurl.com/9ymgb5

This weeks top 10 personal finance stories

from marketwatch: http://tinyurl.com/8jot79

Market Analysis

Market Behavior.  The plots of the two leading indices, the S&P 500 and the Nasdaq 100, provided for the most recent 30 business days, are supplemented by trend lines and by the 30-day moving average (in red).  The tredn lines ae obtained by regression analysis of the local highs and lows in the region shown.

The plots show clearly the ongoing recovery since the last bottom experienced 3 weeks ago.  In fact, the market has gained nearly 15% during this short time.  Note, however, the recent narrowing of the trend lines.  This usually indicates that we can expect in the very near future either a sharp increawe or a strong decline.  Our MACD analysis sugests that a decline is now more likely than contined recovery, but no one really knows.

Stepping for a moment beyond technical analysis, common sense tells us that the deep auto industry crisis is not going away any time soon.  In fact, as long as Detroit arrgantly insists on manuafcturing inferior cars - American consumers will simply continue purchasing the better Japanese models assembled in the South…  Therefore, don’t be surprised if the maarket starts another substantial decline in the next week or two.

Our Timing Systems.  We use two independent timing systems, referred to as slow and fast.  The slow system is based on conventional trend analysis, and its main ingredient is a modified MACD (Moving Average Convergence-Divergence) approach, determining and extending the trend of the most recent 30 business days.

The fast timing system is our original contribution.  It uses volume data of the most recent 15 days and provides daily forecasts – one day at a time.  It is fairly reliable for the upcoming 1-2 dys.  For both systems we update our calculations daily.  In the slow system trades are typically carried out 2-3 times a month, while in the fast system trades are performed almost every day.

The trades leading to our investment returns are carried out within the Rydex funds, providing a large variety of pairs of index funds, direct and inverse.  Changes in the direct funds are in phase with market changes, while for inverse funds they are out of phase – in fact opposed to them.  You can find a lot more about the Rydex funds in www.rydexfunds.com.

Investment Returns.  The table below compares the market and out investment returns.  All returns reported are our real time returns obtained in managed accounts.  On occasions people have stated that some of out results are “too good to be true”.  To remove any doubt we provide, upon request, fund financial statements for the timing system and period of interest.  If interested, you can drop us a note, and you will get the appropriae statement by return email.

The table is organized in two groups.  The upper 4 rows provides returns for completed periods, and the returns are provided with two decimal figures.  The lower 3 rows are for ongoing periods changing every day, and the returns are provided with one decimal figure.

As to the returns, 2007 was a decent year in the market, and both of our timing systems have outperformed the market.  As to 2008, it has been very problematic, especially the October crash, and the table is sprinkled with too many minus signs.  So far our timing systems have not handled well the market crash in the second half of 2008.

 

Nathan Jacobi, Ph.D.

Registered Investment Advisor

n.jacobi@shrago.net

T Bond bubble

Current thoughts;

T Bonds are overbought, there is a Proshares ultrashort fund ETF.  They may stay overbought for sometime but have only been so overbought to same degree as they are now, 5 times in last 30 years.  Mean reversion trade.

There is a leveraged oil ETF, SOIL which has lost 95% of its value this year down from $80 to $6 now.  Potential buy and wait trade.

Review of $VIX, looks like will retrace to 50 dma, then spike upwards again in 1sr quarter, meaning current rally in S&P index has limited duration.

Gold Bugs index ($HUI) has rallied 100% from 150 to 300 in last few weeks.  Will probably pull back a little short term.

Softs will base for some time but will be a good buy in 2009.  Would like to buy position in Arabica (KC) at around 100 c.

Best looking trade at moment is potential breakout higher from basing/volatility squeezes in grains, softs.

Current fall in commodity prices will ensure higher prices in 5 years due to lack of investment.

An Imperfect Offering, by James Orbinski

And that is exactly what James Orbinski is unafraid to do - for as a doctor with MSF (Medecins Sans Frontieres or Doctors Without Borders) in some of the most brutal conflicts of the last 30 years, he was faced with such atrocity daily. And it was not a faceless atrocity as it is for us, tucked safely away in our homes, where human tragedy can be dismissed with a click of the remote, but for Orbinski each person had a face and while he treated them, they were human beings rather than unfathomable statistics.

An Imperfect Offering: Humanitarian Action in the Twenty-First Century is Orbinski’s honest, unflinching memoir of his life as doctor and humanitarian and a profound meditation on how humanitarian needs can be addressed and implemented in today’s society. As the book progresses and Orbinski travels conflict to conflict, the reader notices the increasing complexity of humanitarian involvement, the increased politicization of something that should in essence be apolitical - people’s right to exist, or as Orbinski puts it, the right to “a space to be fully human.”

The book is divided into three parts. The first details Orbinski’s decision to become a doctor and to join MSF. Here we travel with Orbinski to Rwanda (pre-genocide), Somalia and Afghanistan. In each of these chapters Orbinski offers first a detailed explanation of the political situation, and though I sometimes became mired in acronyms, names and geographic considerations (for those who will read it, the index serves as a handy acronym guide), Orbinski sets things out as clearly as possible, and I was hindered more by my own ignorance than any failing on his part. After establishing the place and the conflict, Orbinski offers the first-hand stories that lend the book its poignancy. Orbinski’s writing is never overdramatic or overly sanctimonious, which is difficult in such a tragic and emotionally-charged situation. He realizes the events themselves are tragic enough without need for embellishment. I will spare you the truly horrifying personal stories, which are used sparingly, but effectively, for how else are we to even begin to comprehend these incomprehensibly violent acts? These stories are for the most part saved for part two of the book, during the actual genocide, but part one is no easy read.  After Orbinski leaves Rwanda after his research trip, he wrote in his report:

“It may seem naively idealistic, but I know that as long as we can imagine a better tomorrow, we can work towards a better tomorrow. Such idealism has seeded the world with some of its greatest accomplishments and social institutions. I can change my own life and practices to make these ideals live in what I do today. “

As inspiring as these words are, they are vastly different from the ones Orbinski will utter as he leaves Rwanda the second time.

The  entire second part of the book is dedicated to the civil war in Rwanda, where Orbinski serves as Chef de Mission for MSF in Kigali. These are reports from Hell-on-Earth (in fact, Dallaire’s memoir is entitled Shake Hands with the Devil) where  500,000 to 1,000,000 people would be killed in government-sponsored genocide and RPF reprisals. Orbinski details the day-to-day negotiations that were required for survival when surrounded by the waging war between the militant Hutu Government and it’s  Interahamwe militias and the Tutsi Rwandan Patriotic Front (RPF) who had been driven to Uganda in the late 80s and early 90s and launched guerrilla incursions from there. Simply getting supplies, getting to people who needed help, and avoiding the calls for assassination of MSF expatriates over the RTLM (government-controlled radio station) were day to day battles. Despite reports to the UN from General Romeo Dallaire, that a genocide was imminent, the UN carefully avoided declaring the crisis a genocide, for labelling it as such would have necessitated immediate action, and thus the UNAMIR (United Nations Assistance Mission in Rwanda) lacked the political support and supplies to offer any protection to the humanitarian forces or civilians involved. And the UN wasn’t alone in refusing to acknowledge the reality of the situation: one of the novel’s more alarming moments was when the U.S. government, which also denied a genocide was occurring, urged that the newly released Schnidler’s List should be shown worldwide for “The most effective way to avoid the recurrence of genocidal tragedy is to ensure that past acts of genocide are not forgotten.”

At the end of the second part, which Orbinski labels his “undoing”, note the difference that his second trip to Rwanda has wrought [Orbinski is treating a young girl who hid in a latrine and watched her parents hacked to death with machetes by the Interahamwe]:

“I felt both despair and rage. Despair that she knew intimately our capacity for the most extreme acts of cruelty; that she was alone.Animals could never do this. Animals can be brutal, but only humans can be rationally cruel. We can choose anything, we can be anything, we can get used to anything, I thought. Only humans can be evil. Only humans can make this choice. I felt my heart pounding and I wanted a gun. I wanted to kill the men who had doen this to her. I wanted to pull the trigger again and again and again. My heart was racing; I was fighting for tears, gasping for air, for freshness, for something other than this. Then Eli clasped by arm with his strong hands. I felt an overpowering despair for the little girl, for myself, for all of us - that we can be alone, trapped in our passions, in our reasons, in our minds, in our politics, that I and those men could be so angry and so strong.”

And yet despite seeing and experiencing man’s darkest hour, Orbinski remains committed to humanitarian action. He continues to work in refugee camps in Zaire, where many Rwandans have fled, yet the UN and world governments refuse to acknowledge these people who have been “airbrushed from history.” He eventually becomes the first international president of MSF, accepting the Nobel Peace Prize when MSF was granted it in 1999. In his acceptance speech for the award, Orbinski states: “The humanitarian act is the most apolitical of all acts, but if its actions and its morality are taken seriously, it has the most profound of political implications.”

He struggles with these politics of humanitarianism in North Korea and Kosovo. In North Korea, the government restricted humanitarian access to certain areas, masking the areas of worst offense, and demanding control over distribution of food and medicine, which was then given only to those seen loyal to the army and the state. Eventually, MSF realized they were in fact suporting the regime, by lending it a sort of humanitarian respectability and consequently masking much of the real suffering that existed. Faced with the decision between helping those they could and propping up a regime that would prevent them from the free distribution of aid, they pulled out, and spoke out against “making humanitarian assistance conditional on political and not humanitarian objectives.” They appealed for “independent, impartial needs-based humanitarian assistance” - once again, a space for equivocal access and care for all.  In Kosovo, MSF witnessed NATO using humanitarian action as as a justification for military and political intervention (which of course brings to mind the situation in today’s Iraq and Afghanistan). Orbinski also spends a chapter discussing MSF’s Access to Essential Medicines Campaign, which discusses the wanton capitalistic greed of pharmaceutical companies and the ways in which MSF has fought to circumvent patent laws and secure generic versions of drugs for distribution in the developing world.

This is not an easy book to read, nor should it be, for the reason it is so hard to read is that the occurrences of these crises were so easy to ignore. But I am reminded of the battle-cry of this book: Ummera, or Courage. Because as one nurse says as she treats a struggling young girl receiving treatment, “Sometimes you just have to find your courage.” And this is above all a story of courage: of Orbinski, of his fellow NGO workers, of the people who walk miles with sick children on their backs, who wait outside clinics for days, who have the courage to move forward from the violence of the past. It also demands courage of us who skim the headlines of papers and consider ourselves ‘informed’ .  If nothing else, we must have the courage to bear witness to these events, as frightening and uncomfortable as they may seem. As one artist working in Sri Lanka says, “I have learned that fear is the mother of fearlessness, and the beginning of possibility.”

In his epilogue, Orbinski offers some advice for those who wish to help support the humanitarian cause and promote life and dignity for the oppressed and the suffering throughout the world:

Orbinski offers some organizations which he has worked with as places to start, which I will link here. Dignitas International, Medecins Sans Frontieres/Doctors Without Borders, Drugs for Neglected Diseases Initiative, Hope for Rwanda’s Children Fund, SAFER, War Child, The Global Alliance for TB Drug Development, Amnesty International, and Human Rights Watch. Having read this book, I’m going to pick one of these to follow - and make it my new year’s resolution to follow through. It will be difficult not to take the easy way out, to make a one-time donation, to ignore email alerts, but if people like James Orbinski can offer years of their lives and risk their personal safety for others, surely, it’s the least we can do. For in the words of Leonard Cohen’s  “Anthem” that inspired the book’s title:

December 21, 2008

Oh! Do not attack me with your watch. A watch is always too fast or too slow. I cannot be dictated to by a watch. Jane Austen (1775-1817)

Eternal Spring. Charles C. Mann leads a tour of Japan’s mountain baths and hot springs.  http://tinyurl.com/8fc4eb

How did we get here.  White House Philosophy Stoked Mortgage Bonfire.  http://tinyurl.com/6t7uz6.  “For much of the Bush presidency, the White House was preoccupied by terrorism and war; on the economic front, its pressing concerns were cutting taxes and privatizing Social Security. The housing market was a bright spot: ever-rising home values kept the economy humming, as owners drew down on their equity to buy consumer goods and pack their children off to college.

Lawrence B. Lindsay, Mr. Bush’s first chief economics adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Mr. Bush meet housing goals.

“No one wanted to stop that bubble,” Mr. Lindsay said. “It would have conflicted with the president’s own policies.”

With average household debt rising from about 75 per cent of annual disposable income in 1990 to very nearly 130 per cent on the eve of the crisis, a large proportion of American families are submerging under the weight of their accumulated borrowings. British households are in even worse shape.

Looking back, we now see just how big a proportion of US growth since 2001 was financed by mortgage equity withdrawals. Without that as a means of financing consumption, the economy would barely have grown at 1 per cent a year under President George W. Bush. Looking forward, we see just how hard it will be to stabilise property prices and the prices of the securities based on them. Already, at the end of September, one in 10 American home owners with a mortgage was either at least a month in arrears or in foreclosure. One in five mortgages exceeds the value of the home it was used to purchase…”http://tinyurl.com/5xva4d

When consumers get depressed.  http://tinyurl.com/7yfw9wThe Return of Depression Economics, by Paul Krugman, is certain to be one of the most gifted books this holiday season; that’s what happens when you combine a Nobel Prize with a massive economic crisis and book with the word “depression” in the title. Here’s another reason to buy it for someone, as I found out: it’s so short you can read it in a couple of hours before wrapping it up.

The title of the book refers broadly to the recurrence of a need to deal with Depression-style economic threats, a theme that originally (in the 1999 edition) referred to the emerging markets crisis of 1997-98 and and the stagnation in Japan caused by the collapse of their housing bubble at the beginning of the 1990s. More particularly, however, it refers to the problems brought on by a collapse in economic demand - “insufficient private spending to make use of the available productive capacity,” as Krugman puts it. And it seems clear that that’s where we are today.

The Case-Shiller index of housing prices reached its peak in real terms sometime in 2006, but the economy continued to grow until the end of 2007, even as housing prices fell significantly. Although the negative wealth effect of falling housing must have had some effect, people still wanted to spend. When the severe phase of the crisis began in September 2008, it was widely described as a credit crunch, meaning that reductions in the supply of credit were making it difficult for borrowers to get the money they needed, either for investment or consumption. Today, however, as Simon has said before, falling demand for credit may be just as big a problem. People just don’t want to borrow money any more, and if that’s the case, then increasing the supply of credit (by funneling cash into banks) will have only a limited effect, as we’ve seen. This is what Krugman finds most worrying about the current situation: the “loss of policy traction,” in which even dramatic moves by the Fed have only a limited impact ont he real economy.

He doesn’t quite come out and say it in so many words, but a lot of Krugman’s story has to do with what might be called psychology. He describes how economic crises may be the product of poor governmental policies and weak economic fundamentals - or they may be entirely the product of panics that have the very real effect of destroying wealth and setting countries back for years. Seen from this perspective, the scale of the current crisis may not have any proportional relationship to the fundamental flaws of our economy (or the global economy). It may simply reflect the fact that the scale, liquidity, and leverage of the global financial system have made it possible for panics to have much greater damage than they did in the past. (I know we’re still not dealing with anything on the scale of the Great Depression, but while the financial system was simpler then, it also had a simpler flaw - the lack of deposit insurance - and a simpler mistake - the failure to expand monetary policy in response to the downturn.)

In any case, it’s a quick read, and for those who are nervous about Krugman’s politics they make only a very brief entry near the end.”

3 Things that Christmas can do for you

20 December 2008. City Harvest Church. Sermon by Rev. Kong Hee

Main Biblical passage: John I : 4 - 5 (NLT) 

4 The Word gave life to everything that was created, and his life brought light to everyone. 5 The light shines in the darkness, and the darkness can never extinguish it.

There are three things that Christmas can do for you:

1. Let Jesus make you a person of Vision. Vision is necessary for successful victorious living. And Vision is given by God. In vision / dreams there are no limitations. 

2. Let Jesus make you a person of Value. Diamond looks so glorious because it shines. If we apply this context to man, then we have to shine for God. In other words, we got to up our value all the time. If your value never go up, you’ll never got promoted.

Refer to 2 Corinthians 3:18. (NLT) So all of us who have had that veil removed can see and reflect the glory of the Lord. And the Lord—who is the Spirit—makes us more and more like him as we are changed into his glorious image.

Note: Reflect is the result of shining, while more and more like him means we need to increase our value. 

3. Let Jesus make you a person of compassion

Isaiah 60: 19 (NLT)

How to have the light of God?…The answer is in Isaiah 58

Isaiah 58: 7 - 8 (NLT)

Isaiah 58 tells us to reach to the poor, the hunger, the afflicted. 

Isaiah 61: 1 (NLT) 

Isaiah 61 tells us to comfort the brokenhearted, the lonely. 

My Goals for 2009.       Name: Roan Yong.    CG: NA

Christmas Songs:

Silent Night

Joy to the World

We Wish you a Merry Christmas

SIKKIM: Sikkim ranks high on environmental sustainability index

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MANKIND IN ACTION FOR RURAL GROWTH

AUTOWORKERS TO RALLY AT THE DETROIT AUTO SHOW, Sunday, January 11, 1PM, Hart Plaza, Detroit, Michigan

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The loan calls for conditions that would gamble half of the fund paying for retiree health care in company stock, while wages and working conditions are expected to be “competitive” with those of workers in non-union internationally-owned transplants in the South. Auto workers in the South will continue to lose ground at the same time, as their companies look to index their wages with state averages rather than UAW standards.

Lowering wages and weakening work conditions in auto will only further erode wages and benefits of all workers and will do nothing to help alleviate the auto industry’s crisis. Auto worker wages make up only 5% of the sticker cost of a Big Three vehicle. Why are auto workers making the sacrifices?

The last rank-and-file led auto worker rally of the Detroit auto show was in 2006 after Delphi announced bankruptcy, threatening the jobs and benefits of thousands of auto workers while executives banked the big bucks.

Auto workers have called for long-term solutions to the crisis facing U.S. industry such as green conversion and environmentally sustainable production. Workers have also been advocating for support of a national single-payer health care program that would level the playing field for U.S. workers. The fight for union contracts is also a central theme, with workers backing the Employee Free Choice Act, which makes the road to unionization fairer.

Auto workers have invited workers in all industries and the community to the rally, knowing that if the Bush administration and their allies in Congress are able to get these concessions, wages and benefits of all workers will suffer.

UNHCR Launches

In order to raise funds for helping all the IDP’s (internally displaced people) in the DR Congo, the UNHCR has launched a Gimme Shelter Campaign.

The campaign features a video set to music of the UNHCR work in the camps in the DR congo.

The long version of the video is here and the short version here.

Here are some more UNHCR Congo links:

DRC: UNHCR and other aid agencies visit the area

DRC: Concerns at Kibati camp as transfers continue

UNHCR concerned about violence in North Kivu as aid worker killed

DRC: UNHCR deplores murder of Italian NGO staffer; rebels reportedly pressuring IDPs to return

UNHCR has received worrying reports that the rebels are stopping people trying to reach the site near the MONUC base. The rebel group has reportedly recruited youths to conduct night patrols and to prevent people from reaching the site.

Ben Affleck video unveiled for UNHCR “Gimme Shelter” campaign

Gimme Shelter: Ben Affleck and UNHCR launch campaign for Congolese

UNHCR Country Index for DR Congo

DRC: UNHCR urges forces to respect humanitarian principles

Friedman, Kristof and Rich

Mr. Friedman, writing from Hong Kong, gives us “China to the Rescue?  Not!” in which he says the partnership between Chinese and American enterprises is about to undergo a radical restructuring as a result of the current economic crisis.  Let us all hope that China doesn’t call for repayment of our debt…  Mr. Kristof, in “Bleeding Heart Tightwads,” says that liberals show tremendous compassion in pushing for government spending to help the needy, but when it comes to individual contributions to charitable causes, they are cheapskates.  Mr. Rich asks “Who Wants to Kick a Millionaire?”  His point is that without transparency and accountability in Washington, as well as on Wall Street, no one will trust the system.  Here’s The Moustache of Wisdom:

I had no idea that many of those oil paintings that hang in hotel rooms and starter homes across America are actually produced by just one Chinese village, Dafen, north of Hong Kong. And I had no idea that Dafen’s artist colony — the world’s leading center for mass-produced artwork and knockoffs of masterpieces — had been devastated by the bursting of the U.S. housing bubble. I should have, though.

“American property owners and hotels were usually the biggest consumers of Dafen’s works,” Zhou Xiaohong, deputy head of the Art Industry Association of Dafen, told Hong Kong’s Sunday Morning Post. “The more houses built in the United States, the more walls that needed our paintings. Now our business has frozen following the crash of the Western property market.”

Dafen is just one of a million Chinese and American enterprises that constitute the most important economic engine in the world today — what historian Niall Ferguson calls “Chimerica,” the de facto partnership between Chinese savers and producers and U.S. spenders and borrowers. That 30-year-old partnership is about to undergo a radical restructuring as a result of the current economic crisis, and the global economy will be highly impacted by the outcome.

After all, it was China’s willingness to hold the dollars and Treasury bills it had earned from exporting to America that helped keep U.S. interest rates low, giving Americans the money they needed to keep buying shoes, flat-screen TVs and paintings from China, as well as homes in America. Americans then borrowed against those homes to consume even more — one reason we enjoyed rising wealth without rising incomes.

This division of labor not only nourished our respective economies, but also shaped our politics. It enabled China’s ruling Communist Party to say to its people: “We will guarantee you ever-higher standards of living and in return you will stay out of politics and let us rule.” So China’s leaders could enjoy double-digit growth without political reform. And it enabled successive U.S. administrations, particularly the current one, to tell Americans: “You can have guns and butter — subprime mortgages with nothing down and nothing to pay for two years, ever-higher consumption and two wars, without tax increases!”

It all worked — until it didn’t.

With unemployment now soaring across the U.S., said Stephen Roach, the chairman of Morgan Stanley Asia, Americans — “the most over-extended consumer in world history” — can no longer buy so many Chinese exports. We need to save more, invest more, consume less and throw out most of our credit cards to bail ourselves out of this crisis.

But as that happens, we need China to take our discarded credit cards and distribute them to its own people so they can buy more of what China produces and more imports from the rest of the world. That’s the only way Beijing can sustain the minimum 8 percent growth it needs to maintain the political bargain between China’s leaders and led — not to mention pick up some of the slack in the global economy from America’s slowdown.

However, if I’ve learned one thing here, it’s just how hard doing that will be. China’s whole system and culture nourish saving, not spending, and changing that will require a huge “cultural and structural” shift, said Fred Hu, chairman for Greater China for Goldman Sachs.

In China, for instance, to buy a home you have to put at least 20 percent down, and the average is 40 percent. If you try to walk away from the mortgage, the bank will come after your personal assets. Moreover, China can’t just shift production from the U.S. market to its own consumers. Not many Chinese villagers want to buy $400 tennis shoes or Christmas tree ornaments.

Also, China has no real Social Security, health insurance or unemployment insurance. Without that social safety net, it’s hard to see how Chinese don’t end up saving most of their stimulus. “You open up the newspaper every day and you hear about this factory shutting down or that supplier going belly up,” said Willie Fung, whose company, Top Form International, is the world’s leading bra maker. “You can never be too careful in this financial climate.”

As such, “the world should not have a false hope that China can cushion the global downturn,” by stimulating its domestic demand in a big way, said Frank Gong, head of China research for JPMorgan Chase. “The best thing China can do is keep its own economy stable.”

It’s good advice. China is not going to rescue us or the world economy. We’re going to have to get out of this crisis the old-fashioned way: by digging inside ourselves and getting back to basics — improving U.S. productivity, saving more, studying harder and inventing more stuff to export. The days of phony prosperity — I borrow cheap money from China to build a house and then borrow on that house to buy cheap paintings from China to decorate my walls and everybody is a winner — are over.

I guess it’s nice to know where “sofa art” comes from.  I always assumed it was done by machines…  Here’s Mr. Kristof:

This holiday season is a time to examine who’s been naughty and who’s been nice, but I’m unhappy with my findings. The problem is this: We liberals are personally stingy.

Liberals show tremendous compassion in pushing for generous government spending to help the neediest people at home and abroad. Yet when it comes to individual contributions to charitable causes, liberals are cheapskates.

Arthur Brooks, the author of a book on donors to charity, “Who Really Cares,” cites data that households headed by conservatives give 30 percent more to charity than households headed by liberals. A study by Google found an even greater disproportion: average annual contributions reported by conservatives were almost double those of liberals.

Other research has reached similar conclusions. The “generosity index” from the Catalogue for Philanthropy typically finds that red states are the most likely to give to nonprofits, while Northeastern states are least likely to do so.

The upshot is that Democrats, who speak passionately about the hungry and homeless, personally fork over less money to charity than Republicans — the ones who try to cut health insurance for children.

“When I started doing research on charity,” Mr. Brooks wrote, “I expected to find that political liberals — who, I believed, genuinely cared more about others than conservatives did — would turn out to be the most privately charitable people. So when my early findings led me to the opposite conclusion, I assumed I had made some sort of technical error. I re-ran analyses. I got new data. Nothing worked. In the end, I had no option but to change my views.”

Something similar is true internationally. European countries seem to show more compassion than America in providing safety nets for the poor, and they give far more humanitarian foreign aid per capita than the United States does. But as individuals, Europeans are far less charitable than Americans.

Americans give sums to charity equivalent to 1.67 percent of G.N.P., according to a terrific new book, “Philanthrocapitalism,” by Matthew Bishop and Michael Green. The British are second, with 0.73 percent, while the stingiest people on the list are the French, at 0.14 percent.

(Looking away from politics, there’s evidence that one of the most generous groups in America is gays. Researchers believe that is because they are less likely to have rapacious heirs pushing to keep wealth in the family.)

When liberals see the data on giving, they tend to protest that conservatives look good only because they shower dollars on churches — that a fair amount of that money isn’t helping the poor, but simply constructing lavish spires.

It’s true that religion is the essential reason conservatives give more, and religious liberals are as generous as religious conservatives. Among the stingiest of the stingy are secular conservatives.

According to Google’s figures, if donations to all religious organizations are excluded, liberals give slightly more to charity than conservatives do. But Mr. Brooks says that if measuring by the percentage of income given, conservatives are more generous than liberals even to secular causes.

In any case, if conservative donations often end up building extravagant churches, liberal donations frequently sustain art museums, symphonies, schools and universities that cater to the well-off. (It’s great to support the arts and education, but they’re not the same as charity for the needy. And some research suggests that donations to education actually increase inequality because they go mostly to elite institutions attended by the wealthy.)

Conservatives also appear to be more generous than liberals in nonfinancial ways. People in red states are considerably more likely to volunteer for good causes, and conservatives give blood more often. If liberals and moderates gave blood as often as conservatives, Mr. Brooks said, the American blood supply would increase by 45 percent.

So, you’ve guessed it! This column is a transparent attempt this holiday season to shame liberals into being more charitable. Since I often scold Republicans for being callous in their policies toward the needy, it seems only fair to reproach Democrats for being cheap in their private donations. What I want for Christmas is a healthy competition between left and right to see who actually does more for the neediest.

Of course, given the economic pinch these days, charity isn’t on the top of anyone’s agenda. Yet the financial ability to contribute to charity, and the willingness to do so, are strikingly unrelated. Amazingly, the working poor, who have the least resources, somehow manage to be more generous as a percentage of income than the middle class.

So, even in tough times, there are ways to help. Come on liberals, redeem yourselves, and put your wallets where your hearts are.

If you’re looking for a place to give, please consider the ASPCA (I have an ongoing monthly gift), or Heifer International (on my Christmas list every year), or Kiva (I’ve made a number of loans, all but one of which were 100% repaid).  I ask friends to give chicks or honeybees in my name as gifts to me because I have more “stuff” than I know what to do with an don’t need any more.

Now here’s Mr. Rich:

During the Great Depression, American moviegoers seeking escape could ogle platoons of glamorous chorus girls in “Gold Diggers of 1933.” Our feel-good movie of the year is “Slumdog Millionaire,” a Dickensian tale in which we root for an impoverished orphan from Mumbai’s slums to hit the jackpot on the Indian edition of “Who Wants to Be a Millionaire.”

It’s a virtuoso feast of filmmaking by Danny Boyle, but it’s also the perfect fairy tale for our hard times. The hero labors as a serf in the toilet of globalization: one of those mammoth call centers Westerners reach when ringing an 800 number to, say, check on credit card debt. When he gets his unlikely crack at instant wealth, the whole system is stacked against him, including the corrupt back office of a slick game show too good to be true.

We cheer the young man on screen even if we’ve lost the hope to root for ourselves. The vicarious victory of a third world protagonist must be this year’s stocking stuffer. The trouble with “Slumdog Millionaire” is that it, like all classic movie fables, comes to an end — as it happens, with an elaborately choreographed Bollywood musical number redolent of “Gold Diggers of 1933.” Then we are delivered back to the inescapable and chilling reality outside the theater’s doors.

Just when we thought that reality couldn’t hit a new bottom it did with Bernie Madoff, a smiling shark as sleazy as the TV host in “Slumdog.” A pillar of both the Wall Street and Jewish communities — a former Nasdaq chairman, a trustee at Yeshiva University — he even victimized Elie Wiesel’s Foundation for Humanity with his Ponzi scheme. A Jewish financier rips off millions of dollars devoted to memorializing the Holocaust — who could make this stuff up? Dickens, Balzac, Trollope and, for that matter, even Mel Brooks might be appalled.

Madoff, of course, made up everything. When he turned himself in, he reportedly declared that his business was “all just one big lie.” (The man didn’t call his 55-foot yacht “Bull” for nothing.) As Brian Williams of NBC News pointed out, the $50 billion thought to have vanished is roughly three times as much as the proposed Detroit bailout. And no one knows how it happened, least of all the federal regulators charged with policing him and protecting the public. If Madoff hadn’t confessed — for reasons that remain unclear — he might still be rounding up new victims.

There is a moral to be drawn here, and it’s not simply that human nature is unchanging and that there always will be crooks, including those in high places. Nor is it merely that Wall Street regulation has been a joke. Of what we’ve learned about Madoff so far, the most useful lesson can be gleaned from how his smart, well-heeled clients routinely characterized the strategy that generated their remarkably steady profits. As The Wall Street Journal noted, they “often referred to it as a ‘black box.’ ”

In the investment world “black box” is tossed around to refer to a supposedly ingenious financial model that is confidential or incomprehensible or both. Most of us know the “black box” instead as that strongbox full of data that is retrieved (sometimes) after a plane crash to tell the authorities what went wrong. The only problem is that its findings arrive too late to save the crash’s victims. The hope is that the information will instead help prevent the next disaster.

The question in the aftermath of the Madoff calamity is this: Why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown? The lesson could not be more elemental. If there’s a mysterious financial model producing miraculous returns, odds are it’s a sham — whether it’s an outright fraud, as it apparently is in Madoff’s case, or nominally legal, as is the case with the Wall Street giants that have fallen this year.

Wall Street’s black boxes contained derivatives created out of whole cloth, deriving their value from often worthless subprime mortgages. The enormity of the gamble went undetected not only by investors but by the big brains at the top of the firms, many of whom either escaped (Merrill Lynch’s E. Stanley O’Neal) or remain in place (Citigroup’s Robert Rubin) after receiving obscene compensation for their illusory short-term profits and long-term ignorance.

There has been no punishment for many of those who failed to heed this repeated lesson. Quite the contrary. The business magazine Portfolio, writing in mid-September about one of the world’s biggest insurance companies, observed that “now that A.I.G is battling to survive, it is its black box that may save it yet.” That box — stuffed with “accounting or investments so complex and arcane that they remain unknown to most investors” — was so huge that Washington might deem it “too big to fail.”

Sure enough — and unlike its immediate predecessor in collapse, Lehman Brothers — A.I.G. was soon bailed out to the tune of $123 billion. Most of that also disappeared by the end of October. But not before A.I.G. executives were caught spending $442,000 on a weeklong retreat to a California beach resort.

There are more black boxes still to be pried open, whether at private outfits like Madoff’s or at publicly traded companies like General Electric, parent of the opaque GE Capital Corporation, the financial services unit that has been the single biggest contributor to the G.E. bottom line in recent years. But have we yet learned anything? Incredibly enough, as we careen into 2009, the very government operation tasked with repairing the damage caused by Wall Street’s black boxes is itself a black box of secrecy and impenetrability.

Last week ABC News asked 16 of the banks that have received handouts from the Treasury Department’s $700 billion Troubled Asset Relief Program the same two direct questions: How have you used that money, and how much have you spent on bonuses this year? Most refused to answer.

Congress can’t get the answers either. Its oversight panel declared in a first report this month that the Treasury is doling out billions “without seeking to monitor the use of funds provided to specific financial institutions.” The Treasury prefers instead to look at “general metrics” indicating the program’s overall effect on the economy. Well, we know what the “general metrics” tell us already: the effect so far is nil. Perhaps if we were let in on the specifics, we’d start to understand why.

In its own independent attempt to penetrate the bailout, the Government Accountability Office learned that “the standard agreement between Treasury and the participating institutions does not require that these institutions track or report how they plan to use, or do use, their capital investments.” Executives at all but two of the bailed-out banks told the G.A.O. that the “money is fungible,” so they “did not intend to track or report” specifically what happens to the taxpayers’ cash.

Nor is there any serious accounting for executive pay at these seminationalized companies. As Amit Paley of The Washington Post reported, a last-minute, one-sentence loophole added by the Bush administration to the original bailout bill gutted the already minimal restrictions on executive compensation. And so when Goldman Sachs, Henry Paulson’s Wall Street alma mater, says that it is not using public money to pay executives, we must take it on faith.

In the wake of the Madoff debacle, there are loud calls to reform the Securities and Exchange Commission, including from the president-elect. Under both Clinton and Bush, that supposed watchdog agency ignored repeated and graphic warnings of Madoff’s Ponzi scheme as studiously as Bush ignored Al Qaeda’s threats during the summer of 2001.

But fixing that one agency is no panacea. All the talk about restoring “confidence” and “faith” in capitalism will be worthless if we still can’t see what’s going on in the counting rooms. In his role as chairman of the Federal Reserve Bank of New York, Timothy Geithner, Barack Obama’s nominee for Treasury secretary, has been at the center of the action in the bailout’s black box, including the still-murky and conflicting actions (and nonactions) taken with Lehman and A.I.G. His confirmation hearings demand questions every bit as tough as those that were lobbed at the executives from Detroit’s Big Three.

On Friday, Geithner’s partner in bailout management, Paulson, asked Congress to give the Treasury the second half of the $700 billion bailout stash. But without transparency and accountability in Washington’s black box, as well as Wall Street’s, there will continue to be no trust in the system, no matter how many cops the S.E.C. puts on the beat. Even the family-owned real-estate company of Eliot Spitzer, the former “Sheriff of Wall Street,” had entrusted money with Madoff.

We’ll keep believing, not without reason, that the whole game is as corrupt as the game show in “Slumdog Millionaire” — only without the Hollywood/Bollywood ending. We’ll keep wondering how so many at the top keep avoiding responsibility and reaping taxpayers’ billions while relief for those at the bottom remains as elusive as straight answers from those Mumbai call centers fielding American debtors.

This wholesale loss of confidence is a catastrophe that not even the new president’s most costly New Deal can set right.

Vietnam business environment: Global integration the main growth driver

 

 

 

 

 

Alcohol Can Be A Gas

In 1983, David Blume wrote and hosted a 10-part how-to television series called Alcohol as Fuel for KQED, the San Francisco PBS affiliate. He also wrote the definitive how-to book on ethanol, Alcohol Can Be A Gas!, which was going to be sold on the air.

The book was at the printer preparing to go to press, and the first airing of the television series in San Francisco was underway, to be followed by release to 140 PBS stations nationwide. Big Oil got wind of the project and convinced KQED to halt the printing and cancel the release of the series to the rest of PBS.

Although there were lawsuits, KQED’s oil-funded lawyers crushed Blume, and the series ended up locked in KQED’s vault, while the rights to the book went back to Blume. The book sat on the shelf for the past 20 years.

Beginning in 2003, Dave Blume set about updating the book in a big way. He raised money from individuals (not institutions or corporations) to fund his research into the current state of the art in alcohol fuels. He traveled extensively in both the US and Brazil, collecting and documenting innovations and the success of Brazil’s alcohol fuel program. Four years of full-time work with a team of researchers has resulted in a completely new and greatly expanded version of the book.

Alcohol Can Be a Gas! (subtitled Fueling an Ethanol Revolution for the 21st Century) is an information-dense, highly readable, profusely illustrated manual, covering every aspect of alcohol fuel from history through crops, hands-on fuel production, and vehicle conversion. It’s the first comprehensive book on small- to farm-scale alcohol production and use written in over 90 years.

Internally divided into six books, the single volume contains 640 8.5″ x 11” pages, with more than 500 illustrations, charts, and photos. It sports a 700-word glossary and a full index. It retains the original 1983 foreword by R. Buckminster Fuller. Alcohol Can Be A Gas! is a complete toolbox for farmers, green entrepreneurs, and activists to wrest control of our energy system from the Oilygarchy and put it back in the hands of the public.

JASPER JOTTINGS Week 51 - 2008 Dec 21

JASPER JOTTINGS Week 51 - 2008 Dec 21

Jasper Jottings - The achievement journal of my fellow Jaspers, the alumni of the Manhattan College

http://www.jasperjottings.com/2008/jasperjottings2008WEEK51.html

INDEX

POSITRACTION: Give the benefit of the doubt

JEmail: Matt Coyne, Matt (MC2011) having trouble with the powers that be

JObit: Azzariti, John Frank [MC1973]

JObit: Leibrock, Harry [MC1952]

JNews: Thompson, David P. [MC1964]

JFound: Bonardi, Jim [MC1998]

JFound: Heithaus, John L. [MC????]

JNews: Richardson, Melissa [MC1988]

JEmail: McEneney, Mike (MC1953) cites Br. Byran NYT story

JObit: Ventura, Frank Andrew [MC????]

JFound: Eastment, George T. [MC1967]

Comment on JEmail: Matt Coyne, Matt (MC2011) having trouble with the powers that be by David Ellison

ENDNOTE: “Sex invariably spells trouble” Dalai Lama

# # # # #

POSITRACTION: Give the benefit of the doubt

http://news.yahoo.com/s/ap/20081205/ap_on_re_us/ticketed_in_labor;_ylt=Av_nmRiA4uKeXP5TfdDm91_tiBIF

Mass. man ticketed in gridlock while wife in labor

Fri Dec 5, 3:31 pm ET

*** begin quote ***

BOSTON – A man in Massachusetts is appealing a $100 ticket he got for driving to a hospital in the breakdown lane of a gridlocked Boston highway while his wife was in labor.

*** end quote ***

One has to wonder how we treat our fellow man. Having done many years as na EMT, I know that most folks over estimate labor and how much time they have. But, he was your average ‘civilian’. So, maybe, he didn’t need to go nuts when stck in traffic. But, by the same token, the cop didn’t need to be the butt end of a horse.

I hope that this reminds me to give my fellow man the benefit of the doubt.

# # # # #

* Posted on: Sun, Dec 14 2008 12:37 PM

JEmail: Matt Coyne, Matt (MC2011) having trouble with the powers that be

REPORTING LIVE FROM THE FACEBOOK NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

Last Ditch Effort

To members of The Official Manhattan College Ice Hockey Club Group

Matt Coyne

December 14 at 1:19pm

Hey guys,

In case you haven’t read the group, Student Government turned us down. They initially told us that we wouldn’t have a problem getting approved and now they, too, have {Expletive Deleted} us.

There is a little hope though. The Men’s Swimming program that was stared is in trouble for a bunch of reasons and one of the main arguments against a hockey club was that Athletics wanted to fund us at least partially. If the rumors are true, then the Men’s Swimming team is going to be disbanded, which leaves a gap in the Athletic budget.

I’m going to try and write some letters/emails over break to various people in the administration to try and get some support from them and show the school that we are serious about playing and that this is a good move for the school.

This is the last think I can think of that could get us a team. I know a lot of us have put in a lot of effort and I know that I wouldn’t be comfortable knowing that I didn’t do all I could to make this work.

-Matt

[JR: Seems like there needs to be some fundraising? I have no idea what the gap is. But, it would seem that it wouldn't be insolvable if one was motivated.]

——————–

Re: Last Ditch Effort

John,

Thanks a lot. Part of it is money, but I feel like a significant part of it is “We just don’t want to do it.” It’s a little infuriating. I can understand where they’re coming from, but we have 25+ guys interested in playing, and we just want to represent MC (and we’re willing to pay our own way, too).

Thank you,

Matt

# # # # #

* Posted on: Mon, Dec 15 2008 9:20 AM

* Updated: Mon, Dec 15 2008 12:07 PM

JObit: Azzariti, John Frank [MC1973]

http://www.legacy.com/NaplesNews/Obituaries.asp?Page=LifeStory&PersonId=121439116

John Frank Azzariti Danbury, CT Naples, FL

John Frank Azzariti, 56, of Danbury, CT and Naples, FL, husband of Kathleen (Maroney) Azzariti, took the Lord’s hand on Saturday, December 13, 2008 after unexpectedly taking ill at his home. John was born to Frank and Frances Azzariti on January 25, 1952 in the Bronx, NY and was the younger brother of Gaetano (Guy) Azzariti. He attended Stepinac High School in White Plains, received his B.S. from Manhattan College in 1973 and always remained an active and staunch supporter of his alma maters. John relocated to Danbury in 1973 after marrying his high school sweetheart, Kathie. The couple raised two beautiful daughters in Danbury, each of whom now reside in White Plains with their husbands and children, who were John’s greatest joy, and formed the foundation of “Pop Pop’s” dynasty; Kimberly and Jonathan Baumstark, their sons, William and Nathaniel and their daughter, Francesca; and Kara and John Gally and their son, John. An ideal husband and father and beloved patriarch, John’s family was the single greatest source of pride and fulfillment was his family.

A CPA and partner at the accounting firm of KPMG, John was a testament to hard work, determination and loyalty. He began his 36 year career with the firm in its White Plains office and ascended to his most recent position as managing partner of the Stamford practice. As part of his innumerable professional accomplishments, John was especially proud of his work as a mentor for his “team” and enjoyed nothing more than helping others to succeed - both professionally and personally. Alongside being the consummate family man and professional, John was very active in the community. He served as chairman of the board of directors of the Danbury Hospital Development Fund, helping to raise significant funding for hospital programs, and also sat on the boards of directors of The Business Council of Fairfield County, the Greater Danbury Chamber of Commerce, the United Way of Stamford and the Connecticut Business and Industry Association. He was a member of the Steering Committee of the Ancell School of Business of Western Connecticut State University as well.

John was a long standing member and served on the board of directors at the Ridgewood Country Club, where he spent countless weekends golfing and enjoying the company of his family and friends. In more recent years, John and his family treasured time spent at their second home in Naples, FL.

While words cannot convey how sorely John Azzariti will be missed by the many that he touched in life, he was and will remain an inspiration to us all as husbands, brothers, fathers and friends.

A Mass of Christian Burial will be celebrated at St. Gregory the Great Church on Friday at 11:00 a.m. Interment will follow in Mount Calvary Cemetery, White Plains, NY.

Friends will be received at the Green Funeral Home, 57 Main Street, Danbury, CT on Wednesday and Thursday from 4:00 to 8:00 p.m.

In lieu of flowers, contributions may be made to the Danbury Hospital Development Fund, 24 Hospital Avenue, Danbury, CT 06810.

# - # - #

Azzariti, John Frank [MC1973]

Guestbook: http://tinyurl.com/6h4dj4

[JR: When these young fellows cut in line for the exit, I get very upset. All I can think of is that their work is done and mine is unfinished. That's better than the alternative that "the good die young" and what that makes me. Even sadder.]

# # # # #

* Posted on: Tue, Dec 16 2008 7:20 AM

JObit: Leibrock, Harry [MC1952]

http://www.legacy.com/MyCentralJersey/Obituaries.asp?

Page=LifeStory&PersonId=121446039

HARRY LEIBROCK

AGE: 83 SOMERSET

Harry Leibrock died Sunday, Dec. 14, 2008, at St. Peter’s University Hospital in New Brunswick. He was 83. Born in Woodhaven, N.Y., Mr. Leibrock moved to Brooklyn, then lived for a time in Syosset, Long Island before settling in Somerset in 1962.

He served his country in the U.S. Navy on a destroyer during World War II.

A graduate of Manhattan College, Mr. Leibrock went on to work as a financial analyst for IBM.

Mr. Leibrock was a very active parishioner at St. Matthias Roman Catholic Church in Somerset, where he served as an usher for many years; was a member of Holy Name Society; worked Friday night bingo, and participated in the Monday night bowling league.

A loving and devoted family man, Harry Leibrock will be dearly missed.

Mr. Leibrock was predeceased by his brother, Robert Leibrock.

He is survived by his wife of 60 years, Anne “Penny” Leibrock; his children, Stephen Leibrock of Somerset, Jody Leibrock of Long Beach, N.Y., and John Leibrock of Palmer, Pa.

A Mass of Christian Burial will be offered at 9 a.m. Wednesday, Dec. 17, at St. Matthias Roman Catholic Church in Somerset. Those wishing to attend are asked to meet at the church. Committal will be private. Services entrusted to Gleason Funeral Home.

# - # - #

Dear John,

I believe that Harry is a member of the Class of 1952.

May He Rest In Peace.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# - # - #

Leibrock, Harry [MC1952]

Guestbook: None cited

# # # # #

* Posted on: Tue, Dec 16 2008 7:26 AM

* Updated: Wed, Dec 17 2008 7:58 AM

JNews: Thompson, David P. [MC1964]

http://www.acorn-online.com/joomla15/index.php?option=com_content

&view=article&id=15992:town-appoints-public-works-deputy&catid=10:greenwich-local&Itemid=68

Town appoints public works deputy

David P. Thompson has been appointed deputy commissioner of public works for the town. The search process began in October.

Mr. Thompson has served as the town’s chief engineer since September 1995. As the chief engineer, Mr. Thompson plans and directs all activities of the engineering division of the Public Works Department providing in-house design, project management and engineering assistance to other divisions, departments, boards and agencies. Mr. Thompson manages the development and implementation of the town’s capital improvement programs with an annual budget of $5 to $10 million dollars.

From 1984 to 1995, Mr. Thompson served as the director of public works/town engineer for Litchfield where he oversaw the construction, repair and maintenance of public properties including highways, buildings, storm drainage systems, bridges and equipment. Before 1984, Mr. Thompson served for four years as the town engineer for Bloomfield and as design, structural and project engineer for engineering consulting firms.

Mr. Thompson has been published in association publications such as the Public Works Magazine, APWA Reporter, and the New England Chapter of the American Public Works Association Newsletter. Mr. Thompson graduated with a bachelor of science degree in civil engineering from Manhattan College, a masters of science in civil engineering from New York University and a masters of science in engineering science and an masters in business administration from Rensselaer Polytechnic Institute. He is licensed qualified and was choen among four candidates interviewed. The appointment is effective immediately.

# - # - #

Dear John,

I believe that David is a member of the Class of 1964.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# - # - #

Thompson, David P. [MC1964]

# # # # #

* Posted on: Tue, Dec 16 2008 5:26 PM

* Updated: Wed, Dec 17 2008 7:58 AM

JFound: Bonardi, Jim [MC1998]

REPORTING LIVE FROM THE LINKEDIN NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

http://www.linkedin.com/pub/a/b7b/41a

Jim Bonardi

Physical Therapist at RINJ

Greater New York City Area

Manhattan College

Bachelor of sciences and education, Physical therapy

1994 – 1998

# - # - #

Bonardi, Jim [MC1998]

# # # # #

* Posted on: Wed, Dec 17 2008 8:42 AM

JFound: Heithaus, John L. [MC????]

http://www.marketwatch.com/news/story/

SentriLock-Names-John-L-Heithaus/story.aspx?

guid={CA2E1CA0-0DAF-4F8C-A3E5-3D100608C5FF}

http://tinyurl.com/3revxk

PRESS RELEASE

SentriLock Names John L. Heithaus as Senior Vice President of Sales and Marketing and NVAR’s CEO Christine M. Todd to Board of Directors

Two Key Executive Appointments Strengthen the Company’s Growth and Market Influence

Last update: 12:27 p.m. EST Dec. 17, 2008

CINCINNATI, Ohio, Dec 17, 2008 (BUSINESS WIRE) — In just five years, SentriLock ( http://www.sentrilock.com), a leading provider of electronic lockboxes to the real estate industry, has seen its client roster increase to 200 REALTOR(R) Boards and Associations and more than 200,000 sales agents. But this burgeoning company is not satisfied to sit idle and take for granted this tremendous business growth.

As a result, SentriLock CEO Scott Fisher has named two highly respected real estate industry veterans to its growing team of professionals: John L. Heithaus as Senior Vice President of Sales and Marketing, and Northern Virginia Association of REALTORS(R) CEO Christine M. Todd as the newest members of the company’s board of directors.

“We are absolutely thrilled to have John join our executive team where he will use his nearly three decades of real estate industry experience to guide our sales and marketing efforts,” Fisher said. “And the appointment of Christine Todd to our board of directors demonstrates SentriLock’s national respect. Her appointment and is a reflection of our ongoing commitment to bring in some of the industry’s best minds to assist us in creating innovative products that exceed the expectations of real estate professionals.”

Fisher added: “Both John and Christine will work to advance SentriLock’s growth as we continue on our record-setting pace.”

Heithaus said, “I’m really excited to be leading SentriLock’s Sales and Marketing team and to be associated with this industry-leading, American-built product and company.”

In fact, SentriLock has been rated the number one lockbox provider in four out of five key areas for two years running, according to a national survey of MLS and Association Executives. SentriLock was tops in lockbox product, service, system and overall satisfaction. Unlike any other lockbox system, the REALTOR (R) Lockbox NXT product contains “smart” technology (such as an electronic keypad) built into the box that is combined with smart-card technology.

Heithaus’ 28-year career in residential real estate and relocation spans management and executive positions with Coldwell Banker, Prudential Real Estate and Relocation and Internet startup Monstermoving.com. The majority of his career has been in business development and strategic alliance management. Heithaus and the teams he has led have been widely credited with pioneering mutually beneficial and long-lasting alliances with residential real estate organizations and ancillary service providers. These include: national mortgage programs, home inspection companies and residential closing and title services. In addition, Certified Closing Network, a national closing services firm Heithaus co-founded, was acquired by First American Residential in 2005. Heithaus is a frequent keynote and panel speaker at regional and national industry events.

Educated at Iona College, Manhattan College’s MBA program and Georgetown University’s McDonough Graduate School of Business, he is currently matriculating for a Ph.D. in Organizational Theory and Design from Warren National University. Heithaus received The Employee Relocation Council’s coveted President’s Award in 1996, in addition to three Distinguished and two Meritorious Service Awards, for his contributions to the industry’s educational and technological initiatives. He and his family will relocate to Cincinnati.

{Extraneous Deleted}

About SentriLock

SentriLock LLC, founded in 2003, is majority owned by the NATIONAL ASSOCIATION OF REALTORS(R) (NAR) and is the official lockbox solution of NAR’s REALTOR Benefits(R) program. SentriLock has more than 200 REALTOR(R) Association clients using its REALTOR(R) Lockbox system representing over 200,000 agents. For additional information on the REALTOR(R) Lockbox system, contact SentriLock toll-free, 866-736-2322, or visit http://www.sentrilock.com.

About the NATIONAL ASSOCIATION OF REALTORS(R)

The NATIONAL ASSOCIATION OF REALTORS(R), “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries. Information about NAR is available at www.REALTOR.org.

REALTOR(R) is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS(R). All REALTORS(R) are members of NAR.

SOURCE: SentriLock

Siler & Company PR

Hugh Siler, 949-646-6966

hugh@silerpr.com

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Heithaus, John L. [MC????]

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* Posted on: Thu, Dec 18 2008 5:18 AM

JNews: Richardson, Melissa [MC1988]

http://www.lansingstatejournal.com/article/20081217

/NEWS01/312170004/1002/NEWS01

http://tinyurl.com/3qv9su

Bariatric surgery duo rely on relationships to maximize benefits for their patients

Samantha Meinke • glwoman • December 17, 2008 • From Lansing State Journal

*** begin quote ***

It took a very long set of eyelashes to turn Dr. Melissa Richardson and Dr. Mindy Lane into the only female bariatric surgery team in Michigan.

The two were practicing general surgery in Lansing when Lane took a fateful trip to a minimally invasive surgery seminar focusing on bariatric surgery.

{Extraneous Deleted}

Lane convinced Richardson to go to a bariatric surgery conference in Tampa, where they also had a chance to tour Dr. Murr’s practice.

“What sold me was not Dr. Murr, although he is very intriguing,” Richardson says. “It was the patients. Normally, as a general surgeon, you have a patient come in to have a gallbladder taken out, you take it out and you never see them again. But with this surgery, patients come in and they’re miserable. They have like eight medical illnesses. They don’t feel good about themselves. They don’t leave their homes. I love to see them transform into the person they really want to be. It’s amazing to see the medical illnesses fade away and their true personalities come to the surface.”

Lane and Richardson, who were already practicing medicine in a Lansing group with six other surgeons, decided to go to Ohio State for a mini-fellowship in bariatric surgery.

During their training, they realized that for bariatric surgery to work, patients need a lot of support in pre-operative and post-operative programs.

They wanted to do the surgeries exclusively at Ingham Regional Medical Center, where they perform all their other general surgery, so they worked to set up a bariatric program there. It took a year and half before they performed their first surgery.

“At the hospital, there was a big push to move it forward, move it forward,” Lane says. “We were like, ‘Listen, no, not until it’s right.’ “

Lane and Richardson established their own practice in 2006, and it wasn’t long before they realized they wanted to take control of the entire bariatric program.

“The year and a half the program was based at Ingham we did maybe 30, maybe 40 cases,” Richardson says. “They were just trickling in.”

The two expanded their practice to incorporate the bariatric program in a new office space in May of 2008.

Their program requires patients to go through an educational seminar and six weeks of pre-surgical education and health evaluations before they even meet the doctors. Patients meet with a dietitian, behaviorist, nurse and psychologist right in the surgeons’ office. And they’re required to follow up with the doctors for at least five years after surgery.

“Anybody can do the surgery, but that’s not going to make for a successful program,” says Dr. Eugene Lavaroni, an attending vascular physician who trained both Richardson and Lane at Botsford Hospital in Farmington Hills. “The patient will fail. In their program, they take care of the whole patient and don’t just act as technicians.”

Both Lane and Richardson say it’s important to bond with their bariatric patients.

One way they do it is by asking patients to write a personal letter when they begin their pre-surgical health screenings and education.

“It’s the only way for us to get to know you as a person before you become our patient,” Lane says. “Some of these letters, seriously, you get goosebumps… They’ll say things like, ‘I have children, and I can’t go on the rollercoaster with them.’ Or, ‘I’ve been made fun of since I was in second grade because I was always the fat girl. This means everything to me.’ It’s powerful, and it’s emotional, and it lets us see beyond their skin before we get involved with them.”

They also take a photo of new patients and save it to show them after surgery.

“When they come back in a year or two I get their letter out or I open up their old picture, and they’re just like, ‘Wow. Oh God, put that picture away,’” Richardson says. “And it’s fun to look back at their letter and all the things they wanted to do before surgery and they’ve done all of those things already.”

Both surgeons are involved with every bariatric case, alternating who the patients see to ensure they get the benefits of both doctors and their different styles.

“Patients demand Melissa’s time,” says her husband, Dr. Dan Richardson. “They call her at home when she’s not ready to be interrupted. And she’ll take 10 minutes out of her day to talk to them. … A lot of doctors don’t take the time to talk to patients or pray with them. But she does. She’s approachable.”

“I’ve referred a lot of patients to Mindy, and they’ve told me she’s very good in the office,” says Dr. Grace Gibbs, a local OB/GYN who did a surgical rotation under Lane as an intern at Ingham. “She’s very confident. And she’ll tell you how it is, even if you don’t want to hear it. She’ll tell you if you’re too fat and you’ve got to lose weight for your health. Sometimes it’s important for a doctor to be that way so patients know how serious a situation is.”

{Extraneous Deleted}

Richardson, on the other hand, knew at an early age she wanted to be a surgeon.

“Originally I wanted to do orthopedic surgery because I played a lot of sports when I was younger, and had a lot of injuries that required orthopedic surgery,” she says.

She went to Manhattan College on a basketball scholarship. She went on to earn an MBA from St. Joseph’s University in Philadelphia and a D.O. from Philadelphia College of Osteopathic Medicine, where she decided to become a general surgeon.

{Extraneous Deleted}

Richardson’s husband, Dan, is an emergency room doctor at Botsford. They live in Okemos with their 7-year-old twins.

“We’ve been married 11 1/2 years and I don’t know that we’ve ever had a fight,” Dan says. “We’re boring. We’re consistent. … We schedule things to make it work. Her schedule is much more set than mine, so I work a lot of afternoons, and she’ll be pulling in as I’m pulling out. … Right now the kids are important - especially with twins, because you only go through things once.”

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Melissa Richardson

• Age: 42

• Family: Married to Dan Richardson, an emergency room physician; they have 7-year-old twins, Jacob and Grace

• Hometown: Pompton Plains, N.J.

• Education: B.S. in Biology from Manhattan College in 1988, MBA from St. Joseph’s University in Philadelphia in 1991, D.O. from Philadelphia College of Osteopathic Medicine in 1993

*** end quote ***

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Richardson, Melissa [MC1988]

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* Posted on: Thu, Dec 18 2008 12:37 PM

JEmail: McEneney, Mike (MC1953) cites Br. Byran NYT story

From: McEneney, Mike (MC1953)

Date: December 18, 2008 1:10:37 AM EST

To: “Jasperfjohn Reinke”

Subject: NY Times 12/17/08 Br. Brian Carty, FSC

Dear John,

The NY Times of 12/17 at page A35 has an article about Brother Brian’s success with his alternate school - De La Salle Academy - and its predecessor. It also relates that one of his former students was killed on Flight 103 when it was blown up over Scotland in 1988. When the students Mother died she left $2,470,000 , a significant potion of the settlement that Libya paid to the families of the victims of the disaster, to Brother Brian’s school.

A few years back Brother Bryan spoke at The Manhattan College and Businessmen’s annual retreat. He is a very dedicated and inspiring man.

Mike

[JR: Thanks for the Jasper connection. No automated search would "know" that. You're irreplaceable!]

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* Posted on: Thu, Dec 18 2008 4:37 PM

JObit: Ventura, Frank Andrew [MC????]

http://www2.bolesfuneralhome.com/frank-andrew-ventura/

http://tinyurl.com/474hxv

Frank Andrew Ventura

Dateline: December 16, 2008

Southern Pines, NC

Frank Andrew Ventura, 96, died Tuesday, December 16, 2008 at St. Joseph of The Pines in Southern Pines.

Born May 17, 1912 in New York, New York to the late Peter Ventura and Amelia LaRussa Ventura, he was a graduate of the Manhattan College and the New York Law School. He was a World War II veteran and in his youth, not only played professional baseball, but was the business manager for several professional baseball teams.

A native of New York, he loved West Palm Beach where he lived for ten years and loved the Pinehurst area where he and his wife of 59 years lived for the last 22 years. An avid golfer, he hales three holes-in-one. He also wrote a sports column for The Pilot entitled, “Sports Reflections.”

He is survived by his wife Dorothy Impeduglia Ventura, a daughter Gail Deane of Wilmington, sons, Glen Frank Ventura and companion Linda, and Kenneth Ventura both of Greensboro; grandchildren, Michael Ueland of West Virginia, Rebecca Crouch of Wilmington, Matthew and Ciera Ventura of Greensboro, NC; great-grandchildren Katie and Jackson Crouch.

A memorial service will be held Thursday, December 18, 2008 at 1 pm at Boles Funeral Home Chapel in Southern Pines with Rev. Archie Stevens officiating. Interment will follow at Pinelawn Memorial Park.

Boles Funeral Home of Southern Pines is assisting the family.

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Ventura, Frank Andrew [MC????]

Guestbook: http://tinyurl.com/474hxv

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* Posted on: Fri, Dec 19 2008 9:16 PM

JFound: Eastment, George T. [MC1967]

http://rismedia.com/wp/2008-12-18/

the-long-foster-companies-appoints-eastment-as-vice-chairman/

http://tinyurl.com/46d44x

The Long & Foster Companies Appoints Eastment as Vice Chairman

RISMEDIA, Dec. 19, 2008-P. Wesley Foster, Jr., founder, chairman, and CEO of the Long & Foster Companies, announced the promotion of George T. Eastment, as vice chairman of The Long & Foster Companies, comprised of Long & Foster Real Estate, Inc., one of the largest, privately owned real estate companies in America, Prosperity Mortgage Company, Long & Foster Insurance Agency, Inc., and Long & Foster Settlement Services.

Eastment has been president of Long & Foster’s Financial Services since 2004. Prior to that, he served as executive vice president from March 1996 to December 2003. Eastment has held numerous senior management positions since joining Long & Foster in 1972 as controller, when the firm was in its fourth year. He was promoted to financial vice president in 1977 and senior vice president in 1982.

According to Foster, “George’s promotion to this newly created position solidifies our senior management team. It has been his financial expertise all along that has enabled the 40-year-old company to prudently grow to the largest privately-owned real estate company,” Foster added.

Eastment is a 1972 graduate of The University of Virginia’s Darden School of Business in Charlottesville, Va., where he received an MBA, and he is an undergraduate of Manhattan College in New York City, where he received a BBA. He is a Certified Public Accountant and a Certified Financial Planner.

Eastment resides in Warrenton, Va. with his wife Tina. They have a son, Scott 22.

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Dear John,

I believe that George is a member of the Class of 1967.

Mike

[JR: Thanks, Mike. Much appreciated. ]

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Eastment, George T. [MC1967]

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* Posted on: Fri, Dec 19 2008 9:24 PM

* Updated: Sat, Dec 20 2008 11:38 AM

Comment on JEmail: Matt Coyne, Matt (MC2011) having trouble with the powers that be by David Ellison

Student Activities has a million-dollar budget and continually — with the powers of student government — do not represent what the students want and stand for.

All these guys want is an ice rink to play at with some insurance. They’ve been willing to practically find the whole thing. They’re eager to just play some hockey, a sport that used to be at Manhattan College.

I dont understand why time and time again the administration at the school does not listen to its students on the things they desire. Part of it, is the weakness we call student government that does a poor job representing the people (what else is new).

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* Posted on: Tue, Dec 16 2008 2:59 AM

ENDNOTE: “Sex invariably spells trouble” Dalai Lama

http://www.breitbart.com/article.php?id=081128183857.lgjbvt92&show_article=1

Sex invariably spells trouble, says Dalai Lama

Nov 28 02:39 PM US/Eastern

The Dalai Lama, the exiled Tibetan spiritual and temporal leader, on Friday said sex spelt fleeting satisfaction and trouble later, while chastity offered a better life and “more freedom.”

*** end quote ***

Celibacy? Chastity?

End VD, AIDS, Illegitimacy, abortion.

Wonder if the New York Times is going to write “smirk” article about him?

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* Posted on: Sat, Dec 20 2008 8:37 PM

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“Bon courage a vous tous”

-30-

STATE OF OUR U.S. ECONOMY

Canadian housing prices need to be better understood

This information is compliments of Canadian Business Blog from December 9, 2008.

——–

Canadians think house prices are tumbling in Canada thanks to Canadian Real Estate Association (CREA) reports that say prices have dropped 10% over the year. But it’s generally recognized their methodology is flawed: CREA compares average prices between two periods even though the composition of houses sold in the two periods can be quite different in terms of type, dwelling size, quality, etc.

A new price index gets around the apples-to-oranges comparison and shows by how much CREA statistics miss the mark. The repeat-sale price index (RSPI), developed by Teranet Inc. and National Bank, says house prices are still above the level of a year ago (by 3.3%). For more detail on the RSPI, see the website maintained by Teranet Inc. and National Bank (also shows price changes at the city level).

The RSPI approach is what’s used in the U.S. for the S&P/Case-Shiller and the Office of Federal Housing Enterprise Oversight (OFHEO) indexes. And now that Canada has the same approach, comparisons with the U.S. are more valid (the S&P/Case-Shiller index is down almost 20% year-over-year, showing how much worse things are in the U.S. at present).

Visit the link for this blog post for the rest of the details

——–

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Japan for Beginners

What happened to the global economy and what we can do about it

For a full list of Beginners articles, see the Financial Crisis for Beginners page.

The most common point of comparison for our current economic crisis is, far and away, the Great Depression. The Depression is most often bracketed with some version of the phrase, “but we’re unlikely to see a depression, just a recession,” whatever that’s supposed to mean. And, fortunately for us, with the addition of Christina Romer, we now have two scholars of the Great Depression on our nation’s economic policymaking team.

But in many ways, a more relevant comparison may be the Japanese “lost decade” of the 1990s, when the collapse of a bubble in real estate and stock prices led to over a decade of deflation and slow growth. This is the Nikkei 225 index from 1980 to the present.

At a high level of generalization, the causes of the bubble were similar to those we have just seen. Loose monetary policy (in late 1980s Japan, and in the U.S. this decade) and high savings levels (by Japanese households in Japan’s case, China and oil exporters in ours) created a large pool of money looking for investments to buy. Rising prices encouraged speculation in both real estate and stocks. Poor underwriting standards - due to some combination of government direction of investment and self-dealing within industrial and financial conglomerates - and an unconditional willingness to lend against real estate as collateral meant that banks made hundreds of billions of dollars’ worth of loans that were sustained solely by rising prices. When prices fell, those loans lost most of their value, crippling banks’ ability to lend to creditworthy borrowers and choking the economy. The lack of credit, combined with the negative wealth effect of collapsing asset prices, dampened economic growth, which averaged 1% per year for the 1990s.

What makes Japan more interesting than the Great Depression is the fact that it happened after the Great Depression, and after all of the academic research into the Depression and what the Fed did wrong. Although there are debates about many of the details, at a high level the conventional wisdom is that the Fed should have loosened monetary policy in the 1930s, making it easier to borrow money and thereby stimulating the economy. What’s interesting about Japan is that despite the benefit of all that academic research - which the Bank of Japan took to heart, lowering short-term interest rates to zero for much of the 1990s - policymakers were unable to restore the Japanese economy to anything like its growth potential for over a decade, and perhaps not even then. Fiscal stimulus was similarly ineffective

One of the major barriers to expansionary policy was the weakness of Japan’s banking system. The asset price collapse and economic slowdown meant that increasing proportions of their loan portfolios became non-performing. Because writing down these loans to their true market values would have caused banks to become insolvent, they kept them on their books, rolling them over (extending bad loans indefinitely) in order to avoid having to take writedowns. As a result, the banks were severely undercapitalized and largely unable to engage in new lending. It was only in 1998 or 2003 (depending on whom you ask) that the government got serious about cleaning up the banking sector, letting weak banks fail or forcing banks to accept new government capital.

Of course, Ben Bernanke knows plenty about the lost decade. There are two major differences between the current policy response and the response in Japan in the 1990s.

First, the U.S. government has moved much more quickly to attempt to fix problems in the banking sector. To some extent, the fact that so many of the bad investments are securities rather than loans, combined with mark-to-market accounting, has had the salutary effect of highlighting the problems; banks have already taken close to $1 trillion in writedowns, although many writedowns may still be hidden on bank balance sheets. This has forced banks’ balance sheet problems into the open, leading to the recapitalization programs announced all over the world in October. For now, though, it’s not clear if these programs have gone far enough. The small scale of the capital injections (capped at 3% of bank assets or $25 billion, whichever is smaller) does not seem to have definitely restored confidence in the banking sector (see the re-bailout of Citigroup, for example), and has left many banks in a position of hoarding their cash rather than lending it out.

Second, the Fed has in just a few months acknowledged that its main monetary instrument - the Fed funds rate - is no longer useful, and has instead hinted at a broader program of quantitative easing, through some combination of printing money and buying all sorts of assets to prop up prices and push down yields. This was a major topic of Bernanke’s famous 2002 speech on fighting deflation, which was written with the Japanese experience in mind. In that speech, Bernanke implied that Japan’s problem in the 1990s was political deadlock that prevented policymakers from taking the decisive steps that were necessary. For better or for worse, we seem to have the political will today to do whatever it takes, and the general consensus is that worries about inflation should be put on hold for now.

That said, we still can’t be sure that we won’t see a replay of 1990s Japan. First of all, while we have the political will to spend large amounts of money, it’s not clear that we have the political will to shut down insolvent banks; the bailout packages so far have been notable for their attention to the interests of existing shareholders. Second, simply because Bernanke is willing to use a broader arsenal of tools, earlier in the crisis, than was the Bank of Japan doesn’t mean those tools will work; we are essentially in uncharted territory for any central bank. Third, Japan managed to create its boom and bust largely on its own, and when it did begin to come out of its lost decade it was largely thanks to exports to a booming world. This time, with more or less the entire world slowing down in unison, there is no external growth engine to bail us out.

The longer this crisis drags on without upticks in personal consumption and inflation, the more comparisons to Japan you are going to see. Let’s hope it doesn’t come to that.

For more on the Japanese crisis, you could look at these two books from the Peterson Institute, at least sections of which are available online.

December 21, 2008 at 9:04 pm

Alcohol Can Be A Gas (Fuel)

In 1983, David Blume wrote and hosted a 10-part how-to television series called Alcohol as Fuel for KQED, the San Francisco PBS affiliate. He also wrote the definitive how-to book on ethanol, Alcohol Can Be A Gas!, which was going to be sold on the air.

The book was at the printer preparing to go to press, and the first airing of the television series in San Francisco was underway, to be followed by release to 140 PBS stations nationwide. Big Oil got wind of the project and convinced KQED to halt the printing and cancel the release of the series to the rest of PBS.

Although there were lawsuits, KQED’s oil-funded lawyers crushed Blume, and the series ended up locked in KQED’s vault, while the rights to the book went back to Blume. The book sat on the shelf for the past 20 years.

Beginning in 2003, Dave Blume set about updating the book in a big way. He raised money from individuals (not institutions or corporations) to fund his research into the current state of the art in alcohol fuels. He traveled extensively in both the US and Brazil, collecting and documenting innovations and the success of Brazil’s alcohol fuel program. Four years of full-time work with a team of researchers has resulted in a completely new and greatly expanded version of the book.

Alcohol Can Be a Gas! (subtitled Fueling an Ethanol Revolution for the 21st Century) is an information-dense, highly readable, profusely illustrated manual, covering every aspect of alcohol fuel from history through crops, hands-on fuel production, and vehicle conversion. It’s the first comprehensive book on small- to farm-scale alcohol production and use written in over 90 years.

Internally divided into six books, the single volume contains 640 8.5″ x 11” pages, with more than 500 illustrations, charts, and photos. It sports a 700-word glossary and a full index. It retains the original 1983 foreword by R. Buckminster Fuller. Alcohol Can Be A Gas! is a complete toolbox for farmers, green entrepreneurs, and activists to wrest control of our energy system from the Oilygarchy and put it back in the hands of the public.

Japan

“Sales have been falling at a speed we’ve never seen before,” an official at an electric machinery firm said in the survey.

And in yet another sign that no nation or industry was left unscathed by the crisis that has spiraled from a U.S. housing market collapse, Ireland said it would pump $7.7 billion into its three major banks.

The relentless stream of bad news is set to continue later on Monday, when the world’s top carmaker and Japan’s industrial champion Toyota Motor Co is expected to forecast its first annual parent operating loss in 71 years.

MARKET HOPES

“The market is growing hopeful about the situation as a whole as the government looks willing to do everything it can to stabilize the financial system,” said Soichiro Monji, a chief strategist at Daiwa SB Investments.

“The U.S. autos bailout is also positive as it’s better to help the automakers than let them fail.”

Tokyo shares were up 1.4 percent while MSCI index of stocks elsewhere in Asia and Pacific slipped around 1 percent.

Toyota trailed the Tokyo market with a 2.8 percent loss, weighed by expectations that a collapse in global demand and soaring yen will hit its earnings.

Oil prices crawled back from last week’s more than four-year lows below $34 per barrel, rising $1 to $43, but that had more to do with the dollar weakness than any sense of optimism about demand.

Taking cue from Washington, Canada pledged $3.3 billion for its carmakers over the weekend.

RACE TO ZERO

The European Central Bank, which this month slashed its key rate by the biggest ever margin to 2.5 percent is expected to tread more cautiously, but one of its policymakers said it may cut again in January.

“We must not forget that the current crisis was caused by a period of interest rates taken to a very low level for too long.”

(Reporting by Reuters bureaus around the world; Editing by Lincoln Feast)

Copyright © 2008 Reuters Limited. All rights reserved.

Dilbert on Investing

Dilbert author Scott Adams wrote this blog post about the average Joe investing in the stock market.  I thought this was an interesting insight.

————————————————————————————————————————————–

Recently I suggested that someday it might be illegal for untrained citizens to invest in stocks of individual companies because it is too risky. As regular readers know, I sometimes throw out provocative ideas just for the fun of it. I didn’t think much about that idea until after I wrote it. But the more I mulled it over, the more it started to make sense. So I’m going to develop that argument here.

I remind you that I lean libertarian (without the crazy stuff) so all of my impulses are to allow people the freedom to hurt themselves any way they choose, so long as their corpses don’t block my driveway or cost me anything. So the argument I am about to make offends even my own sensibility. The troubling part is that it makes sense.

Let’s begin by noting there are already plenty of restrictions on personal freedoms when the consensus is that these restrictions somehow protect people from themselves, or they protect society as a whole. For example, where I live you can’t legally…

The list goes on, and that doesn’t even include the many restrictions on underage activities. So there is nothing unusual or unprecedented about legal restrictions on freedom when an argument can be made that it protects lives or property.

My argument against allowing individuals to invest in stocks is that unless you have insider knowledge, which is already illegal, your odds of beating the index averages are slim. It is nothing more than gambling.

The myth of stock investing is that a person who does more research has better results. But there is no science to support that view. Indeed, the person who understands the most about individual stock investing avoids them completely and invests in ETFs or index funds.

The problem with doing your own research on stocks is that you must rely on the information coming from the management of a company, and managers are generally misinformed or lying. Even the most seasoned investment professionals running mutual funds perform worse than the indexes on average. Brains and research can’t overcome the fact that much of your data is deliberately tainted at the source.

When people go to Vegas to gamble, they usually set some sort of limit for their losses. And they go with the full knowledge that winning is unlikely. It makes sense for that sort of activity to be legal, within limits, because it is viewed as entertainment and not investment. But if it were common for people to bet their retirement savings on Blackjack, you can be sure it would be illegal.

We don’t allow unlicensed people to practice law or medicine, sell real estate, or even build a house. It is entirely consistent to restrict the untrained from making risky stock investments.

I reiterate that this runs against my own libertarian philosophy. I would feel I had lost something important if I couldn’t invest in individual stocks. But it is also true that my net worth would be larger if I had never done it. And it would be larger still if I hadn’t allowed professionals to do it on my behalf.

If anyone comments to this post by saying, “I do my own research and I made money in the stock market,” it is proving my point. And if you don’t see why that proves my point that further proves my point.

Indian equities move up, but remain range bound - Newstrack India


By Giancarlo RinaldiSouth of Scotland reporter, BBC Scotland news websiteThe last section of road from Dumfries to Lockerbie winds up a hill towards the Dryfesdale Cemetery.At most times, it is a quiet route but this Sunday the traffic was thicker than usual and the lay-bys were packed with cars parked nose-to-tail.Minibuses, police vans and television trucks surrounded the grounds of the Garden of Remembrance.They were there to mark the 20th anniversary of a day which nobody who knows the area could ever forget.On 21 December 1988, a total of 270 people were killed when Pan Am Flight 103 was blown up over the town."Nothing will ever change the pain, nothing will change those gut-wrenching experiences which followed this tragedy"Canon Michael BandsTwo decades on, families and friends huddled together in a Lockerbie graveyard to pay their respects.The skies were cloud-laden, but a brave sun made a tentative attempt to break through on a typically indecisive Scots winter afternoon.It beat a retreat later in the day to be replaced by a cold, raw wind blowing across the gravestones.Long before the ceremony got under way people had started to gather around the large memorial carrying the names of all 270 victims.Some have travelled from America, most from much closer to Lockerbie.All of them hear the same words of warmth, sadness, remembrance and hope.Community wishesOn one side of the memorial stand those who have come to lay flowers and pay their respect to the victims.On the other, the massed ranks of the media have come to capture that tribute and relay it around the world.It is a situation which Lockerbie has grown accustomed to over the years.The simple wreath-laying ceremony was in keeping with the wider wishes of the community.Canon Michael Bands attempted to sum up the feelings of everyone present.”Nothing will ever change the pain, nothing will change those gut-wrenching experiences which followed this tragedy,” he said.”But how we deal with them, and how we go on in to the future history of this country depends so much on what we make of it all in our faith.”This air disaster has long ceased to be a Lockerbie event and become a world event and it takes its place in the whole pattern of human experience of good and evil.”But we still have the ability within us to make the changes.”A slow procession of people then made their tributes to the dead while a lone piper played.There were tears, but this was also a show of the strength and determination of a small community to carry on in the face of adversity.They were joined in their sorrow and memories by many more people in other ceremonies being held in the United States.Slowly, everyone filtered away from Dryfesdale Cemetery back to the warmth and comfort of their homes.They had honoured the lives which were lost 20 years ago in a quiet and dignified way.Now it was time to return to getting on with everyday lifeThis article is from the BBC News website. © British Broadcasting Corporation

‘No plans’ for state loan charges
The government has insisted it has no plans to charge interest on emergency state loans to the country’s poorest households.Politicians from all parties had criticised a paper proposing to replace the social fund with credit union loans charging up to 26.8% per year interest.The Tories accused ministers of acting like “loan sharks”.But work and pensions minister Kitty Ussher said ministers had already ruled out the idea.The social fund pays out around 500m a year to low-income households unable to access credit from mainstream sources.Last year, around 1.2 million people - many of them elderly or disabled - used it to cover outlay such as paying for funerals, cots or replacing broken cookers or refrigerators.The proposal to charge up to 2% a month - the equivalent of almost 27% annually - was included in a consultation paper issued last month.The document, signed by Work and Pensions Secretary James Purnell, proposed allowing credit unions to charge “affordable rates” to cover the cost of other services, such as savings accounts and financial advice.Charging interest would add 47.80 to the cost of the average budgeting loan of 433.30, which would take four weeks longer to pay off as a result, it said.But Ms Ussher said: “We are absolutely not proposing to charge interest on social fund loans.”She insisted the aim was to make emergency credit more easily available and prevent vulnerable households turning to loan sharks charging as much as 1,000% in interest.Ms Ussher said that the government wanted to enter into partnerships with local credit unions, which offer loans at interest capped at 2% a month. But she insisted that any state loans provided through them would be interest-free."It’s just driving people who are already in difficulty into even further difficulty"Vince CableLiberal DemocratsQ&A: The social fund”We do propose expanding the way that crisis loans work, to make them more available to more people,” she said, pointing out that families were currently unable to access loans for “legitimate” reasons such as buying their children Christmas presents.”We are talking about removing some of the restrictions, as long as people can afford to pay it back,” she added.Shadow work and pensions secretary Chris Grayling had written to Mr Purnell demanding he ditch the “outrageous” plan.”I just don’t understand why on earth the government would come up with a plan like this in the middle of a recession, when unemployment is rising by thousands each week,” he said.”Gordon Brown keeps criticising the banks for charging excessive rates of interest. But when he thinks no-one is looking, he does exactly the same himself. It makes him look like a loan shark.”HAVE YOUR SAY" The people who need it the most will suffer while those who milk the system will not notice a thing " Steve Godrich, Reading Send us your commentsTreasury spokesman Vince Cable told the BBC: “It’s completely self-defeating. It’s just driving people who are already in difficulty into even further difficulty.”It’s harsh, it’s insensitive and it doesn’t reflect the needs of the day.”Former Labour leader Lord Kinnock told BBC1’s Andrew Marr Show he had no idea where the idea had come from but that it was going nowhere.”There is no point in doing it, let alone no justice in doing it,” he added.Since the row broke out on Sunday, the government has tried to distance itself from the DWP document and said that poor drafting had given a false impression people could be charged interest on social fund loans. Have you used the emergency loan fund Are you considering using the facilitySend your comments using the post form below, or text 61124.In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below.

Crews tackle petrol station blaze
A petrol station in County Tyrone has been extensively damaged in a fire.The Fire Service is trying to establish the cause of the blaze which started at the station on Morganshill Road, Cookstown, on Sunday evening.Five appliances were called to the scene to tackle the fire and prevent it from spreading to petrol pumps. A police spokesman warned motorists that the Morganshill Road may remain closed for some time because of the blazeThis article is from the BBC News website. © British Broadcasting Corporation


Mumbai, Dec 22 (IANS) Indian equities opened on a positive note during the penultimate trading week for 2009 beginning Monday, with a key index ruling with a gain of more than 50 points over the previous close, some 20 minutes into trading. The
Source: www.newstrackindia.com

Thai shares open 0.11 per cent higher - Nation - Thailand
Thai stocks gained 0.48 points or 0.11 per cent when the market was open for trading Monday morning. The composite index of the Stock Exchange of Thailand rose to 447.49 at 10:02 am with a trading volume of Bt362.71 million. The blue-chip SET50 rose
Source: www.nationmultimedia.com

Unitech flares up - MyIris
Shares of Unitech are trading at Rs 48.10, up Rs 3.85, or 8.70% at the Bombay Stock Exchange (BSE) on Monday at 10:30 a.m. The scrip has touched an intra-day high of Rs 49.20 and low of Rs 44.00. The total volume of shares traded at the BSE is 8,533
Source: www.myiris.com

Market Live - Economic Times
The Bombay Stock Exchange’s 30-share Sensex Monday opened at 10,102.42, up 2.51 points or 0.02 per cent from the previous day’s close. The high in the few minutes of trade was 10,116.30 and low was 10,070.56. National Stock Exchange’s 50-stock Nifty
Source: economictimes.indiatimes.com

End of post. . . . . . . . . . . . . . . .. . . . .

Some Words About Holiday Giving

Liberals show tremendous compassion in pushing for generous government spending to help the neediest people at home and abroad. Yet when it comes to individual contributions to charitable causes, liberals are cheapskates.

Arthur Brooks, the author of a book on donors to charity, “Who Really Cares,” cites data that households headed by conservatives give 30 percent more to charity than households headed by liberals. A study by Google found an even greater disproportion: average annual contributions reported by conservatives were almost double those of liberals.

Other research has reached similar conclusions. The “generosity index” from the Catalogue for Philanthropy typically finds that red states are the most likely to give to nonprofits, while Northeastern states are least likely to do so.

It’s hard for me to criticize someone like Kristof, who has reported courageously from some places of true hardship in the world. I consider him someone generally well qualified to act as a voice for those most destitute individuals who have no one else to speak out on their behalf.

However, I’d like to point out a few things.

I don’t know by what means Brooks was able to determine who was liberal and who was conservative; even though I’m sure Brooks asked someone point blank, Kristof’s column, for example, claims that conservatives also give more blood than liberals. Now you have to provide a lot of information to the Red Cross before you donate, which is only right, but political inclination isn’t one of them, and no one has ever asked me that (maybe “Do you want some cookies, a bag of pretzels or an iced tea?” after donating, but never which party I support or which candidate, not that such a question would make me happy anyway).

Kristof, though, actually addresses his own concern I believe when he notes above that “liberals show tremendous compassion in pushing for generous government spending to help the neediest people at home and abroad.”

Now I haven’t studied this issue, but I believe that it makes much more sense to allocate tax dollars for the purposes of providing for those most in need than to make individual contributions (and I think this supports that argument, in particular the following)…

Americans strongly favor government aid to the poor. The Pew Forum’s U.S. Religious Landscape Survey, conducted in the summer of 2007, found that 62% of Americans agree that the government should do more to help needy Americans, even if it means going deeper into debt. There is considerable agreement among members of major religious traditions, including the unaffiliated, on this point. But Americans are divided on who they think can do the best job of providing social services for the needy. According to an August 2008 survey by the Pew Forum and the Pew Research Center for the People & the Press, 31% of Americans say religious organizations can do the best job. The same number (31%) says federal and state government agencies can do the best job, and about as many (29%) say nonreligious, community-based organizations can do the best job.

And in terms of conservatives donating privately versus liberals, I think that a 2-to-1 ratio favoring conservatives, given the latter’s antipathy to government, is about where it should be.

I realize this is a matter of political philosophy concerning what, say, a liberal or progressive thinks government should do versus someone who is a conservative, but it makes sense to me to use the force of government (that is to say, us) to see to it that the donated money is allocated as efficiently as possible by the charitable institution, and there is less of a chance of that happening if you’re talking about a mass of individual donations to any charity under the sun (again, though, as the Pew post notes, many people think faith-based groups should be part of this process).

As for me, I think another reason government should be “calling the shots” is due to the truly sad state of our economy. I know a few people who are out of work right now, as I’m sure many of you do also; their politics are similar to mine, and I can guarantee you that charitable giving isn’t at the top of their list at the moment – they’re more concerned with making the mortgage payments and paying for utilities and feeding and clothing their families. And I actually think it’s kind of crass for Kristof or anyone else to wag a metaphorical finger at people because donations are down; I’m sorry we’re not all a well-ensconced, widely known and celebrated columnist for the New York Times who has the means to donate as he chooses, but we’re not.

(And if you choose to donate individually, you’re going to be dealing with an onslaught of phone solicitations, and with economic times being what they are, that’s going to make the proverbial donation pie even smaller when fewer people are able to say yes.)

So with this in mind, I would ask that you look at this analysis of how much money Bushco has provided for faith-based organizations to perform charitable work (you knew I’d lead back to them on this, didn’t you?) and how that money has been misused (such as having to defend itself in lawsuits such as the Prison Fellowship Ministries case), as well as other circumstances in which some of these groups proselytize where they shouldn’t (see David Kuo’s book “Tempting Faith: An Insider’s Story of Political Seduction” here to get an idea of how Bushco typically played the fundies, in particular, including those like Kuo who set out to do good).

As Kuo tells us here…

I worked for William Bennett and John Ashcroft in the mid-1990s on issues like immigration, welfare, and education as they tried to promote a more compassionate Republican approach. While pure (compassionate conservatives) were never terribly powerful in Republican circles, Bush’s endorsement of this progressive conservatism was exciting. And when he became the president, there was every reason to believe he’d be not only pro-life and pro-family, as conservatives tended to be, but also pro-poor, which was daringly radical. After all, there were specific promises he intended to keep.

Sadly, four years later these promises remain unfulfilled in spirit and in fact. In June 2001, the promised tax incentives for charitable giving were stripped at the last minute from the $1.6 trillion tax cut legislation to make room for the estate-tax repeal that overwhelmingly benefited the wealthy. The Compassion Capital Fund has received a cumulative total of $100 million during the past four years. And new programs including those for children of prisoners, at-risk youth, and prisoners reentering society have received a little more than $500 million over four years–or approximately $6.3 billion less than the promised $6.8 billion.

Kuo also tells us that, as far as he’s concerned, both political parties “played to stereotype — Republicans were indifferent to the poor and the Democrats were allergic to faith” (and though I think it’s odious that Barack Obama is dealing with Rick Warren the way he is given the latter’s homophobia, for better or worse, he’s trying to bury that canard about the party for good).

And as Bill Berkowitz’s post tells us, there are three issues that I believe should be addressed concerning the effectiveness of faith-based groups:

So to recap, Dubya has basically been pushing faith-based donations as part of his “compassionate conservative” con, but when push comes to shove, those funds have always been sacrificed for those “unfortunates” of the pay-no-price, bear-no-burden investor class who always managed to receive tax cuts even though they were never needed. And since those cuts resulted in monies not paid to our government to keep our infrastructure running efficiently (to say nothing of the pitiful job creation numbers during the last eight years), that resulted in fewer donation dollars for the rest of us.

And even though Brooks and Kristof may think that “the financial ability to contribute to charity, and the willingness to do so, are strikingly unrelated,” I can most definitely tell you in our case that that is not true (and speaking of holidays, Happy Hanukkah to those who will begin their celebration tonight).

Mortgage rates at record low

Freddie Mac, the mortgage company, reported Thursday that average rates on 30-year fixed-rate mortgages dropped to 5.19 percent, down from the year’s previous low of 5.47 percent, set last week.

The rate is the lowest since Freddie Mac’s weekly mortgage rate survey began in April 1971.

Mortgage rates started falling after the Federal Reserve launched a sweeping new effort in late November to aid the U.S. housing market by purchasing up to $600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

A daily survey found that the national average rate fell even lower Wednesday. Rates on 30-year, fixed mortgages was 5.06 percent, according to financial publisher HSH Associates, the lowest since the 1960s and down from 5.3 percent Tuesday.

It was the best news in months for anyone looking to lock in a 30-year, fixed-rate mortgage. But it was not expected to be a cure-all, and borrowers already in danger of foreclosure probably won’t be able to take advantage because only borrowers with stellar credit can qualify.

Meanwhile, rates this week fell on 15-year fixed-rate mortgages to an average of 4.92 percent, down from 5.2 percent last week, Freddie Mac said.

Rates on five-year, adjustable-rate mortgages fell to 5.6 percent, compared with 5.82 percent last week. Rates on one-year, adjustable-rate mortgages dropped to 4.94 percent, from 5.09 percent last week.

The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point last week. The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.5 point.

Mortgage application volume jumped last week, fueled by borrowers seizing on lower rates to refinance home loans, the Mortgage Bankers Association said Wednesday.

The trade group’s seasonally adjusted application index rose 2.9 percent for the week ended Dec 12.

The Federal Reserve, aiming to free up lending and jolt the economy back to life, on Tuesday cut the federal funds rate from 1 percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments.

Mortgage brokers are already reporting a surge of calls from borrowers trying to take advantage of the Federal Reserve’s extraordinary actions.

On Wednesday, some mortgage brokers were quoting interest rates of close to 4.5 percent for people with strong credit and hefty down payments.

Tata to inject

MUMBAI/SINGAPORE (Reuters) - India’s Tata Motors has agreed to inject “tens of millions” of pounds into Jaguar Land Rover to prevent an immediate cash flow crisis, the Financial Times reported on Monday.

The move by Tata, which bought the luxury carmaker earlier this year for $2.3 billion (1.5 billion pounds) from Ford, comes on top of “hundreds of millions” of working capital it has provided to the British firm, the paper said citing sources close to Tata.

Tata Motors, reached by Reuters in Mumbai, had no comment on the report, but analysts said pumping money into Jaguar Land Rover would strain Tata Motors’ finances.

Car makers around the globe have been hit by a collapse in demand as the economic slowdown spreads and access to credit is choked off by the financial crisis.

The Times newspaper reported on Monday that the prospect of British government assistance to help keep Jaguar Land Rover afloat had helped the company’s owners to secure last-minute funding from the banks.

It quoted senior figures in the British civil service as saying that British Prime Minister Gordon Brown, Chancellor (finance minister) Alastair Darling and Business Secretary Peter Mandelson had agreed that assistance for Jaguar would be necessary to prevent its collapse.

A spokesman for Britain’s Department for Business, Enterprise and Regulatory Reform told Reuters: “The government stands ready to help companies in the current difficult economic circumstances but does not have an open cheque book.

“The government has been in regular contact with Tata over Jaguar.”

Last week Mandelson confirmed that he had held talks with Jaguar Land Rover, which he said was under “particular strain”.

Brown said on Friday the government wanted to help the car industry through the economic downturn but the main responsibility lies with the carmakers’ owners.

Trades unions have called on the government to step in to save an industry employing tens of thousands directly and indirectly through suppliers.

The United States last week announced a $17.4 billion loan package to rescue its stricken auto makers.

The Canadian government put up an additional $3.3 billion in emergency loans a day later.

TATA STRAIN

Analysts said any injection of funds by the top Indian vehicle maker would strain its finances. Tata Motors has already struggled to pay off a $3 billion bridge loan it had taken to fund the Jaguar and Land Rover brands.

“Debt funding is not a good option as it has to service that debt and it already has a high debt to equity ratio,” said India Infoline’s auto analyst Jatin Chawla.

Funding options for the company include leveraging the loans it has given to dealers and buyers and also using the group’s assets to raise finance, analysts said.

Earlier this month Standards & Poor’s lowered the company’s corporate credit rating to BB- from BB and placed it on credit watch with negative implications.

Tata Motors is raising about $540 million through term deposits, which analysts expect would also be used to repay the loan. Last October the company’s founders had to come to the rescue of an $850 million rights equity issue which was inadequately subscribed by shareholders.

However, shares in Tata Motors were trading up 4.7 percent on expectations that falling interest rates could boost demand for its vehicles and also on hopes that the UK government would provide assistance to Jaguar Land Rover.

Tata Motors, which has a market value of about $1.5 billion, has dropped 74 percent so far this year while the main index is down more than half.

(Reporting by Janaki Krishnan and Kazunori Takada; Additional reporting by David Milliken in London; Editing by Ranjit Gangadharan and Lincoln Feast)

Tough Times ahead for the Solar Power Industry?

According to a just released report on Reuters where they interviewed several noted analysts there are some possibly tough times ahead for the solar power industry.

The story, here on Planetark.org (http://planetark.org/wen/50973) suggests that it might be a good thing that some of the smaller companies might go into bankruptcy.

Excerpt: “It will be a tumultuous year for most solar companies,” said Karina Funk, an analyst with Winslow Green Funds in Boston.

The WilderHill Clean Energy index, whose components include SunPower Corp, First Solar Inc, Suntech Power Holdings Co Ltd and other solar companies, is down about 70 percent so far this year. That far surpasses the nearly 40 percent decline in the Standard & Poor’s 500 index in 2008.

The gloom over solar stocks followed a sharp run-up in 2007 as investors banked on increased concerns about climate change and rising oil prices to spur demand for clean energy sources.

As always I thank you for your time and interest. Please take the time to Digg, Stumble Upon or add to the other social network of your choice to help me spread the word about these issues. Please forward any questions or suggestions to: askthefm@gmail.com

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Market Recap

Thanks largely to Tuesday’s Federal Reserve statement, the historic drop in mortgage rates over the last few weeks continued a little further this week. Lower than expected inflation data from the November Consumer Price Index (CPI) report also was favorable for mortgage rates. According to Freddie Mac’s weekly survey, average 30-year fixed conforming mortgage rates fell to the lowest level in 37 years. Mortgage rates turned slightly higher late in the week, however, raising the question of whether the downward trend will continue.

Ireland Bailouts Banks, and Nationaliz Anglo-Irish

Dec. 22 (Bloomberg) — Ireland will pump 5.5 billion euros ($7.7 billion) into its three largest banks, taking control of Anglo Irish Bank Corp., to protect the nation’s financial- services industry from collapse after credit markets froze.

The government will inject 1.5 billion euros into Anglo Irish in return for preference shares with 75 percent of its voting rights, the government said late yesterday. Allied Irish Banks Plc and Bank of Ireland Plc surged in Dublin trading after getting 2 billion euros apiece.

Ireland, which was the first country in Europe to guarantee all bank deposits, is being forced to use public money after initially urging the banks to seek private investors to assist in the country’s bank bailout. Since the guarantees on Sept. 30, the ISEF Financial Index has plunged 72 percent as lenders’ capital was eroded by bad loans to homeowners and property developers in Ireland and the U.K.

“While the market will want to see some significant equity issuance in the New Year, this is a good start,” Scott Rankin, an analyst at securities firm Davy in Dublin said. “This should help put a floor under the banks and get us into the New Year.”

Allied Irish rose as much as 21 percent and traded up 33 euro cents as of 8:14 a.m. in Dublin trading. Bank of Ireland gained 38 percent and Anglo Irish rose 2.9 percent.

The preference shares issued by Anglo Irish will pay the state a fixed 10 percent annual dividend. The Bank of Ireland and Allied Irish shares will pay an 8 percent dividend and the government will have 25 percent of the voting rights on “key issues” such as change of control and capital structure. The preference shares are “perpetual” and won’t convert into ordinary shares.

Capital Ratios

Bank of Ireland and Allied Irish’s capital ratios, a measure of the banks’ ability to absorb loan losses, will rise to about 8 percent to 9 percent after the government investment, Finance Minister Brian Lenihan said. Bank of Ireland’s core Tier 1 ratio was 6.3 percent at the end of September.

The investment by the government and private investors will boost Allied Irish’s core Tier 1 capital ratio to about 8.5 percent, the bank said in a statement today.

The government measures come days after Anglo Irish was embroiled in a scandal related to Chairman Sean Fitzpatrick’s non-disclosure of 87 million euros in loans he received from the bank. Both Fitzpatrick and Chief Executive Officer David Drumm resigned last week.

Donal O’Connor, who succeeded Fitzpatrick, said in a statement that the investment ensures Anglo “will continue to be a sound and viable institution.” Anglo Irish, which will appoint an external adviser today to begin the search for a new CEO, said this month it will provide an additional 500 million euros to cover rising loan losses.

‘Better Terms’

The dividend payable to the government is lower than the dividend of about 12 percent the U.K. has charged British banks that tapped it for new capital. Lenihan said he reviewed other bank investments and didn’t want to charge too high a price to restrict lending. “This is on substantially better terms than we have seen in the U.K. and they’ve obviously learned lessons,” said Kevin McConnell, head of research at Bloxham Stockbrokers in Dublin. “Whether it’s enough or not just depends on your viewpoint of the bad debt cycle.”

The state is also prepared to underwrite a further issue of as much as 1 billion euros in shares by both Allied Irish and Bank of Ireland. The finance ministry said that while it has a “substantial pool” of additional capital available, it “encourages” the banks to seek private money. Bank of Ireland said Nov. 21 that it received “approaches from a number of parties” looking to invest in the company.

Allied Irish said it has the “capacity to improve” its capital ratio “through asset disposal.” It owns a 24.2 percent stake in Buffalo, New-Jersey-based M&T Bank Corp. and 70.4 percent of Polish lender Bank Zachodni WBK SA.

Separately, a group of unidentified fund managers approached the finance ministry last month about investing in the banks alongside the government, while Irish Life & Permanent Plc is in talks to merge with EBS Building Society

Climate Change and farmer’s affectedness: a personal account from East Africa

3 Reasons the Price of Oil Will Rise

By Joe Chase of IndexBeating.com

After seeing oil skyrocket to $145/barrel and then falling into the thirties, oil is currently priced at $42/barrel.  Demand has fallen off the table, and traders are not convinced demand will increase soon.   I will show three reasons, other than increased demand, why the price of oil will rise significantly within the next year.  

A lower value for the dollar leads to higher prices for a barrel of oil because the total cash laid out by a foreign purchaser and the revenue received by a foreign producer will remain the same in their home currency although it could be more in US dollars.  The dollar is likely to give back some of the gains it made in the last few months as people become less hungry for safety.  The stimulus packages the Obama administration is planning will be good for the economy, but could hurt the value of the dollar.

     2.  Contango

The contango effect occurs when the spot price for a commodity is much lower than the future price for it.  Currently the price of oil for February delivery is $42.72, and December of 2009 is selling for $55.25.  If you buy February oil and sell December oil by writing a contract to deliver in the futures market, you can guarantee a profit of 35% annualized.  This gap, or “spread,” has narrowed significantly since Friday, when there was an opportunity to make 80% annualized return, risk free.  Since oil traders know this concept and are implimenting it, all they have to worry about is where to store it.  They have been able to fill a couple oil tankers with oil for storage, not transportation, at a cost of just a few dollars per barrel.  When the spread is $15, a $2 expense is manageable.  Since traders are using this strategy the demand for February oil will increase and the supply for December oil should increase, narrowing the spread, and making the price of oil go up in the near future.

Source: http://www.npr.org/templates/story/story.php?storyId=98410267

More Info: http://en.wikipedia.org/wiki/Contango

     3.  Gasoline prices have not been falling as fast

While gasoline prices have fallen over 60% (I paid 1.559 this weekend) since the peak in the Summer, the price decline was much more precipitous as first and has begun to flat line.  Here is the chart from GasBuddy.com. 

Thanks to GasBuddy.com

 When oil peaked in July, gasoline prices slowed their rise and plateaued just before oil began to fall.  I missed this selling opportunity, I do not want to miss this buying opportunity.

4. Pound plunges closer to Euro parity

If oil were to steady no lower than $30, BP’s share price could hold above the £5.00 level for some time. A no touch trade predicting that BP wont touch £4.60 at any time in the next 60 days could return 108% at BetOnMarkets.com.

December 22, 2008 Daily Highlights

MARKET REVIEW

MEDIA HIGHLIGHTS

MEDIA HIGHLIGHTS

Yen Weakens as Carmaker Loans Revive Confidence in Carry Trades The yen weakened against the euro and the dollar as Japanese exports tumbled and U.S. government aid to General Motors Corp. and Chrysler LLC increased demand for so-called carry trades. The Japanese currency dropped to the lowest level versus the dollar in almost a week after Bank of Japan Governor Masaaki Shirakawa expressed concern over the yen’s gains as exports plunged by a record in November. The dollar weakened against the euro before data this week that may show U.S. consumer spending, home sales and durable goods orders declined.

ECONOMY HIGHLIGHTS

German Import Prices Drop, Led by Decline in Oil Cost (Update1) German import prices fell in November by the most in almost five years on energy products, adding to evidence that cost pressures in the euro area’s largest economy are easing. Prices dropped 1.3 percent in November from a year earlier after rising 2.9 percent in October, the Federal Statistics Office in Wiesbaden said today. Economists expected a drop of 0.2 percent from last year, a Bloomberg News survey of 14 analysts showed. In the month, prices fell 3.4 percent, the second biggest drop on record after last month’s 3.6 percent decrease.

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

22 December 2008 Newz Bits

HIGHLIGHTS

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Origin of Mankind

As is characteristic of most of the Australopithecus, robustus had a flat face. It’s muscular jaw and flat, almost molar-like teeth seemed to imply that the Australopithecus was likely a vegetarian.

Characteristics of Homo erectus are a brain capacity of 800 - 1300 cc, a large face and thick skull, brow ridges and a forehead that recedes. “Tukana Boy” was an African discovery, which shows that Homo erectus had a similar body size to humans. The period that this boy lived in was 1.6 million years ago.

Being able to construct tools, such as handaxes, was within the capacity of Homo erectus. Homo erectus, according to some studies, made use of fire and occupied caves.

In the Carreze region of South Western France in 1908, a Neanderthal skeleton was located. The image of “a hulking dim-witted brute who shuffled along with a bent-kneed walk of an ape,” was incorrect. “severe hip arthritis, a broken rib and diseased vertebrae” caused this Neanderthal to walk bent over.

Caves and shelters made of rocks have been the discovery location of Neanderthal skeletons. Weapons and tools made from stone have also been found in these places. Archeology findings shows that the injured and dead were cared for and buried by Neanderthals.

INTERMEDIATE FORMS

One of the most fundamental beliefs of evolutionism is that man has evolved from beasts through time, chance and natural selection. Some insist that evolutionism does not teach that man evolved from apes but rather from “ape-like” ancestors. This argument is specious as virtually any of the presumed “hominid ancestors” of man would be classified as apes were they alive today. An ape is defined as merely a tailess monkey. The research dealing with mans evolution from the apes begins with the assumption that man did in fact evolve from the apes. No observations or interpretations are allowed to question this apriori assumption. What has been sought in paleoanthropology (the study of human and “prehuman” fossil record) then are the transitional stages from ape-like animals to man. Transitional forms have proven as elusive here however, as between any other class of plants or animals. The missing links remain missing.

One would think that paleoanthropologists would have to begin with some idea of what sort of structural features may be assumed to prove that an ape is becoming man. Since mainly skulls are found in the fossil record, and especially teeth, we can reasonably expect that criteria used to judge transitional forms will pertain largely to these. What we are really asking is what is a hominid? A hominid is defined as an erect- walking primate that is either a “known” ancestor of man, a collateral relative of man or true man. Obviously man is the only known hominid.

The evidence most often sighted to show that an ape is in the process of evolving into man is the shape and cranial capacity of the skull. The average for the human is 1,350 cc for a woman and 1,500 cc for a man. The normal range is from 830cc (australian aborigines) to the largest brain ever recorded, about 2,800 cc. There is virtually no known correlation between intelligence and brain size among humans in this normal range. By comparison, modern apes have a brain capacity of 500cc.

DISTINGUISHING CHARACTERISTICS OF HUMAN SKULL COMPARED TO APE

Brow ridges are small Dome shape of skull Eye sockets broad and spaced relatively far apart Dental arcade - parabolic for man and U-shaped for apes Teeth morphology, small incisors and canines compared to molars in ape Position of the foramen magnum Shape of jaws Angle that canine teeth enter maxilla

Do paleoanthropologists have a consistent basis for determining if an ape-like creature really is near man or becoming man? The answer is quite simply NO! In his book LUCY, Donald Johanson said :

“It may seem ridiculous for science to have been talking about humans and prehumans and protohumans for more than a century without ever nailing down what a human was. Ridiculous or not that was the situation. We do not have even today, an agreed-on definition of humankind, a clear set of specifications that will enable any anthropologist in the world to say quickly and with confidence this one is a human; that one isn’t”.

The destinguished British Anatomist Sir Solly Zuckerman has pointed out much the same thing in a paper titled, “Correlation of Change in the Evolution of Higher Primates” (in EVOLUTION AS A PROCESS, A.C. Hardy, and E.B. Ford, eds., 1954):

“Views on phylogeny are never more than inferences, drawn in the light of the geological time scale …. The inferences are sometimes very insecurely based because of inadequacies of the evidence.” “The lack of accepted criteria by which to judge the hominid nature, or otherwise, of borderline features in bones makes the whole position very difficult.

Still it is not difficult to tell that a human skull is human, the problem is with the idea of an ape becomming a man. What exactly would one look for in an ape to prove that it is evolving into man, or conversely, what does one look for in men that might indcate that they are more closely related to the apes than other men? Finally, we must not overlook the problem of the range of variation which is normal for a given primate species or sexual dimorphism which is often quite extreme in nonhuman primates.

Before we begin our consideration of the cast of characters that have been proposed as ancestors of man, we should be familiar with certain terms that are used by paleoanthropologists to name their hominid hopefuls. The term “pithecus” means ape, “anthro” means man and “homo” means self or modern man. Thus the name “Pithecanthropus” literally means “ape man”.

PAST MISTAKES

PILTDOWN MAN —-Eanthropus dawsoni (dawn man) In 1912, Charles Dawson a medical doctor and an amateur paleontologist discovered a mandible and part of a skull in a gravel pit near Piltdown England. The jaw bone was ape-like but had teeth that showed wear similar to the human pattern. The skull was very human-like. These two specimens were combined to from “Dawn man”, which was calculated to be 500,000 years old.

The whole thing turned out to be an elaborate hoax. The skull was indeed human (about 500 years old) while the jaw was that of a modern ape whose teeth had been filed to look like the human wear pattern. The success of this hoax for over 50 years in spite of the careful scrutiny of the best authorities in the world led Sir Solly Zuckerman to declare:

“–It is doubtful if there is any science at all in the search for man’s fossil ancestry”.

NEBRASKA MAN —- Hesperopithecus haroldcookii In 1922, Henry Fairfield Osborn, then head of the American Museum of Natural History, received a tooth from a Mr. Cook who said he found it in the Pliocene deposits of Nebraska. Osborn claimed that this tooth had characteristics of man and ape and decided that it was from an ancestor of man. Other distinguished scientists supported Osborn’s view. A picture of Nebraska man and his wife were published in the Illustrated London Daily News. This tooth was used at the Scopes “Monkey” trial in 1925 as irrefutable evidence of the animal ancestry of man. Since William Jennings Bryan was himself from the state of Nebraska, Osborn chided him about Nebraska man in the press:

“the earth spoke to Bryan from his own state of Nebraska. The Hesperopithecus tooth is like the still, small voice. It’s sound is by no means easy to hear —-. This little tooth speaks volumes of truth, in that it affords evidence of mans descent from the ape”.

Other parts of the skeleton were found in 1927 when it became clear that the “still small Voice” was nothing more than the tooth of an extinct pig (peccary).

RAMAPITHECUS

This animal was long believed to be the first branch from that line of apes which evolved into man about 14 million years ago. In an article on Ramapithecus in Scientific American (May 1977) Dr. Elwyn Simons said that:

“this extinct primate is the earliest hominid or distinctively man- like, member of man’s family tree. The finding of many new specimens of it has clarified its place in human evolution”.

Simons confidently concluded that the:

“pathway can now be traced with little fear of contradiction from generalized hominids — to the genus Homo”.

The crucial importance of Ramapithecus as an early ancestor of hominids is evident in this comment by Simons in Time magazine (Nov. 7, 1977):

“Ramapithecus is ideally structured to be an ancestor of hominids. If he isn’t we don’t have anything else that is”.

Simon’s confidence in the human or hominid ancestry of Ramapithecus is surprising in view of a study by Dr. Robert Eckhardt which appeared in an earlier issue of Scientific American (226: 94, 1972). Eckhardt had made 24 different measurements of the teeth from two species of Dryopithecus (a fossil ape) and one species of Ramapithecus. He compared the range of variation of these measurements with that of similar measurements of a population of modern chimpanzees. He found that there was greater variation in the teeth among living chimps than there was between Dryopithecus and Ramapithecus. This is significant because Ramapithecus is judged to be an early hominid primarily on the basis of its teeth. Eckhardt concluded:

“there is no compelling evidence for the existence of any distinct hominid species during this interval (pliocene 14 myo), unless the designation hominid means simply any individual; ape that happens to have small teeth and a corresponding small face.”

Richard Leaky (American Scientist 64:174, 1976) apparently agrees with Eckhardt:

“the case for Ramapithecus as a hominid is not substantial, and the fragments of fossil material leave many questions open”.

What about the human like dental arcade of Ramapithecus? In 1961, Elwyn Simons published a reconstruction drawing of the dental arcade of Ramapithecus based on a particular maxillary fragment (YPM 13799), which purportedly showed a nearly parabolic form with the post canine teeth strongly diverging posteriorly. This reconstruction has been accepted and reproduced by numerous authors. In 1969 however, Genet-Varcin using the same maxillary fragment showed that a completely different reconstruction is possible which shows the U-shaped dental arcade typical of apes. Moreover, there are living animals with dental characteristics quite similar to Ramapithecus. A high altitude baboon living in Ethiopia (Theropithecus galada) has incisors and canines which are small relative to those of other living apes. It also has the short deep face and other man- like features of the type associated with both Ramapithecus and Australopithecus. Clearly teeth reflect habitat and diet and not necessarily evolution.

Some investigators have suggested that Ramapithecus is nothing more than a female of Dryopithecus which every one agrees was an ape. Others have pointed out that some recent specimens of ramapithecus show a clear canine gap but that this is often ignored by authors who wish to emphasize its hominid status.

Many drawings have been made of Ramapithicus walking upright but Zihlman and Lowenstein have pointed out that:

“Ramapithicus walking upright has been reconstructed from only jaws and teeth. In 1961 an ancestral human was badly wanted. The prince’s ape latched onto the position by his teeth and has been hanging on ever since, his legitimacy sanctified by millions of textbooks and Time-Life volumes on human evolution”.

Ramapithicus may not be hanging on so well after all. In a recent issue of Science 82 (April p. 6-7) is an article titled “Humans lose an early ancestor” which states that:

“A group of creatures once thought to be our oldest ancestors may have just been firmly bumped out of the human family tree, according to Harvard University paleontologist David Pilbeam.” “Many paleontologists have maintained that ramamorphs are our oldest known ancestors, evolving after we split away from the African apes”. “But these conclusions were drawn from little more than a few jaw bones and some teeth”. “The heavy jaw and thickly enameled teeth resemble those of early human ancestors, says Pilbeam, but in more significant aspects, such as the shape of its palate, the closely set eye sockets that are higher than they are broad, and the shape of the jaw joint, it looks more like an orangutan ancestor.”

AUSTRALOPITHECINES

In his book LUCY, Donald Johanson refers to the “australopithecine mess” and indeed as we shall see it is certainly that. Australopithecus means “southern ape” because the first fossils were found in limestone quarries of South Africa (in Taungs). In 1924 a fossil of the face, lower jaw and a natural brain cast of a juvenile ape was found in a hillock together with the remains of other animals; all showed marks of inflicted blows. The fossil was given to Dr. Raymond Dart professor of anatomy at Witwatersrand University in Johannesburg.

Dart was convinced that certain features of the Taungs skull and particularly the teeth were man-like so he concluded that it represented an intermediate between apes and man. He immediately rushed a notice to the journal Nature titled “Australopithecus; the man-ape of South Africa”. His opinions on the matter were largely scorned by the scientists of the time who considered it to be some kind of chimpanzee. The skull was soon known derisively as “Dart’s baby” but Dart and Dr. Robert Broom a physician, spent the rest of their lives trying to gain acceptance for Australopithecus.

Shortly after the discovery of the Taungs “child”, as it is known today, Dart and Broom found other Australopithecines at Kromdraii, Swartkrans and Makapansgat. The apes seemed to show two parallel lines of development one being a small “gracile”(slender) type and the other a larger “robust” type. Much controversy has existed regarding these types and some investigators, including Richard Leakey, have concluded that they represent merely male and female of the same species while others say the gracile form, which is believed to be older, evolved into the robust form. Today these animals are known as Australopithecus africanus and Australopithecus robustus respectively. The latter is clearly heavier, has more massive jaws and a pronounced sagital crest - all typical of sexual dimorphism in male apes. The australopithecines have often been found in association with other animals such as baboons and these often show evidence of bashed in skulls. Bone tools in the form of clubs, knives and choppers were found as well as evidence of fire. It might be attractive to assume that the Australopithecines had been the hunters and butchers except that some of their skulls were broken in as well. Were they then the hunters or the hunted? An American journalist met up with Dart who convinced him that the Australopithecines were actually hunting one another. The journalist, Robert Ardrey wrote a book AFRICAN GENESIS that popularized the view of the “killer ape”.

In 1959, Mary Leaky discovered a badly broken skull (100 pieces) in Olduvai Gorge in East Africa. When she showed it to her husband Lewis he is reported to have said “why it’s nothing but a damn Australopithecine”. Louis quickly got over his disappointment, however, when he found a great variety of stone tools as well as the fossilized bones of animals in the same strata. The bones of many of these animals revealed that they had been butchered and deliberately broken for their marrow. Leakey decided on the basis of this evidence that his fossil had been the tool maker and butcher and thus called him Homo habilis or “handy man”. Most other investigators, however, were not comfortable with such an extremely primitive beast being a tool maker. Like Australopithecus robustus, Leakey’s “Homo habilis” had huge and very unhuman molars, a very small brain and a large bony sagital crest on the top of its skull. Later, Leaky thought better of the whole idea of his “Homo habilis” as a tool maker and demoted him to the classification of Zinjanthropus which means East African man. Although Mary Leaky found Zinjanthropus, or “Zinj” as it was often called, it made Louis Leakey famous as a result of the publicity he received from the National Geographic Society through its magazine and educational films. The National Geographic Society financed Leakey’s work and largely through their publicity of Leakey and Zinj, paleoanthropology once again became both popular and respectable after a long period of disrepute following the Piltdown hoax. Today, Zinjanthropus is considered by everyone to be just another robust australopithecine just as Lewis Leaky originally said it was.

Australopithecines are considered by many to be hominids because they are believed to have been bipedal and thus walked upright. Dart and Broom for example, had no trouble determining that their australopithecines were erect walking hominids although they had no post cranial fossils! Until the 70s, the upright and bipedal posture was based on the position of the foramen magnum and very fragmentary finds of pelvis, limb and foot bones. Then Richard Leakey found several more nearly complete remains that threw considerable doubt on the idea of a upright posture. In Science News of 1971 (100:357) Leakey concluded that:

“the Australopithecines were long-armed short-legged knuckle-walkers, similar to existing African apes”.

Perhaps no one has studied the Australopithecines more extensively than Sir Solly Zuckerman and yet he rejects the idea that they be classified as a hominid rather than simply an ape (in EVOLUTION AS A PROCESS, 1954):

“There is, indeed, no question which the Australopithecine skull resembles when placed side by side with specimens of human and living ape skulls. It is the ape - so much so that only detailed and close scrutiny can reveal any differences between them”.

As for its putative bipedal posture, Zuckerman says:

“In short, the evidence for an erect posture, as derived from a study of the inominate bones, seems anything but certain.”

In addition the anatomist Dr. Charles Oxnard of the University of Chicago claims that:

“multivariate studies of several anatomical regions, shoulder, pelvis, ankle, foot, elbow, and hand are now available for the australopithecines, these suggest that the common view, that these fossils are similar to modern man may be incorrect. Most of the fossil fragments are in fact uniquely different from both man and man’s nearest living genetic relatives, the chimpanzee and gorilla (Nature 258:389).

Neither of these investigators, who have spent much of their professional careers studying the Australopithecines, believe that they walked upright and were bipedal. Most evolutionists now consider both Australopithecus africanus and robustus to be an evolutionary dead end and few consider them in any way ancestral to man. We could write the Australopithecines off entirely at this time were it not for the current love affair with an Australopithecine named “Lucy”.

AUSTRALOPITHECUS AFARENSIS

In 1974 while searching for the bones of early human ancestors at Hadar, a desert in northeastern Ethiopia, the American paleoanthropologist Donald Johanson and French geologist Maurice Taieb discovered a nearly half complete skeleton which they estimated to be nearly 3 myo. This diminutive female specimen was named Lucy after the Beetle’s tune “Lucy in the Sky With Diamonds”. A year later portions of 13 similar fossilized animals were found. Although Lucy’s V-shaped jaw was quite different from the others it was decided to call them all Australopithicines. In most respects the skulls were markedly more ape-like than either A. africanus or robustus so they called them A. afarensis. Johanson also decided to include some Australopithecines discovered by Mary Leaky over 1000 miles away in Laetoli in the same species. Mary Leaky objected saying Johanson’s work was “not very scientific” and Johanson responded that Mary Leaky “really shows a poor appreciation of what evolution is all about”.

Lucy is about three and one half feet tall and had a tiny brain for her size even by ape standards. In his book LUCY, THE BEGINNINGS OF HUMAN KIND, Johanson said:

“with Lucy I had no problem. She was so odd that there was no question about her not being human. She simply wasn’t. She was too little. Her brain was too small. Her jaw was the wrong shape.” Her teeth “pointed away from the human condition and back in the direction of apes” and the “jaws had some of those same primitive features”.

On the basis of the knee joint and pelvic bones, however, Johanson believes that Lucy did walk in an upright bipedal fashion. Thus he believes that Lucy is an ancestor of man as well as an ancestor of A. africanus. What is rarely mentioned, however, is the fact that the knee joint was found over a mile away from the skeleton and in strata 200 feet lower!

Note to reader: The 1973 knee joint is often referred to in the context of the Lucy skeleton. This knee joint, however, was found over a mile away and in strata 200 feet lower than the Lucy skeleton (1974) —a point not always made clear by those who discuss the evidence for bipedality in Australopithecus afarensis in general, or Lucy in particular. Johanson has never claimed that the 1973 knee joint belongs to the individual skeleton known as Lucy, but _is_ convinced that the knee joint belongs to the same species as Lucy [Australopithecus afarensis] because of “anatomical similarity”.

Johanson as we have seen is quite willing to incorporate other peoples fossils into his own classification. Not only did he incorporate Mary Leaky’s Laetoli fossils into A. afarensis over her objection, he also claimed that A. afarensis made the remarkable human footprints she had discovered in layers of volcanic ash in Laetoli. Mary Leaky discovered a 73 foot long trail of fossilized footprints consisting of 20 prints of an individual the size and shape of a modern 10 year old human and 27 prints of a smaller person. The paleoanthropologist Timothy White who was working with Leakey at the time said:”Make no mistake about it, they are like modern human footprints. If one were left in the sand of a California beach today, and a four-year old were asked what it was, he would instantly say that somebody had walked there. He wouldn’t be able to tell it from a hundred other prints on the beach, nor would you. The external morphology is the same. There is a well shaped modern heel with a strong arch and and good ball of the foot in front of it. The big toe is straight in line. It doesn’t stick out to the side like an ape toe” (Lucy p. 250, Johanson & Edey).

Louis Robins of the University of North Carolina who analyzed the foot prints said:

“the arch is raised, the smaller individual had a higher arch than I do — the toes grip the ground like human toes. You do not see this in other animal forms”(Science News 115:196-197, 1979).

In a recent lecture in St.Louis, Mary Leaky pointed out one additional feature of her footprints that one does not often see mentioned in the literature; all of the larger foot prints of the trail have a smaller footprint superimposed on them! Mary Leaky herself conceeded that it appears that a child was intentionally lengthening its stride to step in an elders foot prints! It shouldn’t be necessary to emphasize that this is a far more sophisticated behaviour than one expects from apes. In addition there were thousands of tracks of a wide variety of animals that are similar or identical to animals living in the area today including antelopes, hares, giraffes, rhinoceroses, hyenas, horses, pigs and two kinds of elephants. Even several birds eggs were found and many of these could be easily correlated with eggs of living species.

Mary Leaky assumes that the footprints were made by some hominid but not by Homo sapiens because the stratum in which the prints are found is estimated to be 3.5 myo. That happens to be the current presumed age of A. afarensis and thus it is that Johanson insists that they simply would have to have been made by his A. afarensis:

“the foot prints would have to be from A. afarensis. They substantiate our idea that bipedalism occurred very early, and our contention that the brain was too small to master tools”.

Mary Leaky disagrees with Johanson and his claims for A. afarensis as the maker of her footprints. Mary Leaky is not the only one who questions Johansons claims for Lucy. In a recent article in Science News 122:116 titled “Was Lucy a Climber?” two groups of scientists working independently challenged the claim that Lucy had completely abandoned the trees and walked fully upright on the ground. Anthropologist Russel Tuttle from the University of Chicago said that the Laetoli footprints that Leaky discovered in Tanzania were made by another more human species of ape-man that coexisted with A. afarensis about 3.7 million years ago and that it was this unknown hominid that is the direct ancestor to man. After a careful examination of the Laetoli prints and foot bones of the Hadar A. afarensis he concluded that the “Hadar foot is ape-like with curved toes” whereas the foot prints left in Laetoli are “virtually human”.

Susman and Stern of the State university of New York at Stony Brook have concluded that A. afarensis while capable of walking upright, spent considerable time in the trees. They base this conclusion on an examination of Lucy,s scapula, foot and hand bones which they say show “unmistakable hallmarks of climbing”. They also believe that Lucy,s limb proportions did not allow an efficient upright gait.

Finally, to make matters even more confusing, some anthropologists claim that A. afarensis is really the same animal as A. africanus. In a recent lecture at Washington University in St. Louis (May, 1984), The Harvard anthropologist Dr. David Pilbeam stated that A. afarensis was virtually indistinguishable from A. africanus. On the other hand, Pilbeam said that he believed that A. africanus was directly ancestral to man but conceeded that in the hominid fossil record, one organism could be “substituted for another”.

HOMO HABILIS

As we have pointed out, the taxon Homo habilis had an illegitimate birth with Zinjanthropus whom Louis Leaky thought was the “handy man” responsible for the stone tools with which he was found buried. After the demotion of Zinj to an Australopithecine, Louis Leakey and his coworkers reported four new fossil specimens in 1964 that they found in Olduvai Gorge. These they claimed were larger brained than australopithicines and surely deserved to be classified as Homo habilis. All were badly crushed skull and jaw fragments. In his book LUCY, Johanson said that :

“always obsessed with finding human fossils, he (Leakey) insisted that these belonged to the genus Homo and should be so named”.

Measurements of the cranial capacity of these fossil fragments were difficult if not impossible but, none the less, it was concluded that they averaged 642 ccs, 200 ccs larger than australopithecines and that was considered enough to make them human. They also felt that their Homo habilis had human-like molars and premolars. Not everyone was equally enthusiastic about these new candidates for the “handy man” however. Wilfred LeGros Clark said:

“Homo habilis has received a good deal of publicity since his sudden appearance was announced — from the brief accounts that have been published, one is led to hope that he will disappear as rapidly as he came”(LUCY).

C. Loring Brace seems to be in agreement with this assessment of the taxon:

“Homo habilis is an empty taxon inadequately proposed and should be formally sunk”.

New life was breathed into Homo habilis by Louis Leakey’s son Richard who worked in the Lake Rudolf area in Kenya. He asked for and was given financial support by the National Geographic Society for the purpose of finding human ancestors. Leakey found numerous stone tools and 40 specimens of Australopithecus. Then in 1972 he made a discovery that was to shake paleoanthropology to its foundations. He found the tool maker that his aging father had so long sought in vain. Perhaps he found even more than he bargained for. He found several fossilized bone fragments of a skull which his wife Meave carefully assembled to make a nearly complete skull minus the lower jaw. The skull was given the unimaginative name KNMER 1470 for its registration at the Kenya National Museum in East Rudolf.

The skull capacity of 1470 was difficult to estimate because of the condition of the specimen but was estimated to be 800 cc (later measured to be 750 cc), much larger than most ape-men skulls. There were only small eyebrow ridges, no crest and a domed skull typical of a human. Indeed , it appeared to be a human skull. Professor A. Cave an anatomist who was the first to demonstrate that Neanderthal man was a Homo sapiens examined 1470 in London and concluded that: “as far as I can see, typically human”. In addition, Leaky fund two complete femurs, a part of a third femur and parts of a tibia and fibula near the skull which he said: “cannot be readily distinguished from Homo sapiens”.

THE “ABSOLUTE” DATING OF 1470

How old is 1470? In July 1969 samples of KBS tuff from just above the stratum in which 1470 would be found, had been sent to Cambridge for potassium argon dating. Three tests gave average dates of 220 myo (million years old)+ or - 7my! This was considered unacceptable for this strata given its fossil content and so “extraneous argon” was blamed. Less calcified samples were sought out and tested which gave dates of 2.37 and 3.02 myo which were considered “encouraging”. Further tests were run giving dates from 2.25-4.62 myo. An age of 2.61 myo was put forward as “the best and most acceptable estimate” (Fitch & Miller, 1970, Nature 226:226-228).

Since 1470 came from just below the KBS tuff containing layer, it was decided that it was 2.9 myo. An essentially human skull 2.9 myo! In National Geographic Magazine in June of 1973 Richard Leakey said:

“Either we toss out this skull or we toss out our theories of early man”. “It simply fits no previous models of human beginnings”. “1470 leaves in ruins the notion that all early fossils can be arranged in an orderly sequence of evolutionary change”.

The problem was that 1470 was clearly contemporary with Australopithecus, if not older, and yet looked much like modern man! This absolutely unseated the Australopithecines as the ancestors of man. Incredibly, when Richard Leaky spoke at Webster College in St.Louis in February of 1984 he said almost nothing of 1470 and insisted that the only reason that 1470 got so much publicity from the media was because “the world was flat in 1972″ apparently suggesting that there was nothing else news worthy going on in the world at that time! One is tempted to conclude that 1470 had simply proved to be too difficult to deal with and thus must now be swept under the rug.

The human-like appearance of 1470 coupled with its age of 2.9 myo was a big problem for Johanson who considered his A. afarensis to be the sole evolutionary link between apes and man. With a vastly more human appearing 1470 around that was either a contemporary of afarensis or even slightly older his fossil was unlikely to be directly ancestral to man. So Johanson decided to have 1470 “redated”. Lucy herself had been dated by several radiometric methods whose published results varied from 2.5 to 3.7 myo and 2.9 had been chosen as the “absolute” age. Johanson sought the aid of Basil Cooke who claims to have assembled a detailed two million year sequence of fossil pig lineages which he insists is consistent over a wide geographical area. This incredible scheme is based on what is assumed to be a constant but rapid rate of evolution in length of the third molar of certain pig fossils found in southern Ethiopia. These “index pigs” were used to redate Leaky’s 1470 at less than 2 myo which placed it on the desired human side of Lucy. To make things even more comfortable for Lucy, Johanson decided to date her again too in an effort to see if he couldn’t make her a little older. In his book LUCY, Johanson said:

“That meant turning to Basil Cooke and his pig sequences. These had already straightened out a dating puzzle at Lake Turkana and shoved Richard Leakey’s 1470 H. habilis skull forward from 2.9 my to less than 2.0 my. Perhaps they could do it for Lucy too. But in this case they would be stretching her age not shrinking”.

Needless to say, Cooke came through as expected and said that his pig sequence showed:

“an age of 3.0 - 3.4 m.y. would give a better fit than the 2.9 m.y. age for Lucy” (p. 206 -207).

So much for scientific objectivity in paleoanthropology and “absolute” dating employing radiometric techniques. To make matters even more confusing, Garnis Curtis at Berkeley has recently used potassium argon dating on the KBS tuff and come up with younger dates yet. His first series of tests showed it to be 1.8 m.y.o. and his second series of tests showed it to be 1.6 m.y.o. To add chaos to confusion, recent fission track studies of zircons from the KBS tuff indicate an age of 3 m.y.o.! No wonder radiometric dating labs require that all samples to be “dated” be identified as to their source in the Geological column! Approximately 8 out of 10 specimens (”dates”) are discarded by radiometric dating labs because they are well out of range of age they “ought to be” given there source in the geological column. In their book POTASSIUM ARGON DATNG, PRINCIPLES, TECHNIQUES AND APPLICATIONS TO GEOCHRONOLOGY, Dalrymple and Lanphere sum up the whole circular process of radiometric dating:

“If the potassium-argon ages of a group of rocks agree with the stratigraphic sequence determined on the basis of physical relationships of fossil evidence, then the probability is good that radiometric ages are reliable…”(page 197)

One thing is clear, when the radiometric dates are found to be in dissagreement with the assigned age of fossils based on evolutionary assumptions, the assumed evolutionary age of the fossil always takes precedence over the “absolute” radiometric dates. Still, evolutionists continue to insist that their methods of dating are so precise and reliable that the dates always come out the same even when several different methods of dating are used on the same specimen.

HOMO ERECTUS

The Homo erectus story is undoubtedly the weakest link in the whole human evolutionary scenario. It all began soon after the publication of Darwin’s ORIGIN OF SPECIES with a Dutch physician by the name of Eugene Dubois who burned with the desire to find the “missing link” between apes and man. Dubois had been a student of Ernst Haeckel at Jena University. Haeckel is well known for his “biogenetic law” which stated that each embryo in the course if its development passes sequentially through many of the evolutionary stages of its ancestors. It is now well known that Haeckel deliberately falsified the data he used to support this vacuous claim. Jane Oppenheimer in her book ESSAYS IN THE HISTORY OF EMBRYOLOGY AND BIOLOGY (p.50) said that:

“the work of Haeckel was the culmination of the extremes of exaggeration which followed Darwin”. “Haeckel’s doctrines were blindly and uncritically accepted”.

Haeckel had invented a hypothetical ape-like man he called Pithecanthropus alalus (speechless ape man) and suggested that he could be found somewhere in Southern Asia or Africa. Haeckel even commissioned a painting of his ape-man who appeared with wife and child.

Dubois was convinced that he would find Pithecanthropus in Sumatra and having failed to get financial support from the Dutch government for his quest he enlisted as a surgeon in the Royal Dutch Army in order to be stationed in Sumatra. There he learned that a fossil skull had been found on the nearby island of Java. He was able to secure the skull and found another at the same site but unfortunately these fossilized skulls were too much like modern man to be of interest to one searching for an ape-man. In September of 1891 he discovered a large molar tooth in a cave on the banks of the Solo river. The following month he discovered another molar tooth. The month after that he found an ape-like skull cap. On the following year he found a fossilized human femur 46 feet away from the where the skull cap had been found. Although he first considered the skull cap to be that of a chimp, after correspondence with Ernst Haeckel he declared his collection of skull cap, femur and two molars to belong to one and the same creature which he described as “admirably suited to the role of the missing link”.

The missing link arrived just in time as Darwin’s theory was under fire because of the lack of fossil transitional forms between the major classes of animals and especially between ape and man. By joining an ape skull with an essentially modern human femur, and insisting that this conglomerate represented one specimen, Dubois succeeded in creating a true “ape-man” which he called Pithecanthropus erectus (upright apeman). He had originally claimed that the strata he was working in was pliocene (about 1 m.y.o.) but after he found his ape-man he decided that it was really Tertiary (10 myo). This of course was before “absolute” dating methods.

When Dubois exhibited his Pithecanthropus in Berlin, the distinguished anatomist Rudolph Virchow refused to even chair the meeting. Virchow pointed out the ape-like features of the skull and commented that “the thigh bone has not the slightest connection with the skull”. None the less, interest ran high for Pithecanthropus and numerous imaginary paintings and drawings were made and published of this famous “ancestor” of man for the benefit of the laity. G.K. Chesterton commented that:

“People talked of Pithecanthropus as of Pitt or Fox or Napoleon. Popular histories published portraits of him like the portraits of Charles I or George IV. A detailed drawing was reproduced carefully shaded to show the very hairs of his head were all numbered. No uninformed person, looking at its carefully lined face, would imagine for a moment that this was the portrait of a thigh bone, a few teeth, and a fragment of a cranium.”

As Dubois came under increasing attack he became very secretive about his fossil finds. He locked his fossil specimens away and even hid some under his dinning room floor. Not until about 40 years later did he reveal the two fossilized human skulls he had found in the same strata as Pithecanthropus. A few years before his death in 1940, Dubois himself admitted that Pithecanthropus was in his opinion the skull of a large gibbon. His admission was not accepted by the evolutionists however and to this day Pithecanthropus is considered to be Homo erectus.

The other fossil in the Homo erectus taxon is even more enigmatic - Peking man. In 1929 an almost complete skull cap was found in an infilled limestone cave at Choukoutien near Peking China. This ape-like skull cap was similar to Java man. The cave was continuously excavated until the beginning of World War II and fragments of 14 skulls, 12 lower jaws and 147 teeth were found. Several skeletons of modern men were found at a higher level. Bone fragments were once again gathered from various places and assembled to form a skull. The jaw bone for example came from a level 85 feet higher that the skull and face bones. A sculptor was hired to model a womans features on a cast of the skull and the result was named “Nellie”. Nellie has appeared in many textbooks. Unfortunately the skull was lost during the Japanese occupation of China during WW II.

Once again as in many of the other presumed hominid fossil finds, numerous stone tools and evidence of butchery and fire was found. Choukoutien has recently been intensively investigated by Chinese scientists who have found over a thousand fragments of stone tools, the skulls of over 100 animals as well as fragments of 6 Homo erectus skulls. The skulls show consistent evidence of having been broken in. In addition, a layer of ashes over three meters thick has been found. The Chinese scientists assume that Homo erectus made the tools and the fires because they are confident that there were no representatives of Homo sapiens around 500,000 - 1,000,000 years ago!

Once again, Richard Leaky and his co-workers have added a confusing chapter to an already confusing story. In July 1984, a nearly complete fossilized skeleton of an obviously human 12 year old boy was discovered in Lake Turkana in Kenya. The skeleton of this child was like that of a modern human in all respects except for certain details of the skull. He had a low forehead and pronounced brow ridges not unlike some races of modern man. Richard Leaky said that this boy would go unnoticed in a crowd today. Since this human skeleton was fond in strata “dated” at 1.6 myo it was classified by age alone as another representative of that enigmatic taxon Homo erectus!

NEANDERTHAL MAN

Although we are considering Neanderthal man last, he was really the first “ape-man” having been discovered in Darwin’s day. We have seen how paleoanthropologists have tried to make men out of apes, now we shall see how they have tried to make apes out of men. The story began in the Neander valley of Germany. Here in 1856 a local school teacher discovered a skull cap, two femurs, two humeri and other fragments. A careful anatomical description by Professor Schaafhausen reported them to be human and normal. Two years later two similar skulls were found in Belgium. Subsequently portions of 60 Neanderthal type skeletons were fond in China, Central and North Africa, Iraq, Czechoslovakia, Hungary, Greece and north western Europe. At first not much attention was given these finds but with the publication of Darwin’s ORIGIN OF SPECIES, the search was on for man’s ape-like ancestors. Darwinians argued that Neanderthal man was an ape-like man while many critical of Darwin like Virchow argued that these individuals were fully human but some might have been

Should I still invest in Unit Trust today?

Should I? Shouldn’t I?

What is the big picture of the KLSE tell me? It reminds me to sow in the rainy season and harvest in the summer.

The KLSE is over-sold and people are pessimistic. People are not keen in investing. They are saying “good-bye” to the market.

To the shrewd investor, the worse the market, the more the people are pessimistic and saying “good-bye” it sounds GOOD BUY!

But with the pall of “recession” to come in 2009, I would average in on an Index Fund - preferably one without any front-end load or sales charge. Is there such a one in the market?

Check it out yourself at www.signalinvest.com

What does the big picture tell you?

Merry Christmas and a Happy New Year.

Shalom.

Property Weekly Review: 15th – 21st December 2008

Share price performance

Notable property news

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Construction Weekly Review: 15th – 21st December 2008

Share price performance

KLSE Construction Index rose by 2.7% last week and the main gainers were Muhibbah Engineering and IJM Corporation which rose 8.9% and 7.5% respectively. Employees Provident Fund added 3.87m and 0.05m shares in Gamuda and Muhibbah Engineering respectively.

Spillover effect from Singapore’s pump-priming

Singapore’s plans to bring forward up to S$4.7bn (RM11.3bn) worth of construction projects to help its faltering economy may have a spillover effect on Malaysian construction players as well as building material suppliers. Among companies under coverage, Sunway Holdings may stand to benefit as it already has a presence in the island republic via its joint ventures to develop apartments as well as supply of premix concrete and aggregates.

Contracts awarded

There was only one notable overseas job awarded during the week amounting to RM32.3m.

Comments:

Gamuda’s 1QFY09 net profit was significantly lower due to margin compression and slow work progress in the double tracking project as a result of hiccups in land acquisition. The 5- year project will now be delayed by a year. An interim dividend of 4 sen gross has been declared, a sharp cut from 12.5 sen in 1QFY08.

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Why are U.A.E. share prices falling

Again, another post in response to a thread on DST.

http://www.dubaisharetalk.com/viewtopic.php?t=9100

sammy started the thread, apparently wondering why prices had fallen drastically during the first and second trading sessions this week.

If you’re not interested in gleaning the details from below, here is the summary.

To start with, obviously last Thursday, important support levels were broken , and in ADX, the main shares of Sorouh, Al Dar and FGB showed that they can’t support the index, and were turning bearish. Look around the blog to read about that.

80% of what’s written in the DST thread is pure garbage, nonsense, and useless non-news. Won’t help you get back your money.

There is a very large global fundamental economic and financial crisis going on, and worsening that’s affecting the U.A.E., the G.C.C. and the Middle East as well. That’s the bottom line.

People and companies are in debt and have to pay it back by raising cash anyway they can, by selling their piss even. People and companies are getting scared and even those that don’t have any debt are switching swiftly to cash. And people in general are too scared to buy anything market related and are not buying anything anymore.

End of story.

Add to that the very minor (being very sarcastic here) fact that emotions rule markets, especially Wild East Cowboy markets like DFM and ADX.

Markets move 90% on emotion. The reasons to sell were obvious many months ago to all, and the big players acted on them, for the most part. Now the emotional damage is being done to completely destroy the small people, the retail accounts, left in the market.

BTW, retails account could mean multimillion dirhams.

The movements now are by short-term speculators. The buy and holders who are not funds or institutions are feeling the pain of course in thin markets.

Wait for the big money to come in. Who knows when they will start buying. 2 months, 1 month, 6 months, 1 years, I don’t know. When it comes those of you who exited EMAAR at 3 will be chasing the market at 7.

And crying about it.

sammy seems to imply there hasn’t been any major important local or global news to justify the price drops.

From a chart perspective, there was a breakout on the downside, and the consolidation ended after a week or two of sessions. It’s absolutely normal to continue downwards this way after important support has been broken.

Many many times on DST, dxb kola posts have tried to bring home the fact that stock markets, or any markets, are not necessarily media news-driven. In Wild East Cowboy markets like the Middle Eastern stock markets, prices precede news by months, not just weeks and days, or hours (hours in very developed markets).

It is total insanity to log on to your online brokerage platform and then buy or sell securities, make those decisions based on what the media say.

Because you will always be late.

And contrary to common opinion, rumours don’t move markets to the extent we’ve witnessed lately.

I’ve said many times on DST, that news comes after the price movement, and that’s if there actually is any meaningfulnews. Half the time, the media, or people on DST, have to wonder why the market moved.

Analysis of that kind is always nonsense.

Fundamentals are well know and have been in play for a year now.

Crashing oil price, banking problems, job cuts, real estate.

Forget all that now. It’s all priced in. Now it’s an exploration of how low prices will go. They want the retail account to give up.

Any funds still in the market are either extremely professional and successful (meaning taking advantage of the small players) or are losing a lot of money and don’t know what the hell they are doing.

The market is headed down also because of a very well concealed/hidden fact.

80% of the U.A.E. stock brokers are leveraged and losing money in the market.

No one. Nobody. Is. Interested in this story on DST.

Bravo to all of you.

glued offers the following opinion to sammy:

Oil has been fucked for a good few months, and especially a good few weeks now, and fallen below the Oh I, G.C.C. country, AM REALLY FUCKED level for quite some time now (i.e. 60 dollars).

And the ratings agencies’ downgrades and analyst downgrades don’t mean fuck all anymore.

People definitely know better now than to listen to what any investment bank has to say about shares anymore. They’ve learned that lesson the hard way well before the declines witnessed the first couple of sessions mentioned by sammy.

Job cuts and cancellations, according to another member.

Do you really think a WAM report will push markets the way they’ve been pushed this week?

Friends, all of the above have been priced in!

ALL OF THE ABOVE have been priced in!

Repeat after me ,

Again!

ALL OF THE ABOVE HAVE BEEN PRICED IN.

Job cuts, real estate crash, oil crash (which definitely influences EVERYTHINg in the gulf, reduced tourism and visits to the country because of problems elsewhere people are facing, whatever…

The funds and real big money investors have liquidated and will keep on liquidating because they are smarter and more connected to the real economy, and more aware.

DXB KOLA repeatedly mentioned DFM and ADX are in a confirmed bear market back in August. Beginning officially in July.

The low prices you see today are what bear markets do. Especially in Wild East Cowboy Markets.

members robchad and stylinexpat pushed home the fact that real estate is a fucked market here, and that the stock market was anticipating that.

In the summer when EMAAR broke out below 9, it was because major shareholders, the meaningful ones, insiders, could see that the time would come when people would refuse to pay forthcoming instalments on projects that looked good on paper to people wanting to make an easy buck.

We have EMAAR calling up “buyers” of their properties nowadays, asking them, no, begging them, to pay the next instalment, or else “We cannot begin construction.”

The same EMAAR insiders and shareholders who got out knew very well that people in the U.A.E. already knew that in Dubai and the U.A.E. even when the times are good, no developer in their right mind would start, let alone deliver, a project on time!!

The hens are coming home to roost. That’s the story with EMAAR.

DPW is an even sadder story. Especially to people like DXB KOLA who still play the long-term investor (IPO shares) game. The smart ones exitedf with a 20% loss last year!

We have a situation where officials in the U.A.E. honestly believe people are THAT stupid.

All the ports and shippers and shipbuilders in the world are shitting their pants worried about the current recession and how long it will last, but NO, the guy who runs DPW is not at all worried about a global slowdown impacting the global Dubai Ports World business.

Oh yeah?

Goods will be coming through the Middle East, no matter what? Is that what you are saying?

Yes, there’s a sucker born every minute, but come on, are we this dumb to believe your endless stream of garbage that the G.C.C. and Dubai are immune to the most serious economic slowdown the world has witnessed in its history?

DPW at 25 cents is probably an accurate assessment of the Ports/Shipping business. No one doubt that.

DXB KOLA buying those IPO shares and holding for eternity was definitely a stupid decision, when signs that global trade was slowing because of a cautious banking sector were already present during the days of the IPO.

DXB KOLA also were very wrong to believe that the G.C.C. banking industry was somehow operating independently from the global money markets and could then support the real estate/construction industry in Dubai in particular.

Wrong. Wrong. Wrong.

Short of the Central Bank issuing money against falling oil revenue, there is no way the U.A.E. can support it’s problematic banking situation, which is simply destroying the property market.

The money to finance everything meaningful here came mainly from European banks, that are now regretting their cowboy lending attitudes.

So DXB KOLA wrong about that, screwed up there. But FYI, to manage risk, we did sell properties prior to Cityscape. How beautiful if we’d sold EVERYTHING. Balance sheet would look good now, wouldn’t it? Mainly cash.

It was not to be!

stav39 writes his opinion

But I think it has more to do with the recent bank rating down grade. Certainly real estate picture is very negative but not to the extend that justify the current stock prices

sam111sam, it is time to 1) stop being in denial and 2) lay down the crack pipe.

Bank rating downgrade?

Banks over here should have NO GRADE, that’s how inept and useless they are. They will have to be supported by oil money. No question. So instead of worrying about whether FGB or UNB ENBD or NBAD is a CC or whatever nice rating scheme those moneymaking agencies use, worry about how much the government is going to utilize of this “cash reserve” or oil surplus revenue we keep hearing about.

Let’s hope they actually saved those surpluses.

I think I am presageing stylinexpat and robchad’s response to your last statement when I say that the banking share prices are anticipating a very ugly, very sad, spectacularly collapsed real estate/property market.

DXB KOLA view has changed a week or two after Cityscape , and we were wrong that stocks and property were decoupled in every way. No, it is true that the people who sold shares have anticipated the fucked up situation the U.A.E. and Dubai are in.

If people like Foreigner want to believe that Nakheel has a few billion in repayments next year, fine, maybe all the chief executives he speaks to regularly are not lying. Maybe they know there is more money. Like money hidden inside their asses that no one knows about to pay for things such as financing instalments for all the ports they acquired a few years ago.

I want to know if Dubai Bourse (DFM) will pay a dividend next year. Will they fulfill their promise to DFM company shareholders of 50% of profit? That’s an interesting question when they have refinanced loans this year at crazy interest rates. (What happened to all that bullshit about being an Islamic company by the way?)

A few more things:

I still want to know how foreign selling is of any interest in trying to understand the collapse of share prices here, when locals and GCC nationals have always owned the vast majority of shares here.

So who gives a damn about foreign selling. Foreign funds worth their salt exited back in August, or October at the most.

Volumes and trades are DOWN DOWN DOWN. That’s because local, G.C.C. and foriegn funds have mainly already exited the market! They are now watching the beautiful scene of people who refused to sell, or are getting the point only now, that you have be out of this market.

BTW, this is not to say you should sell, god forbid I give this advice and then the market starts to fly.

Accusations of manipulations I am not concerned with. All the world markets have collapsed. Maybe Dubai and ADX more so than many others, but re manipulation, I have this to say.

Manipulation accusations are typical of people bitter about losing money, unfortunately.

Some of my properties have fallen at least 50% since August. What manipulation? Same with shares.

There is foul play, no doubt, but it’s tought to manipulate giant money exchanges.

Look at DXB KOLA posts on banking shares here and sammy, please look at our ARTC posts from a few days ago, and ALDAR, SOROUH.

People with experience can navigate these markets. When you know it’s a big bad bear market, you wait for rallies and sell.

Some people on DST rememember that advice from August.

It’s normal for ARTC to buck the trend and go up, when everyone is still crazy about buyback news and stupid Board of Director decisions on currently meaningless things like bonus shares.

Keep dreaming about those lies and all that bullshit.

Enough for today.

May the market gods be with you at some point in the future.

What is the point?

I only got the anger and the frustration of the author…as it’s not possible to throw it at the DFM and the crisis etc., takes his chances on some forum posters.

Christmas and New Year - good opportunity to take a break.

Happy Holidays Folks!

2008 in review

2008 was a very… different year.

As with all years.

But 2008 was different in a unique way.

It was more different.

(How’s that for a useless introduction?)

I didn’t really know where or when to begin, so I perused through my blog entries. It seems fascinating that a weblog can uncover a great deal hidden in your memory.

2008 began with a smashing post, “school has… um started?“, holding the record for the shortest post in this blog. Then I posted a quick message about being an intransigent, short for a stubborn and uncompromising individual, thereby justifying my bad impression of myself. March was possibly the most disappointing month, after not being selected for the BB AQ race in the school team, of reasons I still will not fathom. The day the selection results came out was undoubtedly the saddest day in my recent history, and permanantly altered my outlook towards BB. (*the post is not available for public viewing.)

March was also a month of renewed hopes. The World Scholars’ Cup Asian regional semi-finals were held in Singapore. This round of competition, to tell the truth, was lacking in organisation and rigour. Our team also had a poor performance, but, thanks to a random sponsorship, entered the Finals. Still, we did beyond expectations in the World Finals held in Seoul, clinching an 8th, which wasn’t really too bad. Two intellectual role-models, Gerald Sng and Andrew Tam, were brilliant in their own ways; the first seemed slack but won a number of individual prizes, the second had a natural capacity to ingest information smoothly.

May was a spectecular month - there was the Interhouse Humans Quiz, which boosted the image of Humanities in our school. I lost my computer due a rare virus, but thankfully resuscitated some data. There was also the introduction of geographic thought in the Geog RA syllabus, resulting in the True Growth Index. This eventually morphed to become my RE report, which entered the semis and wasn’t bad at all. It also marked the first of a string of nights where sleep was compromised. Of course May also saw my sudden awareness of Leona Lewis, winner of the 2006 (British) X-Factor. For the rest of the month, my ears heard nothing but her songs and her voice. (You cannot imagine.)

June marked another competition - NUS GeoTrail - but was a stunning disappointment. It also marked the stellar rise of Mariah Carey in my playlist count, because of her unparalleled brilliance at vocal control. The next month, July, was somewhat uneventful, save for the new term cewhlerobama to describe my favourite divas.

August wasn’t too exciting either. There was the Interhouse Debates, which was a beginning in my interest in formal debates. September was quite a different matter - it was the month where the US Presidential Elections started to heat up! The rivalry of McCain and Obama was spectecular (and so were the funds), but showed that democracy was still alive and kicking in America. That month gave birth to an impassioned post about a mallicious, overly popular video about a lame US veteran using the fallacy of emotions to appeal to abuse American’s emotions and create a logical black hole.

The beginning of October marked the EOYs - with unexpected performances in various subjects  - some unbelievably good, others quite the opposite. That month also saw the conversion of a science student to a humanities student, argued with a number of reasons coming into play. Despite plenty of iner turmoil and external surprise, I am now a fully-fledged humanities student.

Eventful? Yes. Meaningful? Yes. Fun? Not always. Easy? No.

There were people particularly relevant to the series of events which occured. Among these are my teachers - two of whom I owe particular debt to - Mr Yuen and Mr Wee, incidentally also both my RA teachers. Their dedication, experience and passion are rare qualities in the teaching sector nowadays, and they shone elegantly through both mentors. I believe both should be hallmarks of what the national teaching occupation should aim towards.

If you ask me, 2008 isn’t at all about those things that happened, as detailed above. It’s not just the personal experience, but it’s the people, the friends, the family which built a beautiful year.

This year, in review, was a wonderful experience.

Crisis in Asia - No Exports

By Ambrose Evans-Pritchard

Last Updated: 4:34PM GMT 22 Dec 2008

The shock data came as the Japanese Cabinet Office warned that the world’s second biggest economy is now deteriorating at an “exceptionally high pace”.

Shipments collapsed to almost all markets in North America, Europe, and Asia, following a pattern already set in recent days by South Korea, Taiwan, and China. Thailand on Monday said its exports fell 19pc in Novermber.

It is unclear to whether the violent drop is distorted by a “one-off” inventory shock as companies slash stocks, or whether it is the start of a trade slump that threatens Asia’s entire export strategy.

“We think this is very serious,” said Stephen Jen, currency chief at Morgan Stanley. “These export surplus countries are super-leveraged to the West, and now we’re seeing a multiplier effect (in reverse) as the intra-Asian trade model is stress-tested. What’s incredible is that Japan has run a trade deficit for two months in a row despite the fall in oil prices. The next country to watch is going to be Germany,” he said.

The Baltic Dry Index measuring freight rates for bulk goods has crashed by 94pc since peaking in June. Container shipping for manufactured goods has been less volatile but that too has begun to buckle. Denmark’s Maersk and China’s COSCO have both cut container rates from Asia by a quarter.

Importers have been struggling to secure letters of credit, the lubricant of the trading system. Even large banks in Asia have had trouble obtaining dollars needed for shipping deals.

Masaaki Shirakawa, the Bank of Japan’s governor, said the central bank was preparing to buy corporate debt and commercial paper in an emergency move to unlock the credit market. … “It’s an exceptional step,” he said, insisting that the authorities were taking on private credit risk with great reluctance. The bank is boosting its purchase of governement bonds from ¥1.2 trillion to ¥1.4 trillion ($156bn) per month in a return to quantitative easing.

In China, the central bank cut rates for the fifth time since September to 5.31pc and trimmed the reserve requirement for lenders. The Govenrmment is rushing through a $585bn fiscal stimulus package.

Beijing is alarmed by outbursts of civil unrest, both in the country’s hinterland as 9m of migrant workers return after losing their jobs, and in the export hub of Guangdong where violence has been simmering for months. Some 3,600 toy factories have already closed this year.

Premier Wen Jiabao said over the weekend that the key priority is to find jobs for migrants and some 6m fresh graduates — the two groups most feared as a political tinderbox. “If you are worried, I am more worried than you,” he told students.

Japan’s … Cabinet Office warned that the surge in the yen against all major currencies was now tightening like vice on Japan’s economy. “The tempo of the economic downturn is getting substantially faster… ,” it said.

The yen has appreciated by a third to ¥89 against the dollar since the credit crunch began. There has been a dramatic reversal of the “carry trade” as hedge funds close worldwide bets that were financed at near zero rates in Tokyo. Japanese investors began to repratriate their vast foreign holdings. It has doubled in value against sterling.

The surging yen has played havoc with the balance sheet of Japan’s leading exporters. Every one yen appreciation against the dollar and euro shaves Toyota’s profits by $450m. The company is now underwater, facing its first loss since 1938.

The risk is that Japan could slide back into a deflationary crisis and renewed perma-slump. The country’s `Lost Decade’ never seems to end.

Tuesday

Mike: Today’s top economic reports are both related to housing.  New and existing home sales numbers will be released at 10am and both are expected to point toward less activity on both fronts, which means less housing related employment. If you are looking for some excellent housing related information, I recommend that you look at the following sites, which are also posted on the links section of the page. The authors of these sites were in the forefront of calling the housing bubble, while the MSM  and talking heads were yelling to buy now or be priced out forever:

http://mrmortgage.ml-implode.com/

http://www.thehousingbubbleblog.com/index.html

http://optionarmageddon.ml-implode.com/

A few other informative sites include:

http://www.housingwire.com/

http://patrick.net/housing/crash.html

 

Mike: Existing homes sales fell by a larger than expected amount:

Existing home sales sink by 8.6 percent in November, as prices plunge a record 13.2 percent

WASHINGTON (AP) — A real estate group says sales of existing homes plummeted far more than expected last month as buyers reeled from October’s big plunge on Wall Street. The median sales price fell by the largest amount on record.

The National Association of Realtors said Tuesday that sales of existing homes fell 8.6 percent to an annual rate of 4.49 million in November, from a downwardly revised pace of 4.91 million in October.

Sales had been expected to fall to a pace of 4.9 million units. according to Thomson Reuters.

The median sales price plunged 13.2 percent in November to $181,300, from $208,000 a year ago. That was the lowest price since February 2004 and the biggest year-over-year drop on records going back to 1968

via November existing home sales fall by 8.6 percent: Financial News - Yahoo! Finance.

 

Mike: New home sales also fell by a larger than expected amout. This bodes ill for any immediate relief for construction, mortgage and real estate employment:

WASHINGTON (Reuters) - Sales of newly built U.S. single-family homes slowed in November to the weakest levels since 1991, according to Commerce Department data on Tuesday that offered fresh evidence of housing market distress.

The seasonally adjusted annual sales pace of 407,000 was down 2.9 percent from October and was the lowest rate since January, 1991.

Economists polled by Reuters had forecast sales would notch a 420,000 rate compared with a downwardly revised 419,000 in October, previously reported as 433,000.

via New home sales fall 2.9 percent in November: Financial News - Yahoo! Finance.

 

Mike: I don’t like to even post this economic reading, since it is virtually tied to the price of gas. Gas price goes up, sentiment goes down and vice-versa; but here is the report:

NEW YORK (Reuters) - Consumer confidence rose in December due to declining prices, although job losses and falling income continued to weigh on sentiment, a survey showed on Tuesday.

The Reuters/University of Michigan Surveys of Consumers said its final index reading of confidence for December rose to 60.1 from November’s 55.3.

 

US firm Textron, world’s leading maker of corporate jets, has expanded its job cuts to 2,200 amid global downturn.

The maker of Cessna aircrafts and Bell helicopters said the figure included previously announced cuts in its Cessna and Bell divisions.

via BBC NEWS | Business | Cessna company loses 2,200 jobs.

NEW YORK (CNNMoney.com) — Industrial conglomerate Textron and information technology firm Unisys announced Monday that they would cut a total of 3,500 jobs to reduce costs as economic activity slows.

The Providence, R.I.-based Textron said it would cut about 2,200 job cuts worldwide, expanding on a previously announced restructuring plan. The company said the plan may cost $65 million by the end of the quarter, but save $100 million in 2009.

 

Mike: After ignoring economic storm warnings and sinking the country’s financial ship, I don’t think that this group of civil servants should even consider a pay raise at this time.  Send CONgress a message by going to the site listed below and place your congressional pay raise vote

- CONGRESS GETS A PAY RAISE. DO THEY DESERVE IT?

Under existing law, as part of a deal to give up outside income from speeches and other sources, Congress receives an automatic pay raise unless it votes otherwise. In January, Congress will receive a raise of $4700. This will increase the average Member’s pay to about $174,000 or a 2.8% increase.

- Does Congress deserve a raise this year? A bill was introduced to reject the pay increase, but it died in committee. Tell Congress what you think about this pay increase.

 

via Hamilton County cuts spending to 1999 levels - Business Courier of Cincinnati: .

The number of worker in line for unemployment benefits because of large-scale job cuts jumped more than 50 percent in Ohio in November, according to a federal report.

The Bureau of Labor Statistics reported 120 dismissals of 50 or more workers in the state last month, up from 58 a year ago, seasonally unadjusted. Resulting first-time unemployment insurance claims hit 11,680, up 59 percent from 7,369 in November 2007.

via Mass job cuts jump in Ohio in November - Business First of Columbus: .

The recession is taking its toll on Wilmington’s public radio station, WHQR. On Monday, they announced four key positions will be cut from its staff.

The general manager, news director, and development director will be out of job in about a month. The fourth position being cut is the programming director, a spot that’s been vacant for a few months.

via WHQR announces cuts will be made | WWAY NewsChannel 3 | Wilmington NC News.

The Weyhaupt Bros. pork processing plant has suddenly closed in Belleville. Last summer, owner Amy Bouvet announced that the parent company of the business at 1510 Lebanon Ave., Porco Inc., had reorganized. The business included a retail market that sold pork chops, tenderloins and sausages, along with milk, cheese, eggs and beverages directly to the consumer. The market and the plant are now locked up. …

via Several businesses close in the metro-east - Metro-east news - Belleville News-Democrat.

SAN FRANCISCO (Reuters) - IT services company Unisys Corp (UIS.N) said Monday it will slash 1,300 jobs, or more than 4 percent of its work force, and suspend matching contributions to its U.S. 401(k) plan as it moves to cut $225 million in costs.

In addition, Unisys said it will forgo salary increases in most of its markets next year.

via Unisys slashes 1,300 jobs | Reuters .

- Aleris International is laying off 32 employees at its Lewisport plant effective Jan. 5.

Employees of the aluminum mill were informed of the decision last Wednesday, said Melissa Olmstead, director of human resources at Aleris’ Beachwood, Ohio, headquarters.

“We’re continuing to respond to economic conditions,” she said.

via ARS Aleris will lay off 32; Job cuts effective Jan. 5.

CARSON CITY — Manufacturer Chromalloy Nevada laid off more employees because of a continued slowdown, a spokesman with the business’s parent company said last week.

The 75 workers laid off Wednesday and Thursday at the jet engine parts manufacturing and repair plant may be rehired in January if the airline business picks up, said Andrew Farrant of New York-based Sequa Corp.

via Chromalloy cuts another 75 jobs in Carson City | TahoeDailyTribune.com.

FREEPORT, Maine — Hit hard by the recession, Maine’s L.L. Bean is considering company restructuring, cost cutting and even layoffs.

An e-mail memo from President and Chief Operating Officer Chris McCormick obtained by the Times Record newspaper of Brunswick, Maine, indicates the catalog retailer missed its sales targets by “10 percent or more.” And the new year isn’t looking any better.

via L.L. Bean: Layoffs possible in new year | burlingtonfreepress.com | The Burlington Free Press.

BOLTON LANDING, N.Y. (AP) - The new owner of 1 of the Adirondacks’ biggest resorts is laying off up to 200 employees and shutting down its main operations for the winter.

Sagbolt LLC, a subsidiary of Delray Beach, Fla.-based Ocean Properties Ltd., said Monday that The Sagamore resort on Lake George will close from Jan 4. through March because of the weak economy.

via RNN-TV: New York’s Hudson Valley News Authority - National News and Politics — Adirondack resort plans layoffs, winter closure.

- Pilgrim’s Pride has announced the loss of more than 500 jobs at its Suwannee County chicken processing plant. Ray Atkinson, director of corporate communications for Pilgrim’s, said Tuesday that 505 of the nearly 1,400 workers at the plant would be laid off in coming months.

via Suwannee Democrat - UPDATE: 500 TO LOSE JOBS AT PILGRIM’S.

Suwannee County’s job market is suffering a major blow with the announcement that the Pilgrim’s Pride chicken processing plant in Live Oak will lay off 505 of its 1,400 workers in February and March.

MEMPHIS, Tenn. (AP) — The University of Tennessee Health Science Center plans to cut as many as 200 jobs next year, though university officials said the final number hasn’t been decided.

via Chattanooga Times Free Press | Job cuts planned for UT Health Science Center.

 

 

 

The South Korean government said yesterday it would cut 19,000 jobs at 69 public firms in the fourth stage of its public sector reform program.

The Ministry of Strategy and Finance said the job cuts would be carried out gradually through a natural phasing-out process and voluntary retirement over three to four years, given the current grim economic situation and bleak job market.

via S. Korea to axe 19,000 state workers.

A number of other construction projects intended to symbolize Russia’s economic might have been put on ice amid deepening financial woes. The powerful state gas monopoly Gazprom, too, has shelved plans to build a glossy $2 billion headquarter building in St. Petersburg.

There are many other, less visible signs of the global financial crisis’s deepening impact on Russia.

- The crisis had so far largely spared the Russian population, mainly because share ownership and private pensions are still rare. But ordinary Russians have begun feeling the pinch in recent weeks, prompting talk of looming social unrest.

 

Mike: It looks like you had better bring your own cab if you want to be a cabbie in NYC:

Like Melissa Plaut before them, it’s being reported that “thousands of New York City residents laid off in the financial crisis have turned to driving taxis.” One problem: now there are too many cabbies and not enough cabs. Harlem Yellow Cab says they’re “sending people home every shift without a car. It’s a very bad situation.”

 

Mike: A little good news is nice to see on occasion:

WASHINGTON — The U.S. economy is sinking deeper into recession and companies are shedding hundreds of thousands of jobs, but the technology firms that Santa Fe, N.M., venture capitalist Trevor Loy invests in haven’t stopped growing.

In fact, they’re still adding to their payrolls, and they plan to continue doing so next year. The firms that Loy is funding are developing products such as state-of-the-art water purification systems and the next generation of construction site surveying cameras.

via McClatchy Washington Bureau | 12/22/2008 | Amid the economic wreckage, some sectors still hiring.

- Fewer United Launch Alliance workers will lose their jobs in February, the company announced Monday.

The company’s projected layoff of 350 workers has been reduced to 172. Only 23 positions will be lost at Cape Canaveral, which has about 800 ULA workers. Nationwide, the company employs about 4,200.

“It’s certainly a lot more encouraging than it was,” ULA spokesman Mike Rein said.

via ULA cuts its layoff estimate | floridatoday.com | FLORIDA TODAY.

 

Mike: And some decent advice is always useful when going through strssful times:

-How to Keep Your Job in Uncertain Times-

Meredith Haberfeld

People are contacting me left and right these days with understandable concern about their job security. We all know corrosive worry and concern isn’t good for us and can even reduce our performance level, which can ultimately lead to job loss, the very thing we are all trying to avoid. The real focus is getting one’s head out of the worry pit and back in the game to put oneself in the best situation to keep their job and their careers on track.

via Meredith Haberfeld: How to Keep Your Job in Uncertain Times.

 

Mike: If offered a reduced salary or benefits to keep your job, this may be a good time to accept those reductions:

- A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor.

And in some cases, workers are even buying in. Witness the unusual suggestion made in early December by the chairman of the faculty senate at Brandeis University, who proposed that the school’s 300 professors and instructors give up 1 percent of their pay.

via More Companies Cutting Labor Costs, but Not the Labor - NYTimes.com.

 

Mike: Canceled contracts will not be such a surprise in 2009 as companies try to control spending:

-Telecom contractor North Sky Communications laid off 27 people in Sherwood this month after Verizon scrapped unspecified construction plans.-

“Verizon is delaying the start date for certain projects until the second half of 2009, thereby requiring that we lay-off many employees until that work resumes (presuming that it will),” North Sky President Rodney Kuenzi wrote in a letter to the state’s Bureau of Labor and Industries. “This news surprised North Sky management because just weeks ago we understood that our work with Verizon was on schedule to begin immediately.”

 

Mike: If you do get laid  off, wouldn’t it be somewhat comforting to at least get a classy farewell from your employer, as Charlie Rose offered last week?

 

Mike: The Microsoft rumors continue to float and no response from the corporates in Redmond:

Search Biz: MSFT Layoff Rumors, Google Chrome Complicates Mozilla Relationship & More

Dec 22, 2008 at 2:34pm ET by Matt McGee

There are several gloom-and-doom reports in circulation today about Google, Microsoft, Web 2.0, and the entire Internet sector, for that matter — not exactly how you’d like to start out a holiday week, but so be it. Let’s get started, shall we?

 

More companies lining up for piece of bailout fund

Ramblings of A Smartass

 

 

AP

 

WASHINGTON (AP) - A trio of reports due out Tuesday are expected to paint a bleak picture of the nation’s housing market and the broader economy, as the deepening recession sends more companies lining up for a piece of the government’s $700 billion bailout fund.

Wall Street expects the gross domestic product, the country’s total output of goods and services, fell at an annual rate of 0.5 percent in the July-September quarter. That would match the estimate for GDP made a month ago, but economists believe that small drop will be followed by a much larger plunge in the current October-December quarter.

The National Association of Realtors is expected to report that sales of existing homes in the U.S. for November fell 1.6 percent to a seasonally adjusted annual rate of 4.9 million units, according to the median forecast of economists surveyed by Thomson Reuters.

And new home sales data from the Commerce Department are expected to dip 3 percent to 420,000 units in November. October’s new home sales were the lowest in nearly 18 years.

Builders such as Centex Corp. (CTX), Pulte Homes Inc. (PHM) and Hovnanian Enterprises Inc. (HOV) have been caught with a glut of unsold properties over the past year as mortgages became harder to get and sales slowed. Developers have slashed prices, but many buyers remain on the sidelines, waiting and watching for bigger discounts.

U.S. stock index futures were narrowly mixed, and Asian stock markets fell Tuesday amid persistent gloom about prospects for the American economy - a vital export market - and growth around the world.

Barney Frank, chairman of the House Financial Services Committee, said Monday he is preparing legislation to require that some of the bailout money be spent for specific purposes, such as stemming foreclosures and reducing mortgage rates. Frank is pushing to get the second half of the $700 billion rescue fund released next month, before President-elect Barack Obama is inaugurated.

Frank’s bill would impose tighter restrictions on the second $350 billion, such as requiring banks to report on their new lending every quarter and toughening limits on executive compensation. Many U.S. banks have received federal capital in an effort to stimulate lending.

“I don’t want to wait until Obama,” the Massachusetts Democrat said in a phone interview. “I think we can do it now.”

A spokeswoman for Obama did not return a call for comment Monday.

Last week, the Bush administration used the final piece of the initial $350 billion to provide loans to automakers General Motors Corp. (GM) (GM) and Chrysler LLC. The Treasury Department has earmarked $250 billion to buy stock in banks and provided $40 billion in capital to insurance giant American International Group Inc. (AIG)

Lawmakers have criticized Treasury for not using any of the initial $350 billion to prevent additional home foreclosures. Up to 2.25 million Americans could lose their homes to foreclosure this year, Federal Reserve chairman Ben Bernanke has warned.

Frank said his legislation would include a version of a plan, supported by Federal Deposit Insurance Corp. Chairman Sheila Bair, to spend $24 billion to give lenders financial incentives to modify more loans and help more borrowers keep their homes. Bair has estimated it could prevent 1.5 million foreclosures.

His proposal also would include a measure, under consideration by Treasury, to use government-controlled mortgage companies Fannie Mae (FNM) and Freddie Mac (FRE) to reduce mortgage rates to 4.5 percent or lower to stimulate more home buying.

Frank also wants to revamp the Hope for Homeowners program, which was launched Oct. 1. It was intended to let 400,000 troubled homeowners swap risky loans for conventional 30-year fixed-rate loans with lower rates. The early results have been disappointing, with only 312 applications so far, and officials are looking at ways to expand the program’s use.

Meanwhile, financial industry groups are pushing to use the bailout fund to help a wider array of companies, including automotive financing companies such as GMAC Financial Services. GMAC is 51 percent owned by Cerberus Capital Management LP, a private equity firm; General Motors owns the rest.

GMAC, which provides financing for GM vehicle and dealer loans along with home mortgages, is having trouble finding adequate support from its bondholders for a debt transaction that would allow it to become a bank holding company and gain eligibility for bailout money.

Commercial real estate developers said Monday they also are petitioning the government for support from the $700 billion rescue fund. The Real Estate Roundtable said an estimated $400 billion of commercial real estate mortgages will come due by the end of 2009 without adequate refinancing options.

Industry officials said thousands of office buildings, hotels, shopping centers and other commercial buildings could be headed into foreclosure or bankruptcy unless the government provides support.

Jeffrey D. DeBoer, president of the Real Estate Roundtable, said the industry has written to federal officials asking to be included in a new $200 billion loan program being run by the Federal Reserve, with support from the financial bailout program, to bolster the market for credit card debt, auto loans and student loans.

Treasury spokeswoman Brookly McLaughlin said no final decisions had been made yet on the request from commercial developers. But she noted that Treasury Secretary Henry Paulson, when he announced the effort to help the credit card, auto and student-loan markets, said the new lending facility could be expanded and specifically mentioned providing assistance for “commercial mortgage-backed securities.”

Federal Bailout Money Office

How to save America

Subject: Saving the Consumer With 275 Billion Dollar Annual Injection For 3 Years

Dear Mr. President,

1)    Mr. Bernanke’s “high interest rate” policy made millions homeless, took their jobs away, and brought the world’s economy down. This is a foul up to the nth degree. This high interest rate policy that continued for 4 years created an economic Tsunami is the world. The American dream of having your own home is now subjected to this economic Tsunami.

2)    In the economics textbooks, the extension of credit to the subprime masses for car buying and house buying is not considered. In textbook economics, it is assumed that the rise in interest rates would reduce the borrowing demand. However, it is not taken into account that variable rate loan would be granted to masses and millions of subprime borrowers would run away when interest rates would be increased. This would cause a depression in the housing sector, which would develop into other sectors. The resulting unemployment would cause repossession and foreclosure of millions of cars and houses and the credit profile of millions of people would be ruined which would keep them out of the marketplace forever.

3)    Instead of saving the failing institution by buying the stocks of the financial institutions such as  Wachovia, Wamu , Countrywide, and Merrill Lynch, hereinafter the  (Failed Four),  the Fed made a mistake and injected funds and purchased the stocks of Wells Fargo, JP Morgan and Bank of America, now the (Big  Three).

4)     Under the direction of the Fed, the said cash injection allowed the ‘”Big Three” to take over the “Failed Four.”

Unfortunately, the “Big Three” are known as “Fee Banks” and make their money from excessive fees that they charge. They are not lenders. During the prosperity if one paid 30%-40% down payment then Bank Of America or Wells Fargo provided financing.

Now we are expecting the “BIG Three” to lead us out of recession by extending credit to the jobless people who now have foreclosure on their credit records. The “Big Three” did not extend credit to anybody during the prosperity. Do you think that they would extend credit now? They do not have the mentality and they would never do it.  “The Big Three” are planning to sell the foreclosure notes to the government, get the money and collect foreclosure fees and more fees from the people. They are “fee banks” and thrive on fees and not loans. We are in big trouble now that Bank Of America, Wells Fargo and JP Morgan are placed on the helm of the ship. This is another foul up to the nth degree.

Suggestions:

I- National Mortgage Interest of 3%

The house foreclosures have caused a market panic that has resulted to catastrophic price reductions in real estate to the point that everything is upside down. The mortgages on the properties are now higher than the value of the properties. People cannot sell their houses.  Borrowers are walking away.

Assuming that the mortgage value of a property could be  $100,000 over the market value of a property and this issue has made the borrower weary of holding on to his/her property, the Fed should allow the consumer to separate this $100,000 from their mortgage and make it an unsecured loan payable to Federal Reserve at 3.5% rate payable in 5 years. Since this loan is a government loan, borrowers cannot file bankruptcy and the 3.5% interest is tolerable and the value of the property would no longer be upside down and the borrower has an incentive to keep his/her property. After collection of the $100,000 the said amount would be given to the lending bank that had given the original loan. If the property is sold the said $100,000 unsecured loan could be assumed by the new buyer or could stay with the original borrower as an unsecured loan.

By adopting this suggested policy the Fed can stimulate the housing market and houses could be sold. If a borrower owes $600,000 and his/her house is worth $500,000 and the borrower cannot make his payments, this borrower could sell his house for $500,000 and separate the $100,000 debt from the house and pay 3% interest on the said $100,000 to the Federal Reserve. For a consumer the payments of $100,000 at 3% in affordable and he can save his credit. However the payments of $500,000 could be unaffordable.

B)     Assuming that there are 30 million households in the US where the mortgage is higher than the market value of the house. Assuming that on the average the mortgage to market value relation is $100,000 upside down. Then the cost of buying down the interest rate from 5.5% to 3% would be 2.5% x $100,000 x 30,000,000( Houses) = 75 billion dollar per annum. It is assumed that $25 billion would come back to the government in the form of tax on windfall benefit.

I am of the opinion that this economy would not turn around until the consumers are saved from heavy interest payments and the property values would be such that one could sell his/her property without worrying about the upside down mortgage value relationship.

Americans work hard for their homes, for their cars and for their lives. The Fed’s mistaken policy of keeping the interest rates high for 4 years has created this economic Tsunmai which has created this unprecedented unemployment. The Fed creates the economic Tsunami. The hard working people lose their jobs and cannot pay their loans. Then the system blames the unemployed people for their misfortune and ruins their credit profile.

I do not know how to deal with this unfairness that is happening to the people. However, there must be a solution if we want to keep the people in the marketplace. This economy cannot be stimulated unless masses of population come back to the marketplace again.

Credit Card Industry:

More attention should be given to the Credit Card Industry and a ceiling of 10%-12% interest rate should be imposed to control this whole crooked credit card industry.

Respectfully

Joseph Badiei, Ph.D.

The Global Crash = Islamic Economic System

Im not saying 100% that this will happen in the future.  The future is very tricky to predict as those in the past can attest to.  We do know a couple of things for sure though:

1)  The current economic crash is much greater in depth and width then we had first thought.

2)  The globe is in a season of transition.  Things are changing quickly as the nations are shaken. 

3)  There are certain types of economic systems that are staying, for the most part, steady during these unstable times.

4)  The Islamic Banking System is one of those systems that are enduring.

Below is an article I read recently in regards to this.  I find it very enlightening.

“The current financial collapse is an opportunity. The ugly side of Wall Street is exposed; it’s always been there but covered by a layer of glamour that is now stripped away,” Faisal said. “We are more conservative and sober in our investments. That used to be considered a handicap. Now it’s considered the height of wisdom

Financial Screens for the Islamic Finance and Lesson from the Ethical Investment Industry

Quoted from the Islamic Business and Finance by Professor Rodney Wilson available at: (http://www.cpifinancial.net)

The criteria for selection outlined in the first part of the article are essentially qualitative, in the sense that they involve judgement rather than precise measurement. Quantitative criteria are however also used when screening equities to ensure that they are Shari’ah compliant. These involve calculation of ratios, such as the proportion of interest bearing debt to assets or the ratio of total debt to the average market capitalisation of a company over a period of 12 months. The issue of leverage is complicated. Avoidance of investments in companies which have any involvement with Riba-based banks is ideal, but this would mean the exclusion of virtually all quoted companies, including those whose stocks are traded in the equity markets of Muslim countries.

In practice, fund management groups seeking to comply with Shari’ah adopt several criteria, and there is disagreement and debate about what approach is most appropriate. Firstly, they examine the extent to which a company’s income is derived from interest, and any proportion in excess of 15 per cent is deemed unacceptable. The second criterion is to consider the extent of debt to equity finance, where a proportion in excess of one-third is considered unacceptable. Rushdi Siddiqui of Dow Jones Islamic Indices advocated tighter criteria in the 1990s, with a limit of 25 per cent for the debt to capitalisation ratio, but there was no consensus on this. The TII-FTSE Islamic index adopts only one financial screen, excluding companies whose interest bearing debt divided by assets is equal or greater than one-third, or 33.33 per cent. The Dow Jones Islamic Indexes have three financial screens to exclude companies:

It is debatable if excluding companies because of cyclical developments affecting the entire market is justified, or indeed whether it is really legitimate to include debt laden companies simply because there has been a bull market with a very positive impact on their market capitalisation. These matters deserve further consideration from Shari’ah scholars, as companies cannot be blamed or excused because of developments in the market in general, although admittedly it can be argued that prudent companies with low or moderate debt are less likely to be affected by market downturns than those with high debt. Nevertheless, Islamic disinvestments during a slump may make matters worse for a struggling company, and bring bankruptcy and redundancy for employees, including those who are Muslims. Investors in the Islamic equity fund may also suffer, as selling shares when prices are falling may not be the best exit strategy.

The TII-FTSE Islamic Index does not screen out companies with more than one third of their revenues deriving from interest on cash and securities, but the Dow Jones Islamic Indexes, as already indicated, specifically exclude such companies. This exclusion of course applies to most conventional banks, but there is no need to use a financial screen to exclude these institutions, as they are already excluded because of the sector screen. Investment companies may be excluded if they have excessive cash holdings under this financial screen, as in practice their liquidity is likely to be invested in interest earning bank accounts or conventional bonds. For Islamic investment companies, the answer to the liquidity dilemma will be ultimately to hold sovereign and corporate Sukuk when they become more widely issued and traded. For conventional investment companies, such securities are likely to remain marginal for their liquidity management.

The concern of the Shari’ah advisors to the Dow Jones Islamic Indexes over receivables arises because there is often interest charged on deferred payments and accounts overdue. The stipulation that companies should be excluded if the ratio of accounts receivable to total assets exceeds 45 per cent is designed to ensure that companies selected for Islamic portfolios are not dependent on interest income for most of their earnings. However, this is exactly what has happened to many multinational industrial companies, that might otherwise be suitable for inclusion in Islamic fund portfolios. For instance, due to the global competition in the vehicle industry, car manufacturers such as Ford, General Motors and Daimler Chrysler have become in effect banks, with most of their profits derived from financing vehicle sales through extended payments terms. None of these manufacturers now qualify for inclusion in the Dow Jones Islamic Indexes, even though they are the world’s largest car manufacturing companies.

Rather than specifying a fixed proportion for income from cash and interest bearing securities, or a limit on receivables, the TII-FTSE Islamic Index suggests that Muslim investors can purify their income through dividend cleansing. This implies giving away any income derived from Haram sources to charitable causes, and hence making the residual income Halal. The so-called tainted dividend receipts relate to the portion, if any, of a dividend paid by a constituent company in an Islamic equity portfolio that is attributable to activities that are not in accordance with Shari’ah. Once this is calculated, Muslim investors have the opportunity to legitimise their earnings, and deserving charities benefit.

The Friends Provident Stewardship fund is the leading UK ethical fund with more than $2.5 billion under management, compared to $3.6 billion managed by the entire Islamic equity fund management industry. Friends Provident Stewardship fund aims to avoid companies that cause environmental damage and pollution, or are involved in the manufacture and sale of weapons, trade with or have operations in oppressive regimes, exploitation of developing countries, unnecessary exploitation of animals, nuclear power, tobacco or alcohol production, gambling, pornography or offensive or misleading advertising. As most Muslim economies are developing, and some have oppressive regimes, the negative list of the Friends Provident Stewardship fund may be of particular interest to Islamic equity fund managers and their Shari’ah advisors.

Islamic equity funds should arguably put stress on the positive criteria for selecting companies rather than simply listing prohibitions. The Friends Provident Stewardship fund looks to support companies that supply the basic necessities of life and provide high quality products and services that are of long-term benefit to the community. As Muslims share these objectives that are stressed in Islamic teaching, it may be appropriate for Islamic equity funds to include such positive statements in their prospectuses. At present the Islamic equity funds industry is largely reactive, disinvesting when companies breach its financial screens or change the nature of their business, hence being excluded by the sector screens. The ethical investment industry is more proactive than reactive, seeking to engage with companies in order to change their policies, so that they can conform to their social and environmental agendas.

In practice, most of the engagement with companies by the Friends Provident Stewardship fund has involved encouraging international pharmaceutical companies to supply patented medicines to the developing world at lower prices and improve working conditions and employment practices. Unlike many fund management groups, the Friends Provident Stewardship fund is actively engaged in corporate governance by voting in around 1,500 companies each year. Where they vote against a company proposal, reasons are given in writing, and the fund attempts to start a discussion with the company over its concerns. The complete voting record is made available on the website and updated every month.

Ethical investment encompasses stock broking and portfolio management as well as equity fund management, Charcol Holden Meehan, being the largest specialist firm in the sector in the United Kingdom. Individuals with more than $178,000 to invest can have a personal ethical screening service, and Charcol Holden Meehen also offer ethical pensions and investment opportunities for venture capital. The standard of information disclosure to clients is extremely high, and in many ways could be regarded as a benchmark for the Islamic fund management industry.

Charcol Holden Meehen offers clients three different levels of ethical compliance, designated light green, medium weighting and dark green. Even for the light green designation, companies involved in tobacco production or distribution, the armaments trade, animal testing or environmental exploitation are excluded. However, much of the emphasis is on positive screening. Portfolios are designed to have market sector weightings, so that performance can be compared with major indices, but companies for inclusion are selected according to a best of sector approach, this being defined in ethical rather than financial terms. Companies are selected that exemplify the best environmental and social policy in each sector. For Charcol Holden Meehan, the medium ethical category implies some exposure in oil, pharmaceuticals and banks, but below market weight for each of these sectors. Companies that are included in the dark green portfolio are expected to contribute significantly to the ethical objectives adopted, for example waste management companies making a major contribution to recycling.

Although many may view Shari’ah compliance in binary terms of Haram and Halal, there are often ethical trade-offs when adopting screening, and choices are by no means clear cut. It is not simply a matter of sacrificing material gain in order to be certain that Islamic principles are being upheld, but of recognising that a step-by-step approach may be the best means of attaining religious objectives. Hence, those who are at the light green stage may be regarded as being at the start of the journey, and those at the dark green stage further down the road. There are philosophical as well as practical lessons for the Islamic screening process to be learnt from the ethical screening experience. Yusuf Talal DeLorenzo, a leading Shari’ah advisor to numerous equity fund managers, has stressed the benefits of building bridges between the ethical and Islamic investment industries.

Satisfying the Shari’ah advisors regarding screening is a necessary but not a sufficient condition for the success of Islamic equity funds. Having a Shari’ah committee composed of eminent and respected scholars is a source of comfort for most clients, and is a major factor in ensuring a sound reputation for the fund. However, knowledgeable clients in the future may want direct assurance of Shari’ah compliance rather than indirect assurance through the Shari’ah committee as intermediaries. As with ethical funds, clients may wish to make their own judgements in the light of full information on the screens, and an explanation of why they are relevant to Shari’ah compliance. This will not necessarily reduce the role of the Shari’ah advisors, but rather they may become more communicators and educators as well-informed clients ask ever more questions about the rationale for investing according to conscience, and not simply on the basis of financial returns.

Silver Buggin

Carl Delfeld is head of the global advisory firm Chartwell Partners and editor of Chartwell Advisor . He served as a director on the executive board of the Asian Development Bank during the administration of President George H. W. Bush, and he is the author of The New Global Investor . For more analysis from Delfeld, or to subscribe to Chartwell Advisor, Click here.

William Jennings Bryan’s “Cross of Gold” speech on July 9, 1896, electrified the Democratic National Convention, giving the 36-year-old the inside track on capturing the presidential nomination.

The speech addressed the issue of monetary policy and the debate over backing the dollar with gold and silver rather than just gold, which was deemed overly restrictive and unfair to working people and farmers. It ended with this memorable sentence: “You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold.”

More than a century after Bryan’s speech, gold still has its sparkle, and silver still has an inferiority complex. Gold exchange-traded funds have attracted huge inflows by investors seeking a hedge against inflation, protection against global fiscal imbalances and a weak dollar, and positions that hopefully will not be closely correlated to global equities.

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It’s time, however, to take a closer look at silver and the silver ETF–iShares Silver Trust (amex: SLV - news - people )–which has gained nearly 25% since its June low but still trades at a price below where it launched in late April of this year.

Silver has long been the neglected orphan of the precious metals markets. Investor sentiment toward silver has been depressed by the perception that demand for silver in film and paper for photo imaging is falling sharply due to the rise of digital photography. But photography only accounts for about 8% of total demand for silver. Actually, silver has some of the best-looking supply and demand fundamentals in the metals markets.

The demand for silver is rising fast, due to increasing demand for the raw material for the manufacturing of jewelry and silverware, and because it has so many industrial applications.

It is, for example, one of the best electrical conductors of all the metals.

The real case for investing in silver, however, lies on the supply side, because silver really is quite rare. There are only 23 pure silver mines operating around the world, and most of the silver supply comes as a byproduct from mines mainly engaged in digging for lead, zinc and copper. Furthermore, silver production was flat this year and is expected to be flat again next year.

The amount of mined silver has been less than its demand every single year for the last 15 years, but this hasn’t been a huge problem, because the world has been able to fill the gap from inventories and official stockpiles.

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However, today the U.S. government’s stockpile is all but gone, and sales from other official sources, such as China, Russia and India, appear to be declining, too. According to research consultancy CPM, in 1990, there were around 2.2 billion ounces of silver held in above-ground stocks. Today, there are probably only about 300 million. That’s a 50-year low.

SilverStockReport.com notes that while about 95% of the gold ever mined still exists in above-ground refined form, 95% of the silver ever mined has been consumed by electronics and jewelry. Aside from industrial demand/supply imbalances, silver is once again being viewed by many as a pure metals investing play.

When the silver ETF closed its first day of trading on April 28 at a price of $138.12, I recommended to clients that they sit on the sidelines because of the rapid run up in the price of silver during the SEC registration process. Since then, the ETF’s price has fallen from a high of $152 in early May to below $100 while it accumulated $1.2 billion of silver.

It is also interesting to look at the point and figure chart for (SLV) complements of Chartwell Advisor’s partner Don Smith, president of go2mypv.com.

Don’s view is that SLV broke through a triple bottom in May, but by the end of June, it took a nice turn. If it reaches a level of $128, it will break a second consecutive double top, which is a buy signal.

With an annual fee of only 0.50%, the silver ETF is the cleanest and easiest way to gain some exposure to silver. Another option is to invest in one or more of the largest silver miners, but they are, for the most part, located in somewhat unstable countries, such as Bolivia and Peru. The top six silver miners have a combined market cap of just $8 billion and do not seem particularly cheap to me. The largest silver miner in the world is BHP Billiton (nyse: BBL - news - people ), which I have liked for some time; it now has a market cap larger than that of Coca-Cola (nyse: KO - news - people ). BHP is also the largest position in the iShares MSCI Australia Index (amex: EWA - news - people ).

William Jennings Bryan’s “Cross of Gold” speech is a classic, and investors can benefit from his captivating message 110 year later. Put the silver ETF in your core portfolio with a 10% trailing stop loss.

Carl Delfeld, is also the and author of “The New Global ETF Investor”. Carl will periodically contribute articles on ETF investing based upon his book. To order his book click here.

Here Comes Santa Claus!

That time of year is upon us already.  Bing Crosby and Nat King Cole are playing on the radio.  Shoppers are looking for last minute deals, snow is falling in parts of the country and travelers have begun their pilgrimages home.  Whether you are ready or not, Santa is coming to town! 

This Christmas does feel different than those of the recent past.  The “season of cheer” has been somewhat muted by the economic meltdown we’ve witnessed the second half of the year.  I don’t think I’m going out on a limb here by saying, “Many of us can’t wait for 2008 to end.”  

While 2008 will soon be behind us, the more important question that you should be asking yourself is, “What should I be doing in 2009?  Below I will list 5 steps you can take next year to start on the path to financial recovery.  

As the calendar year comes to a close, I’d like to take this time to wish you and your family a happy holiday season.  Here’s hoping you have a healthy and prosperous 2009! 

Justin

Strange Relationship - Version X Chapter 004: In The Car

Kitchen looking like the morning after Glastonbury; check. Clothes strewn over chair in corner of bedroom; check. Caitlin wearing expensive perfume and even more expensive underwear, which remains indecently undisturbed; check. Caitlin wearing expression displaying equal parts sexual frustration and annoyance whilst staring into darkness; check. The clincher - is there medium tending towards heavy snuffling/snoring from somewhere to my right? Of course there is. Once all the above boxes have been ticked, the conclusion can only be that Richard is spending the night.

At first I was quite pleased. In fact, it would not be unfair to say that a month ago I would actually have been quite excited by the prospect of having my boyfriend stay over for the night; something about it making us seem like a real couple. However, in view of the events of the past week or so, I am rather underwhelmed by today’s events, and distinctly underwhelmed by tonight’s lack of events.

It was nice that he called me at work to say that he was unexpectedly free tonight and wanted to come round. I might even go so far as to say that it put me in a good mood for the rest of the day. However, once I saw him unpacking supermarket carrier bags I knew that things were not going to go quite as I would like.

You see, Richard likes to think of himself as a master chef, some sort of experimental kitchen whizzkid. The reality is that if there were such a program as ‘Vaguely Incompetent Chef’ Richard would be stood on that podium every time - it’s not that he’s bad, but his cooking technique relies on pairing unexpected ingredients and hoping that the results pass FDA guidelines on being fit for human consumption. Think Dr. Moreau’s island for food, and you’re somewhere close.

But that’s not the worst bit, bad as it sounds. I haven’t got to the bad bit yet, but I needed to go through that preamble so that you would understand why the bad bit is quite so bad, and what it is bad in relation to, because it sounds fairly innocuous. Richard likes to have a glass of wine while he cooks.

He’s quite a burly chap so he thinks he can take his drink. Because it takes him so long to do things (which is strange, seeing as everything about his cooking style seems so spontaneous) Richard can easily go through a whole bottle of red, and is usually into a second before he even sets the starter on the table. Then we have a bottle or two with the meal, and another couple of drinks when we’ve settled down afterwards. At one point, I swear to God, I looked up at Richard and the grim reaper was stood behind him. But he wasn’t wielding a scythe, he was waggling a crooked little finger at me and grinning, and I knew that the curse of brewer’s droop had already ended any chance of sex for me tonight.

Still, I tried. I managed to get him into bed at a relatively early hour, before he had chance to complain about being tired. The red set with black lace came out, as did the Chanel. My attempts at seduction were as futile as George Bush’s attempts at apelling. Richard was already in bed when I came out of the bathroom, and snuffling/snoring by the time I’d got into bed. And that’s a full recap of my day, starting with unexpected and welcome surprise, veering towards domestic anarchy, and ending up with equal amounts of predictability and monotony.

Until my phone beeped to say I had a text.

That someone had sent me a text was unusual in itself, and that someone had sent me a text at almost midnight was more so. Generally I remember to turn my phone off before I go to bed. Toying with notions of retrieving my phone from my bag on the other side of the bedroom, the factions in my head for and against the motion battled for supremacy. I checked the alarm clock, and was surprised to see it was only 11:03. When a second text arrived within a minute or two, it was enough to swing the contest.

It was a little chilly with the window open in my room, so I snatched my phone up and jumped back into bed. There seemed little chance of disturbing Richard - usually after red wine you could carve Adam Sandler’s head onto Mount Rushmore without waking him. Pulling the quilt back up, I rolled onto my front and flipped the phone open. The twice-sent text was from Ben:

Hey. What are you doing?

Strange question in itself really, plus a strange time to send it. At least it was the accepted form of the English language. Call me old-fashioned, call me anal if you must, but I hate and detest the language of the text message; textish, or whatever you may wish to call it. I’ve been known to ignore text messages until they came through properly spelt and correctly punctuated. I thought about not replying, what with having Ben’s father lying inches away from me, but curiosity already had his hands around the cat’s neck, and you know, it was Ben. Frowning slightly, and with one eye on the gently undulating mass of blubber at the side of me, I tapped out a quick reply.

Not sleeping. What do you want?

Quickly, his reply came back. I set my phone to silent just in time.

Why can’t you sleep?

Knowing but not wishing to divulge the true answer (”your father has alcohol-induced penile dysfunction”), I returned to him the slightly vague

I don’t know. Why are you still awake?

There was a slight pause this time before his answer came back to me.

Stressful day at work. Can’t seem to nod off.

Sympathising, I nodded. Richard’s gelatinous mass shuddered somewhere in the depths of the bedclothes but did not stir. Still light-headed from the wine I sent him a playful response.

Tried counting sheep?

If we had had videophones I still wouldn’t have been able to see is grin as clearly as I could picture it now.

Are you in bed?

Of course I am.

There was another brief pause. Rolling onto my left side, partly to make myself comfortable and in no way just so I would be hiding my phone from Richard if he should so happen to wake up, I awaited his response.

May I ask what one’s nightwear consists of?

I wasn’t really sure what to say. Obviously my intentions on entering the bedroom earlier did not number sleeping amongst them, and even when I pulled back the quilt I still harboured some hope that I might rouse Richard in some way.

That’s for me to know…

Show me.

I wasn’t sure what he meant. Show him what? What I was wearing? Not bloody likely. And how? Send a photo message? That would mean lights, and lights would mean waking people up.

I don’t understand. How?

The response was as quick as it was surprising.

I’m parked outside your house.

A chill ran through me that had nothing to do with open windows. It might have been a shiver induced by the slight creepiness that Ben was outside my house, but the possibility existed that it was a feeling that owed a lot more to unsubscribed-to anticipation, the illicit tingle that the thought of Ben awoke in me. Of course, the other possibility was that he was just joking, and of course there was only one way to find out.

My house is just off the main road, on the left as you head up the hill. You have to turn left to go down the side of the hill to get to the new development that my house is part of, but the upshot of this hill-ography is that if you park halfway down the side road you can see straight into both bedrooms. That’s why I have thick, lined curtains as well as net curtains on my bedroom window.

It was to these curtains that I went, the soft pad-pad of bare feet on thick carpets seeming unexpectedly loud now that I was doing something wrong, something immoral; something exciting.

Trying to be both sly and clever, I used one hand to make the slightest gap in the curtains. The net curtain was too thick, so my subterfuge failed, and I was forced to draw back the curtains several inches in order to gain access to the nets, which I also needed to draw back as they were too thick to see through in the dark.

He saw me instantly of course, and flashed his sidelights once, briefly, to let me know he had. Caught out I raised one hand in a wave, before coming back to my senses and remembering I wasn’t wearing enough clothing to choke a small Chihuahua. Praying desperately that I hadn’t just flashed him-

Wow, what are you wearing?

Guess I had flashed him then. Working the slightest gap down the side of the net curtains, I tried to peer into the darkness of the car to see what he was doing. It was dark, and the half-moon did little to stop me from showing a little half-moon of my own.

Show me again!

I will most certainly not, I thought. I’m sure that if we were living in a matriarchal, pantheistic society where women ruled and were allowed to do exactly what they wanted there would be a goddess devoted to looking after women like me. She would wear underwear, perfume and high heels at all times, and her staff would be a five foot long vibrator (and she would be the goddess of wine), and moreover she would ensure that I would get away with an escapade such as that so recently and briefly outlined by my lover’s son. But we don’t, there isn’t and I wouldn’t. From behind the safety of the curtain I sent a reply to exactly that effect.

No way!

Once the delivered message popped up, I risked a peek through the window. There was just enough illumination from his phone to see his face, and for a moment there was a definite pang in the pit of my stomach. I stood outside the bathroom door for a moment and it passed, so whether it was down to Ben’s presence or his father’s cooking was a question best left to the philosophers. Looking outside the light from Ben’s phone was still visible, but I had no message on my phone, so what was he doing?

Suddenly the bedroom phone rang. I turned desperately to grab it before it woke Richard up. Barking my shin against the bedside table I managed to grab it before Richard stirred too much. Hitting the cancel button I hobbled back round to the window but did not open the curtains.

That was you? Why did you call?

To wake up my father. Come back to the window or I shall do it again.

I was about to ask how he knew Richard was here, until I realised Ben had parked behind his father’s car. Parting the curtains again I looked down at the car, waiting for another message. Its contents I could have guessed at.

Now show me.

Blackmailed into posing by a main road by my boyfriend’s son, whilst said boyfriend sleeps but inches away. That same betraying thrill ran down my back. I don’t want to do this, I thought, knowing full well that I would. I would do it, and be aroused by it, and seemingly there was nothing to do about it. I slipped between the curtains, ensuring that they pulled shut behind me so there was no light to disturb Ben’s father. I couldn’t look up for a moment, but when I did Ben was stood outside the car, leaning on the bonnet with arms folded and legs crossed. I saw him flick open his clamshell phone, tap onto the keypad.

Thank you, it said simply.

My phone was still in my hand, and I tapped out the question what now?

Was that a smile I could see in the moon’s half-light?

Let’s go for a ride, came the reply.

Give me a second to get dressed.

No. Come as you are.

Leaning over Richard, I could see that he was sleeping soundly and I could only pray that it would hold. I slipped on the heels I’d been wearing when I first put on this outfit, and, pulling the bedroom door quietly shut behind me, I made my way downstairs. At this time of night there was an outside chance that I might bump into one of the neighbours on their way back from the pub, but I imagine that had already occurred to Ben long ago. I snatched up a small purse - there wasn’t anywhere on this outfit that leant itself to storing my phone, door key etc. - and stole outside, turning they key slowly and silently. Looking round and listening intently, I could discern no sounds to indicate I was anything other than alone. There was no chance of running in these heels, nor did I want to walk across the slightly muddy grass in them, which meant I had to walk the long way round to get to the car.

Crossing my arms over my quarter-cup bra (why? Everything else was clearly on view) I walked as quickly as I could to the car, very aware of everything: the feel of the night air on my skin; the way the moon made my skin look pale, contrasting with the dark lingerie; the click-clacking of my shoes on the paving slabs; and the burning of Ben’s gaze on my body. When at last I arrived at the car, I slipped inside as quickly as I could whilst saying something childishly snotty about taking a picture, it would last longer.

“We’ll get to that in good time. I’ve been thinking we might go for a drive, Caitlin, would you like that?”

“Depends where we’re going,” I snapped, folding my arms against both the chill and my being near-naked. “And whether there’ll be something to wear when we get there.” His grin was predictable.

“That would rather spoil the mood, don’t you think?” Imagine a pack of hyenas. Statistically, the odds would suggest that one of their number would be a practical joker - the one amongst them who would play dead and then jump up and bite whomever tried first to bite them, for example. This was Ben’s smile; equal parts predator, joker and sadist, and his smile said exactly that. “It would rather spoil my mood, anyway.” So, no clothes then.

“Would you mind telling me where we’re going then? Or would that also spoil the mood?”

“Where is but a function following the form of what, and what it is is a surprise,” he said, paraphrasing a movie that I could remember neither the title nor point of. So, no point asking questions either. There was one obvious question to ask, and it lurched about in the back of the car being all huge and unspoken. I left it there for a while, until I tired of it kicking the back of my seat.

“What about your father?”

“I don’t think that lingerie would suit him quite as well, which is why I’d rather invite you, if that’s not a problem.”

“Invite me where?” There was a slight pause whilst Ben seemingly wrestled with how much to tell me. I wasn’t overly impressed with how the evening had gone and Ben was doing little to improve my mood. I guess this must have been visible on my face, because he relented a little.

“I have a friend I’d like you to meet.”

“Please, go on.”

“It’s someone I met through work, who I was rather hoping might be able to help you out with something. We’re almost there, I’d prefer to explain the rest when we’re together.” we drove in silence for a few more minutes. We were on the north side of the city in one of the, umm, less exclusive districts. Not somewhere I would normally go; and if I did I would usually be wearing clothes. And be inside my car. With the doors locked.

Ben slowed to a crawl in front of a row of terraced houses across from a short row of shops; a newsagents, an off-licence, a pizza joint, all illuminated by gaudy neon signs. Scanning the door numbers, he eventually brought the car to a stop, and, taking his mobile from the hands-free cradle, made a call.

“We’re here,” he said before a pause. “Will do. Two minutes.” He killed the call.

“We’re here?” I asked.

“We’re here,” he confirmed. He didn’t understand the subtext of the question - he is male - so I sat with arms even more robustly folded than before. “Are you coming?”

“No,” I answered. “Not like this.”

“Caitlin, look around you…” As bidden I surveyed the scene. There were a large number of women in groups of two or three and many of them were not wearing much more than me. They were rowdy, they approached the cars that slowed for the traffic lights (not all did slow down, even when the colours told them to), and one of them was administering oral sex to two men in a darkened doorway. “Do you think anyone will look twice? They’ll assume I’m a customer.”

More aggrieved than I could realistically verbalise that he’d even brought me to the city’s most notorious red light district, let alone the thought that someone might think I was a prostitute, I simply sat.

“Suit yourself,” he said, getting out of the car. “Let me know how much you make.” He had a point. I followed him out of the car and scurried behind him as he remotely locked the doors, taking his arm in mine and trying to hide behind him. I’m sure he walked more slowly than was necessary, but in truth no-one did look twice, even though I was sure my lingerie would be valued at more than most of the property in the street.

We nipped down the jennel between two houses and opened a gate into the backyard of the house to the left. Knocking twice he let himself in and I followed quickly, my mood and manner best described by any number of words beginning with un-.

There were two girls slouching at a table that woodworm wouldn’t touch. High, drunk or possibly aliens they were both wearing bras and mini skirts and drinking beer from bottles. Their make-up reflected the neon signs outside in being bright, gaudy, ostentatious and occasionally described as faulty. Removing the bottle and cigarette from her mouth long enough to nod in the vague direction of the stairs, the blonde whose roots had seen less recent maintenance than the Parthenon uttered one word which may have been ‘upstairs’. Ben returned her nod and, taking my hand, pulled me through the kitchen as the girls and I looked each other up and down. They were younger than I expected; very probably teenagers.

Treading carefully around shoes, clothing, ashtrays, beer bottles and a sleeping (or dead) skinhead we conquered the stairs. The carpet was quite the dirtiest thing I had ever seen and I understood why they preferred to illuminate it by ambient light that came in through the un-curtained window. The walls were smeared with some substance so virulent that it defied attempts to identify it because it had attained basic motor skills and could simply get away. A shiver struck me, ran down my back; it took one look at the carpet and ran back up.

There was one door left ajar, emitting a diffused light via the gap, and it was to here we headed. Ben knocked, paused and pushed the door open gently. I wasn’t sure that I wanted to enter, but I didn’t think I could tackle the wall excrement on my own if it attacked me. Defeated without even entering into combat with the ooze, I followed him.

There were black curtains, and a black quilt cover; a single bulb to illuminate the room was enshrouded by a black lampshade; the ceiling, populated by self-adhesive, glow-in-the-dark stars, was black; the walls were clad with various drapes in various shades of black (although the walls themselves seemed to be a pale, baby-ish shade of pink); and whilst the young girl lounging on the bed had skin so white she might have been albino, her hair was raven-black and she displayed a predilection for black underwear of the sluttiest type. She had a number of tattoos in the form of coiled dragons, celtic symbols and Germanic script, and was reaching over to turn down the volume on the CD player.

“Liv,” said Ben, as though that syllable explained the evening thus far. She nodded and I’m afraid I may have curled my lip in distaste, an involuntary movement that neither she nor the decor seemed remotely surprised by. Struggling to think of a place I would rather be less than here (the hills of Afghanistan - the surface of Pluto - the Big Brother house - all failed to replace this teenage Goth shag-den on the list) I faked a smile, but she seemed pre-occupied with chewing gum and did not return it. I clutched Ben’s arm tighter and grimaced.

Liv reached onto her bedside table and picked up a bottle without a label, of something clear that I could smell from across the room. Holding it with outstretched arm she offered us both a drink, which we both refused, before taking a swig herself. Wiping her mouth as she swivelled upright, she patted the bed beside her.

“Why don’t you come sit down honey,” she said in a surprisingly girly voice. I don’t know why but I’d expected her to speak like that shouty guy from Full Metal Jacket. “I’m not going to hurt you, and you know, some of us are punching a clock here.” I hugged Ben’s arm tighter and looked up at him.

“It’s okay Caitlin, Liv’s a professional.” That much I’d gathered for myself. Sensing his mistake he continued. “I mean, with other women. I’ve seen her in action and honestly, there’s no-one better.”

“What do you mean? Ben, what are we doing here?”

“You told Asok, in the shower, that if you went with another woman you’d want her to take the lead. That’s Liv’s particular kink. She likes to dominate other women.”

“So?”

“I like to watch her do it,” he said, pulling out his phone. “However, I can see you’re not that bothered and I made a mistake bringing you.” Ah, now we were getting somewhere. “So I’ll just phone my father to collect you. See you later,” he said, turning to go.

My choice made for me, I sat down on the bed, sighing. This would be even more difficult to explain than being caught with my hand round Christian’s cock, so what could I do?

Ben sat in the chair opposite, still fiddling with his phone. Liv put her hand on my thigh, patting it comfortingly.

“Hon, it won’t be all bad, trust me. First time you’ve been with another woman?” I nodded, feeling absurdly like a sulking child. “Don’t worry, I won’t hurt you. That costs extra!” she laughed, a tinkling noise that actually made me feel a little better. “Ben and I have done this before, he knows I’ll look after you.” We both looked up at him, and I was sure I caught him shaking his head at Liv. What was that supposed to mean?

“Come sit here, let’s at least get a little more comfy.” She patted the bed beside her. “Do you want a drink?” Like a child on my first day at school I grudgingly allowed myself to be manoeuvred to my seat. Liv smiled at this little progress, and I realised she was actually quite pretty under all that coal dust. She moved to kneel behind me, and started to gently massage my shoulders.

“See? It’s not all that bad. Let Livvy give you a little massage, make you feel better,” she said. Ben took the one armchair and dragged it to the middle of the room, so he was directly facing us and only a foot or two beyond my reach. Settling into it he settled into his observing duties as Liv appended her massage with little kisses on my neck, nibbles of my earlobe. His arms were flat out on the stuffed arms of the chair, palms flat down.

Unable to help myself my head tilted to the left to allow Liv better access to my neck, and at this her hands glided down my front, stopping once they could cradle my boobs. My heart was hammering at such intimacy with another woman, whilst the fact that Ben was watching was another facet of the experience. Caught between a cock and a hot place, I wanted to excite Ben - a legacy of the growing feelings I was having for him - but Liv’s action were having an involuntary reaction on me, and I could already sense the twinges between my legs. Once she started to play with my boobs over the delicate little quarter-cup bra I was almost wearing, my nipples leapt into action with unnecessary fervour. Ben smiled, recognising that despite my clear distaste for lesbianism my body was telling another story altogether.

Liv’s right hand swooped gently south, fingertips delicately sliding across my tummy, circumnavigating my belly button and resting on the gathered waistband of my knickers. Clearly a woman with an agenda, I could at least appreciate that whatever I was to be subject to tonight would be over quickly thus minimising the chances of Richard awaking to discover my absence. Of course if I played along, participated rather than endured, my absence could be further hastened, but I still faced the issue that I was fundamentally uncomfortable having sex with this or any woman. Even now my hands itched to jump up and grab hers, but knowing Ben this would be counter-productive and only prolong Ben’s fun by incurring reprisals.

Passively I sat as one black fingernail sneaked under the elastic, forced its way into my knickers and was quickly joined by the rest of her hand. I felt her fingers snag on my pubic hair as she made for my traitorous pussy, which wept for loving attention. She massaged my pubic mound without making further move towards my hole, deflecting my attention from the fact that she was freeing my boobs from my bra by easing them up and out of the cups. Ben maintained a stolid expression but I knew that there was a swelling in his crotch that wasn’t there moments ago.

With breasts released and erect nipples exposed, all that Liv had to uncover to expose me completely to Ben was my vagina. She tapped the inside of my thighs, a sign to part my legs as far as I could, and followed this by extricating her hand from my pubic hair and dragging my gusset to one side. I was now open, on view for my gorgeous young lover whilst being caressed by this expert teenage hooker. Despite my reservations the sheer sleaziness of the situation was electrifying, even if my body was waiting for my mind to catch up.

Content to continue taking the lead Liv started to massage my pussy lips, gently but firmly, sliding her fingertips to and fro over the lubricated, swollen skin underneath. I could do nothing but sigh as my whole body heated up under her touch, and the power of Ben’s gaze. I knew I wanted to perform for him, but at the same time I felt like going along with his wishes here would make it too easy for him. If he seriously wanted to see me with another woman, I figured he would have to earn it.

She moved quickly but delicately to my clitoris, rolling it under the ball of her index finger. My stomach flip-flopped but I was determined I would not let him see how aroused I was. I could hide it, to some extent; he could not, and it was obvious to Liv and I that our little show was working. As much as I could I kept my eyes on his, but he could not match me for fear of missing out. By now Liv’s finger was slipping between my pussy lips as she rubbed up and down over my clit, making me thoroughly wet. She took hold of my chin and tilted my head back, and in an instant her tongue was in my mouth, seeking out my tongue.

We kissed for two or three minutes as she manipulated my clitoris and I struggled to concentrate on, well, anything really beyond the sensations between my legs. Through half-closed eyes I could see that not only were Liv’s wide open, but that they were clearly focussed on Ben and I wondered, not for the first time, if they had concocted some plan beforehand beyond what was already happening.

Liv broke from the kiss leaving me sucking fresh air and unable to either move or open my eyes. She had two fingers working their way in and out of my sopping wet vagina, and because of the angle she was coming from as she knelt behind me she couldn’t help but hit my clitoris on every stroke - something that was not, I was sure, an accident. I was floating, at that time, suspended in time and space on the cusp of the orgasmic plateau, my first induced by another woman and a bloody good orgasm at that! Of course, there was no chance that Ben could make it that simple for me… and once I opened my eyes and found him standing immediately in front of me I reasoned I might be about to discover what that was.

It was the sound of his zipper that returned me to wakefulness from my pre-orgasmic reverie. It was Liv, pulling down the zipper with her left hand as she continued to frig me with her right - how lucky I was to land an ambidextrous woman first time out - as Ben stood squarely in front of us, hands behind his back. Effortlessly she freed his member, taking it in hand and granting it several loving caresses, slowly peeling back the foreskin until the head was revealed, moist and scintillating by the light of the candle on the bedside table, almost close enough to lick. I’ll never understand why men think their penises are ugly or merely perfunctory; right now the one in front of me represented the ultimate in beauty, the beauty that elicits such desire that coherent thought becomes an impossibility.

Liv played with it, keeping it tantalizingly out of my yearning mouth’s reach, manipulating it in a gentle, almost romantic way in sharp contrast with the frantic, forceful way men themselves masturbate. Her action made me want to think up new verbs - squoozing, for example. With each squooze she brought it almost undiscernibly closer to my mouth, and I was so entranced with the game that I had no power to compel my hands to take hold. She rubbed the head and slit with the ball of her thumb, massaging in the warm, clear liquid that leaked from his member, until she stuck her thumb out away from his cock as if thumbing a lift. I realised she wanted me to suck it, this miniature erection-substitute replete with genuine masculine taste and scent.

When, seemingly, my oral prowess satisfied Liv she granted me my prize, gently guiding Ben forward until I was allowed the chance to love him with my mouth. Slowly he entered me, until I realised Liv was guiding him and she wanted his wholeness in my mouth. Trying to relax I took as much of him in as I could, adjusting the angle of my head and neck to accommodate him, until the gag reflex was so strong I had to tap Liv’s thigh urgently, twice. There seemed little room for my tongue to operate so I sucked, hard, urging his essence to be released.

With this objective completed Liv renewed her acquaintance with my hole, hot and desperate, but that was too much. I couldn’t handle being masturbated so intently at both clitoris and now nipple while giving head, and in a minute or two I was making urgent noises asking to extricate myself. Of course Liv knew what I wanted but she was in a position to demand favours in order to see my release granted.

“Caitlin, if I let you free, are you going to be a good girl for me?” I made a gruff approximation of an affirmation. It sounded like ‘gwwwwwhhhhmmmmm’. “Caitlin, if I do let you free, I want you to lick my cunt. You have to suck my clitty, and give me a really good, deep tonguing. Do you think you can do that?” Despite my instinctive mental recoil from the C word, I made the same noise. It seemed to make her happy. “Good,” she said, “because if you don’t, I shall take that whip on the wall over there, and beat this peachy bum here until it bleeds. Do you believe me?” I made the noise to indicate that I believed her. I did, too.

While Liv removed her knickers (and I took in quite how many tattoos she had) Ben bundled me backwards onto the bed. When I was prone Liv clambered on, with excitement but without finesse, until her knees were either side of my head and her pussy literally dripped just an inch or two above my face. Having never been so close to another woman’s sex - and frankly having neither wished nor expected to - I was struck by the scent, tangy and musky, yet alluring. I wondered if she tasted the same and realised I was soon to discover.

I heard her say something to warn me, but I was lost in contemplation and by the time I worked out what it was I could already taste her. The immediate sensation was panic - induced by sudden darkness and claustrophobia, no doubt - but once I was calmed and had closed my eyes, I felt prepared to at least attempt to follow Liv’s instruction, lest her whip find my behind. Tentatively I stuck out my tongue and wiggled it, like a blind person’s stick, taking note of obstructions and landmarks until I’d built up a reasonable mental map of her vaginal landscape.

Unfortunately I seemed to be going a little bit too slow for Liv, who was by now urging me on with a number of rather descriptively crude comment. There was a sudden shift in the topography and I guessed that Liv had leaned forwards; a suspicion confirmed when I felt her starting to fiddle with me again, flicking my clitoris with a fingernail and expressing a wish to ‘do me like this you virgin bitch’ or some such nonsense.

Liv opened and stretched my lips, exposing my hole for the audience of one waiting at the foot of the bed. I felt him carefully insert one, then two fingers into my pussy and slowly work them in and out. I was soaking wet; even with a pair of earmuffs such as I had, and over the sound of my innocent slurpings, I could hear the noises that my vagina made in concert with Ben’s digits. That much I could handle but when Liv started flicking my clit again I started to moan, forsaking anything I was supposed to be doing.

Coarsely Liv started to slap my button, with outstretched tensed fingers, meaning that the staccato insults and derision at my oral technique streaming from her mouth barely registered. The contrast between Ben’s gentle, almost loving touches and Liv’s assault-like approach left me breathing in snatches (literally breathing in snatch! I thought, absurdly) and alternately moaning and squealing.

Just as I thought that I might be able to orgasm from their attentions, all ceased. Breathlessly I waited for something, anything to happen, to shuttle me back onto the path of bliss. I think I may even have wiggled my hips, slammed my pelvis back into the mattress to get them to start again. Of course, I couldn’t see anything with Liv’s vagina planted in my face and I was afraid of missing out, that they were doing something without including me. I could feel movements but the inconsistent quality of the mattress rendered them generic and I could discern no pattern to them.

Suddenly the fingers returned to my pussy and I sighed, normal service almost resumed. Again she held open my flower, tickling my clit teasingly, but this time it was not Ben’s finger that entered me. Liv stretched me so that I barely felt his erection until it was between my sugar walls. He continued pushing it until he was all the way home, and it felt so good I really thought I might cry. His weight was distributed lopsidedly as he accommodated Liv sitting on my face, and it was her voice I heard next.

“Caitlin? We give up, it’s clear you’re only happy with some dick inside you. Your loss, honey! But in order to get anything else, you gotta get back to work with your tongue, baby!” I understood finally and was now eager to comply. As I started to lick at Liv’s fanny, she manipulated my clit and in turn Ben started to fuck me. As my concentration wavered, she would slow down and Ben would do likewise, prompting me back into action.

We continued like this, Liv squirming at my improving technique, me gasping at her digital manipulation and groaning as Ben’s weapon thrust in, out, in, out, my moaning synchronising with the external stimuli. This was mutual, animal fucking, and I knew that I could not keep going for long without an orgasm that would likely make me black out. When it came, I let out a squeal and exhaled forcibly into and over Liv’s clitoris. I felt her shudder, ripples firing through her body, as my lower body went into spasm and my muscles seized Ben’s cock. That was the encouragement he needed, and with a guttural grunt he too came, emptying himself into my vagina and causing me to thrill again.

Liv was already removing herself from me and settling back, seated upright against the wall with legs parted and outstretched. As Ben slowly withdrew, I propped myself up on my elbows to see what Liv was doing; surprisingly (to me, although Ben seemed unperturbed by it) she was furiously masturbating herself.

“You fucking virgins,” she opined between snatched breaths, “you fucking leave me hanging - EVERY - FUCKING - TIME!” Her syntax degenerated into stream of consciousness invective and cursing, and I could do little but watch in fascination as she brought herself off with brutal ferocity. Ben was getting dressed, but all I was fascinated by the sheer intensity of her self-love, and the need to relieve herself. Her eyes were on mine, but I couldn’t stop staring at her frantic fingering.

I was still trying to adjust my knickers as she ushered us quickly out of the room, claiming that she had a punter due any second. I was still very conscious of being almost naked, but in the afterglow of sex it seemed like something that was easier to handle. We drove in silence for several minutes, and for reasons I could not discern I felt the onus lay with me to initiate conversation, heaven knows why.

“Everything okay, Ben?” He checked his mirrors before glancing at me two or three times, as though unable to express his thoughts clearly.

“You didn’t enjoy that?” I wasn’t sure - how often that phrase seems to be part of my everyday experience just lately - to what that referred. Sex with him, with Liv, with both, being forcibly abducted in my skimpies at midnight - come on, be more specific!

“Well, it was - it was nice,” I erred cautiously. “I didn’t expect…” I trailed off, noting that most that had happened in the last few days would be described that way.

“I just thought that you might have been a little more enthusiastic,” he continued, as though I hadn’t spoken. “I thought that you seemed happy and willing to experiment and I thought that being with another woman was the next step, logically. I don’t know, maybe I was wrong about you, I don’t know,” he said, shaking his head in equal parts puzzlement and disappointment. He suddenly reminded me of a mad scientist in a B movie describing in his journal how his hideous experiment had gone wrong and the creature he’d created had been horribly disfigured. Mainly, he was talking as though I were not there. I didn’t like that, and I didn’t like being Benkenstein’s monster either. My feelings were rather hurt.

Silence reigned for the remainder of the journey. We pulled up behind his father’s car and he looked at me in a resigned way, sort of ‘oh well, if that’s the best you can do’ sort of way which made me both angry and desperately unhappy. Did he not appreciate how much I risked every time we did this?

It seemed easier to open the car door and leave than talk to him. I felt as though I should hate him, although I didn’t really want to, and that hurt too. I couldn’t even have the childish satisfaction of slamming the car door for the fear of waking my boyfriend, the one left hopefully sleeping in my bed. I would have wanted to walk up my path with dignity, but I was upset and wearing only my underwear outdoors, so I ran instead.

The refrigerator contained solace, which I poured into a large glass. Kicking my heels off into the corner I slumped onto a chair at the kitchen table, illuminated only by the small lamp on the extractor fan hood. Taking a deep draught of wine, I thought about the bizarre end to the night. The subterfuge of the occasion was no doubt exciting; I would have preferred just Ben and I, but at least I’d not wimped out and run away when faced with another naked woman. Shame I couldn’t tell Jen and the girls, really, but they’d never believe me. But at least the night was over and I could go to bed.

“Caitlin?”

“Richard-”

“I’m so thirsty, I can’t tell you. What are you drinking?”

“It’s wine, I think there’s some left if you want?”

“No, think I’ve had quite enough!” He rustled through the fridge looking for juice. Wearing just his boxers (a small victory, getting him to abandon y-fronts) one could see quite what a huge bear of a man Richard was. He glugged down apple juice before turning back to me. “My, what have you got on?” Great. Now you notice.

“Well, I put them on earlier. I thought you might like them,” I said, with a delicate hint of indignance in my voice. “But you fell asleep before I’d even finished putting them on,” I said with a sledgehammer of indignance resonating through the kitchen. He did have the good grace to look ashamed.

“Okay,” he said bashfully, “but I’m awake now! Let’s have a look.”

“What? Richard, I’m …” Careful Caitlin, what are you going to say here?

“Nonsense, you’re awake enough to get up in the middle of the night and drink wine,” he smiled, sweeping me up from my chair and holding my arm out. Taking in the full view, he looked me over for several seconds before pulling me close and kissing me. It was the kiss I was looking for earlier in the evening; unfortunately, since then, I’d already received that sort of kiss and was pretty much just looking forward to my bed (and the scratty grey flannel bedclothes that are so much more comfortable).

However, Richard did not seem to be in much of a mood to say no. Feeling a stirring in his shorts that seemed so unlikely earlier, he pulled me closer towards him with one massive paw on each of my bum cheeks. His tongue was in my mouth and his kisses contained far more passion and urgency than normal. Once again I found my body responding before my mind, realising that my pussy was juicing up way before my head was used to the idea.

“Cait… lin,” he gasped breathlessly between kisses, “suck me off…” He seemed unwilling to stop kissing despite issuing an order that appeared to countermand that. “Please baby… Let me put… my cock… in your mouth.”

With a gently firm hand on each should he pushed me down, barely giving me chance to sort myself out and get comfortable. He was fumbling with his shorts, so I slapped his hand to let him know I could manage fine. Perhaps there was a chance I could get him off before he got inside me. If I could make him come now, we’d go upstairs but he’d be asleep before I’d changed out of these undies.

Through the flimsy cotton I rubbed his bulge. It seemed harder than I remember it getting previously, and it didn’t really need a lot of work to make it harder. Playfully I tugged at the two buttons on his shorts and popped them open, making the whole process take far longer than it needed to, then reached inside to take hold of his shaft. It was very warm, and being so stiff made it difficult to get through the opening to his shorts. That was just part of the fun for me, delaying the inevitable. If he was going to insist on this blowjob, it would be on my terms!

Once I had his erection freed, poking through the fly on his shorts, I opted for manual manip

Malaysia: CSR Report Card 2008 - Part 4 (Community)

Exploring the Corporate Conscience

This, the CSR Digest’s first editorial, has discussed corporate social responsibility (CSR) issues highlighted by the press in 2008. In the first part, Malaysian CSR marketplace issues were explored, while the second instalment discussed CSR at the workplace issues. The third part took a look at environmental issues, while this instalment will discuss CSR in the community.

Late in 2008, Malaysiakini reported the Penang’s state government dissatisfaction with MMC-Gamuda Joint Venture Sdn Bhd for attempting to ‘pass the buck’ on relocating temples affected by its electric train double-track project.

Deputy Chief Minister Dr P Ramasamy was reported to have said that the company was unethical and irresponsible. Apparently, Ramasamy was particularly unhappy with the company’s position that the temples were illegal structures. He was reported to have said,

I have told the company not to classify them as illegal because the temples have existed for decades. How could the temples suddenly become illegal structures overnight just because of the double-track project?

Meanwhile, Penang’s Chief Minister, Lim Guan Eng, expressed disappointment with MMC-Gamuda for awarding unsatisfactory compensation to private house owners and places of worship in its land acquisition process for the project. He was reported to have said,

The company should consider giving a higher quantum to compensate not only for land acquisition but also for relocation process for them. The house owners may not be able to buy even a bathroom with the amount the company plans to compensate according to market valuation,

The RM12.485 bill project, stretching from Ipoh to Padang Besar, started in January this year and is expected to be complete in 2013.

Sime Darby Berhad announced that it was taking over majority equity in the National Heart Institute (IJN) in December 2008. Notwithstanding the company’s president and group chief executive, Datuk Seri Ahmad Zubir Murshid, assuring the public that maintaining IJN’s social obligations was not only one of the conditions from the Government but also a demand by his own board of directors, the public and many political parties felt that privatization of such a major healthcare institution should not be effected.

Because of the outcry, Deputy Prime Minister Datuk Seri Najib Razak announced a few days later that Sime Darby’s acquisition deal had been postponed until an in-depth review was undertaken by the relevant ministries. Datuk Seri Najib explained that the review, led by the relevant ministries, might take several months.

Need An Installment Loans With Bad Credit To Set Up Fiscal Aid

Primarily, the need an installment loans with bad credit is designed carefully to keep your monthly budget under control. The Flexible terms and conditions of these loans allow you to obtain funds at affordable condition. You can make the loan payment in fixed monthly payments. Availability of the required funds through installment loans is open to every section of borrowers. The bad credit borrowers are also entitled to avail this lending opportunity in the same way. There is usually no hidden cost associated, so you do not have to pay anything more than the principal and interest.

If you are in a great need of large sum then you can avail that by placing collateral of the high equity value against the loan amount. This is known as secured loan provision. You get benefits of long repayment tenure coupled with low rates of interest along with borrowing a large sum of money. But if you do not have anything such, unsecured lending can yet do a good work for you. You do not have to put any collateral to get an appropriate amount for you. This form of lending does not take a long time. Its approval is very fast and it does not require any collateral to be pledged against the loan amount.

The terms and conditions under which you need an  with bad credit installment loans are very much borrower-friendly. The repayment period assures an affordable monthly installment. The loan processing is very fast and you could secure the loan money you need within the shortest possible time by using the internet.

By: David dison

David Dison is financial advisior of no credit checks installment loans.For more information about installment loans visit www.installmentloans.org.uk

Source : http://www.articledashboard.com/Article/Need-an-Installment-Loans-with-Bad-Credit-to-Set-Up-Fiscal-Aid/636416

ARC year-end Roundup 2008…

Pitch over.  Here’s the skinny…

The Holiday “Kissing Christmas” Record + CD sale has finally ended with every record sold, as the remnants were shipped off via mysterious Middle Eastern traders!  It was an unexpected success in these times of recession, but then again good things, under $5, are forever great gifts. We want to thank all the great folks who donated materials to sell and all the even greater folks who came out to shop.  More importantly the sale helps grow the collection.  As you know we ONLY sell third copies, so end of the year massive donations allow us to weed our garden properly; comparing the new adds to existing materials and keeping the best and alternate versions.  So while we sold some 15,000 discs, we added 25,000 new ones gleaned from all the drop-offs.

One of our more challenging jobs this year was supplying all the scans (over 800) for the new Grammy Hall of Fame that opened Dec 6 in LA.  ARC was the only library or organization in America that could supply such a wide array of popular music, in good condition, in a timely manner.  Well, we had a little help from the Institute of Jazz Studies out at Rutgers.  Scanning artwork and labels continues to be a major use of the collection, and this year we did work for Universal, Verve, Cadence, Sony, Def Jam, Nonesuch, Dave Clark and CBS among others.

On the massive database front you can now visit the NYMIA - The New York Musicians Index and ARChive @ www.nymia.org   This is an online listing of all working musicians and music related businesses in New York State.  This project was funded by ARC, Columbia University and a $250,000 grant from the New York State Music Fund.  The grant was awarded and administrated by the Rockefeller Philanthropy Advisors. Irwin Chen @ Information Architecture did the programming.  As the project winds down early next year we say goodbye to project director Dr. Daniel Neely, and researchers Bryan Koniarz and Jon Hammer.   If you ARE a musician, or work in a music related field in New York State, do go online and make sure you’re listed.  If you need to book a tour through ancient New York – Phoenicia, Troy, Syracuse, Rome, Ithaca, Utica, Athens – the NYMIA makes it easy to find venues and help to promote your shows.

In March I gave a talk at the 42nd Annual ARSC Conference in Palo Alto, California.  My talk was titled “The New Center for music studies at Columbia U., ARCasia in Singapore and new approaches to mass cataloging”.  And you know, that’s exactly what I talked about.  Other west coast happenings included a meeting with longtime ARC Board of Advisors members and American songwriting geniuses, Jerry Leiber and Mike Stoller, a tour of the UCLA and Sanford Music Libraries, a formal stay at the Madonna Inn and a casual visit with mating elephant seals along US 1 in Big Sur.  Other visits included Arhoolie Records in El Cerrito, the Gibson Guitar Showroom, the Grammy Foundation, PR man with a bow-tie Bob Merlis, Brewster Kahle and the folks at the Internet Archive (they take all our second copies of comedy records), and author Greil Marcus.

If you came to the sale you may have noticed it was in our new space.  ARC took over an additional 4000 sq feet on White Street and this is where we have our sales and process incoming materials.  So much new material is coming in that we are considering using a portion of this space to open a permanent record and CD outlet.  Good idea?

Thanks to everyone who donated materials, funds, energy and time to keep ARC going this year!   Special thanks to our interns and volunteers, including Jessica Thompson (who also donated 137 LPs!), Juan Amaya, Ashley Madalone, Jeff Koch, Joe Flynn, Kaci Bycek, (NYU), Nancy Breslow and Henry Beer.  Balde Mamadou was our West African-French intern this year via EPEIGE in Paris.  Pam Meyer continues to make those wonderful, official ARC pins for us.  And when we needed a truck, Keith Streng was right there.

AND finally, coming this Jan, be on the watch for the formal press release about our partnership with the Libraries of Columbia University and the state of Singapore!

Another estate gift came from the family of James Dukas.  Jim was an actor, early radio announcer and voice over artist who appeared on TV commercials, as well as countless spoken word and children’s recordings.  His passion was Jazz and we received sheet music, songbooks, magazines and books.  More importantly there were 1584 reel-2-reel tapes, 912 cassettes, lots of acetates, 78s, CDs, and 3508 LPs.  Thanks to Tara Dowd who made all the arrangements for the gift.  You can read more about Mr. Dukas here.

Jim Eigo @ Jazz Promo Service did a massive cleanup made a very nice donation of indie jazz CDs (3028) and an even better donation of jazz magazines (1440) this year.

Speaking of Jazz, collector Jim Doran continues to be generous with his annual donations. He began the year with 177 LPs and 308 books, and ended it with 411 jazz CDs.  Jim’s a hero because he also catalogs all of his donations.  Could we have a better friend?

If we could have, it would be Lois Weiss.  We picked up a second bath of priceless memorabilia, books, posters, photos and recordings (including 196 LPs, 145 singles, 162 cassettes and 46 reel-2-reel tapes) to accompany her earlier donation last year.  Lois was a member of the Fillmore East’s (in)famous Joshua Light Show and she donated piles of great stuff from that late 60s era.  More to come too!

Music writers of note who made ‘08 donations include Ben Ratliff of the Times (496 LPs, 80 singles) and Jim Farber (417 LPs) and David Hinkley, both from the Daily News.  David’s been a regular for more than ten years, giving piles twice a year – including over 300 music books.  Those other guys are newbies.

Radio station Z100 sent over 2100 LPs, while Ben Young up at WKCR dropped off hundreds of LPs, and right before the sale boxes of World Music cassettes, including many cassette-only African releases.

Ron Dingenary, a long–time donor from Footlight Records, for years the premier shopping spot for soundtracks and Broadway shows in NYC, this year again made a major donation of 162 DVDs, 327 seven-inch singles, 1048 CDs, and 3169 LPs.  Thanks Ron!

Musicians Dan Zanes (814 CDs, 1950 LPs - including an incredible batch of Reggae LPs and 23 Burl Ives discs – some beardless!), Jellybean (2136 CDs, 1352  LPs) and Fred Schneider (bags and bags of his annual bags of weird and wonderful LPs) all chipped in.

Labels, distributors and them new-fangled aggregators were also good to us this year, including Peter Wright @ Virtual, Mark Ghuneim @ Wiredset , Ed Steinberg @ Rockamerica (1577 CDs, 304 Videos), Chris Thieke @ Shore Fire Media (3171 CDs, 120 DVDs), Rich Appel @ Sony (300 CDs), John Earley @ Sony (21 DVDs), the folks at Nonesuch (373 CDs), Nasty Little Man (348 Cds), Anita Daly @ Daly Communications (235 Cds, 36 DVDs), Randy Haecker @ Sony/BMG (160 CDs) , Carolyn Freeman @ DefJam (884 CDs, 147 LPs, 373 dance singles), Gerald Moss @ Koch Entertainment (120 CDs), Mark Fotiadas @ Mute (815 CDs, 256 twelve-inchers), Jay Yee @ Giant Step (173 CDs), Gabby Gibb @ Sony/BMG/Legacy, Harry Weinger @ Universal (128 CDs), Carrie Cuneo @ Weasel Land, Helene Blue Musique, Kenny Margolis @ Selkem Records (400 music magazines, 217 CS), Drew Miller @ Omnium, Caroline Distribution, Jared Hoffman @ Instinct Records (600 twelve-inchers), Steve Knutson @ Rough Trade, Dan Storper @ Putumayo, Scott Bergman @ Astralwerks, Jon Hafter @ Big Sounds International (120 CDs), Ariel Hyatt @ Ariel Publicity (375 CDs), Cory Robbins @ Robbins Entertainment (1200 CDs) and the good folks over at Wax Poetics.  Speaking of Good, we got 162 LPs from former GOOD Magazine folks, who’s names are…?   Thanks also to all the small labels and individual artists who contributed one-offs, self produced and limited runs material.

Eagle Rock Entertainment sent over their complete catalog – over 800 DVDs – featuring studio and live musical performances and films with musical content.  They’ve kept us on their mailing list and we greatly appreciate this important addition to our visual archive.  We REALLY appreciated some of the tackier stuff (I mean brilliant), like the teensploitationastic “Wild Youth” with a baton-twirling jitterbug number and Peter Falk as a blasé killer Beatnik in “The Bloody Brood”.

Serial donors include Nick Hill who dropped off 2625 seven-inch singles, John Hammond who gave 225 CDs, Anne Leighton who continues to send bi-monthly big bags ‘o mags and Billy Adler who recently re-gifted Christmas-centric CDs (149) and singles (37).  Brian Gerosa of Gerosa Records Store in Brookfield, CN, also donated quite a few recordings this year, as always.

Producer Tom Hayes @ Telemotions gave 170 videos, Fred Hatt 110 LPs, and Jamie Johnson 400 LPs plus an incredible array of high-end audio equipment.  A Mr. Herbert Moscowitz gave 632 LPs, including a rare version of an early Dylan release.

And there were countless donations of 10, 20, 40, 125, 200+ by countless other ordinary citizens like Barbara Linhart, Fred Haptro, Thomas Erickson, Marcia Elliott, Bruce Rayvid, Amy Larkin, Barbara Arocho Negron, Scott Sendrow, Marcos Sueiro Bal, Peter Kapp, Andy Cohen, Bruce Alexander, Elizabeth Primamuce, Adam Dolgins, Lynne Goldsmith, Dan Morgenstern, Sarah Lazin, Dave Withers, Herb Jue, Bryan Koniarz, Nancy Breslow, Andy Schwartz, Harry Eriksen and Sarah S. Erwin.

Sorry if we forgot anyone.  We had a hard drive crash in October, and well, remind us if we lost info about your help or contribution.

As always, Because of YOU, ARC is the largest and best collection of popular music in the world.  Donate, drop off or drop by anytime.

Thanks again,

You can use these tags : <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Sites like dizzywood

Just click on the words and you will be at the website.

http://www.spineworld.com/

http://www.lulilab.com/

Whirled.com

2.OurWorld.com

3.Planet Cazmo

4.Webkinz

5.Club Penguin

Millsberry.com, Neopets.com, Fantage.com, Zetapets.com, and Poptropica.com.

They’re all websites for kids.

If you want a website thats not for kids, then go to Marapets.com or Chapatiz.com

Roblox.com

This virtual world involves a set of islands such as Shark Tooth Island or Time Tangled Island, each of which offers a mission to complete. Start off by customizing your avatar, then moving around your first island to see what’s going on. Update your clothes with the Costumizer! Move from island to island, collect items, play games. There’s a prescripted chat option only.

What’s it about? Well, “Adventure Rock is where you explore, create, interact and innovate, creating content ranging from music and dance to drawing and animation. Set within a 3D virtual landscape, you can play games, express yourself artistically and solve the mystery of the island.”

These virtual pets for kids take the form of cute and colorful elephants!

At the center of Tootsville is Toots Square, where you can go shopping and dining, find sweets and candy recipes, and visit the virtual travel agency. Earn Peanuts, the Tootsville virtual currency, in TootMall - or go over the bridge to set up your Toot’s home!

Change the look of your Toot, buy clothes and furniture for your home, or use emoticons or text messages - text filters and moderators keep an eye on communication, and safety rules are clearly explained.

From the travel agency, visit new worlds with new discoveries - as well as collecting stamps for your passport. Destinations include

To register, you’ll need to get hold of Bella Sarah Trading Cards. Each card has an activation code which you then enter on the site. There’s no chat here, and you can find more info about the site in the FAQ and parents’ page.

In this world of virtual pets for kids, children have to take care of their pet by feeding it and keeping it happy. There’s a virtual tour you can take to see all the features ePets has to offer, which is pretty useful.

Kids get to find out about the ocean and the environment while having fun! Create a home for your Pal, and invite other SeaPals to your Pad for a sleepover, and purchase cool items for your Pad or aquarium using your Pearl Points, SeaPalsWorld’s virtual currency. Take the tour to find out more and check out the parents’ section.

Chat-wise, the site is launching its new instant chat feature, where your child can choose from many pre-approved phrases. Or you can choose the “silent” option, where your child cannot chat or see other players’ chat.

Once you arrive in Buildabearville, you can see your character appear alongside other characters. Walk around by clicking the part of the screen where you want to go. Games are accessed via a small icon at the top of the screen, as well as appearing in various locations as you walk about.

It’s not the cleanest interface I’ve seen, but there’s quite a lot to see - you can get to other parts of Buildabearville by following the triangular icons leading off the screen. Click on a pawprint in front of a building to enter it. We’ve just entered the library area, where a choice of stories and activities pops up. There’s a map icon too, so if you get lost, click on that and then click where you want to go.

The great advantage to this site is that you can get a flavor of the site by joining without buying the toy first.

Your first purchase gives you a year’s access to the site. To extend your membership, you have to buy another Webkinz and adopt that new pet into your account before your first pet’s year runs out.

Webkinz is designed for kids 6 thru 13, although you’ll find many activities that younger kids can enjoy. For example, Quizzy’s Question Corner offers over 1,000 age-appropriate questions for 5 to 7 year olds, and they are curriculum-based. Dressing and feeding your pet is easy, too, and your child can use the KinzCash they earn to buy food, accessories, furniture, garden stuff and more for their pet.

From the home page, take a tour or visit the parents’ area.

You can try this site for free! Sign up with a username and password, then “borrow” a pet to become a guest.

After purchasing a VIP pet, the secret code on the collar helps you register and name your pet. You get access to the site for a year with one purchase of a VIP pet. Kids play games, feed their pets, tend the garden, and earn points that they can use to get virtual clothing and other stuff for their pet in the virtual shops.

Find games, chat, your own room, and a Big Book of Beanies that you can personalize for your collection of Beanie Babies 2.0.

Like the Ty Girlz site, there is a Basic Chat or Freestyle Chat option. In Basic, your child can only choose pre-determined words and phrases - they can’t type anything of their own. The Freestyle option lets your child write their own message, and communication is filtered to prevent personal details, numbers, or inappropriate language etc.

soruce:

Here good websites i know..

www.vmk.com

www.girlsense.com

www.neopets.com

www.marapets.com

www.cartoonnetwork.com

www.yahoo.com/games

www.clubpenguin.com

www.gaiaonline.com

www.runescape.com

Also, you can go to www.nexon.net There, they have some free online games you can play.

www.zwinky.com ask me, queenel, for cheats

www.stardoll.com

if you are in to horses try

www.howrse.com

www.creaturebreeder.com (its a farm game)

http://www.ecookinggames.com/

http://www.spineworld.com/

http://play.binweevils.com/index.php

http://www.planetcazmo.com/

http://www.trollz.com/home/

non virtual games

Information about Club Penguin: Players create a penguin, then waddle around the island of Club Penguin, engaging in a variety of fun and imaginative activities. Players can chat, send greeting cards, use emotes (emotion icons) or choose from a set of pre-defined actions such as waving or dancing. Users can also play games to earn virtual coins which can be used to buy clothing and accessories or furniture for their igloo. New content, such as games and theme parties, is added every week. Club Penguin is designed for 6-14-year-olds but is open to all ages. Club Penguin is free to play, although additional features such as buying clothing or decorating an igloo, require a membership. You have to pay real money.

Information about Panfu: Panfu is a friendly, virtual world, in which children can play online games, have fun, learn Spanish easily and make new friends. Panfu is a friendly, virtual world in which children can play, have fun and make friends. Each child chooses a panda, gives it an identity and discovers the panda world of Panfu. They can interact and chat with other children, play games, send greeting cards and learn the basics of Spanish through the immersive learning principle, all while developing their creativity! Children can earn virtual money, called Panfu coins, by helping other pandas and playing games. With Panfu coins they can, for example, buy clothes, own pets and decorate their tree houses. This way, they learn to manage money while having fun. You have to pay real money. PS: I THINK THAT THEY TOTALLY COPYED CLUB PENGUIN!!!

Information about Planet Cazmo: .

Sorry, I’ll get some information soon.

Information about Runescape: Runescape is a massive multiplayer adventure, with monsters to kill, quests to complete, and treasure to win. You control your own character who will improve and become more powerful the more you play. This isn’t a game where everything that happens is pre-determined. What you do in the world is up to you! The game is multiplayer which means you will meet many other people in the world who you communicate and trade with. Make new friends and go adventuring together to stand a better chance against the stronger monsters. Perhaps you want to make your money trading valuable goods with others. Or if you like taking risks, you can choose to fight with like-minded people to try and steal their treasure.

Information about Habbo Hotel:

Habbo is one the world’s largest and fastest growing virtual worlds and social networking services for teenagers. Localized Habbo communities all around the world are visited by millions of teenagers every week.

Habbo is a place to meet new and existing friends, play games and simply have fun. It is a richly colorful, multi-dimensional virtual community and game environment to which users join by creating a fully customized online character called a Habbo. From there, Habbos can explore many public spaces in the virtual environment, play a variety of games, connect with friends, decorate their own rooms and Habbo homepages, and have fun through creativity and self expression. The Habbo experience consists of many parts, which are all inextricably linked. There’s the virtual world and game environment Habbo Hotel, social networking environment Habbo Home, different Habbo games and several brand extensions.

Informaion about Webkinz: Webkinz are stuffed animals that were originally released by the Ganz company on April 29, 2005. The toys are similar to many other small plush toys. However, each Webkinz toy has an attached tag with a unique “Secret Code” printed on it that allows access to the “Webkinz World” website. On Webkinz World, the Secret Code allows the user to own a virtual version of the pet for virtual interaction.

Stardolls

Webkinz

Zionist Merkin, Cerebrus Executive Illegally Sent Money To Madoff

Dec. 24 (Bloomberg) — New York University, the largest private university in the U.S. by number of students, lost $24 million in investments managed by Bernard Madoff, the institution said in a lawsuit filed against J. Ezra Merkin, Gabriel Capital LP fund and Ariel Fund Ltd.

Merkin’s hedge funds invested NYU’s money with Madoff without telling investors or proper due diligence, the school alleged in a complaint filed yesterday in New York state court in Manhattan. NYU had $94 million invested in Ariel, which operated as a limited partnership with Merkin and Fortis Bank, according to the lawsuit. Fortis is also named as a defendant.

The NYU claim adds to a growing list of suits by Madoff victims against feeder funds. Gabriel Capital, a $1.5 billion fund, plans to liquidate due to Madoff losses, Merkin said in a Dec. 18 investor letter. The fund lost 39 percent of its value this year through Nov. 30, mirroring the drop in the S&P Index.

“Without making disclosures in the quarterly reports to investors, and in the face of an extraordinary number of ‘red flags,’ Merkin, for years, simply turned over a substantial portion of Ariel’s funds to Madoff,” NYU alleged in the complaint. NYU alleged Merkin made all the investment and executive decisions for Ariel.

Clients of Madoff had about $36 billion with his firm, according to a Bloomberg tally that may include some double counting. Before his arrest on Dec. 11, Madoff confessed to employees that his “giant Ponzi scheme” may have cost as much as $50 billion, according to an FBI complaint.

Merkin’s lawyer Andrew Levander didn’t return a call seeking comment. Madoff has been charged by federal prosecutors with one count of securities fraud and faces as much as 10 years in prison if convicted.

Finance Arm

Merkin, the chairman of GMAC LLC, the finance arm of General Motors Corp. that is 51 percent owned by Cerberus Capital Management LLC, was also blamed by Yeshiva University for losses. The school said it lost about $110 million in investments tied to Madoff, most through Merkin’s Ascot Partners LP fund.

Merkin resigned as a school trustee and its investment chairman on Dec. 12. Madoff was also a trustee. Tufts University said last week that it lost $20 million, or less than 2 percent of its endowment, from investments through Ascot.

New York Law School sued Merkin and Ascot last week for investing in funds run by Madoff. That suit, filed in Manhattan federal court, seeks class action, or group, status on behalf of other Ascot investors. The law school allegedly had $3 million invested in Ascot.

“Mr. Merkin and his family are personally among the largest victims of the massive fraud,” Levander, of Dechert in New York, said in a statement last week. “Like the other victims and the entire financial community, Mr. Merkin is shocked by these events” and will fight the federal lawsuit.

The case is New York University v. Ariel Fund Ltd., 08- 08603803, New York State Supreme Court (Manhattan).

GCC boom is over

The end of 2008 is nigh, and the year has answered a very important question:

Would the energy-rich countries of the Gulf Cooperation Council weather or even survive a global economic downturn? 

In other words, did the region’s economy have anything special going for it that allowed for a unique decoupling  from the rest of the world?

The short and blunt answer is No.

Crude oil prices below USD 50 a barrel have put paid to any notion of continued boom in general in the Gulf, but regional stock markets priced in a recession ahead of the total collapse in the price of oil.

The global banking crisis claimed a big victim in Dubai, even as the price of crude oil remained above USD 100 per barrel at the time. The month of July saw the UAE stock markets enter a bear market as the general index’s gave up over 20% of gains achieved since September 2007. EMAAR’s stock price broke below crucial support at AED 9.00 in the summer, foreshadowing a total collapse of the real estate (property) market a few months later. The spectacular collapse would begin in earnest a few weeks after the collapse of Lehman Brothers in September, when the interbank credit markets froze.

Looking back, in the summer the UAE stock markets began their precipitous fall as shareholders grew increasingly nervous over Dubai’s massive reliance and dependence on money borrowed from the international credit markets. Dubai used banking leverage to bankroll all kinds of real estate developments, infrastructure projects, and even the purchase of international assets such as ports and stock exchanges.

Land prices were on the verge of crashing in the summer, to be followed by the rest of the property market after the significant Cityscape show in early October.

The UAE stock market crash that began in July continued to accelerate as the Lehman collapse confirmed to everyone the interbank credit market was as good as dead, and that Dubai would be left scrambling for “liquidity” or cash flow to refinance all its debts.

Optimists revelled in the still relatively high price of crude oil at the time, believing prices over USD 60 a barrel would shield the UAE and the GCC from a disastrous economic recession, and help bankroll further economic development. 

Now 25 dollar oil is just a few percent away, leaving governments here to ponder their economic future, as their sovereign wealth funds absorb massive losses and the prices of their international assets keep falling.

The picture has become ugly for Dubai in particular, with people losing jobs and a property market that has lost far more value (over 50%) in a much shorter timeframe than most markets (less than a couple of months).

Banking shares have now caught up with the stock market leaders in crashing in value, as shareholders realize job cuts mean higher default rates on mortgage and credit card and other personal debt. 

The situation is dire in the main GCC countries (Kuwait, Saudi, and the UAE) but it is more acute in Dubai.

FEMA Awards S.C. With Over $3.4 Million in Grants For Hungry and Homeless

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The Federal Emergency Management Agency (FEMA) granted South Carolina over 3.4 million in grants to provide food, shelter and other services for those suffering under the economic crisis.

Bah Humbug!

NEW YORK (AP) — Retailers are suffering through one of the most difficult holiday seasons in years, slashing prices by 70 and 80 percent and offering other deals in a desperate effort to ring up more sales.

But consumers aren’t exactly bailing them out: Worried about job security and the impact of unsettled markets on their retirement funds, potential shoppers have been cautious about spending.

Does this spell doom for U.S. retailers?

Here are some questions and answers about the importance of the holiday season to the retail sector.

Q: How important are the holidays to retailers in terms of sales?

A: The holiday season can account for up to 30 percent of annual sales at many stores. For toy sellers, it’s more like 50 percent.

Calling the day after Thanksgiving “Black Friday” emphasizes the importance of the season: The traditional start of the holiday shopping period, it historically was the day when the surge of shoppers helped stores break into profitability — as in, into “the black” — for the full year.

Although the nickname has stuck, it’s been quite some time since many retailers could count on Black Friday to vault them into profitability for the year.

Q: How bad is the holiday season looking this year?

A: The National Retail Federation trade group expects overall holiday spending will total about $470.4 billion, a 2.2 percent rise from a year ago. That qualifies as a pretty bad season — it would be the slowest growth in holiday sales since 2002, falling well short of last year’s 3 percent growth and the 10-year average of 4.4 percent.

And Michael P. Niemira, chief economist at the International Council of Shopping Centers, expects sales in stores open at least one year — a key indicator of a retailer’s health — will fall as much as 1 percent for the November and December period. That would be the worst performance for the holidays since at least 1969, when the group’s index began.

Q: Is online retailing faring any better than traditional stores?

A: Online retailers have seen their explosive growth of the past few years screech to a halt.

For the holiday season through Dec. 19, about $24.03 billion had been spent online, down 1 percent from the corresponding days last year, according to ComScore, a digital technology monitoring company. ComScore expects online retail spending for November and December to be flat compared with the same two months in 2007 — sharply below last year’s growth rate of 19 percent.

Q: Have major retailers been done in by a weak holiday season before?

A: Indeed. A weak holiday season last year and the struggling economy led gadget retailer Sharper Image Corp. and catalog gift seller Lillian Vernon Corp. to file for bankruptcy protection in February. FAO Schwarz filed for bankruptcy protection twice in 2003, first in January after a weak 2002 holiday season. It emerged in April but returned to Chapter 11 in December.

Q: Who is most at risk this year?

A: A few big names have already filed for bankruptcy protection.

Circuit City Stores Inc. filed last month as it faced pressure from vendors and consumers who aren’t spending. It plans to keep operating, but toy retailer KB Toys, which filed for bankruptcy protection earlier this month, has already begun to liquidate all of its stores and will shutter operations completely. It is the second time KB Toys filed for bankruptcy protection. The first time was in January 2004.

Experts expect a spate of bankruptcies in January, after holiday sales are tallied and weaker players become unable to survive.

Q: What can retailers do to make up for the dismal holiday season?

A: Merchants are focusing on paring back their costs and keeping close control of their inventories so they end up with fewer items that they have to mark down to get sold. Many are cutting jobs, curtailing or delaying the opening of new stores, or taking other steps to offset slumping sales.

Electronics retailer Best Buy Co. said last week it will slash capital expenditures by half in 2009 and will offer voluntary severance packages to virtually all its 4,000 corporate employees. Children’s clothing chain Gymboree Corp. is cutting salaries by up to 10 percent for senior management and corporate staff to prepare for what it believes will be a deepening spending slump.

Case: People don’t have jobs and any money they have is to maintain their basic needsand obligations. They are in limbo because they don’t know what tomorrow will bring, so they are holding on to what little money they have. There are a few people spending knowing they can not afford to buy Christmas presents this year. But they are spending because that is what they are use to doing and they don’t want to disappoint their families especially their children. When the holidays are over, and the bills are due, they will be broke and wishing they had kept their money in their pockets because the loss of their jobs means very little money will be available.

Unless prices are slashed considerably, look for consumers to halt their spending this year.

ETFs and You

The ETFs highlighted in this article are: ProShares Short S&P500 (SH), ProShares Ultra QQQ (QLD), ProShares Short Financials (SEF), ProShares Ultra Short QQQ (QID), ProShares Ultra Health Care (RXL), ProShares Ultra Technology (ROM), and ProShares Ultra Consumer Goods (UGE).

Since then, the number of ETFs and the kinds of ETFs available have grown tremendously.Now there are ETFs on the Dow Jones, newer ones of the S&P 500, ETFs on the Nasdaq and the different Russell Indexes. In addition to that, there are also ETFs on different sectors and industries, such as Financials, Oil and Gas, Basic Materials and Consumer Goods. Also, Real Estate, Healthcare, Technology, Telecommunications, Utilities and more. There are even ETFs on currencies and Treasuries, such as Gold, Silver and International Markets, etc. But the innovation of the ETF business doesn’t stop there.

In addition to making money on the ETFs as the price goes up (i.e. the market or industry goes up), investors can actually buy ETFs that will make money (rise in price) as the market or a specific industry falls.This is a great alternative to outright shorting stocks. Since shorting stocks requires a margin account, there are some who can’t short because of the type of account they have while others simply don’t want to. But many of these investors would still like a way to profit as prices go down.

For example: if the S&P 500 was down 3% one day, the short ETF that you bought would increase by 3%, giving you an easy way to profit from a market decline without any special setting up in your account. And since it trades like a stock, you can get in and out at any time during the market you want.

In addition to short (and long) index ETFs, there are also short (and long) sector and industry ETFs. Let’s say you thought Financials were headed for another fall. You could buy a Short Financial ETF, such as ProShares Short Financials (SEF). This would correspond inversely to the daily price movement of the Dow Jones Financials Index, which holds companies such as JP Morgan, Bank of America, Citigroup, Goldman Sachs and more. As those companies fall and the financial index goes down, your stock would increase in value commensurately.

If, on the other hand, you’re exceptionally bearish or want to leverage your investment dollars to their fullest amount, you can buy an UltraShort ETF, such as ProShares Ultra Short QQQ (QID). This ETF correspond inversely to twice the daily price change in the underlying Nasdaq 100 Index. So a 5% decline in the Nasdaq 100 for example would equate to a 10% increase in your UltraShort Nasdaq ETF, QID.

These UltraShort ETFs are also available for the Dow Jones, the S&P 500, different market Cap and Style Indexes, as well as various Sectors and Industries.

These types of products are ideal ways to make money if you believe stocks are headed for a fall. They are also great ways to hedge an existing portfolio. And with the extra leverage available with the Ultra ETFs, you won’t have to tie up a lot of money to do so. And of course, the Ultra ETFs are great ways to maximize your returns on the long side too. Even a small 5% or 10% rebound in the market could add up to a 10% or 20% gain. But a word of caution: don’t over-leverage yourself or put too much money into any one of these Ultra ETFs in an effort to try and make it all back, all at once. Get comfortable with seeing your position rise or fall twice as much as the underlying market or sector you’re participating in. Sure, a 10% gain on a 5% down day for the market is exciting. But a 10% loss on a 5% up day for the market may push you out of your risk-to-reward comfort zone. So take it slow and feel how it feels to have this additional leverage in your portfolio.

The top 50% of the Zacks X or Expanded Industries (those with the best Average Zacks Rank) significantly outperformed the bottom 50% (those with the worst average Zacks Rank) by a margin of nearly 4 to 1. The top 10% of industries showed the greatest outperformance of them all. So before you make your next trade in the market with stocks, options or ETFs, do your research first and see what your chances of success are with the Research Wizard.

Three of the top Sectors and some Ultra ETFs to consider are listed below:

Start learning how to select the top sectors and industries on your own in order to find the best stocks and ETFs to trade them. Sign up now for a free trial to the Research Wizard and start doing this today. Get ready for 2009 with the right tools and new ideas.

No Help for Housing from Paulson: numbers continue to tank

The Grinch was spotted doling out bags of dough to big financials and refusing to help homeowners…

From WSJ:

Sales of existing homes tumbled 8.6% in November from the prior month to an annual pace of 4.49 million units, the National Association of Realtors said. The figure reflects contract closings, which lag behind sales activity, and as a result capture the credit-market turmoil that hit the economy starting in mid-September.

New-home sales declined 2.9% to an annual rate of 407,000 units, the Commerce Department said, continuing a nearly three-year decline

-snip-

A broad measure of home values by the Federal Housing Finance Agency, released Tuesday, showed prices nationwide dropping 1.1% in October from the prior month and 7.5% from a year earlier. The agency’s index, built on purchase prices of houses backing mortgages sold to or guaranteed by Fannie Mae and Freddie Mac, is down 8.8% from its April 2007 peak.

The Realtors group said the median sale price of an existing home declined to $181,300 in November, down 13.2% from a year earlier. That is the largest drop in the four-decade history of the survey and likely the sharpest decline since the Depression. The group estimates that 45% of existing-home sales are linked to foreclosures. The inventory of unsold existing homes rose 0.1% to 4.2 million in November, representing an 11.2-month supply, up from 10.3 months in October.

The Commerce Department’s sales figures showed the median price of a new home at $220,400 in November, down 11.5% from a year earlier. The average price declined 9.2% to $287,500. The inventory of unsold new homes declined 7% to 374,000 at the end of November. That represents 11.5 months of supply at the current pace, down from 11.8 months in October…

The Northeast saw a large drop in home values, ‘welcome to our nightmare’ says the Sunbelt, which has been the canary in the coalmine telling the Treasury that all is not well for the better part of two years….

From the Boston Globe:

The Massachusetts housing market experienced its worst monthly price drop in more than 20 years as concerns over the slumping US economy and the stock market worried consumers, the Warren Group reported today.

“The November median home price slumped 16.7 percent to $275,000 from $330,000 during the same month in 2007,” said the Warren Group, a Boston firm that tracks local real estate activity and that publishes Banker & Tradesman. “November’s percentage decline exceeds the monthly price drops in September and October, when median home prices were down 15.3 percent and 13.9 percent, respectively.”…

From the NYT:

…Housing values have plummeted since the peak of the market in July 2006, when the median home price was $230,200. But the housing bubble burst, sales declined, credit dried up and a flood of foreclosed homes hit the market, a combination of events that pulled median prices down 21 percent to their November levels.

Still, some economists said that home prices will fall even farther before they dip low enough to entice potential home buyers. Joshua Shapiro, chief United States economist at MFR, said that some parts of the country may only be halfway through such a retrenchment….

I don’t know about you, but in the Sun Belt we are DEEP in retrenchment, waaaaay DEEP, like ‘digging to China’ deep,  our home values have dropped so far…HOLC baby, give us HOLC…

Anyone who doubts for even one second that the Fiscal Stimulus put forth by PEBO and Congress will have HOLC funds, well you’re dreaming, or you’re Larry Kudlow deep in D-E-N-I-A-L.  I thank Gawd we have a majority in Congress that will address housing out of the gate in January. Search our site for our numerous posts on housing, it is the NUMBER ONE issue in this economy, number one…in case we weren’t clear….HOUSING IS JOB ONE FOR PEBO..

The utter, abject failure of Dubyah and Paulson and Bernanke to address the root of this entire recession is a disgrace. For THREE YEARS I have watched as these maroons went from INSISTING there has NEVER BEEN a consumer led recession (in regard to the subprime collapse), to blaming it on Bear Stearns, (which would not have had an issue were it not for the dreaded CDO MBS nightmare), watched as those in the ‘know’  HA! refused to listen to people like Schiff and A. Gary Shilling, who called this three years ago, watched as they were laughed at as concern trolls…and here we are HUNDREDS OF BILLIONS later and they STILL don’t (OR WON’T) get it..it’s the HOUSING STOOPID!

Kudlow actually had a video clip from Wizard of Oz showing Dorothy’s house in the twister whenever Gary Shilling came on, they thought it was quite funny as he spoke about the imminent collapse..needless to say they aren’t showing that clip anymore…here is Kudlow perma-bull in November of 06 (when the DOW was over 12,000), talking about his Goldilocks economy (Larry apparently missed the part of that fairy tale where the BEARS scare the hell out of Goldi and chase her away..)

Go view here and here and here

Here is Gary’s current outlook…

Bernanke is finally on board and pushing rates down, but it is not enough at this late date. Now we have to contend with not only the subprime bubble pop and the reversal of the unsustainable increase in values we had from 02-05, now we have to handle the additional foreclosures that are the result of the increase in unemployment…

IOW it will take much more to address what could have been avoided in 05 had anyone listened to a certain wonky goddess I know…but there is still HOPE, (not the BS Hope for Homeowners plan that wasn’t funded or staffed by Paulson), but the real HOPE, the HOPE that comes from wonky goodness:

Today in New York City, Hillary Clinton challenged Wall Street to help end the foreclosure crisis that it helped to create, and vowed to introduce legislation if they fail to act. She also called for fast-acting, short-term stimulus measures to help hardworking families during this time of economic uncertainty.

Clinton would implement a three-step plan to tackle the foreclosure crisis, including: at least a 90-day moratorium on foreclosures; a freeze on the fluctuating rates on subprime loans for at least 5 years until they can be converted into fixed rate, affordable loans; restoring accountability by requiring that lenders provide status reports on the number of subprime mortgages moved from adjustable to fixed rate.

“I’m here today to call on Wall Street to do its part to help end the foreclosure crisis that is devastating middle class families and threatening our economy,” Clinton said. “Wall Street needs to be part of a comprehensive solution that brings to the table all those responsible and calls on them to do their part. Wall Street helped create the foreclosure crisis, and Wall Street needs to help solve it.

“I believe we need a new beginning in our economic policy - one that strengthens our middle class and ensures that prosperity is widely shared, and that is based on an ethic of shared responsibility. A new beginning that makes Wall Street shoulder its responsibility for this crisis, and that gives homeowners the breathing room they need. One that makes the most well-off pay their fair share and gives the middle class the help it needs for education, for health care, and for retirement.”

More than 1.8 million foreclosure notices have been sent out this year, an increase of 74% from last year. And with the monthly payments set to rise on more than 1 million subprime loans next year, the situation is likely to worsen unless something is done. Experts now say that the foreclosure crisis is weakening the economic outlook, hurting industries from construction to autos, and making banks reluctant to lend companies the capital they need to expand and create jobs. Cities face the prospect of vacant properties marring neighborhoods, cutting tax receipts, and dragging down property values. With the decline in property values, home equity is also falling, and in the process families are losing a major source of wealth (home equity makes up 60% of the wealth of the middle class) and disposable income (in 2005, home equity withdrawals were 8% of families’ disposable income).

To help families cope with growing economic challenges, Clinton would provide a package of middle class tax cuts, including generous new support to make college, health care and retirement more affordable. She would also implement fast-acting, short-term stimulus measures, including a Community Support Fund of up to $5 billion to help hard-hit communities and distressed homeowners endure the foreclosure crisis, and a $2 billion emergency investment in energy assistance for families in cold weather states.

### Hillary’s plan to address the foreclosure crisisHillary called on Wall Street and the mortgage industry to voluntarily agree to a moratorium on foreclosures; a freeze in monthly mortgage rates; and regular updates on the industry’s progress in modifying loans:

If Wall Street does not voluntarily agree to the three-step plan, and the crisis builds, Hillary will consider legislation that offers protection to mortgage servicers and others who work with borrowers to modify their mortgages. Servicers and others who administer the mortgages can save families’ homes, save investors from losses down the road, and help the economy. However, many servicers are concerned about opening themselves to lawsuits from the investors who actually own the loans. Hillary is prepared to consider giving legal protection to servicers and others who administer mortgages when they do the right thing by balancing the interests of the homeowners, the investors, and our economy.

Americans are anxious about more than the housing crisis. They are worried about an economy that is producing stagnant wages for middle class families. Productivity has risen 18 percent in six years, yet wages have stayed flat, and family incomes have fallen by nearly $1,000. Addressing our housing crisis is only one component of Hillary’s broader agenda to restore shared prosperity for America’s middle class. For seven years, middle-class families have been struggling with declining incomes and skyrocketing costs. Hillary Clinton has proposed a package of middle class tax cuts to help families realize the American Dream by rewarding work, making college affordable, ensuring healthcare is affordable, and encouraging savings and wealth creation. As President, she will:

Offer generous tax credits to help families afford health care, including a premium affordability cap to ensure that no family pays more than a reasonable share of their income on healthcare. These tax credits are part of Hillary’s American Health Choices Plan to provide quality affordable healthcare to all Americans.

Today, Hillary outlined two initial steps to help struggling families. She stands ready to take further steps if the economic situation continues to deteriorate. Those steps are:

Merry Christmas

What’s Happening at Trinity UMC, in Disputanta, VA

Inspiring!  Informative!  Insightful!  Humorous! Subscribe to the Virginia Advocate, the official newsmagazine or the Virginia Conference of The United Methodist Church.  The Advocate serves as your monthly resource to:  local church stories of faith and discipleship, practical ideas for ministry, training events for all ages, mission opportunities around the world, and news relevant for today’s United Methodists.  A 1 year subscription is ONLY $15.  See Mitzie Albert to subscribe or receive more details.

We’re planning to break another record. Our New Goal for School Kits is over 300 and we’re well on our way.  Taking advantage of back to school savings, we currently have material for at least 300 kits.  However, we need your help in covering the cost for these supplies.  If you would like to contribute, please Make your check to Trinity UMC and mark your check with “School Kits”.

Flowers! If you are placing flowers on the altar and would like a special announcement in Trinity In Ministry, please contact Julie Brockwell with the wording.

Write someone special. Trinity’s UMW are selling note cards depicting an sketch of the church (prior to 1968), a pack of ten cards costs $10. Proceeds go to our mission work, both locally and globally.

Keep them coming. Donations of used Upper Room, Pockets, Guideposts and Devozine devotionals; Bibles; and other spiritual material are encouraged. These are distributed to the residents of Poplar Springs Hospital and Poplar West Youth Development Center. A collection basket is under the hallway information table.

Free CareNotes are available to help. People dealing with difficult situations are looking for concise, easy-to-read guidance and support. Care Notes are available at each information table to provide help for you or someone you are concerned about. Please feel free to pick one up or share it with a friend. Trinity’s

Prayer Ministry: Each week, groups and individuals from our congregation pray for the concerns of our community and world as part of our life together.  If you would like to request prayer and be added to our prayer list, you can email your concern to prayer@trinitydisputanta.org.  Requests can also be made at church using the prayer cards in the pews and return in the offering plate.  If you have a concern that should remain private or you would like prayer or counseling, please contact Pastor Bert directly at 804.991.2299.  Urgent situations needing prayer, will be forwarded to our phone and email prayer chains.

Mr. T says, “I pity the fool that doesn’t use T-Mail.“An initiative of our care and nurture team, T-mail provides a mail folder for every family connected with Trinity.  You can find your T-Mail in the work room at the post office entrance of the church.  Folders for church leaders can also be found there along with index cards for you to drop a not to someone special.  We are still in start up on this, so please forgive any omissions or spelling errors (it’s unintentional).

these announcements delivered to your email.

church email list including weekly devotion by Pastor Bert

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Russia’s Central Bank Devalues Ruble for Third Time in Week

Russia devalued the ruble for the third time in a week, sending the currency to its lowest level against the dollar since January 2006, as oil’s drop below $37 a barrel dimmed the outlook for growth.

The ruble, down 18 percent against the dollar since the beginning of August, weakened 0.9 percent against the U.S. currency to 28.6905 and 1.4 percent versus the euro to 40.1773, near an all-time low.

The central bank allowed the ruble to fall about 1 percent against a basket of dollars and euros, accelerating the slide after spending 27 percent of reserves, or $162.7 billion, trying to defend the currency over four months. Oil, Russia’s biggest export earner, lost 4 percent to $37.43 on the New York Mercantile Exchange and is down nearly 75 percent since the July high. The government requires oil to average $70 to balance its 2009 budget.

“As long as oil remains depressed and at many year lows the central bank has no other choice but to carry on with its devaluation,” said Mikhail Galkin, head of fixed income research at MDM Bank in Moscow.

The currency has fallen 14 percent against the dollar and 11 percent versus the euro this year amid the plunge in oil, international condemnation of the country’s war with Georgia and the spreading global credit crisis. BNP Paribas SA estimates investors withdrew $211 billion from Russia since August. The nation’s oligarchs, who and took over assets of the biggest companies after the collapse of the Soviet Union in 1991, are vying for $78 billion of Kremlin loans to meet debt payments.

Recession

The economy, which recovered from the government’s 1998 debt default to expand an average 7 percent in the eight years to 2007, may slip into a recession in the first half of 2009, Kremlin economic adviser Arkady Dvorkovich told Bloomberg Television on Dec. 19.

The government will post a budget deficit next year for the first time in a decade and will use its $132.6 billion reserve fund, or extra oil revenue the government has set aside, to cover the financing gap, Dvorkovich told reporters in Moscow today.

An “accelerating” ruble devaluation is “detrimental” to economic growth because it stimulates currency speculation and limits new lending, Evgeny Gavrilenkov, chief economist at Troika Dialog in Moscow, wrote in a research note today. Troika Dialog earlier called for a one-time depreciation of as much as 20 percent.

“If in 2009 the oil price is between $30 and $40 and the state carries on with its strange policies on the money market, the possibility of an economic downturn will rise,” Gavrilenkov said.

Currency Basket

The ruble fell 1.2 percent against the basket of dollars and euros that the central bank uses to manage its fluctuations, and traded at 33.86 at 5:02 p.m. in Moscow.

Bank Rossii allowed the ruble to decline against its currency basket for the third time in four working days and the 10th time since Nov. 11, according to a central bank official who declined to be identified.

The Micex stock index fell for the first time in four days to 654.29, a drop of 1.1 percent.

The monster in the mirror

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. Like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “Bad Guys” he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

But November isn’t September, 2008 isn’t 2001, Pakistan isn’t Afghanistan and India isn’t America. So perhaps we should reclaim our tragedy and pick through the debris with our own brains and our own broken hearts so that we can arrive at our own conclusions.

It’s odd how in the last week of November thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara – one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you may not have heard that ordinary people too died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness. The Indian media, however, was transfixed by the rising tide of horror that breached the glittering barricades of India Shining and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish centre.

We’re told one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company I think) said “Hungry, kya?” (Hungry eh?). It then, with the best of intentions I’m sure, informed its readers that on the international hunger index, India ranked below Sudan and Somalia. But of course this isn’t that war. That one’s still being fought in the Dalit bastis of our villages, on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet. So maybe, like everyone else, we should deal with the one that is.

There is a fierce, unforgiving fault-line that runs through the contemporary discourse on terrorism. On one side (let’s call it Side A) are those who see terrorism, especially “Islamist” terrorism, as a hateful, insane scourge that spins on its own axis, in its own orbit and has nothing to do with the world around it, nothing to do with history, geography or economics. Therefore, Side A says, to try and place it in a political context, or even try to understand it, amounts to justifying it and is a crime in itself.

Side B believes that though nothing can ever excuse or justify terrorism, it exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed, who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shias and Democracy and believes that jihad should be waged until Islam, his Islam, rules the world. Among the things he said are: “There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera): “We didn’t spare a single Muslim shop, we set everything on fire … we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.”

(Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently in Kandhamal in Orissa, Christians were the target of two and a half months of violence which left more than 40 dead. Forty thousand people have been driven from their homes, half of who now live in refugee camps.)

All these years Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaat-ud Daawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jehad with his twisted, fiery sermons. On December 11 the UN imposed sanctions on the Jammat-ud-Daawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest. Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide he left the VHP to join the Shiv Sena. Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat. So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata.

Suhel Seth, a TV impresario and corporate spokesperson, recently said: “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted. The RSS has 45,000 branches, its own range of charities and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister AB Vajpayee, current leader of the opposition LK Advani, and a host of other senior politicians, bureaucrats and police and intelligence officers.

If that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organisations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

In this nuclear subcontinent that context is partition. The Radcliffe Line, which separated India and Pakistan and tore through states, districts, villages, fields, communities, water systems, homes and families, was drawn virtually overnight. It was Britain’s final, parting kick to us. Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India left their homes with nothing but the clothes on their backs.

Each of those people carries and passes down a story of unimaginable pain, hate, horror but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives. Pakistan, the Land of the Pure, became an Islamic Republic, and then, very quickly a corrupt, violent military state, openly intolerant of other faiths. India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990 they were ready to make a bid for power. In 1992 Hindu mobs exhorted by LK Advani stormed the Babri Masjid and demolished it. By 1998 the BJP was in power at the centre. The US war on terror put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy. This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism in the subcontinent and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and LK Advani of the Rashtriya Swayam Sevak Sangh is from Sindh (Pakistan).

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express and the 2007 bombing of the Samjhauta Express, the government of India announced that it has “incontrovertible” evidence that the Lashkar-e-Taiba backed by Pakistan’s ISI was behind the Mumbai strikes. The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies the Lashkar operates in India through an organisation called the Indian Mujahideen. Two Indian nationals, Sheikh Mukhtar Ahmed, a Special Police Officer working for the Jammu and Kashmir police, and Tausif Rehman, a resident of Kolkata in West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy. Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously. In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. Neither will war. (Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighbouring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.)

Thanks largely to the part it was forced to play as America’s ally first in its war in support of the Afghan Islamists and then in its war against them, Pakistan, whose territory is reeling under these contradictions, is careening towards civil war. As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistan army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to.

Certainly it did not expect them to come calling in heart of the Homeland on September 11. So once again, Afghanistan had to be violently remade. Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders. Nobody, least of all the Pakistan government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs and the maniacs who believe that Islam will, or should, rule the world is mostly the detritus of two Afghan wars. Their ire rains down on the Pakistan government and Pakistani civilians as much, if not more than it does on India.

If at this point India decides to go to war perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before. If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbours. It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front. The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary. Over three days and three nights we watched in disbelief as a small group of very young men armed with guns and gadgets exposed the powerlessness of the police, the elite National Security Guard and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this they indiscriminately massacred unarmed people, in railway stations, hospitals and luxury hotels, unmindful of their class, caste, religion or nationality. (Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The U.S and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.) But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill – and be killed – mesmerised their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news. Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.) Throughout the standoff the terrorists made no demands and expressed no desire to negotiate. Their purpose was to kill people and inflict as much damage as they could before they were killed themselves. They left us completely bewildered. When we say “nothing can justify terrorism”, what most of us mean is that nothing can justify the taking of human life. We say this because we respect life, because we think it’s precious. So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself Imran Babar. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror emails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir. “You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for? Terrorism is a heartless ideology, and like most ideologies that have their eye on the Big Picture, individuals don’t figure in their calculations except as collateral damage. It has always been a part of and often even the aim of terrorist strategy to exacerbate a bad situation in order to expose hidden faultlines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, Communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project. A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theatre, spectacle and symbolism, and today, the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the attack was being condemned by TV anchors, the effectiveness of the terror strikes were being magnified a thousandfold by TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid. Instead we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed (is it alright for the poor to remain unprotected?). We had people suggest that the government step down and each state in India be handed over to a separate corporation. We had the death of former prime minster VP Singh, the hero of Dalits and lower castes and villain of Upper caste Hindus pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir, give us his version of George Bush’s famous “Why they hate us” speech. His analysis of why religious bigots, both Hindu and Muslim hate Mumbai: “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.” His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.” Didn’t George Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

Though one chapter of horror in Mumbai has ended, another might have just begun. Day after day, a powerful, vociferous section of the Indian elite, goaded by marauding TV anchors who make Fox News look almost radical and leftwing, have taken to mindlessly attacking politicians, all politicians, glorifying the police and the army and virtually asking for a police state. It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of Grabbing by Force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid television flashcards like the Police are Good Politicians are Bad/Chief Executives are Good Chief Ministers are Bad/Army is Good Government is Bad/ India is Good Pakistan is Bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically, this regression into intellectual infancy comes at a time when people in India were beginning to see that in the business of terrorism, victims and perpetrators sometimes exchange roles. It’s an understanding that the people of Kashmir, given their dreadful experiences of the last 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation. Eventually the courts acquitted two out of the four accused, including SAR Geelani, the man whom the police claimed was the mastermind of the operation. A third, Showkat Guru, was acquitted of all the charges brought against him but was then convicted for a fresh, comparatively minor offence. The supreme court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.” Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19 this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur and Ahmedabad in 2008. An assistant commissioner of Police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists” known and rewarded for having summarily executed several “terrorists”. There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress Party leaders, students, journalists, lawyers, academics and activists all of whom demanded a judicial inquiry into the incident. In response, the BJP and LK Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying it was “suicidal” and calling them “anti-national”. Of course there has been no inquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the CBI said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted 2kg of RDX and two pistols on them and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir). Ali and Qamar who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS) that was investigating the September 2008 Malegaon blasts arrested a Hindu preacher Sadhvi Pragya, a self-styled God man Swami Dayanand Pande and Lt Col Purohit, a serving officer of the Indian Army. All the arrested belong to Hindu Nationalist organizations including a Hindu Supremacist group called Abhinav Bharat. The Shiv Sena, the BJP and the RSS condemned the Maharashtra ATS, and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists”. LK Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On the November 25 newspapers reported that the ATS was investigating the high profile VHP Chief Pravin Togadia’s possible role in the Malegaon blasts. The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai Attacks. The chances are that the new chief whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

While the Sangh Parivar does not seem to have come to a final decision over whether or not it is anti-national and suicidal to question the police, Arnab Goswami, anchorperson of Times Now television, has stepped up to the plate. He has taken to naming, demonising and openly heckling people who have dared to question the integrity of the police and armed forces. My name and the name of the well-known lawyer Prashant Bhushan have come up several times. At one point, while interviewing a former police officer, Arnab Goswami turned to camera: “Arundhati Roy and Prashant Bhushan,” he said, “I hope you are watching this. We think you are disgusting.” For a TV anchor to do this in an atmosphere as charged and as frenzied as the one that prevails today, amounts to incitement as well as threat, and would probably in different circumstances have cost a journalist his or her job.

So according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police. This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world and yet refuses to ratify the International Covenant on Torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the Underworld and the Encounter Specialists virtually does not exist.

How should those of us whose hearts have been sickened by the knowledge of all of this view the Mumbai attacks, and what are we to do about them? There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering now is far worse. If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US army is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire. (Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?) Hundreds of thousands people including thousands of American soldiers have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on U.S allies/agents (including India) and U.S interests in the rest of the world has increased dramatically since 9/11. George Bush, the man who led the US response to 9/11 is a despised figure not just internationally, but also by his own people. Who can possibly claim that the United States is winning the war on terror?

Homeland Security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland. We have a hostile nuclear weapons state that is slowly spinning out of control as a neighbour, we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalise, end up as a threat not just to India, but to the whole world. If ten men can hold off the NSG commandos, and the police for three days, and if it takes half a million soldiers to hold down the Kashmir valley, do the math. What kind of Homeland Security can secure India?

Nor for that matter will any other quick fix. Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go. Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain (it would be naïve to say end) terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says Justice, the other Civil War. There’s no third sign and there’s no going back. Choose.

Why a down market is the best time invest.

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Why Pro Sports Need Newspapers

Pro sports, every single league, from the NFL to NBA to MLB to MLS to NHL need newspapers. This need exists because of what internet sports reporting has become, and how LOCAL team fans have evolved to use the net.

There is no shortage of coverage of professional sports on the webs.  There is a long list of sites, large and small that provide the same “sports site essentials”.  Scores, news, columnists/blogs, rumors, stats, video interviews and highlights, standings and discussion forums, with a focus on the “outrage of the day”. Then of course there are the league websites that provide much of the same in a sanctioned and sanitized version.  In essence, the home pages of these   network sites have become exactly what the 6pm CBS Network News was. A compendium of what the editors think are the major stories of the day.  Just as reporters were assigned by CBS to cover “whats important”,  the sites assign columnists to cover “whats important”. Unfortunately ‘whats important’ means we are condemned to T.O., Sean Avery and Stephan Marbury’s contract status all the time.   Of course the net has the advantage of unlimited shelf space for each team, but the reality is that individual team or player coverage is nothing more than aggregation of other sources and stats unless something they consider newsworthy happens.

Bottom line is that despite the huge volume of sports coverage, the local coverage of teams for the most part sucks. There is little depth and certainly not the consistent coverage of a newspaper with a team beatwriter or 2.  Thats a  bad scenario for sports leagues. Teams in every league need as much local coverage as we can get. The more stories that are written by sportswriters and columnists, the more opportunities for fans to connect and stay connected to our teams.

The natural response of course is to write more on the team website and to create and support local bloggers who write about your team. Which is exactly what most teams do. The mavs have mavs.com, mavswiki.com, friends.mavs.com and we support a variety of different blogs. We have internet and mobile editions and are expanding all the above. The reality however,  is that if you count  the entire universe of LOCAL  Mavs fans that go to these sites, they are a fraction of people who read about the Mavs in the Dallas Morning News and the Ft Worth Star Telegram print editions.

More importantly, those fans that go to the national sports sites, the local team website and blogs are our customers and hard core fans. While we  will do everything possible to keep them happy, they are easy to reach.  The newspapers reach our hardest to connect to  customers, the casual fan.

I’m a fan of the Dallas Stars, the Cowboys, Rangers and the Burn. I have never been to the website of any of them. I get my scores and AP summary for my favorite teams on My Yahoo page. Any timely or topical information I get  from the Newspaper.  Its just easier for me to pick up the sports page and see at least something about each team.

The Dallas papers have about 500k unique print readers every day. Figure about 70pct read the sports page on any given day. Those 350k users are more than the daily unique local users of most if not all teams in our market.  More importantly, from a business perspective, because their customer base skews older, they dont use the net as a primary source of data,  they have more disposable income to buy tickets and merchandise for themselves, their businesses and their families. In other words, their customers pay  our bills.

The problem of course is that newspapers are pushing themselves to the point of irrelevancy.  They have cost structures that dont support they business they think they are in.  They don’t have a vision on what a profitable future might look like.  They are getting crushed by disappearing advertising revenues .  They are doing what anyone in their position would do, they are cutting every penny they can and praying for divine intervention.  Professional Sports Leagues and teams, if we want to continue to connect to our local casual sports fan, needs to work with our local papers to try to keep them alive as long as possible.

The question is how ?

In the technology business, when a company wants its retail products to get visibility and sales among shoppers, its not unusual for the vendor to pay for a salesrep to be on the retailers salesfloor exclusively selling and promoting their products. When a vendor wants to get shelf space in other retail environments, it buys endcaps. Often through softmoney which are in the form of rebates to the retailer. Its time for the pro sports leagues to take a page from that playbook and  expand our newspaper shelfspace.

My suggestion to the powers that be in the leagues I have spoken to is to have the leagues work together and create a “beatwriter co-operative” .  We need to create a company that funds, depending on the size of the market and number of teams, 2 or more writers per market, to cover our teams in depth.  The writers would  cover multiple teams and multiple sports. They will report to the newspapers where the articles will be placed, who will have complete editorial control. In exchange, the newspapers will provide a minimum of a full page on a daily basis in season, and some lesser amount out of season. That the coverage will include game reporting that is of far more depth than is currently in place, along with a minimum number of feature articles each week in and out of season.  And most importantly, these articles will be exclusive to print subscribers.  They can do all the ad supported short summaries online and minute by minute blog posts and tweets  they would like.  To make this work,  print editions and subscriber only online sites have to become the defacto destinations for in depth and unique coverage .  They have to become the local version of ESPN.com’s for pay  “ESPN Insider”

Buying anything more than small ads in papers  to promote price promotions for the Mavs has not worked for us. I would far rather subsidize in depth coverage of the Mavs, even without any editorial control then spend more money on advertising. Im a firm believer that there is a foundation of readers who use the sports pages as their primary source of local team information. That number may not be as big as it used to be, nor will it be as big in the future. Thats ok.  The numbers may not make the newspaper shareholders happy, but they are of sufficient numbers to have an impact on the local sports market.

Taking a cooperative approach could create a win win for leagues, teams and newspapers.  Letting the newspapers go belly up and depending on our own websites, blogs, newspaper websites  and national sports websites to communicate with our fans, in particular our casual fans, IMHO, is a recipe for disaster.  The cost to reach those fans in a newspaperless world over the next 5to 7 years will cost us far more than working with newspapers today to try to help them.

The math is pretty simple and straight forward. If there are 32 top markets, with an average of 3 teams, thats 96 teams. If you need an average of 3 writers per market, thats about 100 writers. Pay them 65k per year, plus 10k in benefits, and thats 75k per team per year. Index that by market size and team revenues, and that means the biggest market teams probably pay 150k per year, and the smallest markets pay 50k per team per year.  Thats not far out of line with what you would pay to get an experienced sportswriter for your website, with a lot more payoff. For the newspapers, its a way to get employees off the books, retain good writers that have a history with the papers and teams, and actually improve their publications. For the price of 2 pages of newsprint a day.

I know this is in violation of all previous principles of editorial church and state, but then again, watching papers going out of business and not even being able to give themselves away means its time to start a new branch of that church. Having the world of professional sports realize the value of locally created content, available in an offline format, might just be a proactive step that saves us a lot of money in the long run

At worst, its a starting point for discussion

Let me also add, that with the recession and the downturn in advertising for the online marketplace, while not nearly as bad as the newspaper business, the online sports marketplace is starting to have its challenges as well. Traffic, particularly domestic traffic is not really growing for traditional sports sites. Advertising for all but the biggest sites are falling. The same problems that are trashing newspaper profitability are creeping up on websites. To have any dependency on independent websites for coverage of our leagues and teams, could turn into a big problem for us if the blogs and websites we think help us, disappear.

The leagues and teams depend on quantity and quality of coverage. We need to recognize the weaknesses of those we depend on and start addressing them today

This is a good idea, and would help newspapers cut costs a little.

But still, it’s like telling a man who’s falling 140 mph to earth to flap his arms.

Newspapers are gonna have to start charging more per copy, and convince readers/subscribers to pay it. To do so they need to get A LOT better. Still, it’s gonna be tough.

Comment by OSweet — December 24, 2008 @ 8:31 pm

Happy Silly Season to you!

Mark,

Sports franchises and newspapers have always seemed to me to be old school monoliths. I guess necessity is the mother of invention. I’d of course love to get these articles in RSS feed, but the way you are setting this up… I’d read the paper.

Darin

Comment by Darin — December 24, 2008 @ 8:38 pm

“Unfortunately ‘whats important’ means we are condemned to T.O., Sean Avery and Stephan Marbury’s contract status all the time.”

Mark -

Have you been to Bleacher Report?

http://www.bleacherreport.com

I agree 100% on this idea. I personally get the paper every morning to be able to read articles at any time. I dont have the time to stop and read the internet while at work and I have a real hard time doing things like eating without having something to read. It is difficult to carry the laptop everywhere I go to run in eat a hamburger somewhere than it is to go buy a paper and read the articles more in depth.

Comment by Brian Lee — December 24, 2008 @ 10:19 pm

Thanks,

Mark

Dont you think you’re over-estimating the number of people who actually READ the sports page?

You’ve got much better data for web pages / articles viewed than you do for newspaper pages/articles. You can track the article click on the web (although you still cant tell if someone makes it past the headline).

You cant track the eyeball scan on the newpaper.

I think “read” the paper is too generous. Perhaps “come in contact with the paper” is about as good as it gets. Why? Because all you can really guarantee is that the paper was delivered to the front door.

Neighbors, Community, DMN ad junk mail, goes straight from my yard to my recycling bin. I cant figure out how to make it stop showing up.

I wouldn’t be too envious of the newspaper penetration rate; I don’t think its anywhere near what you’ve estimated. Besides, if BELO thought (or told their advertisers) that 70% of their readers read the sports page, wouldnt there be more high-value advertising in the sports section?

Comment by Cary — December 24, 2008 @ 11:58 pm

MES strong on Kuwait

id="blog-title">Frontier Markets

id="tagline">random macro musings centered around the frontier

Market Vectors Gulf States ETF (NYSEArca: MES) seeks to replicate, net of expenses, the Dow Jones GCC Titans 40 Index. The fund invests at least 80% of assets in securities that comprise the index. It may utilize derivative instruments and P-Notes to seek performance that corresponds to the index. The fund may invest in companies located in the following countries: Bahrain, Kuwait, Oman, Qatar, United Arab Emirates and Saudi Arabia.

Since trading at 41.44 since its launch this past summer, MES closed today at $19.28. Intuitively, this makes sense, given if nothing else the combination of the credit crisis and lower oil prices. Though as one analyst pointed out, these shocks are not all bad for the Gulf Cooperation Council (GCC):

“Cheaper oil along with a slowdown in local and international financing, could do what the region’s central bankers have so far failed to: rain in the region’s double digit inflation. The GCC countries continue to book budget surpluses as long as the price of oil does not drop below $50/ barrel.”

Over sixty percent of the fund’s holdings are in financial services and telecommunications, and in fact six of the top ten holdings (see below) are headquartered in Kuwait. In essence, therefore, you can think of MES as a way to tap Kuwait, but perhaps not much else.

SIKKIM: Sikkim awarded in conservation of natural resources

Music featured on Beacon Online Broadband Radio are for promotional purposes only. Artists, Music Companies and Bands are requested to write to barunroydarj@gmail.com. If they are interested in getting their music featured on Beacon Online Broadband Radio.llll

GORKHAPEDIA.ORG

THE FREE GORKHA ENCYCLOPEDIA THAT ANYONE CAN EDIT

WE HAVE 16 BLOOD DONORS ONLINE!

MANKIND IN ACTION FOR RURAL GROWTH

Dr. Mani

Dr. Mani Sivasubramanian is a heart surgeon using his Internet marketing business to fund heart surgery for under-privileged children in India. After working with hundreds of patients over the years he stayed hungry. Just doing surgery wasn’t enough. He stayed hungry – learning how to blog and raise money using the internet. Why? So he could afford to keep treating children with heart problems.

Dr. Mani lives in India. He treats little children born with congenital heart defects.

Heart surgery is expensive. Many of his patients, from poor families, cannot afford the cost of treatment. So he decided to sponsor the operations himself.

That was the simple concept behind the online adventure he started in 1996.

Ten years later, Dr. Mani’s team has raised over $100,000 and funded heart surgery in 23 children, with many more to follow. He’s well on his way to achieving an ambitious mission - making high quality heart health care accessible and affordable to every Indian child.

Did one man do this all by himself?

ABSOLUTELY NOT. It was made possible by Dr. Mani’s network. Just as Triiibes.com has made this website possible, a social network group of caring, generous, passionate people who wanted to make a difference, reach out with a helping hand, change the world and make it a better place made HIS mission possible.

Folks just like you. They made it all possible.

Some of them gave money. Others gave their time. And many helped spread the word - among friends, family and contacts. Over 1 million people have heard the message of Congenital Heart Defects awareness through this effort. While this site may appear to be about getting you to vote for “Stay Hungry,” we’re really using it to show you WHY it’s important to “Stay Hungry” and to keep looking for ways to make your business, your life and the lives of those around you better.

Thanks to the dedication and support, and the “Staying hungry” philosophy of thousands, many children are now alive, healthy, happy.

Dr. Mani’s core audience is primarily online business owners. Small and home business entrepreneurs, and work-from-home folks looking make some extra money. They understand the concepts of “Do it Now,” and “Give Thanks.” But they also know that none of us can afford to sit back and simply say we’re satisfied with success.

Many people didn’t have much to give Dr. Mani’s program or those like it. Still, they gave generously. And this made Dr. Mani think about how much more impactful it would be if he could help boost their businesses, and make them more profitable. (There’s that “staying hungry” thing again!!!)

If he could help them, they would have more money, and in turn, they could give more money to help children get new hearts or have their broken ones mended.

Choosing this direction as his new initiative to fundraising for the ‘heart kids’, Dr. Mani embarked on an exciting voyage of business education, coaching and mentoring.

He created ebooks, courses, homestudy packages and one-on-one training programs to help online business owners get higher profitability and efficiency from everything they did. His product portfolio covers ezine marketing, list building, niche marketing, business optimization and infopreneuring.

IF he had not “stayed hungry,” he wouldn’t have changed the lives he has.

Thousands of business owners have benefited from his teaching. Dr. Mani has received worldwide recognition as an Internet marketing specialist. He is one of ‘99 Purple Cows’ named by business guru and bestselling author, Seth Godin. He is ranked among the world’s top 50 online marketers in the Gurudaq.com index.

The heart surgeon for children is now also well known as an e-business coach and mentor.

Behind it all is a unifying thread that links his vast and growing social network together. A desire to help unfortunate children born with heart defects.

The same desire fuels his supporters. In many ways, with tireless energy and enthusiasm, they have embraced this purpose bigger than any individual or group, and grown it into a global movement.

The Dr. Mani Children Heart Foundation network has become a force that continues to spread awareness about deadly congenital heart defects that threaten thousands of little lives - and raise funds to sponsor life-saving surgery to help these young warriors survive and thrive.

If you want to join hands in this passionate effort, it is our pleasure and honor to have you along. Let’s help a child live.

How can you help Dr. Mani?

By joining the conversation.

It is happening in many places, on different levels. Some partners are talking about the work done by the CHD Foundation, showcasing the impact and suffering caused by congenital heart defects and explaining what needs to be done to fix it.

Others are discussing Dr. Mani’s business optimization products and services - because by spreading the word and making more people aware about them, they are increasing sales, and indirectly raising funds to help the ‘heart kids’. In 2006, the contribution from sales profits to the Foundation was a little over $25,000. This figure has been growing steadily every year.

Many fans of the CHD awareness effort have asked what exactly they can do to help. A few are veterans of online buzz and know how to maximize the impact of what they do to spread the word. Others (maybe you?) aren’t quite sure.

That’s why we have created a short ebooklet. It has 10 pages. In it is a brief explanation of how, what and why you may want to take some specific steps to help sustain and extend the conversation around Dr. Mani and the congenital heart defects awareness effort.

Conversations happen around brands. And brands spread messages. The brand named ‘Dr. Mani’ stands for a serious, important, powerful message.

Keep the conversation growing. Help the brand get wider recognition. Get the message to reach more and more people.

You’ll help a child with congenital heart defects. Or many. Read this ebooklet first and talk to us if you need any further information.

Dr. Mani says, “Thank you from my heart for your support, participation and encouragement.”

On behalf of the team at Dr. Mani Children Heart Foundation, Saving a Heart Child’s Life:

“We’re all about results. $109,501 raised. 23 children heart operations sponsored. Over 532 donors contributed between $5 and $15,000. Every little bit goes to save a child’s life. Help us - if you can.”

GIVE - you will help a child live.

THE WORLD today!

———————————————————————————

1. Barack Obama wins Presidential Election and becomes the 44th President of the United States - Hope for a Change

130 Million Americans, more than in any other election since 1960, voted for a change and choose Obama, obtaining a historic victory to become the first black President of the United States, congratulating and celebrating world leaders, expressing hope, expectations and confidence in a fresh approach to the world’s challenges. Obama won the popular vote with 52% to 46% of McCain and the decisive electoral vote with 349 to 163 of McCain, requiring the Presidential election 270 electoral votes and the Democratic Party is strengthening its majorities in both Houses of Congress, in the House reaching 256 seats/up 21 seats remaining 177 seats for the Republican Party with races pending in Lousiana and Virginia and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota, falling disapointed Democrats short to obtain a 60-vote majority in the Senate. Obama has to confront as he starts Presidency on January 20, 2009, inherited big problems like how to revive economy and the wars in Iraq and Afghanistan, and one has to accept that there are no quick and easy solutions and it will take time to solve them, nevetherless it seems to be important that he keeps promises made during his campaign and helps to overcome divides bringing the country together. The President-elect is already moving ahead to choose his team for the transition process, to take place in complete cooperation with the Bush administration, and to form his cabinet, nominating Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team are cooperating as close as possible with President Bush to inject confidence into the market, coordinating the rescue plan for Citigroup and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats had shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Obama talked also about a redistribution of the tax burden to reduce economic inequality, a real plan focusing on fairness and growth. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1 Trillion considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by President-elect Obama, who said his economic team is working on an ambitious and significant economic recovery plan including permanent middle-class tax cuts and the creation and preservation of up to 3 Million jobs during the next two years, through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, which could cost $675 Billion to $775 Billion or more, to enter into effect as soon as possible after his inauguration on January 20, 2009.  To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department is asking Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position President Bush said he would be open to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance. It seems nearly unbelievable that President Bush apparently conditioned his support to some of the  important initiatives to help the contracting US economy to Democrats dropping their opposition to the free trade pact with Colombia. The President-elect is frustrated that the actual administration refuses to discuss a now needed second economic stimulus package  and worried as Bush issues a record of so-called ‘midnight regulations’, last minute regulations designed to reward supporters, enraging opponents and undermining his new administration, like coal waste dumping into valleys and streams  and easing the building of coal-fired power stations nearer to national parks, having  his transition team already a list of controversial measures that will take months to undo. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a more measured response from Obama and a forcefully demand from President Bush, blaming Moscow for invading its neighbor and requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, making it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. As Russia is demonstrating to be the sole military power in the strategically vital Caucasus region, NATO foreign ministers urged Russian President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops are withdrawing from Georgia, a provocative move, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict will move from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. After the NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, is prepared to resume a constructive dialogue with Russia through French President Sarkozy, current President of the Council of the European Union, saying after an emergency Georgia summit it would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia, but did not threaten to impose sanctions considering French-German unified political position opposing such measures! President Sarkozy and President Medevedew agreed on a complete pull out of Russian troops from Georgia by the second week of October and after the deployment of at least 200 EU-observers up to the beginning of October, retreating to the two enclaves of Abkhazia and South Ossetia, having Russia established diplomatic relations with both. Rumors are currently circulating that US-VP Cheney may have sparked the crisis in Georgia as a favor to the Republican candidate, confirming eventually Prime Minister Putin’s suspicion, and there is a lot of evidence to support such a theory, as one of Cheney’s most experienced advisors, Joseph R. Wood, was in Tbilisi shortly before the Georgian army launched its military operation. McCain, who lost the Presidential election, is also a close friend of Georgian President Saakashvili, who apparently lied 100% to the world, and ordered the assault on South Ossetia before the Russian tanks entered the province, not respecting the cease-fire, attacking the civilian population while they were asleep in their beds, according to OSCE reports. Cheney confirmed during a visit to the Georgian capital that the US are donating $1 Billion to rebuild the country after Russian’s invasion! US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama Administration to restore relationship. Meanwhile President Bush concentrating on the weakening US economy, addressed the nation to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The Bush Administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks. The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies.

http://www.BarackObama.com/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Recession

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. President Bush has signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25% and lowering the federal discount rate to 0,5%,  coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, expecting the weakest Christmas shopping season in decades, dropping consumer confidence 23,4 points to an all time low of 38 the same month, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 5,7% in July, increasing to 6,1% in August, remaining steady at 6,1% in September, reaching 6,5% in October and jumping the jobless rate to a 15-year high of 6,7% in November loosing American economy another 533.000 jobs, climbing claims for unemployment benefits to the highest level in 26 years. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US global car sales fell more than 40% in November in comparision with one year earlier, increasing concerns about the prospects for survival of General Motors, Ford and Chrysler requesting urgently federal financial aid, dropping retail sales 2,8% in October, falling compared with one year earlier 4,1%. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,96 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles.  US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and is expected to slow down even more in the fourth quarter of this year and also at least in the first quarter of 2009. The IMF sees a weak 0,5% US growth for 2008 lowering its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand. The US one year inflation increased to 5,60% in July (including food and energy), but declined to 4,94% in September, 3,66% in October and 1,07% in November. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 15-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling to 2,1% in November, where it is expected to average 2,2% in 2009. The European Central Bank/ECB had raised its main interest rate from 4% to 4,25%, alarmed about inflation trends combined with lower growth increasing stagflation fears in the Eurozone, holding the rate steady at 4,25% in September as inflation risks have fallen but not disappeared, insisting that it is crucial to bring Eurozone inflation back within the target of an annual rate of 2%, but in a joint emergency decision with the world’s most important central banks lowered its key rate to 3,75%, also reducing direct lending rates. The financial crisis has changed economic outlook slowing growth worldwide, falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, lowering the European Central Bank its key rate by another half percentage point to 3,25% and with inflation falling and Europe already in recession decided a new interest rate cut by 0,75% to 2,5%. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 4,8% and 7% respectively lower growth rates in 2008, while the somewhat frenetic growth in China and India, both commodity consumers, could slow down temporarely but will continue with estimated 9,9% and 8,5% respectively in 2008. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standads Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday. In another deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. Merrill Lynch reported for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital the company encouraged by the Federal Reserve, which now officially approved the acquisition, advanced its merger talks with Bank of America and agreed to be bought in a rescue take over for about $50 Billion, making BofA the second largest bank in the world. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion, reporting stronger than expected third quarter earnings of $1,64 Billion, while J.P.Morgan Chase posted for the same period a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw at least $43 Billon in September from US hedge funds, which lost already more than $200 Billion in value this year, borrowing also heavily money, and as hedge fund outflows increase they will have to sell assets, estimating analists that the hedge fund industry, which managed at its peak beginning 2007 about $2.200 Billion in assets, is going to shrink according to estimates by more or less 45%/$1.000 Billion due to withdrawals and investment losses. Also smaller regional lenders are becoming increasingly vulnerable, practicing American banks a new found caution reducing even business loans! The credit crisis has conduced also to a tightening in lending terms of credit card issuers with consumers to lower risk profile, owing US households about $971 Billion ($8.299,- per household) in credit card debts, increasing charge-offs to 6,82% in August in comparison with 4,61% a year earlier, writing lenders off an estimated $21 Billion in bad credit card loans in the first half of 2008, showing 4,6% of credit card owners defaults in payment of 30 days and more in August. The Federal Reserve approved the transformation of American Express, the nation’s last big independent credit card company, into a bank company, getting greater access to the bailout package for banks, requesting about $3,5 Billion in assistance out of this fund. US banking regulators and the Federal Reserve, worried about financial markets, are working  on stricter rules for credit card issuers prohibiting unfair practices and calling on the industry to be more user-friendly, considering borrowers troubles to make their payments in the midst of a deep recession. AIG/American International Group, the world’s largest insurance company with an overexposure in real estate and in the credit default swap market, two problem segments suffering an overall decline in asset prices, was seeking $40 Billion in emergency loans, request initially rebuffed by the Federal Reserve, but to avoid that after Lehman Brothers also AIG was forced to file for bankruptcy

12/26/08

The £1m hate campaign paid for by high street collections

I’m starting to wonder if SHAC is a CIA/MI6 COINTELPRO operation used to link animal rights activists - and I mean those who care about real issues, not glory hounds looking for their latest 15 minutes of fame - with terrorism.

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One stall in Oxford Street could make £500 in a single day, and many thousands of ordinary members of the public signed the petition to close down Huntingdon Life Sciences (HLS), thinking that they were doing their bit to stop animal research taking place in its Cambridgeshire laboratory.

Many of those signatures did not reach Downing Street, or anywhere else. Boxes of petition sheets were found in May last year by police who raided the cottage at Little Moorcote, Hampshire, from where SHAC was run with “almost military precision”.

Almost £100,000 in cash was also found across 29 addresses that were searched at the end of a two-year police investigation costing millions of pounds. Other funds had been spent on co-ordinating an international blackmail campaign against hundreds of victims, some with only the most tangential connection to HLS. They paid, indirectly, for SHAC’s targets to receive hoax bombs, threats that they would be stabbed with HIV-infected needles and receive “home visits” from balaclava-wearing vandals.

There were two faces to SHAC, which was created in 1999 by Gregg Avery, his first wife Heather Nicholson and Natasha Dallemagne, later Avery, his second wife. The campaign, which remains active and is not an illegal organisation, grew rapidly and internationally. At one stage its bank account had a turnover of about £150,000 a year, while the British mailing list topped 10,000, the vast majority of whom simply had a concern for animal rights and took part in nothing more than legal protest.

Pulling the strings was Gregg Avery, a veteran activist with animal rights related convictions. Having run campaigns to close down a beagle kennels and a cat farm that supplied vivisection facilities, he had a bigger target by 1999. HLS, which had been the subject of an undercover Channel 4 documentary, was it.

As they bugged conversations inside Little Moorcote, police heard Nicholson describe their campaign as “a straightforward battle between good and evil, it’s like Heaven and Hell . . . black and white, simple as that”.

“There is a scale of hatred. How I feel goes off the scale,” she told fellow conspirator Daniel Amos, referring to those who worked inside HLS. “I could kill every last one of them and I wouldn’t think anything of it.”

Gregg Avery knew that HLS directors and staff would be prepared to suffer for their livelihoods: they were used to abuse and attack. But the company’s financial and physical supply chains — its banks, customers and contractors – could be its Achilles’ heel. The couriers, scaffolders and bakeries for whom the laboratory was only one contract out of many would be, he concluded, less likely to take a stand when their families were threatened and neighbours began hearing anonymous allegations of paedophilia.

He was right. Under a barrage of threats and blackmail – the almost inevitable consequence of being listed on SHAC’s website as an HLS “collaborator” – one company after the next bowed to the order to e-mail info@shac.net promising to sever all ties. More than 270 businesses, from local firms to multinationals, are listed on the SHAC “roll of honour” of “companies who have dumped HLS”.

HLS contractors and suppliers abroad were not safe. There were trips to Sweden, the Netherlands, France, Germany and elsewhere, where SHAC’s British hierarchy would meet local activists to stage menacing protests and clandestine home visits.

“People say, ‘I’m not letting these bastards push me around’ and three weeks later they pull out,” as one former SHAC target told The Times. “In the end barely anyone got physically attacked . . . but it is the psychological impact, the thought that this could be more.”

Spreadsheets recovered from the conspirators’ computers recorded the names and whereabouts of targets as well as details about their children and security arrangements.

Potential victims were painstakingly researched, a process in which Gavin Medd-Hall, a middle-aged former computer technician from Croydon, often took the lead. The hounding of these targets was also carefully logged – in public usually through “action reports” that appeared on extremist websites. In private, using an e-mail encryption programme that they thought had bought them secrecy, Avery and his core group compiled detailed three-monthly reports of their legal protests and illegal blackmail campaign.

The former were carefully labelled SHAC, a well-known brand in the animal rights movement that was adopted by activists around the world. The latter always took the badge of the “animal rights militia” or Animal Liberation Front (ALF).

Although the SHAC inner circle always denied any connection to the latter, an anonymous newsletter entitled “Animal Abusers Index” found at the Averys’ address painted a different picture. “HLS will not close by us saying aren’t the ALF wonderful when they are no different from every single one of you,” it read. “You are the ALF.” This, prosecutors believe, pointed to the truth: the ALF has no formal membership card, but key figures in the SHAC leadership were at the heart of its activities.

The balaclavas, spray paint and burnt-out remains of a mobile phone discovered during police raids suggested the same thing.

The Averys, veterans of this world, groomed idealistic young activists such as Daniel Wadham and Gerrah Selby to be its next generation. This group didn’t normally write the poison-pen letters and send the hoax bombs themselves – there were others willing to do that – but they researched, fundraised and publicised.

They sensed victory as HLS’s share price collapsed and the company left the London Stock Exchange for New York. Even now, although the company’s finances are sounder than they once were, HLS banks through the Department for Business, Enterprise and Regulatory Reform because its custom is not welcome elsewhere.

By 2005, however, there was a growing mood that the animal rights movement – legal and otherwise – had been getting its own way for too long. The University of Cambridge had pulled out of building a research facility, and construction at Oxford’s laboratory was on hold after the contractor withdrew.

The British police began an operation which involved five forces and the National Extremism Tactical Co-ordination Unit, the City of London Economic Crime Unit and the Serious Organised Crime Agency.

In June 2006 Gregg Avery told an interviewer that SHAC had not done anything illegal since 2000, when he and his wife were given 12-month jail terms for publicising HLS employees’ addresses on the internet. The hounding of HLS contractors since was the work of other unconnected groups, such as the ALF, he said.

“Our phones are tapped, our cars have tracking devices on them, our e-mails are read. Believe me, if we were involved in anything illegal the police would be the first to know,” Avery said. A year later, as 700 police officers swooped on addresses across Britain, Belgium and the Netherlands, he would be proved right.

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Yes, the title says it all; it’s Christmas and I’m happy. So… Yay!

Last night I was up really late (like past midnight) and I never really fell into a deep sleep. I kept having spaz attacks, which is what I do when I’m excited. So after falling asleep at like, IDK, 3:30, I rolled around in my bed for ages. I was having this dream where I jumped up and down singing “Christmas! Christmas!” Then the dream ended and I had another dream where I heard voices in the living room downstairs. But it turned out not to be a dream, so I jumped out of bed and stumbled downstairs to find Mom, Dad, and Cheryl on the couch jumping up and down (well, Cheryl was anyways) over her new Only Hearts doll. Again, Google it.

So I opened my presents from Santa. First I got this huge comforter which is lime green with small polka dots, with a matching pillowcase, which I promptly curled up in. After that was ultra-soft pajamas; I changed from my jeans into the plush bottoms, which are turquoise with darker spots. I didn’t put on the top, but it felt really soft, and that’s what I’ll wear when I go to sleep tonight.

Then it was time for my stocking. Although I’m not sure if I can remember everything, here’s what I can remember:

Anyways, that’s what I can remember. There may or may not be more, but whatever. After that, Mom and Dad did their stockings. Since Santa doesn’t bring presents to over-eighteens, Tristan and I usually buy them stocking stuffers. It’s a lot of fun shopping for them, not least because Mom foots the bill. They liked what we got for them, which is a relief — in past years they have sort of looked at me like, well, the presents are cute anyways. Not this year, though — phew.

After that was breakfast. We ate homemade sticky buns which are dee-lish-ee-oh-so, scrambled eggs, bacon, and fruit. Ahh, sticky buns, they really are great. Yum yum.

Then it was time to open the presents from relatives. We never do that until breakfast is over, I don’t know why, but it’s a tradition and I hate to break tradition unless I think we need a change. Anyways, here is (another) exhausting list of what I got. You really don’t need to read it, I just felt like typing it up. You will probably find it boring. Whatever.

Cats are paranoid.           Rob: What’s going on?!          Bucky: Satchel was trying to kill me!  I   had a card in my hand and he must have thought I was a mailman and he tried to kill me!           Satchel: He has a piece of tape on his head… I was trying to get it off.

There are going to be other presents coming, but unfortunately they didn’t make it in time for Christmas. So I guess I’ll blog about those later… Anyways, after we were done opening presents it was a very mellow afternoon. Then some folks came over for dinner and brought some more presents, I got earbud clips and a Sudoku book. Yay.

In any case, Christmas will be over in two hours in my time zone. I must jump around yelling.

Big Madoff Investor And Hedge Fund Manager Commits Suicide

We have by now heard the news that Mr. Thierry Magon de La Villehuchet, a 65 years old hedge fund manager of Access, which lost $1.5 billion in the Madoff scandal, was found dead an apparent suicide in his Manhattan office. The depth and reaches of the Madoff scandal are only beginning to be unraveled. The issues of ponzi schemes and affinity fraud were covered in a precious post. With regard to the death of Mr. de La Villehuchet, this occasion presents a teachable moment to educate ourselves on Emile Durkheim, who is considered to be the father of sociology; specifically on his theories about societal organization and its impact on the individual. In an articled entitled Zero Confidence, Prof. Steven Lukes of NYU uses Durkheim to explain the collective distress our society is undergoing in the face of the economic downturn and other calamities. The discussion on Durkheim’s Suicide is particularly insightful and timely. Below is an excerpt from the article:

…To gain some grasp on what might be happening, perhaps we might turn to the French sociologist Emile Durkheim, whose classic study of suicide, published in 1897, developed the notion of anomie. He first expounded this idea in his book The Division of Labour in Society, in which he treats it as an “abnormal” form that the division of labour takes in modern industrial societies. But in Suicide anomieplays a central role as a social cause of suicide and one of the principal ills of modern industrial society.

Anomie signifies the breakdown of the normative frameworks of our lives, the upsetting of rules, expectations, one’s sense of one’s place in society, one’s status vis-à-visothers, a social condition with grave psychological effects, leading in extreme cases to suicide. In fact, one could say that Durkheim’s book is not really about suicide, but rather about the distinctively modern condition, ever more present in advanced industrial societies (read capitalism), that induces a distinctive kind of suffering – a pathology that is at once social and psychological, that occurs in the economy at times of booms and busts, and of which the index is a high and rising suicide rate.

Durkheim called anomie “the malady of infinite aspiration”. His central idea was that human beings need regulation – a framework of informal and formal rules that set limits to what they are entitled to expect, for instance, in the form of economic rewards. It is an idea that contrasts sharply with the culture of capitalism, not least its US version. Could there be any more striking contrast with his idea than the culture of Wall Street and the City of London in the last three decades? Durkheim, who was a late-ninetheenth-century socialist, hoped to “moralise” capitalism – a notion that has, perhaps, a somewhat conservative ring. But recall RH Tawney, egalitarian socialist, who once wrote a pamphlet called The Sickness of the Acquisitive Society.

TOC Healines for 2008

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US Dollar Crisis Begins

 

Celebrate Christ

Hello friends and acquaintances, I wish to give you 23 gifts.

I have uploaded 23 of my favorite albums to MediaFire so I can share them with y’all as a Hairy Hannukhristmengs present of sorts.

Some of these albums are more common and others are probably almost impossible to find anywhere else. Here is a link to the albums:

mediafire.com/hungryfreaks

and HERE (following), in a tradition I haven’t returned to in many many years, is a description of each album so you can decide what you want and what you want to avoid. It’s not a year-end list, it’s a cosmic-love list. Each of these albums stirs something in me that I want to share with you, so I wrote a little something about each one to let you know just what you’re in for.

Happy Horrordays, everyone.

Africa Must Be Free By 1983 by Hugh Mundell

In 1975, thirteen year old Hugh Mundell churned out 9 of the most pensive, foggy, and just fucking heavy reggae tracks of all time. Produced by Mister Melodica himself, Augustus Pablo, the teengenerate shows all sorts of insights both specific to and well beyond his years. Ironically, Mundell would be murdered in 1983 at the age of 21. This CD version contains all of Augustus Pablo’s additional dubs. HIGHly recommended.

Babylon by Dr. John

Mac Rebennack’s second album, released in 1969, doesn’t have the hammy voodoo fist of Gris Gris, but his foray into social/political commentary is all for our benefit, as he brings his singularly dark and funky worldview to a world that seems surprisingly similar almost 40 years later. “Babylon,” in particular is up there with songs like “Don’t Worry About The Government” or “Kill The Poor” and for heads and other nerds, “The Lonesome Guitar Strangler” is not only a fun poke at the shredders of the day, but a remarkable showcase of Mr. Doctor’s varied brilliance (he plays all the guitar on this song, as well as most of the album). An underrated slab from Dr. John’s repertoire, this isn’t the free-Toussaint of his previous album nor the dense funky gumbo of his later albums. This is some kind of unique funky proggy sociopolitical concept album that sounds pretty fresh no matter where you come at it from.

Blub Krad featuring various artists

This is a 1978 L.A. Free Music Society compilation featuring performances from various LAFMS bands doing everything from epic slopped-out free-rock (The Yvonnes’ “I Walked With A Zombie”) to bizarre psychedelic parodies (The Pablums’ awesome Rolling Stones tribute, “Under My Gums”) with some incredibly thoughtful and ahead of its time improvisation thrown in by El Trio Primo, a very young Z’ev and many more. The album opens with a fucking brilliant cover of the Modern Lovers “Someone I Care About” as performed by an especially youthful Half Japanese. Every band on this compilation paid 15 dollars to be on it, therefore allowing the album the funds to be released in a limited pressing. Doesn’t exist on CD anywhere, this was transferred from the original vinyl.

Comin’ Out Hard by 8-Ball & MJG

If you’re from the South, these guys are old hat to you, but a lot of us yanks didn’t get turned on to these cats until pretty late in their career, and while their guest spots on “Stay Fly” essentially made the song what it is, and “Don’t Want No Drama” is a load of raucous fun, their debut album, with its ominous Casio beats and lackadaisically boastful wordplay, blows anything they have done since out of the proverbial water. The title track contains one of the most sublime choruses known to man and the Lexus they’re riding in on the cover doesn’t even exist in convertible. They made that up. While the Death Row crew was talking about pimping metaphorically, these guys meant it literally. This album even outlines their business plan pretty explicitly. “The cops work for me because I keep good stuff, plus the government ain’t never paid those tricks enough.

Dave Godin’s Deep Soul Treasures, Volume 1

Deep Soul is a special subgenre, the term coined by the British DJ Dave Godin, that represents the heavier often more gospelly side of soul. Songs like “Me & Mrs. Jones” by Billy Paul but by folks who never released albums, folks who struggled over the course of a few 45’s, on some of which, they only had one side to themselves. This is the dark side of the ballad, power ballads often about feeling powerless created by people whose voices betray powers unheard of and unexperienced by the likes of you and I. You can’t find most of these 45s for anything less than a pretty penny, so let Dave Godin take you on the most epic and soulful journey of your life. HIGHLY HIGHLY HIGHLY RECOMMENDED.

Dopethrone by Electric Wizard

Oh holy fuck. This is a special album. While Sleep may have made longer songs and Sunn 0))) may have deconstructed sounds only to have them born again as sheer minimalist horror drone mist, The Wizard always did it best, as far as I’m concerned. On this 2000 album, EW created a masterpiece of not just stoner/doom/sludge metal, but a masterpiece that would have Lamonte Young and Terry Riley creaming their jeans and throwing up the horns like elderly born again dervishes. This album traverses subjects as varied as violence, getting high, and space, while churning out such densely layered rhythmic ooze that often I’m not sure whether I’m imagining half of the sounds I’m hearing. There could be anything hidden in there. What’s not hidden in there, however, is the immediately apparent sonic care which these folks have given to every single song on this album. Every swoosh, every hum and grunt, every horror sample laid out in front of you, they all reeks of concern, care, and engagement. You owe this album the same thing, surely you shall be rewarded.

Eastern Sounds by Yusef Lateef

This is not free jazz. While Lateef would freak out (still in a pretty mellow way) on later albums on Impulse and other labels, this 1961 masterpiece addresses themes that wouldn’t become cool for almost another decade. The result is not necessarily a freak out, but you will probably be freaked out by just how dang BEAUTIFUL it is. This is pretty straightforward jazz as far as the canon is concerned. Lateef switches from flute to sax to Chinese clay globe flute and then back again while maintaining his distinct voice, cool, refined, but always clued in to something beyond, and he frequently surprises you with just how clued in he is. Not as cheesey as Gabor Szabo’s Jazz Raga and not as personal as Journey In Satchidananda(also on this list), Eastern Sounds showcases Lateef’s deep deep appreciation/love for “Eastern” modes, adapting Western pieces as well as covering more traditional Eastern compositions. My mom loves this record, I bought it for her for Hannukah one year.

Greetings From Asbury Park, N.J. by Bruce Springsteen

So you’ve heard Born To Run and Born In The U.S.A. and probably The River, but have you ever really taken any real time with GFAPNJ?? Sure, you know that Bruce wrote “Blinded By The Light” and that the Mannfredd Mann (sp?) version is a load of horseshit compared to the original, but have you heard the love song about tripping in the woods (”Spirits In The Night”) or the ode to a dying teenage beauty he just can’t bail out anymore (”I Came For You”)? This album is raw, dark, loving, and more densely worded than almost anything he has done since. If you have any doubts, check out the lyrics to “The Angel” before downloading. This is some essential shit, Count Dogula.

Humility In The Light of The Creator by Kalaparusha Maurice McIntyre

As a founding father of the AACM, saxophonist Maurice McIntyre shouldn’t need any introduction, but despite his pedigree as OG free-jazz royalty, he tends to be brushed aside, especially amongst Chicago legends like the Art Ensemble or Phil Cohran. McIntyre has created here a heavily spiritual and exceptionally thoughtful free-jazz album recommended to any fan of Coltrane’s later work, but with a more earnest and immediate tone that is less wooly than Albert Ayler but far less contained than Pharoah Sanders. A handful of these tracks contain vocals not even remotely as annoying as some of Leon Thomas’ blatherings, bringing to light what a solo human voice can actually do in a free-jazz ensemble. Hell of essential, yo.

In Search of Space by Hawkwind

WHY THE FUCK AREN’T MORE PEOPLE INTO HAWKWIND? ALL YOU ASSHOLES WHO JUST LOOOVE ACID MOTHERS TEMPLE AND SHIT LIKE THE BOREDOMS ON VISION CREATION NEWSUN, WHY HAVEN’T YOU SPENT ANY TIME WITH HAWKWIND??? Lemmy was in this band before Motorhead, did you know that?? He sings and plays bass and growls some really terrifying paranoiac poetry over something vaguely like the world’s heaviest Motorik. People call this stuff prog-rock, but it’s so much simpler, so much more focused on the psychedelia of transient sounds and riffs and pulses than any sort of wild time-signatures or epic solos. Not to say there aren’t epic solos. RIYL: Pink Floyd’s Ummagumma, Amon-Duul-I-on-fast-forward.

Journey In Satchidananda by Alice Coltrane

I can’t believe I got Joey’s text telling me AlCol was dead when I was on LSD. You almost gave me a bad trip, BRO. This album, released 3 years after her husband’s 1967 death, and later the same year that she would release Ptah The El Daoud, finds Ms. Coltrane playing with one of the most, if not THE most, incredible ensemble of her career. Alice takes on the usual harp and piano playing with masterfully heavy handed bluesiness, as Pharoah Sanders supports her every step with loving and intricate playing that rivals his best work on albums like Karma and Jewels of Thought, meanwhilethe always stellar Rashied Ali keeps time with the alternating basses of Cecil McBee and Charlie Haden, both creative giants. That group alone should have your mouth watering, but if it doesn’t, imagine the spirituality of her previous album freed of its structural boundaries, wandering the universe in search of the perfect melancholy groove, the perfect harmony between East & West…and then know that success is achieved on all fronts.

Kimono My House by Sparks

Sparks have a lot of albums. This is not one of the ones produced by Giorgio Moroder, SORRY. This is the heavy, funny, spooky, sexy, prog-pop masterpiece that sounds like 10cc grew some hair on their balls, got Big Star’s rhythm section and prayed in front of the shrine of Freddie Mercury for 40 days and 40 nights. The Mael brothers are at the top of their game here being equal parts flamboyance, wit, and sheer rock prowess. This reissue includes some killer bonus tracks including the single “Barbecutie,” which is just as great as the title implies.

L’Enfant Assassin Des Mouches by Jean-Claude Vannier

Way too fucking weird to ever really sound that dated, the title of this albums translates to “The Child Killer of Flies” and is a loose concept album about various murderous children, all with various narratives and themes. Highly recommended to orchestral pop fans and devotees of Gainsbourg and the more lush and dramatic work of his spiritual offspring, Air, Vannier was a celebrated French arranger, composing film scores as well as working with pop artists like Francois Hardy and, most famously, Serge Gainsbourg on his album Histoire De Melody Nelson. If you’ve heard Melody Nelson, you know that Vannier’s string arrangements are an essential part of what make that album so unique, especially if you don’t speak French like me. Here he combines the same funky groovy orchestral ambience of the day with modern composition, heavy prog, circus music, and sound collage to create a singularly bizarre, unnerving, and beautiful work. As wild as the day is long, impress a girl or freak out your boyfriend with this one.

Love Cry Want by Love Cry Want (aka “Nicholas,” Joe Gallivan, & Larry Young)

Free-fusion, but not in the Bitch’s Brew or Ornette sense, free-fusion in a funky and nearly indescribable combination of noise, groove, and fun(k) that is truly unlike any jazz, free or otherwise, that you’ve ever heard. Larry Young, mostly known for pretty standard jazz organry (outside of his landmark Lawrence of Newark LP) appears hear bringing some ultimate fuzzy weight to Gallivan’s eccentric and groovy junk yard percussion, while the singularly named “Nicholas” “shreds” with some strange guitar synthesizer of his own invention. Recorded in 1972 but not released until the 90’s when Gallivan churned out a shoddy reissue CD on his website (I’ve contacted him about re-releasing it with full archival jams, but he’s not interested, sort of a hermit), supposedly, Nixon himself specifically requested these cats shut off that dang racket so he could get some work done during a performance on Capitol Hill. What more of a recommendation could you possibly need? INSANELY HIGHLY RECOMMENDED, ENDLESSLY UNIQUE.

Misery Index by Assück

Easily the greatest grindcore album ever recorded. Brutal, dark, complex, and raw as fuck. Unlike a lot of grind, this never sounds like robots, this always sounds like a band. Just some dudes from Florida that hate your fucking face. Surprisingly dynamic, as well; each song is distinct from the last in a way that contemporary bands like Pig Destroyer couldn’t recreate if they tried.

Neil Young by Neil Young

Not an album that produced any of his standards, Young’s self titled and hideously covered debut was his first solo effort after the disbanding of Buffalo Springfield. Unlike anything he would record from that point on, the sounds on this album are thin and foreign, equal parts the country-rock he would become known for as well as the sci-fi that people would reject on Trans. Beautiful lonely songwriting with bizarre dense production filled with strange guitar tones, gospel choirs, and spooky synthesizers. The final song, “The Last Trip To Tulsa,” is a sort of spiritual precedent for songs like “After The Gold Rush” and “Ambulance Blues,” an exceptionally long (around 9 minutes!) vaguely dystopian solo guitar trip with far-out imagery and sharp words for the world around him. RIYL: Neil Young, Here Come The Warm Jets, things that sound like the tape has been manipulated or pissed on.

Penis Envy by Crass

Crass is probably the only band on here that wouldn’t be mad at me for giving away their album. Here, Eve Libertine takes the lead on my favorite Crass album of all time. Post-punk by accident, these fucking weirdos made the greatest and most fun album about gender in contemporary society since Walter Carlos became Wendy. Especially check “Smother Love” if you ever feel jealous about anyone or anything, and “System” if you’re feeling especially like the man is keeping you down. Libertine pretty much hits every nail on the head in every song while Steve Ignorant and the rest keep it real with an even weirder and more angular (but also poppier) approach to their already treble-kicked-knife’s-edge-punk. E$$ENTIAL YOU FUCKING FASCISTS.

Presence by Led Zeppelin

Insanely underrated late Zep, featuring the greatest album art of all time and aural proof that Led Zeppelin is the best prog/kraut/psyche/heavy/whatevvy band ever. Quit being such a fucking cynic and a snob and get this shit ASAP.

Suan by Armando Piazza

I can’t find that much information on Piazza aside from that he’s from Naples and that this album originally came out in 1972. Amazing and incredibly romantic/sensual fuzzed out Italian prog sung in English. Very intimate with bursts of noise and emotion that will shock any square right out of their chair. It says that Naus is contained when you download the file, but it’s not, sorry. That’s his 1973 album, which is also awesome. Don’t let this lackluster description deter you, this is a hot hot album. Great make-out album, too.

Suburban Lawns by Suburban Lawns

Thanks to Joey for turning me on to this album, I found out even more about it when I was researching my L.A. art-punk project last winter. This is the Lawns’ only real full length album, which is a shame, because it shows a band that could have been L.A.’s hyper-speed answer to the Talking Heads, Devo, and even the Young Marble Giants. Su Tissue fronts an incredibly tight punk/new-wave group that churns through snide the futurism of “Pioneers” and “Janitor” while revealing a reserved post-punk cool on songs like “Green Eyes” and “Protection.” The last track, “Jam The Controls,” sounds like it could even be a Josef K or Certain Ratio song but with the paranoid urgency that only an L.A. band could have.

Terry Riley With Don Cherry by TR & DC

I just discovered this album actually. This is a bootleg of these two giants of freak-out playing live in Germany in 1975. Imagine Rainbow In Curved Air meets No Pussyfooting with both Riley and Cherry slowing down their usual frenetic spirituality to a droned stoney pace that allows both men to interact in ways and on planes unrivaled by either separately. Smoke a doob and fall asleep to this one. HIGHLY RIYL: Cherry solo, Riley solo, Sketches of Spain at a quarter of the speed with googly moogly organ instead of castanets and whatever the fuck else is on that album.

We Insist! Freedom Now Suite by Max Roach

Not even meaning to, I have saved the best for last. You will hear this album and say “Max Roach? The really straighter than straight oldy moldy jazz drummer? I knew he was heavy as fuck and a man to be respected BUT HE MADE THIS!?!?” Gil Scott Heron could not exist without this album. Recorded in 1960(!!!! WHOA.), this is an album before its or anyone else’s time, I’ll actually let the Allmusic blurb speak for this one:

“At a time when the civil rights movement was starting to heat up, drummer Max Roach performed and recorded a seven-part suite dealing with black history (particularly slavery) and racism. “Driva’ Man” has a powerful statement by veteran tenor Coleman Hawkins and there is valuable solo space elsewhere for trumpeter Booker Little and trombonist Julian Priester, but it is the overall performance of Abbey Lincoln that is most notable. Formerly a nightclub singer, Lincoln really came into her own under Roach’s tutelage and she is a strong force throughout this intense set. On “Tryptich: Prayer/Protest/Peace,” Lincoln is heard in duets with the drummer and her wrenching screams of rage are quite memorable. This timeless protest record is a gem.”

I couldn’t agree more.

Well, if you made it this far, I’m impressed and sort of embarrassed, but hopefully you will be inspired to enjoy these albums as much as I have. I hope your Christmas/Hannukah/Kwanzaa/ritual sacrifice was swell and that your heart is filled with love and that your stomach is filled with lunch.

Once again, all of these albums can be downloaded at: http://www.mediafire.com/hungryfreaks

Merry whatever and the happiest of new years.

-Sam

P.S. Please feel free to further share this music if you think you know folks who want it.

Ramramakrishnan

 

The effects of massive fiscal stimulus. A study comparing Japan

The 1942 movie Holiday Inn was fairly typical escapist fare — a musical romantic comedy for people still suffering from the Great Depression. America had hoped that the war after the attack on Pearl Harbor would end in quick victory, but the Bataan Death March, as well as other setbacks in the Pacific and Europe, taught them otherwise.

And so, the song “White Christmas” from the movie, sung by Bing Crosby, because a surprise hit among soldiers, evoking nostalgia for their families back home.

The following year, in 1943, loneliness was a way of life. Bing Crosby scored another big hit, “I’ll be home for Christmas.” Germans and Japanese used to torture American soldiers by playing this song all the time.

The song, “Have yourself a merry little Christmas,” has been changed in the last few decades into a cheerful little ditty. But in the 1944 movie, Meet me in St. Louis, it was a bitter, sad, angry song.

The daughter, played by Judy Garland, had just learned that this was her last Christmas with her lifelong friends in St. Louis. After the New Year, she and her family would be moving to New York. Although plot of the movie takes place in 1904, this song was definitely in the spirit of 1944, when despair over torn families was at its deepest.

Japan seems to run 10-20 years ahead of the United States.

Japan had a major stock market crash in 1919, leading to a new bubble 65 years later, beginning in 1984, and a new stock market crash in 1990.

The US had a major stock market crash in 1929, leading to a new bubble 66 years later, beginning in 1995, and a major financial crisis beginning in 2007, probably with a new stock market crash to come soon.

Thus, for people trying to understand what’s coming, we have two big examples to look at: America in the 1930s, and Japan in the 1990s.

Now, an October presentation by Richard C. Koo, Chief Economist at Nomura Research Institute, compares Japan’s 1990s deflationary spiral with America’s in the 1930s and today. (The web site has links to the presentation slides (PDF) and to a video of the 1½ hour presentation.)

Koo says that what has happened in Japan — a “balance sheet recession” — is not in any economics textbook, and he now sees the same thing happening not only in the US, but in Europe, in Asia, and around the world.

I watched the entire 1½ hour presentation, and I was transfixed. This comparison of Japan with the US provides a great deal of insight into where the American and world economies are going.

A “balance sheet recession” occurs as follows (this is my way of formulating Koo’s description):

Koo points out that this violates much of mainstream macroeconomic theory, which assumes that people and businesses will want to borrow money when interest rates are nearly zero. But monetary policy simply stops working.

Since monetary policy stops working, a government has to resort to fiscal policy — a huge fiscal stimulus package. The purpose of this is to keep the GDP from falling. The government does the opposite of what the private sector is doing. The private sector is paying down debt, refusing to borrow and spend. The government borrows and spends huge amounts of money.

Koo addressed several issues that arise:

Koo notes that Europe needs to do a similar massive fiscal stimulus, but won’t be able to because individual countries are prevented by the 1992 Maastricht treaty from spending more than 3% of GDP on fiscal stimulus.

As long-time readers of this web site know, I’ve been saying since 2002 that we’re headed for a 1930s style Great Depression. I’ve read and commented on millions of words of stuff by people like Ben Bernanke, Paul Krugman, and other mainstream economists, and, as I’ve said many times, it’s all crap. (In fact, during the course of his presentation, Koo also said that Bernanke, Krugman and mainstream macroeconomists were wrong.)

Koo’s presentation is the first thing I’ve heard in years that’s causing me to reassess some conclusions. I’m going to have to think about this for a few days or weeks, but these are my first thoughts:

I have a feeling that I’m going to be commenting on these concepts quite a bit in the next few weeks and months. For now, everyone who’s into economics is urged to invest 1½ hours in watching the video of Koo’s presentation.

OREO For 12 26 08

OREO For 12 26 08

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REIT Volatility and Leveraged ETFs

One of the central tenants in the argument for passive / indexing style of investing is that you can’t beat the markets by actively selecting investments.  As the overall economy grows an investor benefits from owning a basket of securities that represent that economy or sector.  As long as the cost of that basket is low, the investor wins.  Exchange traded funds (ETFs) have become the most widely used vehicle for this strategy.

Now we are seeing evidence that ETFs are influencing markets similar to active trading strategies.  There was a lot of debate about the role of ETFs and other “speculators” in driving up commodity prices earlier this year.  Even Congress got into the act with hearings on the matter for a while, but interest waned as commodity prices collapsed in the face of the credit crisis. Today’s WSJ story, REIT Moves Rub Executives Wrong Way, suggests that ETFs are creating artificial volatility in the REIT markets as well.

REITs have been unusually volatile lately, much more so than normal and more than the s&P 500, and in an asset class that traditionally is less volatile.

Leveraged ETFs are ones that are supposed to deliver 2x to 3x the movement of a particular index.  So, for example, if the S&P 500 goes up 3%, the ETF goes up 6%, or down twice as much on a down day.  Leveraged strategies can be especially detrimental when the ETFs invest in smaller sectors.

The evidence for this remains anecdotal, but this is another aspect of the active vs. passive debate that bears watching.

For now, I remain committed to keeping things simple and focusing on a smaller number of asset classes than I have in the past.

Financial crises, past and present

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All bets are off

Who can you trust when the old adages seem to fail?  You get it from a Certified Enterprise Risk Analyst who is able to model business risk comprehensively and competently.  Below the Economist is sharing how the mantra of “diversification” is not the solution everyone thinks it is.  Diversification is a strategy that works under certain conditions, so going all out and diversifying especially today could mean disaster.   Just like any other management strategy when the risk are high, diversification needs to be assessed with the same analytic depth and rigor .

For more see my forum at http://www.linkedin.com/e/gis/1167537

. . . diversification has surely not offered the benefits most pension funds expected. Indeed, it may have had perverse results. In the old days, with equities trading at below-average valuations, funds would now be on a buying spree. They could afford to ignore the short-term risks because of the long-term nature of their liabilities. Pension funds thus acted as an automatic stabilizer for the market.

This time round, that does not seem to be happening. One reason may be accounting changes which make pension-fund managers more focused on the short term. Another, however, may be the strategic drive to diversification. The Wall Street Journal has reported that CalPERS, America’s largest public-pension fund, has been selling shares to meet commitments to put more money into private-equity firms.

The final problem with diversification has been the cost. Investing in quoted shares via an index fund is very cheap—a fraction of a percentage point. But diversified asset classes cost more to trade and involve higher management fees, expenses that eat into pension-fund returns.

So perhaps diversification has been a free lunch after all. Not for the pension funds, but for the fund managers.

via The myth of diversification | All bets are off | The Economist.

Retirement Advice for All Ages

Retirement Advice for All Ages

Life goals

The financial planning profession is undergoing a revolution, with planners migrating from a money-centered orientation to what Certified Financial Planner Roy T. Diliberto calls “financial life planning.” The more humanistic movement focuses on what clients want to achieve in their lifetime and helps them to reach those goals by working with them in managing their personal finances.

Quiz people about their financial goals and you’ll get general statements about owning a home, raising a family, providing for their children’s college educations, traveling and saving for retirement. Financial life planning puts a finer point on these goals, allowing client and planner to build a roadmap to accomplishing them.

When you’re in your 20s, it’s very difficult to make retirement savings a priority. That’s because you have competing goals for your income such as paying down student loans, buying a car, furnishing your apartment, saving for the down payment on a house. But if your employer offers matching contributions to a 401(k) retirement account, take up the offer. Otherwise you’re turning away free money that would help you achieve your goals.

Money invested in your 20s has 30 to 40 years to earn a return. Wait until your 40s to start investing for retirement and that money only has about 20 years to grow. You’ll need to put a lot more aside to achieve the same nest egg.

My favorite statistic in this area comes from “The Girl’s Guide to Retirement” but, don’t worry guys, it applies to you, too:

Taxes and Investing

If you’re saving for retirement, there are a host of tax-advantaged accounts: Roth IRAs, traditional IRAs, plus employer plans such as 401(k), Roth 401(k), 403(b) and 457 plans. They’re called tax advantaged because some are tax-deferred, such as traditional IRAs, 401(k) and 403(b) accounts, while others — the Roth IRA and Roth 401(k) — are tax-free for qualified distributions.

Contributions to traditional IRAs, 401(k) and 403(b) plans are typically made with pre-tax dollars and qualified distributions are taxed at ordinary income rates when the money comes out of the account. Roth IRA and Roth 401(k) contributions are made with after-tax dollars and qualified distributions are free of federal income tax. Nonqualified distributions, for example, those taken before age 59½ in the case of IRAs, can result in a 10 percent penalty tax.

Money can also be invested in taxable accounts. It’s called a taxable account because you have to pay taxes on the investment earnings in the year that they are recognized in the account. The taxes vary depending on whether the investment earnings are qualified dividend income, interest income, short-term capital gain or long-term capital gain. The tax code also changes with time, so applicable tax rates on these different types of investment earnings can go up or down. Tax-efficient investing in a taxable account can make sense as an alternative to retirement savings in tax-advantaged accounts.

Once you decide on the types of accounts you will contribute to, you can work on the investments held in these accounts. A 401(k) or 403(b) plan typically has a limited list of investments to choose from, but other retirement and taxable accounts don’t face the same limitations. To open IRA, Roth IRA and taxable accounts, you can choose from among banks, brokerage houses or mutual fund firms.

401(k) or IRA?

If your company has a 401(k) plan where the company matches a portion of your contributions, it makes sense to contribute at least up to the limit of the match. After that, where you put your retirement money depends on your income level and investment goals.

I’m an advocate for financial flexibility. Unlike employer-sponsored plans, an IRA or Roth IRA account lets you avoid the penalty tax on early distributions in certain situations. For example, first-time home buyers can tap up to $10,000 of IRA money for a down payment on a home penalty free.

If you are covered by your employer’s retirement plan, then your ability to contribute tax-deferred dollars to a traditional IRA may be limited, depending on your Modified Adjusted Gross Income (MAGI). Your ability to contribute to a Roth IRA doesn’t depend on whether you are covered by your employer’s retirement plan, but eligible contribution limits phase out if your income exceeds a certain level.

If you can’t contribute to a Roth because your income is too high and you can’t contribute pre-tax dollars to a traditional IRA, you can contribute after-tax dollars to a traditional IRA. It can make sense to do so because the income restrictions on the Roth go away in 2010 and you can then convert your traditional IRA monies on a pro-rata basis to a Roth IRA account.

Don’t forget about the spousal IRA or the Retirement Savings Contributions Credit that are allowed up to certain income levels.

Clear as mud? IRS Publication 590, Individual Retirement Arrangements, does a good job of walking you through the rules.

Asset allocation and risk

The common asset-allocation decision among investments is between stocks, bonds and cash, or mutual funds/exchange-traded funds (ETFs) that invest in stocks, bonds or cash. Cash is financial shorthand for money market investments that are short-term debt securities with a final maturity of less than one year. Bank deposits can be classified as cash if they are held in a money market account, checking account or a short-term certificate of deposit, or as bonds if the certificate of deposit has a maturity longer than one year.

Your retirement investments face two major risks: principal risk and inflation risk. With principal risk, the risk is that your investments decline in value. Inflation risk involves the decline of the purchasing power of your investments over time. Conservative investors tend to be more concerned about the risk to principal, but they should be just as concerned about purchasing power risk.

A simple illustration with car prices explains why you need to worry about both. If car prices go up by 5 percent each year, a car that costs $30,000 today will cost $38,288 five years from now. Invest $30,000 today for five years in a CD with an after-tax yield of 4 percent and you’ll have $36,500. Your insured deposit never faced any principal risk, but you won’t be able to afford to buy the car for cash five years from now when you could have today. Take this example out 30 to 40 years and the importance of having your investment returns outpace inflation is magnified.

So you shouldn’t hold a lot of cash in your retirement accounts early in your career. Choosing a specific allocation between stocks, bonds and cash is a balancing act between the investor’s tolerance for risk and his or her investment goals.

Active vs. passive

Active investors believe they can beat their investment benchmarks through investment selection and/or market timing. There are a host of active strategies that include sector rotation, value investing, momentum investing and market timing.

In an extreme example of market timing, someone aims to invest in the stock market when it’s heading higher, sitting on the sidelines the rest of the time. The problem, of course, is that investors are generally lousy at predicting future market movements.

A passive investor is willing to accept average performance. Buy-and-hold investors in indexed mutual funds or exchange traded funds (ETFs) are passive investors. Market timers can also own index funds or ETFs, but they actively trade the shares based on their outlook for the market.

Bond investors can try to time the market too. When interest rates go up, bond prices go down. Active bond investors try to avoid being “long and wrong” — meaning they don’t want to invest in long maturities when they expect interest rates are heading higher. They also don’t want to be “short and sorry,” investing in shorter maturities only to see interest rates head lower.

Tactical asset allocation changes the mix of assets based on what looks cheap or expensive in the eye of the portfolio manager or investor. If stocks look expensive, then the manager lightens up on stock exposure and adds the proceeds to either cash or bonds.

Account fees for actively managed funds are typically much more expensive than for indexed mutual funds. That makes it that much harder for active managers to beat the performance of the benchmark index net of fees.

In the early stages of investing for retirement, a low-cost, no-load, indexed mutual fund that mirrors the holdings of a broadly based market index is a solid investment decision.

Retirement Advice for All Ages

Retirement Advice for All Ages

Retirement Advice for All Ages

Retirement Advice for All Ages

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Investors flee stocks

The pain of being a stock market investor

On the other hand foreign investors have sold their positions in some of the large cap local stocks like Safaricom, Equity Bank and Kenya Commercial Bank. The general argument being that global financial stresses in the wake of the credit crisis has forced foreign based fund managers to sell stocks to fund redemptions. So the net sales by foreign investors have added to the pain of local investors in the stock market.

Governor Ndungu, the head of the Central Bank on 9th September reiterated the bank’s view that inflation is not as serious a threat as many fear. The main driver of higher prices we are seeing is business disruptions in the first quarter related to post election violence and import prices of goods and services. Import prices are determined by cost factors in those foreign countries where the imports are produced and the shilling exchange rate. Both these factors are beyond the control of Kenyans. In the CBK’s view inflation is dissipating and market players should not over react to current inflation developments.

Inflation although high should slowdown considerably and of greater concern to investors, in my view, should be the health of the economy. Guidance should be sought from recent end June company results. So far while almost all companies have mentioned disruptions to operations none have provided for an extra ordinary expense related to the violence. In almost all instances, profits in the current period exceeded, by a comfortable margin, profits of prior periods. All indications are that corporate Kenya is operating at acceptable profit levels reflecting an underlying resilience in the economy.

So what do we make of the recent price declines? In my view investors should view this as a short term phenomenon and a buying opportunity. At some point the market will rally back to above 5,000 points on the NSE 20 index. Possible triggers could be the upcoming Co-op Bank IPO and the entry of value buyers towards the end of the year looking for stock ahead of full year result announcements in February.

It is unfortunate that in this market we do not have derivative instruments, otherwise a trade I’d be advocating would be buying calls on all the large cap companies on the NSE. A leveraged strategy may also yield some fruit. This would require an investor taking a loan to buy some stock and carry the position for about 6mths before selling the stock and paying off the loan. As always this strategy is not for everyone and could backfire.

At current prices I like Equity Bank (220), Kenya Commercial Bank (27), CMC Holdings (18), TPS Serena (60), HFCK (21) and Safaricom (5.1)

A balancing act

The tumultuous 2008 is fast disappearing on us. As I sipped my 208th cup of coffee this year with my friends, one commented once again that we are all leading aimless lives and we need to look for something worthwhile to occupy ourselves with. Another quickly rebuked him, telling him not to compare his life with ours. We then promptly sat down at our favorite square table and contributed to the survival fund of the friend who got retrenched a month back.

As the year draws to a close, it is clear that many of us are taking stock of what we have achieved this year. The problem is the yardstick we are measuring ourselves against, or to quote another: “What ruler are you using?” The Gemini in me cannot help but look back on 2008 to draw strength from it as I prepare for the future that 2009 holds.

Fitness. A small printed ticker declares that once again, I have failed to achieve the required 220cm in the jumping section of my annual physical fitness test. This single perennial blemish on my record is so commonplace that I usually ignore it as I pull, sprint, run and sit myself up to perfect scores elsewhere. Coincidentally, I am actually a ruler’s length away from the required distance. 2009 shall be the year I jumpstart (pun always intended unless otherwise stated) my training to clear this hurdle.

More importantly, I shall eat better, drink more wisely, sleep sounder as overall health is paramount to my occupation. A better sitting posture should help relieve my neck and back aches. And while I do not intend to conquer Antarctica like my friend did, it would be nice to complete 42.195km on home soil.

Finance. Unless I strike lottery or my stocks rise spectacularly before the year ends, I should fall short of my intended target for the year. That said, it has been a generally good year in terms of learning the ropes in the financial markets. While sitting on the sidelines may have been a wiser choice, nothing beats getting involved as the financial world goes through one of its lowest cycles.

One of the greatest lessons learnt, I feel, is a better understanding of oneself. How we react to gains and losses may be a mirror of how we live our lives. I have been rather impatient and tend to have a rather low tolerance of losses. While limiting losses has led to some relief as a certain bank went bust, I have been mostly subjected to the “what-could-have-been” as I took profits or cut losses too early. Patience is certainly a virtue and inculcating that into my financial management for the coming year seems to be a low-risk, calculated move on paper.

Friends. My long time friend made a 25% return on his first ever trade recently. Nonetheless, he was taken aback by my apparent disinterest in his plan to borrow from friends who are not into stocks and returning them a fixed amount every month with higher interest that the bank can offer, saying I am the first person to pour cold water on his plan. While I congratulated him on his gains, I gently warned him that his first trade and profit is not proof of his investment acumen.

Many a time we refuse to heed the advice of the elders, taking their well-intended “i have been thru this before” speeches as nothing more than naggings of someone who doesn’t understand how the modern world works. Yet if a friend has trodden down the same path before, and is kind enough to share the experience, we gladly listen to the story and learn about the benefits or pitfalls.

As it’s that time of the year when we all meet  up, catch up and enjoy the festivities while reminiscing yesteryears, I am glad to have friends who remind me that we should lead a more meaningful life; friends who are there during the good times & the bad times; friends whom I can count on and friends who remember they can count on me. While I cannot claim to be much wiser than my long time friend (we go way back, when playgrounds had sand and we could play marbles on them), I hope that my advice to him may seem more of a friendly advice than an elderly nag.

Family. The most understated part of one’s life may be family time. While I yearned to get annual leave to join my friends DownUnder for a wonderful Xmas party, I now realized flying half the world around to join my family in freezing their asses off in North America doesn’t sound like a bad idea too. Family time certainly improves as the new year beckons and it’s time to plan more places to bring my mum to in the coming year!

As I get some quiet time at home, at least I manage to do some home improvements as I clear my “walk-in” wardrobe. That’s the bamboo pole full of my clothes in the laundry area. I always pride myself in being able to live off a single bamboo pole of clothes, give and take the ones hanging in the wardrobe and folded in the drawers. The funny thing is, earlier this year we had to replace the old bamboo pole with a metal one as the former succumbed to the increasing weight of my clothes. Clearing my clothes, I pack those that I can bear to give away. This brings me to my final point.

Fortune. As we engage in joyful merrymaking, take stock of the year passed by and prepare for the year ahead, we should count ourselves lucky for all that we have. Indeed some of us have some financial losses, but all is not lost and time is on our side. We may have lost some friends or even family, but we must have made new ones and fond memories of loved ones can never be taken away. Health and fitness wise, we all like to watch what we eat between Christmas and New Year, but I quote “it’s what we eat between New Year and Christmas that really counts”.

As we think of the less fortunate and cherish what we have, we should reflect upon our own fortunes. For while we all need a bit of luck in life, having too much of it and not realizing our own shortcomings as we bask in our successes, the fall will be harder when the going gets tough. Life is indeed a balancing act.

The Index thinks the bamboo pole is the avant-garde in measuring one’s success (keeping it balanced requires skill & discipline)!

AN UNMERRY CHRISTMAS FOR AMERICA

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December 2008 Update

The portfolio lost 18.34% after 11 months.  The Hong Kong stock market lost almost 49%.  Even though half of the profolio is cash, it still do better than the index.  But needless to say, losing money is still not a pleasure experience.

Total                HK$6,448,199.53    $828,604.41

JEmail: Flynn, Br. Gregory Jack (MC1957) has had a tough year

Dear Friends of Addis Hope,

I am hoping that your holidays have been blessed. I regret that I must begin this letter on a rather unhappy note. Effective January 1, 2009 donations to Addis Hope will not be tax deductible.

In order to be so, Addis Hope would have to belong to the Lwanga District, (i.e., Province,) who would then take responsibility for the program’s administration, finance and personnel. As a program that began with the blessing of the Ethiopian Ministry of Justice seven years ago, it is the Ministry to which Addis Hope is primarily accountable and must remain so. Therefore, because Addis Hope is not a District project, donations to it are not eligible for tax deductions in the U.S.

On a positive note, the Addis Hope program continues to be recognized by the Christian Brothers as providing a valued service to very needy children of Addis Ababa and their families. The program is also recognized by the Ethiopian Catholic Church for helping to carry out one of the main objectives of the Church, helping to alleviate poverty among the poorest of the poor.

It is our hope that our loyal sponsors will continue to support the program. As many have said, they support the program simply because it is typical of the kind of program they feel worthy of assistance – teaching the poor gratuitously which is also the fifth vow of the Christian Brothers. I am grateful to my cousins in Massachusetts who will continue to provide administrative and website support at their own expense for the program. Please see the end of this letter for new information on how to make your donations.

On a personal note, over the last 18 months, I have experienced some unpleasant surprises and many grace-filled moments. I returned to the States in September of 2007 for my usual Addis Hope fund-raising activities and for medical check-ups. Lab tests revealed that I have non-Hodgkin lymphoma. So, instead of a planned return to Ethiopia in November, I underwent six cycles of chemotherapy at Columbia Presbyterian Hospital in NYC. The grace-filled moments were witnessing the heroism of the cancer-ridden patients I met and the loving care with which we were all treated by the hospital medical personnel. The long and short of it is that I went through the chemo and was given a clean bill of health. I returned to Ethiopia this September with the stipulation that I return to the states every six months for two years as follow-up. Special thanks to the Flynn/Maher clan and the CBA Lincroft community who provided me extended hospitality and kept me in their prayers.

I arrived back in Addis Ababa on the evening of September 9th 2008 to a very warm reception by the other member of my community, Brother Kassu Fantaye, and my Addis Hope Lasallian Associate, Ruth Girmay. The first inkling of a return to the Fourth World was being approached in the airport parking lot on this late cold and rainy evening by a bedraggled young mother and her two children looking for a few coins for food. No one should have to live like that.

It is for such families that the Addis Hope program for kindergarten-age children of street families was officially begun seven years ago. Ruth has seen to it that after two successful years in the program, those children who have graduated go on to gain entrance into government schools. It has been the generosity of family, friends, colleagues and benefactors that have enabled these children to have a new lease on life through education.

It comes as no surprise that the world financial crisis has impacted severely on countries like Ethiopia, which on the United Nations Human Development Index ranks 169 out of 177. In our case, the cost of the grain teff which makes up the daily hot meal we serve the Addis Hope children has risen from 100 Ethiopian dollars for 100 pounds to 1,200 dollars for the same amount. We also had to close one of our three centers due to the substantial increase in rent. This necessitated laying off two teachers, a cook and a guard and reducing the salaries of the staff. The 80 children who normally would be attending classes in that center will have to do without. To save rent cost, we also moved our Selihome Teacher Training program into one of the two remaining centers. This certificate program trains teachers to work with children with special needs. Fifteen graduated this past July, among them several deaf mutes preparing to become teachers in programs for the deaf. We plan on this program moving up from Certificate to Diploma. Much depends on increasing tuition paying students.

It is with the realization that many of the generous Friends of Addis Hope have also been affected by the financial crisis in one way or another, that I still ask for your continued support, if you have not recently done so. Without your assistance the Addis Hope program will either have to close or be drastically cut back.

With every best wish, I remain,

Fraternally,

Brother Gregory Flynn (Jack)

[JR: Hopefully, a few moths will escape and allow Jasper Flynn to do the Lord's work. Darn gooferment rules. Hope there's a special "reward" for these thieves.]

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9 Wise Ways of the Wealthy

Inside media types will tell you that they are guided by this basic rule: If it bleeds, it leads.

The financial media is no exception.

There is a steady drumbeat of news about a “deep recession” or even another “great depression.” How many times in recent months have you read about the “market crash” or the “financial meltdown,” all meant to convince you that it really is different this time?

Is it really?

The list is endless.

Financial Sector Regulations and Economic Growth

Rolling Over a 401k to an IRA

Whole lotta layoffs out there.  Not much I can do to help other than to get my megaphone, stand up on my soapbox and scream from the top of my lungs:

OK, I feel better now.  Here’s the deal with doing a 401k rollover when switching jobs or leaving a company…

When should I roll my 401k over?

In this day and age, anything can happen to any corporation at any time.  Leaving behind a 401k account out of complacency, negligence, or just downright laziness is a big mistake.  What if your former employer merges with someone else, changes platforms or even, gulp, goes bankrupt?  It’s your money in that plan account, get it out of there when you leave, just like you would the rest of your belongings!

Where should I roll or transfer my 401k account to?

IRA’s are great, and turning your 401k into one is the smartest and easiest move people can make when they change jobs or leave a company.  You can open an IRA Rollover account up at just about any brokerage or bank.

What can my 401k account bring with it to the rollover IRA account?

Let’s first separate two terms that many investors (and professionals) tend to use interchangeably:  Transfer and Rollover.

Transferring your 401k allows you the option of never having to take physical custody of your funds as they move between your 401k and your new IRA account.  This does not get reported to the IRS, so if you transfer it to a broker or firm you aren’t happy with, don’t worry, you still have the ability to move it again within the same calendar year without restriction.  This method will allow you to move your securities over (more on this below).

With a Rollover, however, you’ll be getting a check from your 401k sponsor after you request liquidation.  You will then have the responsibility to deposit this amount into a rollover IRA account within a a certain  amount of time (discussed below).  You can only do one rollover a year, so be prepared with a destination you can live with for a little while.

How long do I have to move the money from a 401k to my rollover IRA?

You have 60 days to get the distribution cash reinvested into a rollover IRA or another qualified retirement account.  If you are under the age of 59 and a half and do not get this done, you will be subject to the 10% penalty tax, so don’t play games.  Have your rollover set up before requesting your distribution.

What can I transfer into a rollover IRA?

Your rollover IRA account should be able to handle most investment products like mutual funds and index funds.  You may have the choice between keeping your investments intact as opposed to just receiving a check for the liquidated value of these securities depending on how your plan is set up.

Where things can get tricky is when company stock is mingled with other investments in your account.  Fortunately, the percentage of company stock that employees typically hold in 401k accounts has been in decline for most of this decade (thanks, Enron!).  If you have earned company stock in your 401k, these shares may be rolled to your IRA but might be subject to capital gains and/or income tax.  As I do not offer tax advice for a living, I would simply say that whether or not you choose to keep the stock in your employer’s plan, roll it with the rest of the account into an IRA or take a lump sum distribution will depend on factors like your “net unrealized appreciation” and the method your company uses to determine your cost basis.

Because this is the case, I always recommend that people with company stock consult with their accountant to figure out how they want this aspect handled prior to rolling over a 401k account to me.

Can I transfer my investments as they currently stand, or do I have to sell everything in my 401k?

Many plans currently allow for a “distribution in kind“, meaning you can take your securities to the new qualified account.  This is an attractive option for some people because the weightings and allocations they’ve made in their portfolio can stay in one piece.  The share amounts and weightings should be unaffected by the transfer, however, keep in mind that your future fund purchases will no longer be automatic.  When you make your IRA contributions going forward (assuming you do not get a new 401k with your next employer), your elections will be made manually by either you or your broker.

Even if your plan is set up to allow for “distributions in kind”, there are certain proprietary funds or annuities that may not be transferable to your brokerage IRA.  This may require you to do a partial “liquidate upon transfer” the more difficult holdings.  It is not always possible to do partial transfers, so if you’ve got “unmovable” stuff, the decision to liquidate has basically been made for you.  You will have cash once the account is moved equivalent to what was invested in the liquidated asset or assets.  This problem is becoming more rare, but a good advisor or broker will check that out for you beforehand so that arrangements can be made.

If I do not find a new employer with a 401k, can I contribute to my rollover IRA each year?

Yes you certainly can, just as you would contribute to a regular IRA.  For 2008 and 2009, the maximum IRA contribution amount is $5000.  If you are over 50 years old, you get to make a catch-up contribution of $6000 each year.  Your rollover IRA will also be subject to the same Required Minimum Distribution (RMD) rates as regular IRA’s when you turn 70 and a half.

I hope this explanation on the rules and benefits of rolling over a 401k into an IRA has been helpful.  The rules are tricky, but you usually have just one shot to get it right.  Therefore, doing your homework or working with an experienced professional are your only options.  Just because things did not work out with a prior employer, do not add insult to injury by triggering a major taxable event for yourself.

If you are interested in discussing how I can assist you in this process, please contact me via a confidential email or by phone.

THE WORLD today!

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1. Barack Obama wins Presidential Election and becomes the 44th President of the United States - Hope for a Change

130 Million Americans, more than in any other election since 1960, voted for a change and choose Obama, obtaining a historic victory to become the first black President of the United States, congratulating and celebrating world leaders, expressing hope, expectations and confidence in a fresh approach to the world’s challenges. Obama won the popular vote with 52% to 46% of McCain and the decisive electoral vote with 349 to 163 of McCain, requiring the Presidential election 270 electoral votes and the Democratic Party is strengthening its majorities in both Houses of Congress, in the House reaching 256 seats/up 21 seats remaining 177 seats for the Republican Party with races pending in Lousiana and Virginia and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota, falling disapointed Democrats short to obtain a 60-vote majority in the Senate. Obama has to confront as he starts Presidency on January 20, 2009, inherited big problems like how to revive economy and the wars in Iraq and Afghanistan, and one has to accept that there are no quick and easy solutions and it will take time to solve them, nevetherless it seems to be important that he keeps promises made during his campaign and helps to overcome divides bringing the country together. The President-elect is already moving ahead to choose his team for the transition process, to take place in complete cooperation with the Bush administration, and to form his cabinet, nominating Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team are cooperating as close as possible with President Bush to inject confidence into the market, coordinating the rescue plan for Citigroup and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats had shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Obama talked also about a redistribution of the tax burden to reduce economic inequality, a real plan focusing on fairness and growth. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1 Trillion considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by President-elect Obama, who said his economic team is working on an ambitious and significant economic recovery plan including permanent middle-class tax cuts and the creation and preservation of up to 3 Million jobs during the next two years, through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, which could cost $675 Billion to $775 Billion or more, to enter into effect as soon as possible after his inauguration on January 20, 2009.  To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department is asking Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position President Bush said he would be open to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance. It seems nearly unbelievable that President Bush apparently conditioned his support to some of the  important initiatives to help the contracting US economy to Democrats dropping their opposition to the free trade pact with Colombia. The President-elect is frustrated that the actual administration refuses to discuss a now needed second economic stimulus package  and worried as Bush issues a record of so-called ‘midnight regulations’, last minute regulations designed to reward supporters, enraging opponents and undermining his new administration, like coal waste dumping into valleys and streams  and easing the building of coal-fired power stations nearer to national parks, having  his transition team already a list of controversial measures that will take months to undo. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a more measured response from Obama and a forcefully demand from President Bush, blaming Moscow for invading its neighbor and requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, making it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. As Russia is demonstrating to be the sole military power in the strategically vital Caucasus region, NATO foreign ministers urged Russian President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops are withdrawing from Georgia, a provocative move, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict will move from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. After the NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, is prepared to resume a constructive dialogue with Russia through French President Sarkozy, current President of the Council of the European Union, saying after an emergency Georgia summit it would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia, but did not threaten to impose sanctions considering French-German unified political position opposing such measures! President Sarkozy and President Medevedew agreed on a complete pull out of Russian troops from Georgia by the second week of October and after the deployment of at least 200 EU-observers up to the beginning of October, retreating to the two enclaves of Abkhazia and South Ossetia, having Russia established diplomatic relations with both. Rumors are currently circulating that US-VP Cheney may have sparked the crisis in Georgia as a favor to the Republican candidate, confirming eventually Prime Minister Putin’s suspicion, and there is a lot of evidence to support such a theory, as one of Cheney’s most experienced advisors, Joseph R. Wood, was in Tbilisi shortly before the Georgian army launched its military operation. McCain, who lost the Presidential election, is also a close friend of Georgian President Saakashvili, who apparently lied 100% to the world, and ordered the assault on South Ossetia before the Russian tanks entered the province, not respecting the cease-fire, attacking the civilian population while they were asleep in their beds, according to OSCE reports. Cheney confirmed during a visit to the Georgian capital that the US are donating $1 Billion to rebuild the country after Russian’s invasion! US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama Administration to restore relationship. Meanwhile President Bush concentrating on the weakening US economy, addressed the nation to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The Bush Administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks. The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies.

http://www.BarackObama.com/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Recession

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. President Bush has signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25% and lowering the federal discount rate to 0,5%,  coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, expecting the weakest Christmas shopping season in decades, dropping consumer confidence 23,4 points to an all time low of 38 the same month, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 5,7% in July, increasing to 6,1% in August, remaining steady at 6,1% in September, reaching 6,5% in October and jumping the jobless rate to a 15-year high of 6,7% in November loosing American economy another 533.000 jobs, climbing claims for unemployment benefits to the highest level in 26 years. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US global car sales fell more than 40% in November in comparision with one year earlier, increasing concerns about the prospects for survival of General Motors, Ford and Chrysler requesting urgently federal financial aid, dropping retail sales 2,8% in October, falling compared with one year earlier 4,1%. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,96 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles.  US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and is expected to slow down even more in the fourth quarter of this year and also at least in the first quarter of 2009. The IMF sees a weak 0,5% US growth for 2008 lowering its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand. The US one year inflation increased to 5,60% in July (including food and energy), but declined to 4,94% in September, 3,66% in October and 1,07% in November. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 15-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling to 2,1% in November, where it is expected to average 2,2% in 2009. The European Central Bank/ECB had raised its main interest rate from 4% to 4,25%, alarmed about inflation trends combined with lower growth increasing stagflation fears in the Eurozone, holding the rate steady at 4,25% in September as inflation risks have fallen but not disappeared, insisting that it is crucial to bring Eurozone inflation back within the target of an annual rate of 2%, but in a joint emergency decision with the world’s most important central banks lowered its key rate to 3,75%, also reducing direct lending rates. The financial crisis has changed economic outlook slowing growth worldwide, falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, lowering the European Central Bank its key rate by another half percentage point to 3,25% and with inflation falling and Europe already in recession decided a new interest rate cut by 0,75% to 2,5%. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 4,8% and 7% respectively lower growth rates in 2008, while the somewhat frenetic growth in China and India, both commodity consumers, could slow down temporarely but will continue with estimated 9,9% and 8,5% respectively in 2008. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standads Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday. In another deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. Merrill Lynch reported for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital the company encouraged by the Federal Reserve, which now officially approved the acquisition, advanced its merger talks with Bank of America and agreed to be bought in a rescue take over for about $50 Billion, making BofA the second largest bank in the world. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion, reporting stronger than expected third quarter earnings of $1,64 Billion, while J.P.Morgan Chase posted for the same period a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw at least $43 Billon in September from US hedge funds, which lost already more than $200 Billion in value this year, borrowing also heavily money, and as hedge fund outflows increase they will have to sell assets, estimating analists that the hedge fund industry, which managed at its peak beginning 2007 about $2.200 Billion in assets, is going to shrink according to estimates by more or less 45%/$1.000 Billion due to withdrawals and investment losses. Also smaller regional lenders are becoming increasingly vulnerable, practicing American banks a new found caution reducing even business loans! The credit crisis has conduced also to a tightening in lending terms of credit card issuers with consumers to lower risk profile, owing US households about $971 Billion ($8.299,- per household) in credit card debts, increasing charge-offs to 6,82% in August in comparison with 4,61% a year earlier, writing lenders off an estimated $21 Billion in bad credit card loans in the first half of 2008, showing 4,6% of credit card owners defaults in payment of 30 days and more in August. The Federal Reserve approved the transformation of American Express, the nation’s last big independent credit card company, into a bank company, getting greater access to the bailout package for banks, requesting about $3,5 Billion in assistance out of this fund. US banking regulators and the Federal Reserve, worried about financial markets, are working  on stricter rules for credit card issuers prohibiting unfair practices and calling on the industry to be more user-friendly, considering borrowers troubles to make their payments in the midst of a deep recession. AIG/American International Group, the world’s largest insurance company with an overexposure in real estate and in the credit default swap market, two problem segments suffering an overall decline in asset prices, was seeking $40 Billion in emergency loans, request initially rebuffed by the Federal Reserve, but to avoid that after Lehman Brothers also AIG was forced to file for bankruptcy

S

Standard & Poors Press Release:

Wall Street set to say good riddance to

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Investors are preparing to close out the last three trading days of 2008 with Wall Street’s worst performance since Herbert Hoover was president.

The hunt for funds allegedly cheated out of investors by Bernard Madoff, who faces fraud charges in New York, has turned to offshore tax havens where investigators believe he may have salted away hundreds of millions of dollars.

Stephen Harbeck, chief executive of America’s Securities Investor Protection Corporation (Sipc) and official receiver of Madoff’s now defunct brokerage business, said the hunt for funds was likely to spread all over the world. “We will trace funds wherever the trail goes,” he said on the steps of the US Bankruptcy Court for the Southern District of New York.

Sources close to the investigation said forensic accountants examining Madoff’s books believed he had regularly sent large sums of money to offshore accounts in the Caribbean and Europe. “There are accounts at New York Mellon Bank that we have been looking at that appear to have sent and received money from offshore locations,” a senior source said. Tracking down the money investors entrusted to Madoff is likely to be one of the longest and most complicated financial investigations on record.

Harbeck said investigators were dealing with a “highly complex hybrid fraud”, adding each individual investment account operated by Madoff could be its own self-contained fraud. “But it is still too early to say with any certainty what was going on inside Madoff’s business.”

The scandal took a chilling turn last week when Rene-Thierry Magon de la Villehuchet, the co-founder of a firm that lost millions investing with Madoff, was found dead in his New York apartment. Access International Advisors - Magon de La Villehuchet’s firm - is understood to have lost $1.5bn in the Madoff affair. Full :  http://tinyurl.com/9d2s48

Put American Airlines Out Of Business: Back High Speed Rail Initiatives!

More about my trip (and then I will let it go): the first thing to remember is that, thanks to Congress and airline deregulation, you have practically no rights as a passenger. If they cancel your flight and delay you for days, well, you have no recourse. They have you at their mercy:

In short: Congress represents the powerful interests and not you. So, the only power we have is to inform each other about the poor performance of the airlines and to not to use the bad ones. So, that is what I am doing.

Also, if so inclined, you can push for your elected leaders to develop other types of transportation to compete with the airlines so as to drive these lousy companies out of business.

I should point out that my story is not isolated; most of the other non-Southwest Airline carries pretty much suck too.

About 26,000 people responded to the survey during the first quarter of this year, rating their level of satisfaction as customers of companies in a variety of industries, including airlines. An American Customer Satisfaction Index, on a scale of 1 to 100, was created based on the responses to questions about overall satisfaction, intention to be a repeat customer and perception of quality, value and expectations.

The index for the airline industry as a whole fell to 62 from 63 last year, barely above its historical low of 61 in 2001. Southwest led the way with an index of 79, up from 76 last year.

“We’re always excited and thrilled that we can offer some of the best customer service in the industry,” Southwest spokeswoman Christi Day said.

After Southwest came a huge drop in customer satisfaction, with scores of 62 at AMR Corp.’s American Airlines and Continental. Delta Air Lines Inc. scored 60, and Northwest Airlines Corp. slipped to 57 from 61 in 2007. US Airways’ score dropped to 54 from 61 a year ago, taking over the bottom spot from United, whose score held at 56.

My story: I submitted it here (where you can read other stories)

Just the facts: I was flying from Austin, TX to Peoria, IL via Dallas. The Austin to Dallas flight left at 4:30; when we got to Dallas we find out that the Dallas to Peoria flight is canceled (due to fog). Ok, that happens.

But American’s response was terrible.

1. The dense fog had settled in prior to the Austin flight leaving; why weren’t we notified at the gate? It is better to be stuck at the start of the trip rather than at a midway point.

2. Only one gate agent was available to deal with this whole flight. We were given a number to call and the operator seemed to not understand that being stuck in a midway point of the trip for 48 hours was unacceptable.

3. When I did finally get a gate agent, he didn’t read the computer correctly; he said that we were rebooked on a flight leaving the next day when in fact it was two days later.

4. Of course, we had to pay for our overnight accommodations even though AA’s scheduling policies were in part responsible for our being delayed for so long.

5. Finally the next day I manage to rebook a flight that got me 90 miles away; fortunately I had someone to give us a ride. We would have been up a creek without that.

6. Of course, the luggage didn’t make it to the final destination.

I find it absurd that one has to have an extra 100-150 dollars extra for the trip because AA couldn’t deliver what they promised to deliver.

I wish I had done what I have done in the past: drive 2.5 hours to a larger airport, pay the parking fees and to have flown Southwest. I’ve never had a problem with Southwest.

Solutions

Maybe, just maybe in a few years, we can get alternate transportation and end up putting pathetic airlines such as American Airlines out of business for good!

John Kerry and Arlen Specter have an idea that I think is promising:

There’s been a lot of talk in Washington and the media lately that one way for the federal government to give the economy a boost would be to start making massive investments in the nation’s infrastructure. Such spending would both create jobs in the short term and give the U.S. the kind of infrastructure to build its economy around in the future.

In that vein, Sen. John Kerry (D-Mass.) and Sen. Arlen Specter (R-Pa.) introduced a bill on Wednesday that would allow bonds to be issued to raise more than $23 billion for high-speed rail projects around the country. Some of that money — it’s not clear exactly how much — could be used on the proposal to build a high-speed rail line in California. Here’s a link to a story about the bill in the Boston Globe.

That is interesting, of course, since voters here earlier this month approved Proposition 1A, which allows the state to issue $9.95 billion in bonds to plan and construct a high-speed rail line. It’s not nearly enough to finish the proposed line from Anaheim to San Francisco — the California High Speed Rail Authority said recently the cost will be $33 billion; critics say it will be much more.

Still, the federal bill is worth watching. If it passes, it would arguably be a boost for passenger rail along some Amtrak corridors after decades of the nation making heavy investments in the nation’s airports and highways.

The press release from Kerry’s office is after the jump.

The press release on the Kerry-Specter high-speed rail bill:

Kerry-Specter Bill Would Create Jobs, Stimulus, Infrastructure Investment

Mayor Michael Bloomberg, Governor Ed Rendell Applaud National High-Speed Rail Initiative

WASHINGTON, D.C. – Today, Sens. John Kerry (D-Mass.) and Arlen Specter (R-Pa.) introduced a bill to create new jobs by updating the nation’s crumbling infrastructure. The High-Speed Rail for America Act of 2008 would transform America’s outdated and underfunded passenger rail system into a world class system.

“At a time when our economy desperately needs a jumpstart, we need an effective national investment that puts Americans back to work,” said Sen. Kerry. “A first-rate rail system would protect our environment, save families time and money, reduce our dependency on foreign oil, and help get our economy moving again. The High-Speed Rail for America Act will help fix our crumbling infrastructure system, expand our economy, and match high-tech rail systems across the globe.”

“We must continue to focus our energies on building and maintaining a strong national passenger rail system in order to ease congestion of air and highway corridors connecting high-growth markets, as well as to meet energy and environmental goals,” said Sen. Specter. “The High-Speed Rail for America Act is an investment in our nation’s infrastructure and has the potential to provide tremendous economic opportunities throughout Pennsylvania and the nation.”

Sens. Sherrod Brown (D-OH), Bob Casey (D-Pa.), Hillary Clinton (D-N.Y.), Chris Dodd (D-Conn.), Dianne Feinstein (D-CA), Daniel Inouye (D-HI), Frank Lautenberg (D-N.J.), Joe Lieberman (I-CT.), Bob Menendez (D-N.J.), Chuck Schumer (D-N.Y.), Olympia Snowe (R-ME), Debbie Stabenow (D-MI), and Sheldon Whitehouse (D-R.I.), cosponsored the legislation.

New York City Mayor Michael Bloomberg and Pennsylvania Governor Ed Rendell both voiced their support for the high-speed rail initiative.

“Creating a national high-speed rail network is an ambitious goal, but one that gets more urgent by the day,” said Mayor Bloomberg. “Investing in modern infrastructure is vital to the nation’s long-term economic and environmental health - and in the short-term, it would help put more Americans back to work. Many countries in Europe and Asia are investing in high-speed rail, and if our economy is going to remain competitive, we have to start catching up. Greater investment in our railways is a top goal of Building America’s Future, the infrastructure coalition that Governors Rendell and Schwarzenegger and I created. I applaud Senator Kerry for tackling the issue head-on, and I strongly support his efforts to create the high-speed rail network our country needs.”

“This long-overdue national investment in high-speed rail would help to stimulate economic recovery while creating good jobs that cannot be outsourced,” said Gov. Rendell, one of the founding co-chairs of the Building America’s Future coalition. “Expanding our nation’s critical rail infrastructure will make our transportation network more efficient, reduce traffic pressure on our already busy interstate highways, and improve the environment.”

The High-Speed Rail for America Act of 2008 builds upon the Passenger Rail Investment and Improvement Act of 2008 which reauthorizes Amtrak and authorizes $1.5 billion over a five-year period to finance the construction and equipment for eleven high-speed rail corridors. It provides billions of dollars in both tax-exempt and tax credit bond and provides assistance for rail projects of various speeds. The bill creates the Office of High-Speed passenger rail to oversee the development of high-speed rail and provides a consistent source of funding.

Specifically, the High-Speed Rail for America Act of 2008 provides $8 billion over a six-year period for tax-exempt bonds which finance high-speed rail projects which reach a speed of at least 110 miles per hour It creates a new category of tax-credit bonds – qualified rail bonds. There are two types of qualified rail bonds: super high-speed intercity rail facility bond and rail infrastructure bond. Super high-speed rail intercity facility bonds will encourage the development of true high-speed rail. The legislation provides $10 billion for these bonds over a ten-year period. This would help finance the California proposed corridor and make needed improvements to the Northeast corridor. The legislation provides $5.4 billion over a six-year period for rail infrastructure bonds. The Federal Rail Administration has already designated ten rail corridors that these bonds could help fund, including connecting the cities of the Midwest through Chicago, connecting the cities of the Northwest, connecting the major cities within Texas and Florida, and connecting all the cities up and down the East Coast.

JASPER JOTTINGS Week 52 - 2008 Dec 28

[JR: One of fellow Jasper's children is having some serious medical issues. Here's a story about some MEN, high school boys, who are selflessly helping out.]

SUNDAY, DECEMBER 14, 2008 12:01 AM, CST

Through the efforts of our own AJ Falco and the Director of Development at Xaverian High School, Rob Oliva, nine high school seniors (pictured above) from Xaverian’s prestigious International Baccalaureate Program took time out of their busy study schedules to make a difference in the lives of cancer patients at Memorial Sloan Kettering Cancer Center. They realized a great need to give back to the community, and were inspired to give by our own dear Caitlin! The boys donated to Caitlin’s blood bank and have even committed themselves to donate blood platelets in early 2009. THANK YOU!

The Xaverian Boys

Carlo Cassata, Connor McPartland, Anthony Falco, Otis Gamboa, Matthew DiNatale (in front), Thomas Brown, Andrew Coppola, Carl Sanon, Sean Wagner

[JR: Humbling when I think of all my petty complaints and the opportunities that I could have had to do a good work or two. I resolve to do better. You?]

[JR; Happy Holy Days to all. Merry Christ Mass.]

http://tinyurl.com/7pjqyz

Donald A. Lotufo

LOTUFO Donald A. Lotufo, age 76 of Huntington section of Shelton, passed away peacefully Tuesday, December 16, 2008 at the home of his daughter in Pembroke Pines, Fla. Donald, a U.S. Navy veteran of the Korean War was born in Yonkers, N.Y. to the late Donato and Rosina (Caggiano) Lotufo. He was educated at Manhattan College and Columbia University and worked for Gillette and Bristol-Myers before founding DAL Partners of Stamford. His family was his life and he will be sadly missed by his beloved wife, Elsi Krusko Lotufo; his devoted children, Scott Lotufo and his wife, Ellen of Millville, Mass., Dean Lotufo and his wife, Franca of Mckinney, Texas, Penny Briganti and her husband, Dominick of Darien, and Melissa Brock and her husband, Jack of Pembroke Pines, Fla.; 11 cherished grandchildren; and several nieces and nephews.

Funeral services will take place Tuesday, December 23, 2008 at 9: 15 a.m. in the Adzima Funeral Home, 50 Paradise Green Place, Stratford and at 10 a.m. in St. John the Baptist Orthodox Church, Broadbridge Avenue, Stratford for a Requiem Funeral Service, with Rev. Peter Paproski officiating. Interment will be in St. John’s Cemetery, Monroe. Friends may call on Monday from 4 to 7 p.m. Panachida at 6: 30 p.m.

In lieu of flowers, those desiring may make donations to St. John’s Church, 1240 Broadbridge Ave., Stratford, CT 06615 or to the Norma Pfriem Cancer Center, c/o Bridgeport Hospital, 267 Grant Street, Bridgeport, CT 06610 For more information or to make an online condolence please visit www.adzimafuneralhome.com.

# - # - #

Lotufo, Donald A. [MC????]

Guestbook: http://tinyurl.com/9ku3oa

Current

* Multi media Consultant at hyatt and associates

* Global E office consultant at Brain Engineering Labs

Past

* Contract Engineer at Kraft Foods

* Resident Life intern at Manhattan College

* Intern at Sestina Enterprises

Education

* Manhattan College

Summary

I would like to get a full time entry level position utilizing my background in chemical and process engineering.

# - # - #

Conway, John (MC2008)

*** begin quote ***

Then why not venture to Manhattan College for the Jaspers game against American University Monday night at Draddy Gym. It’s not just the final home game of 2008 for the Jaspers, it’s also going to be Iraq War Veterans Appreciation Night. All veterans and their families will receive complimentary tickets to the game, courtesy of Manhattan College.

The idea for Manhattan’s “Veterans Night” was spawned from Jaspers coach Barry Rohrssen’s visit to Iraq last summer as part of Operation Hardwood, a goodwill visit by a group of Division I college coaches sponsored by the USO and Armed Forces Entertainment.

*** and ***

So come on out and support our troops. Tipoff for this very worthy cause is 7 p.m.

*** end quote ***

[JR: Sounds like a good idea!]

Camille Rivera, BS, RT, Inducted into Cambridge Who’s Who Executive, Professional and Entrepreneurial Registry

As a diagnostic mammography technologist, she is responsible for assisting radiologists with patient concerns, meeting with breast cancer patients and ensuring that they feel comfortable.

Bronx, NY, December 19, 2008 /Cambridge Who’s Who/ — Camille Rivera, Diagnostic Mammography Technologist, has been recognized by Cambridge Who’s Who for showing dedication, leadership and excellence in all aspects of medical technology.

Inspired by her father, who was a radiologic tecnologist, Ms. Rivera began her own career in medical technology 11 years ago. As a diagnostic mammography technologist, she is responsible for assisting radiologists with patient concerns, meeting with breast cancer patients and ensuring that they feel comfortable. A member of the American Registry of Radiologic Technologists, Ms. Rivera received her Bachelor of Science from Manhattan College and is currently completing her Master’s Degree. She looks forward to pursuing her Doctorate.

About Cambridge Who’s Who

Cambridge Who’s Who is an exclusive membership organization that recognizes and empowers executives, professionals and entrepreneurs throughout the world. From healthcare to law, engineering to finance, manufacturing to education, every major industry is represented by its 250,000 active members.

*** end quote ***

Rivera, Camille [MC????]

Date: 2008-12-24, 1:27AM EST

Price reduced for quick sale. This mirror measures 24″ x 24″. It has the imprint of JASPERS MANHATTAN COLLEGE on the mirror. In very good condition. Call Kenny at 718-263-1695. Emailers tend to not be serious buyers. Around the corner from the F or E train or near all major roadways in Forest Hills, Queens.

* Location: forest hills

* it’s NOT ok to contact this poster with services or other commercial interests

PostingID: 968597836

For those Jaspers, who are addicted to Twitter, feel free to follow JasperJottings. If you follow us, we’ll follow you.

BTW (By The Way), I’ve added a TWITTER desk to the VIRTUAL JASPER JOTTINGS NEWSROOM. SO there is a non-paying editorial position open. You too could be a on the career path to replace the CIC.

If you don’t know what Twitter is, then just skip this foolishness. :-)

*** begin quote ***

43

Junius Kellogg Basketball

Hometown Portsmouth

Born 1927 Died 1998

Claim to fame Refused a gambler’s bribe, setting off the largest betting scandal in college history

Even in a wheelchair, Kellogg was a towering example of integrity. The first black basketball player at Manhattan College, Kellogg was offered $1,000 by an ex-teammate to shave points in a game in 1951. He refused and notified authorities, touching off a scandal in which 32 players admitted fixing 86 games from 1947 to 1950. Kellogg was lauded as a hero by many but also received threatening letters. After a stint in the Army, he completed his degree and joined the Harlem Globetrotters. He was traveling to a game in 1954 when a tire blew and the car flipped. Kellogg was paralyzed from the waist down. He became an advocate for wheelchair basketball, winning four international titles as a coach, and worked for New York City in community development for more than 30 years. The gym at his alma mater, I.C. Norcom High, is named for him.

# - # - #

Kellogg, Junius [MC1953]

[JR: Good deeds ARE remembered.]

JohnG: Class of 61? There are nine others from 61 but I don’t have link to them.

Alfred Hurley   North Jersey, NJ

Egidio Carbone   Los Angeles, CA

Joe Prezzano   Poughkeepsie, NY

John Horgan   Poughkeepsie, NY

John Slattery   New York, NY

Joseph Zeccardi   Washington, DC

Louis Perrotta   Fort Lauderdale, FL

Thomas Mitchell   Tucson, AZ

Know any? I know how intimidating “social networking” can be and a new software as well. I’d be happy to help you if needed.

# - # - #

Re: Welcome to Facebook

Thanks John, You do a great job with Jasper Jottings. I am a regular reader. Give another plug to my friend Brother Gregory aka Jack Flynn at www.addis-hope.com. I know he appreciates your help.

John Gearity

[JR: You just gave the plug yourself. Thanks, for the praise on Jottings. It's all just other people's actions. Anybody can be the collector.]

Raymond J. Dowd

# - # - #

Mr. Dowd is a member of DBM’s intellectual property, corporate, litigation and arbitration practice groups. He has broad commercial litigation experience in both federal and state courts, and has represented copyright, trademark and domain name owners, broadcasters, distributors and content providers in transactions and litigation, representing both plaintiffs and defendants. He has conducted numerous bench and jury trials and arbitrations. He has obtained, enforced, and collected judgments including conducting seizures. In addition, he has provided corporate and transactional representation entrepreneurial companies from the incorporation and startup phase through significant growth. Mr. Dowd represents collectors and dealers of fine art and has litigated disputes involving authenticity, forgery, ownership and provenance. Mr. Dowd regularly speaks to trade associations on copyright, fine art, trademark and litigation issues, and participates in organizing continuing legal education programs.

Memberships and Affiliations: Copyright Society of the U.S.A.; New York State Bar Association; Commercial and Federal Litigation Section; Intellectual Property law Section; President, Southern District of New York State Chapter of the Federal Bar Association (2006-2008); Federal Bar Association, Vice President for the Second Circuit (2008 - ); New York County Lawyers’ Association; Board of Directors (2003 - 2006); Co-Chair, Entertainment Media, Intellectual Property and Sports Law Section (2000 - 2003); Continuing Legal Education (2003 - 2008); Committee on Committees ( 2003 - 2007).

Publications: Copyright Litigation Handbook, (West 3d Ed. 2008); former columnist, New York Law Journal; Copyright Litigation Blog. Member, Editorial Board, The Federal Lawyer (2007 - ).

Bar Admissions: New York (1993); U.S. District Court for the Southern and Eastern Districts of New York (1994); Northern U.S. Court of Appeals for the Second Circuit (1998);U.S. Supreme Court (2000); United States District Court for the Northern District of New York (2000); United States Tax Court (2007)

Education: Manhattan College (B.A. 1986); Fordham University School of Law (J.D. 1991)

Languages: French, Italian

Hi John,

I have a simple question which I’m sure has a long and complicated answer, but I’ll ask it anyway. Why do I sometimes run into the following when I read your email (but not on the website)?

I’m looking for an apostrophe (’) and I find ’

I’m looking for an open quotes (”) and I find “

I’m looking for a close quotes (”) and I find â€

I’m looking for a dash (-) and I find —

I’m looking for a bullet point (·) and I find •

Needless to say, this doesn’t make for very smooth reading, but of course you have a logical explanation. Maybe we’ve just discovered why that coveted Pulitzer Prize has so far eluded you.

Anyway, Merry Christmas and Happy New Year and thank you on an ongoing basis for a thankless job well done!

Vince Alline

[JR: Pulitzer? More like copyright infringement!]

# - # - #

VA: Sounds like a font problem. Certain fonts don’t support every character. A font can become corrupted. Your email reading program translates the message into fonts defined in the program’s preferences. If that font is corrupt or doesn’t recognize that character, it displays the code string. Can’t think of an easy way to fix it. What email client are you using? If it’s only you, then it’s you. I might be possible for Yahoo to screw it up. BUT, that’s unlikely since I get copies emailed to me as a check. fjohn68

# - # - #

FWIW, I have my email forwarded from my MC account to my Gmail account, then on to my ISP webmail and it’s finally downloaded to Thunderbird (Believe it or not, I actually have a reason for this). Tbird is set to receive mail in the original HTML. After receiving your reply, I changed it to simple HTML and then to plain text. Although the fonts were different, it had no effect on the problem. I then downloaded it in Outlook Express - no change. I went back and checked my Gmail webmail account. It read exactly the same.

Now thoroughly confused, I went into the Tbird options and checked the box to Apply the default character encoding to all incoming messages. This had the effect of replacing the aforementioned gibberish with fresh new gibberish. Aaaaaaaaaarrrrrrrrrrrrggggggggggggghhhhhhhhhhh!!!!!!!!!!!!!

Just to confuse matters further, I checked last week’s Jottings and it came through perfectly. Aren’t computers wonderful?

Vince

# - # - #

As a true engineer, I don’t know when to stop tinkering. I went into Tbird’s options and changed the default character encoding from Western(ISO-8859-1) - the default setting - to Unicode(UTF-8). Now the symbol for a dash looks like �” but all the other characters appear normal.

My research indicates that this all may have to do with the use of items such as “smart apostrophes” and “smart quotes”. Of course, since Microsoft is involved, the term is an oxymoron. Apparently MS Word uses different symbols for these punctuation marks consisting of periods with curly tails rather than the more common slanted slash marks. Consequently they are encoded differently and are misunderstood by many applications, thus producing the bizarre markings. Oh well, at least the majority of my problem has been solved.

Vince

# - # - #

[JR: Once I saw what side of the boundary the problem resided, I sighed with releif. Have fun trying to figure this one out. I do know that corrupt font files on Windoze can also screw you up. Argh! Onto Linux asap.]

Dear Friends of Addis Hope,

I am hoping that your holidays have been blessed. I regret that I must begin this letter on a rather unhappy note. Effective January 1, 2009 donations to Addis Hope will not be tax deductible.

In order to be so, Addis Hope would have to belong to the Lwanga District, (i.e., Province,) who would then take responsibility for the program’s administration, finance and personnel. As a program that began with the blessing of the Ethiopian Ministry of Justice seven years ago, it is the Ministry to which Addis Hope is primarily accountable and must remain so. Therefore, because Addis Hope is not a District project, donations to it are not eligible for tax deductions in the U.S.

On a positive note, the Addis Hope program continues to be recognized by the Christian Brothers as providing a valued service to very needy children of Addis Ababa and their families. The program is also recognized by the Ethiopian Catholic Church for helping to carry out one of the main objectives of the Church, helping to alleviate poverty among the poorest of the poor.

It is our hope that our loyal sponsors will continue to support the program. As many have said, they support the program simply because it is typical of the kind of program they feel worthy of assistance – teaching the poor gratuitously which is also the fifth vow of the Christian Brothers. I am grateful to my cousins in Massachusetts who will continue to provide administrative and website support at their own expense for the program. Please see the end of this letter for new information on how to make your donations.

On a personal note, over the last 18 months, I have experienced some unpleasant surprises and many grace-filled moments. I returned to the States in September of 2007 for my usual Addis Hope fund-raising activities and for medical check-ups. Lab tests revealed that I have non-Hodgkin lymphoma. So, instead of a planned return to Ethiopia in November, I underwent six cycles of chemotherapy at Columbia Presbyterian Hospital in NYC. The grace-filled moments were witnessing the heroism of the cancer-ridden patients I met and the loving care with which we were all treated by the hospital medical personnel. The long and short of it is that I went through the chemo and was given a clean bill of health. I returned to Ethiopia this September with the stipulation that I return to the states every six months for two years as follow-up. Special thanks to the Flynn/Maher clan and the CBA Lincroft community who provided me extended hospitality and kept me in their prayers.

I arrived back in Addis Ababa on the evening of September 9th 2008 to a very warm reception by the other member of my community, Brother Kassu Fantaye, and my Addis Hope Lasallian Associate, Ruth Girmay. The first inkling of a return to the Fourth World was being approached in the airport parking lot on this late cold and rainy evening by a bedraggled young mother and her two children looking for a few coins for food. No one should have to live like that.

It is for such families that the Addis Hope program for kindergarten-age children of street families was officially begun seven years ago. Ruth has seen to it that after two successful years in the program, those children who have graduated go on to gain entrance into government schools. It has been the generosity of family, friends, colleagues and benefactors that have enabled these children to have a new lease on life through education.

It comes as no surprise that the world financial crisis has impacted severely on countries like Ethiopia, which on the United Nations Human Development Index ranks 169 out of 177. In our case, the cost of the grain teff which makes up the daily hot meal we serve the Addis Hope children has risen from 100 Ethiopian dollars for 100 pounds to 1,200 dollars for the same amount. We also had to close one of our three centers due to the substantial increase in rent. This necessitated laying off two teachers, a cook and a guard and reducing the salaries of the staff. The 80 children who normally would be attending classes in that center will have to do without. To save rent cost, we also moved our Selihome Teacher Training program into one of the two remaining centers. This certificate program trains teachers to work with children with special needs. Fifteen graduated this past July, among them several deaf mutes preparing to become teachers in programs for the deaf. We plan on this program moving up from Certificate to Diploma. Much depends on increasing tuition paying students.

It is with the realization that many of the generous Friends of Addis Hope have also been affected by the financial crisis in one way or another, that I still ask for your continued support, if you have not recently done so. Without your assistance the Addis Hope program will either have to close or be drastically cut back.

With every best wish, I remain,

Fraternally,

Brother Gregory Flynn (Jack)

[JR: Hopefully, a few moths will escape and allow Jasper Flynn to do the Lord's work. Darn gooferment rules. Hope there's a special "reward" for these thieves.]

F. John,

1966 BBA according to my MC Alumni Directory.

Rich

[JR: After a "quick" trip to the spam folder, credit Senor L with an update. Thanks, much appreciated. ]

F. John,

Class of 1967 and I believe also the son of Dean George T. Eastment who was Dean of Students while we were at MC and also head track coach at MC from 1946 to 1963.

[JR: Also after a "quick" trip to the spam folder, credit Senor L with an update. Thanks, much appreciated. ]

Kilroy, Jim (MC1968)

McKenna, Thomas (MC1969)

Semon, David (MC1999)

Sieger, Jerry (MC1970)

Cotter, Robert (MC1966)

Phone: (732)364-0099

*** begin quote ***

Matthew works with clients in commercial, residential and investment properties. Feel free to contact him with any questions you may have.

*** end quote ***

[JR: I guess we can ASK for the special "Jasper" discount. Seriously, always good to buy from someone you have some connection, no matter how loose, with? Disclaimer: Matt "revealed" himself by following "jasperjottings" on Twitter. He was the first one. So now he's snagged. LOL. Stickier than Charlotte's Web. But he has no idea I'm pimping for him. Guess he'll now be the first "unfollower"! ROFL. The dangers of social networking. A practical example.]

*** begin quote ***

Tracy Beth Edlitz and Mark Anthony Visceglia were married Saturday at Beckwith Pointe, a club in New Rochelle, N.Y. The bride’s mother, Judge Sandra B. Edlitz, officiated.

Mrs. Visceglia, 39, teaches third grade at William B. Ward Elementary School in New Rochelle. She graduated from Northwestern and received master’s degrees in education from Columbia and the Bank Street College of Education.

She is the daughter of Judge Edlitz of New Rochelle and the late Robert I. Edlitz. Her mother is a family court judge in Westchester County and presides in White Plains. Her father was a partner in the Manhattan law firm Gubman, Sitomer, Goldstein & Edlitz.

Mr. Visceglia, 46, is the founder and president of AAA Training for Success, a Manhattan company that specializes in sales development, training and marketing. He graduated from Manhattan College.

He is the son of Joan L. Visceglia and Marco P. Visceglia of Riverdale, the Bronx. His father retired as a crane operator in New York. His father is also the inventor of two safety warning devices, called boom angle indicators, for cranes.

*** end quote ***

# - # - #

Visceglia, Mark Anthony [MC????]

I worked with Don and for him for many years at the Equitable. A finer individual you will never find. He will be missed he was an incredable and wonderful person.

By Matthew Genovese

Thanks, John! No worries about making the offer for me. I’ll gladly honor it. I do agree with your advice,too, and try to always work with people i have some connection with. If any Jaspers are looking for referals to your local area I’d be happy to help with that as well.

*** begin quote ***

LOS ANGELES — Proving that no good deed goes unpunished, the state’s high court on Thursday said a would-be Good Samaritan accused of rendering her friend paraplegic by pulling her from a wrecked car “like a rag doll” can be sued.

California’s Supreme Court ruled that the state’s Good Samaritan law only protects people from liability if the are administering emergency medical care, and that Lisa Torti’s attempted rescue of her friend didn’t qualify.

Justice Carlos Moreno wrote for a unanimous court that a person is not obligated to come to someone’s aid.

“If, however, a person elects to come to someone’s aid, he or she has a duty to exercise due care,” he wrote.

*** and ***

Beverly Hills lawyer Robert Hutchinson, who represented Van Horn, said he’s pleased with the ruling.

*** end quote ***

# - # - #

[JR: Only from the land of "fruits and nuts"! AND, of course the lawyer is pleased, visions of 33% floating in his head. Wonder how he feel if his family was in that "washed away" car and the fellow who saved them wondered about his legal liabilities. This, on its face, is a bad decision. Unless there was diminished capacity due to drinking at the office party OR risk of explosion was nil, I can't see much moral culpability. Argh! Just when you think it can't get worse. So, when you get he chance to save a life, you have to start balancing the civil court versus the eternal one. I think I'll chance it. But who knows what you'll do in the heat of the moment. Or, what the consequences are. Argh!]

Day off

Day off 29 December 2008

Obituary: Christopher Hibbert: popular historian

Letters:

Guardian:

Independent:

Times:

Telegraph:

Irish Times

Well I must be off

Best wishes John

I Have Found the Shortcut to Success

Father, husband, and among other things, an entrepreneur.

I’m often asked what books I recommend so here is my list. By sharing this list you will get an idea of who I am and what I believe in. I think that whatever you read is who you will become. If you find my list is similar to yours, please contact me because we are likely to have a lot in common. I have not included everything I’ve read, just what I recommend. Everything in this list is exactly what you will find on the shelves of my personal library, because I get rid of books that are not worth reading twice.

All About Index Funds – Richard Ferri

All About Asset Allocation – Richard Ferri

Why Smart People Do Stupid Things with Money – Bert Whitehead

7 Stages of Money Maturity – George Kinder

Wear Clean Underwear – Alexis Neely

Your Money or Your Life – Joe Dominguez

Asset Allocation – Roger Gibson

Asset Protection – Jay Adkisson

Starting and Running your own Investment Club – Thomas O’Hara

The Motley Fool Investment Guide – David & Tom Gardner

One Up on Wall Street - Peter Lynch

The Best Way to Save for College – Joseph Hurley

The Offshore Money Book – Arnold Cornez

The Weekend Millionaire’s Secrets to Investing in Real Estate – Mike Summey

The Intelligent Investor – Graham

Economics 3rd edition audio – The Teaching Company

The Number - Lee Eisenberg

A Random Walk Down Wall Street –Burton Malkiel

Against the Gods – Peter Bernstein

Economics in One Lesson – Henry Hazlitt

4 Hour Work Week – Timothy Ferris

The E Myth Revisited

9 Liles that are holding your Business Back – Steve Chandler

Entrepreneur’s Guide to Business Law – Constance Bagley

The Big Book on Small Business – Tom Gegax

The Tipping Point – Malcolm Gladwell

ProBlogger – Darren Rowse

Andy and Me – Pascal Dennis

Book Yourself Solid – Michael Port

Marketing to the Affluent – Thomas Stanley

Selling to the Affluent – Thomas Stanley

Networking with the Affluent – Thomas Stanley

Make Your Contacts Count – Anne Baber

The Power of Personal Branding – Tim O’Brian

The Personal Branding Phenomenon – Peter Montoya

Rain Making – Ford Harding

Selling the Invisible – Harry Beckwith

Word of Mouth Marketing – Andy Sernovitz

Never Eat Alone – Keith Ferrazzi

Get Clients Now - C. J. Hayden

Red Hot Copy – Lorrie Morgan-Ferrero

I’m On Linked In, Now What – Jason Alba

The Psychology of Influence of Persuasion - Robert Cialdini

21 Indispensible Qualities of a Leader – John Maxwell

The Four Obsessions of an Extraordinary Executive – Patrick Lencioni

The Effective Executive – Drucker

Talent is Never Enough – John Maxwell

The One Minute Manager – Ken Blanchard

The Three Signs of a Miserable Job – Patrick Lencioni

The Five Dysfunctions of a Team – Patrick Lencioni

Silos, Politics, and Turf Wars - Patrick Lencioni

Death by Meeting - Patrick Lencioni

The Five Temptations of a CEO –Patrick Lencioni

Winning – Jack Welch

How to Become a Great Boss – Jeffrey Fox

How to Become a Rainmaker – Jeffery Fox

How to Become CEO – Jeffery Fox

What Got You Here, Won’t Get You There – Marshal Goldsmith

Where Have All the Leaders Gone? – Lee Iaccocca

360 Degree Leader – John Maxwell

How to Develop Self-Confidence and Influence People by Public Speaking – Dale Carnegie

How to Outline, Design and Deliver a Dynamic Speech CD – Patricia Fripp

Preparing and Presenting Powerful Talks CD – Patricia Fripp

Connect with any Audience CD – World Champions of Public Speaking

Speaking Secrets of the Champions CD – Darren LaCroix

Top Ten Distinctions Between Millionaires and Middle Class – Keith Cameron Smith

Over the Top – Zig Ziglar

Success Mastery Academy – Brian Tracy

What Got You Won’t Get You There – Marshal Goldsmith

Leadership Master Course – Dale Carnegie

Millionaire Next Door – Thomas Stanley

The Power of Positive Thinking – Norman Peale

What They Still Don’t Teach you at Harvard Business School – Mark McCormack

Getting Things Done – David Allen

What they Don’t Teach you at Harvard Business School – Mark McCormack

How to Win Friends and Influence People – Dale Carnegie

Awaken the Giant Within – Anthony Robbins

Reinventing Yourself – Steve Chandleryour

You Inc, The Art of Selling Yourself, Henry Beckwith

The Success Principles: How to get from where you are to where you want to be – Jack Canfield

The 7 Mind & Manifesting Secrets of Multimillionaire Entrepreneurs – Ali Brown & David Neagle

How to Get What You Want – Zig Ziglar

25 Ways to Win with People – John Maxwell

The 21 Success Secrets – Brian Tracy

Financial Planning: The Next Step – Roy Diliberto

Questions Great Financial Advisors Ask – Alan Parisse

Tools and Templates for your Practice – Deena Katz

So You Want to be a Financial Planner – Nancy Langdon Jones

Practice Made Perfect – Mark Tibergian

How to Become a Successful Financial Consultant – Jim Ainsworth

Garrett’s Guide to Financial Planning – Sheryl Garrett

The Excellent Investment Advisor – Nick Murray

Getting Started as a Financial Planner – Rattiner

Virtual Office Tools for a High Margin Practice – David Drucker

Brawn – Stuart McRobert

Beyond Brawn – Stuart McRobert

Further Brawn – Stuart McRobert

Mastering the Zone – Barry Sears

Sly Moves – Sylvester Stallone

Black Hawk Down – Mark Bowden

Inside Delta Force – Eric Haney

Guests of the Ayatollah — Mark Bowden

Lone Survivor – Marcus Luttrell

Mexico en la Frontera del Caos – Andres Oppenheimer (I started the Spanish version but it was too hard and switched to the English book)

Confessions of an Economic Hit man – John Perkins

How to Win Your First Election – Susan Guber

Grammatically Correct – Anne Stilman

On Writing Well – Zinsser

The Self Publishing Manuel –Dan Poynter

December 28, 2008 at 11:31 pm

THE WORLD today!

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1. Barack Obama wins Presidential Election and becomes the 44th President of the United States - Hope for a Change

130 Million Americans, more than in any other election since 1960, voted for a change and choose Obama, obtaining a historic victory to become the first black President of the United States, congratulating and celebrating world leaders, expressing hope, expectations and confidence in a fresh approach to the world’s challenges. Obama won the popular vote with 52% to 46% of McCain and the decisive electoral vote with 349 to 163 of McCain, requiring the Presidential election 270 electoral votes and the Democratic Party is strengthening its majorities in both Houses of Congress, in the House reaching 256 seats/up 21 seats remaining 177 seats for the Republican Party with races pending in Lousiana and Virginia and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota, falling disapointed Democrats short to obtain a 60-vote majority in the Senate. Obama has to confront as he starts Presidency on January 20, 2009, inherited big problems like how to revive economy and the wars in Iraq and Afghanistan, and one has to accept that there are no quick and easy solutions and it will take time to solve them, nevetherless it seems to be important that he keeps promises made during his campaign and helps to overcome divides bringing the country together. The President-elect is already moving ahead to choose his team for the transition process, to take place in complete cooperation with the Bush administration, and to form his cabinet, nominating Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team are cooperating as close as possible with President Bush to inject confidence into the market, coordinating the rescue plan for Citigroup and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats had shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Obama talked also about a redistribution of the tax burden to reduce economic inequality, a real plan focusing on fairness and growth. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1 Trillion considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by President-elect Obama, who said his economic team is working on an ambitious and significant economic recovery plan including permanent middle-class tax cuts and the creation and preservation of up to 3 Million jobs during the next two years, through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, which could cost $675 Billion to $775 Billion or more, to enter into effect as soon as possible after his inauguration on January 20, 2009.  To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department is asking Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position President Bush said he would be open to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance. It seems nearly unbelievable that President Bush apparently conditioned his support to some of the  important initiatives to help the contracting US economy to Democrats dropping their opposition to the free trade pact with Colombia. The President-elect is frustrated that the actual administration refuses to discuss a now needed second economic stimulus package  and worried as Bush issues a record of so-called ‘midnight regulations’, last minute regulations designed to reward supporters, enraging opponents and undermining his new administration, like coal waste dumping into valleys and streams  and easing the building of coal-fired power stations nearer to national parks, having  his transition team already a list of controversial measures that will take months to undo. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a more measured response from Obama and a forcefully demand from President Bush, blaming Moscow for invading its neighbor and requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, making it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. As Russia is demonstrating to be the sole military power in the strategically vital Caucasus region, NATO foreign ministers urged Russian President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops are withdrawing from Georgia, a provocative move, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict will move from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. After the NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, is prepared to resume a constructive dialogue with Russia through French President Sarkozy, current President of the Council of the European Union, saying after an emergency Georgia summit it would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia, but did not threaten to impose sanctions considering French-German unified political position opposing such measures! President Sarkozy and President Medevedew agreed on a complete pull out of Russian troops from Georgia by the second week of October and after the deployment of at least 200 EU-observers up to the beginning of October, retreating to the two enclaves of Abkhazia and South Ossetia, having Russia established diplomatic relations with both. Rumors are currently circulating that US-VP Cheney may have sparked the crisis in Georgia as a favor to the Republican candidate, confirming eventually Prime Minister Putin’s suspicion, and there is a lot of evidence to support such a theory, as one of Cheney’s most experienced advisors, Joseph R. Wood, was in Tbilisi shortly before the Georgian army launched its military operation. McCain, who lost the Presidential election, is also a close friend of Georgian President Saakashvili, who apparently lied 100% to the world, and ordered the assault on South Ossetia before the Russian tanks entered the province, not respecting the cease-fire, attacking the civilian population while they were asleep in their beds, according to OSCE reports. Cheney confirmed during a visit to the Georgian capital that the US are donating $1 Billion to rebuild the country after Russian’s invasion! US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama Administration to restore relationship. Meanwhile President Bush concentrating on the weakening US economy, addressed the nation to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The Bush Administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks. The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies.

http://www.BarackObama.com/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Recession

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. President Bush has signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25% and lowering the federal discount rate to 0,5%,  coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, expecting the weakest Christmas shopping season in decades, dropping consumer confidence 23,4 points to an all time low of 38 the same month, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 5,7% in July, increasing to 6,1% in August, remaining steady at 6,1% in September, reaching 6,5% in October and jumping the jobless rate to a 15-year high of 6,7% in November loosing American economy another 533.000 jobs, climbing claims for unemployment benefits to the highest level in 26 years. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US global car sales fell more than 40% in November in comparision with one year earlier, increasing concerns about the prospects for survival of General Motors, Ford and Chrysler requesting urgently federal financial aid, dropping retail sales 2,8% in October, falling compared with one year earlier 4,1%. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,96 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles.  US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and is expected to slow down even more in the fourth quarter of this year and also at least in the first quarter of 2009. The IMF sees a weak 0,5% US growth for 2008 lowering its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand. The US one year inflation increased to 5,60% in July (including food and energy), but declined to 4,94% in September, 3,66% in October and 1,07% in November. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 15-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling to 2,1% in November, where it is expected to average 2,2% in 2009. The European Central Bank/ECB had raised its main interest rate from 4% to 4,25%, alarmed about inflation trends combined with lower growth increasing stagflation fears in the Eurozone, holding the rate steady at 4,25% in September as inflation risks have fallen but not disappeared, insisting that it is crucial to bring Eurozone inflation back within the target of an annual rate of 2%, but in a joint emergency decision with the world’s most important central banks lowered its key rate to 3,75%, also reducing direct lending rates. The financial crisis has changed economic outlook slowing growth worldwide, falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, lowering the European Central Bank its key rate by another half percentage point to 3,25% and with inflation falling and Europe already in recession decided a new interest rate cut by 0,75% to 2,5%. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 4,8% and 7% respectively lower growth rates in 2008, while the somewhat frenetic growth in China and India, both commodity consumers, could slow down temporarely but will continue with estimated 9,9% and 8,5% respectively in 2008. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standads Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday. In another deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. Merrill Lynch reported for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital the company encouraged by the Federal Reserve, which now officially approved the acquisition, advanced its merger talks with Bank of America and agreed to be bought in a rescue take over for about $50 Billion, making BofA the second largest bank in the world. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion, reporting stronger than expected third quarter earnings of $1,64 Billion, while J.P.Morgan Chase posted for the same period a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw at least $43 Billon in September from US hedge funds, which lost already more than $200 Billion in value this year, borrowing also heavily money, and as hedge fund outflows increase they will have to sell assets, estimating analists that the hedge fund industry, which managed at its peak beginning 2007 about $2.200 Billion in assets, is going to shrink according to estimates by more or less 45%/$1.000 Billion due to withdrawals and investment losses. Also smaller regional lenders are becoming increasingly vulnerable, practicing American banks a new found caution reducing even business loans! The credit crisis has conduced also to a tightening in lending terms of credit card issuers with consumers to lower risk profile, owing US households about $971 Billion ($8.299,- per household) in credit card debts, increasing charge-offs to 6,82% in August in comparison with 4,61% a year earlier, writing lenders off an estimated $21 Billion in bad credit card loans in the first half of 2008, showing 4,6% of credit card owners defaults in payment of 30 days and more in August. The Federal Reserve approved the transformation of American Express, the nation’s last big independent credit card company, into a bank company, getting greater access to the bailout package for banks, requesting about $3,5 Billion in assistance out of this fund. US banking regulators and the Federal Reserve, worried about financial markets, are working  on stricter rules for credit card issuers prohibiting unfair practices and calling on the industry to be more user-friendly, considering borrowers troubles to make their payments in the midst of a deep recession. AIG/American International Group, the world’s largest insurance company with an overexposure in real estate and in the credit default swap market, two problem segments suffering an overall decline in asset prices, was seeking $40 Billion in emergency loans, request initially rebuffed by the Federal Reserve, but to avoid that after Lehman Brothers also AIG was forced to file for bankruptcy

CHILD ABUSE PREVENTION : INTERNET RESOURCES

 

 

 

 

 

 

 

 

 

CHILD ABUSE : RESOURCES AND LINK

 

Infiltrations

The one thing Targeted Individuals have to understand is the concept of Infiltration. This means that agents, hired operatives, civillian informants, etc will try to infiltrate your organizations or your life.

I recently posted an article about Infiltration of online groups. This has been happening for some time now. Many people think if they are posting online that they will not be investigated, but there are infiltrators who try to engage posters in conversations, where they get them to say things against the government, or use talk of violence, something that might not happen without the provocateur. These individuals are on most of the popular forums, and often you won’t know who they are. You might get a sense of who they are based on their postings, but that is not always the case.

Here on some things to be aware of regarding Infiltrations.

[quote]http://www.theage.com.au/news/technology/security/police-hire-private-spies-to-snoop-online/2008/11/26/1227491580370.html

Police hire private spies to snoop online

THE Internet communications and websites of anti-war campaigners, environmentalists, animal rights activists and other protest groups are being secretly monitored by state and federal agencies.

A Melbourne private intelligence firm specialising in “open-source intelligence” has been engaged by Victoria Police, the Australian Federal Police and the federal Attorney-General’s Department to monitor and report on the protest movements’ use of the internet.

The monitoring, which has been secretly conducted for at least five years, includes exploring websites, online chat rooms, social networking sites, email lists and bulletin boards to gather information on planned demonstrations and other activities. Many of those monitored have not broken any laws, but it is believed information about their participation in online activities is conveyed to government agencies that also deal with terrorism.[/quote]

These types of infiltrations are happening all over the Internet. Sometimes the poster will just be observing gathering information and monitoring. In other cases they will perform a similar fuction to their offline components, and they will engage posters in extreme conversations about violence, anti-government sentiments, etc.

 

When J.Edgar Hoover ran the FBI, the infiltration of the KKK was about 20% infiltration. The agents that had infiltrated the FBI were often responsible for encouraging acts of violence on others, or enacting those acts of violence themselves.

The FBI kept talking with Klan members. By 1965, some 20 percent of Klan members were on the

[quote]The FBI kept talking with Klan members. By 1965, some 20 percent of Klan members were on the FBI payroll, many occupying leadership positions in seven of the fourteen Klan groups across the country, states political scientist Robert Goldstein in “Political Repression in Modern America: 1870 to the Present,” [/quote]

 

http://www.buzzle.com/editorials/3-20-2006-91543.asp

The scary part of these operations is that they will allow a movement to go forward as long as they can eventually be in control. This means that had they been successful in getting Martin Luther King Jr, to kill himself, they would have had their man already set in place to take the helm. They don’t have a problem with the movement as long as they can run the show, or have their people running the show, and their information getting out to the public.

The other thing to be aware of is that they often start groups themselves, with their own people, this way it seems like there is a movement happening, but again they are running the show.

[quote]But Glick and several other researchers argue that COINTELPRO-white appeared only to go after violent right-wing groups, and that the FBI actually gave covert aid to the Ku Klux Klan, Minutemen, Nazis, and other racist vigilantes, under the cover of being even-handed.

“These groups received substantial funds, information, and protection – and suffered only token FBI harassment – so long as they directed their violence against COINTELPRO targets,” Glick wrote.

“They were not subjected to serious disruption unless they breached this tacit understanding and attacked established business and political leaders.”

http://www.aclu.org/images/asset_upload_file744_30623.pdf

I have come across a few of these in doing this research. At first I would judge these people harshly, but now I feel sorry for some of them. Some are happy enough to sell out, but others just really don’t know what to do. They are poor, and without means and resources. This is something groups should be aware of. Someone who is a true target today, might become a turned Informant working for the state. It’s a very scary concept, but it’s again something to be aware of.

Some types of infiltrators stay in the background and offer material support, other informants may have nothing to do with the group or action, but initially heard certain plans and tipped off the police. Among the more active types of infiltrators can be a gregarious person that quickly wins group trust. Some infiltrators will attempt to gain key forms of control, such as of communications/ secretarial, or finances. Other informants can use charm and sex to get intimate with activists, to better spy or potentially destabilize group dynamics.

Active infiltrators can also be provocateurs specializing in disruptive tactics such as sowing disorder and demoralizing meetings or demos, heightening conflicts whether they are interpersonal or about action or theory, or pushing things further with bravado and violent proposals. Infiltrators often need to build credibility; they may do this by claiming to have participated in past actions.

 

The government also used Informants on the panthers, that’s how they knew where Fred Hampton would be, and the informant might have drugged Fred Hampton, just before the assassination.

http://www.thirdworldtraveler.com/FBI/Fed_Bureau_Intimidation.html

The paid Infiltrators are often profiled, these are individuals that they would like to use as Informants.

Carroll, who requested that his real name not be used, showed up early and waited anxiously for Swanson’s arrival. Ten minutes later, he says, a casually dressed Swanson showed up, flanked by a woman whom he introduced as FBI Special Agent Maureen E. Mazzola. For the next 20 minutes, Mazzola would do most of the talking.

“She told me that I had the perfect ‘look,’” recalls Carroll. “And that I had the perfect personality — they kept saying I was friendly and personable — for what they were looking for.”

What they were looking for, Carroll says, was an informant — someone to show up at “vegan potlucks” throughout the Twin Cities and rub shoulders with RNC protestors, schmoozing his way into their inner circles, [b]then reporting back to the FBI’s Joint Terrorism Task Force, a partnership between multiple federal agencies and state and local law enforcement.[/b] The effort’s primary mission, according to the Minneapolis division’s website, is to “investigate terrorist acts carried out by groups or organizations which fall within the definition of terrorist groups as set forth in the current United States Attorney General Guidelines.”

Carroll would be compensated for his efforts, but only if his involvement yielded an arrest. No exact dollar figure was offered.

“I’ll pass,” said Carroll.

For 10 more minutes, Mazzola and Swanson tried to sway him. He remained obstinate.

“Well, if you change your mind, call this number,” said Mazzola, handing him her card with her cell phone number scribbled on the back.

[/quote]

This young man was originally arrested for spray painting. (There is no way to know if he was encouraged by an Informant to perform the action.)

A similar scenario happened to a young man over at the Storm Front Forum. He called to find out more information about the local laws regarding Firearms in the state. A few days later he was paid a visit by the FBI. After discussing his phone call, which is what initiated the visit. He was asked to become a paid Informant to infiltrate white nationalist organizations. He was also asked to name anyone he knew who was involved in any illegal activities.

He advised that he was not aware of anyone involved in illegal activities, and that he did not wish to become an informant. Since then he has been a target of Gang Stalking, and they occasionally call him to see if he will change his mind and become an Informant, which he constantly declines.

(The best thing to do in this scenario is to get a lawyer, and give them the phone number or the card of your lawyer the next time they come calling. )

This information is from the security culture brochure. If you do get a lawyer expect even more retaliation, but it’s apparently the best method for dealing with this kind of pressure.

[quote]If you join a support group, you may also receive harassment via threads posted on message boards. Like other mediums of harassment, the topics of these threads may be about events that are unfolding in your personal life, as well as threats or insults covertly directed at you. This will probably happen repeatedly by the same person or people.

They may also employ some Gaslighting, or Jacketing tactics. Jacketing was often used during Cointelpro to make genuine activists look like informants.(10) Some internet groups which help stalking victims are heavily populated with perpetrators posing as victims.(7) Some of these perpetrators seem to be very vocal & popular members of these support groups. It seems that this a damage-control mechanism put in place to corral people, manage them to some

degree, & impede the groups’ progress. These people may also help with misdirecting events, or generally keeping groups disorganized & ineffective, under the illusion that progress is being been made.

These informants/perpetrators will give you correct information, & you may not find out until later that they’re trying to traumatize you as well. You may not be able to make other group members aware of it, as these informants may be well-respected members. It seems like a contradiction. Why would a perpetrator give you valuable information?

With Infiltration the idea is sometimes to destroy the organization, at other times it is to ensure the state is in control of the organization, this is true offline and online. This is also true for personal infiltrations. Getting someone into your life so they are in a position of trust, which can be used later.

Clean Tech and Life sciences offer highest prediction investment for 2009

 

 

 

  

 

 

Looking forward to looking back

I’ve always felt like New Year’s resolutions set one up for failure. I do, however, love New Year’s day. It’s so filled with possibilities, and for at least one day I’m an optimist. I usually have a few goals in mind for the coming year, but nothing that feels like a straight jacket. I thought I’d actually record them this year. I still need to break some of them down into real goals and steps to get there, but I thought this might encourage others to make their own list. I’m curious what will change, what will no longer seem important, and what will have fallen through the cracks come the end of ‘09. I like the reflection. There’s something to be said for being able to look at a list of what went right even in a tough year. I overheard my Dad say to my Mom over Christmas, “I want to grow old with you…just not as fast as I did this year.” I’m only listing things I had some control over. Acts of God or the devil are not included.

I’m laughing at myself for actually posting this. Some things seem to small to even include, but looking back, some of the smallest items in the past have made the biggest difference. So what’s your plan for ‘09?

Gulf stock investors lose $450 billion so far this year

http://www.business24-7.ae/Articles/2008/12/Pages/12292008_3ba5500a021641dbaeedcb00fdd451d2.aspx

Equity investors in the oil-rich Gulf are about to bid farewell to the worst year in the region’s bourse history, poorer by more than $450 billion (Dh1.65 trillion) after accumulating a massive wealth from share profits of nearly $359bn in 2007.

The staggering loss this year was in defiance of all market fundamentals as the bulk of companies listed on the seven stock exchanges in the Gulf Co-operation Council (GCC) achieved higher profits and the economies of the 27-year-old Gulf alliance raced at their highest rate of more than 30 per cent.

Officials and analysts in the region have cited fear from the global economic crisis and other factors for the collapse this year although the seven bourses had sharply grown in the first five months before they began their free fall just after news of the demise of the US Lehman Brothers bank in mid-September.

After reaping a staggering $359bn in 2007, GCC equity investors saw all their wealth evaporate by the end of October. As 2008 approaches its end, their losses far surpassed their 2007 profits although experts call them paper loss.

From around $1trn at the start of 2008, the market capitalisation of the GCC stock exchanges dived to around $602.05bn, a decline of $450.95bn, according to figures by the Abu Dhabi-based Arab Monetary Fund (AMF), a key Arab League financial body that tracks the Arab world’s 15 bourses.

All the seven bourses recorded large declines but the loss was more underscored in Saudi Arabia, Kuwait, Dubai and Abu Dhabi as they accounted for more than 90 per cent of the total GCC market capitalisation loss. Saudi Arabia’s Tadawul, by far the largest and busiest bourse in the Middle East, tumbled to around $241bn on December 25 from $456bn on January 1.

Kuwait dived to $126bn from $206bn, while Dubai and Abu Dhabi plunged to $64bn from $130bn and to $60bn from $113bn, respectively. Qatar’s fall was milder as it receded to $74bn from $98bn, while Oman fell to $15bn from $23bn and Bahrain to $20bn from $27bn.

The decline in the seven bourses through 2008 means the average daily loss was around $1.5bn calculated by 300 days of trading sessions. The daily loss was much higher in the past two months, when it exceeded $5bn.

The report showed the AMF’s index for the GCC bourses has dropped sharply since the beginning of the year despite its increase in the first four months.

Should you jump in to buy now?

JLL says yes; other property pundits not so sure

THANKS in part to falling interest rates, the affordability for luxury homes in Singapore has improved by 24 per cent since the third quarter of last year, according to property consultancy Jones Lang LaSalle (JLL).

JLL compiles an affordability index for private homes, which takes into account factors such as property prices, national wages and interest rates.

Based on the movement of this index in the past year, JLL said during a media briefing yesterday that luxury residential properties have become 24 per cent more affordable since last year, while mass market homes have become 5 per cent more affordable.

Hence, the consultancy sees investment opportunities in the luxury segment.

In addition, resale capital values and rentals of residential properties have come off the highs seen last year, while monthly rental payments have caught up with monthly mortgage payments.

These reasons, according to JLL, coupled with the assessment by the Economist Intelligence Unit that Singapore’s economy will rebound and grow about 2 per cent in 2010, all point to one thing: This is a good time for property investment funds and developers to inject capital into the property market.

Similar investment opportunities exist in the commercial property sector, said JLL’s head of markets in Singapore, Mr Chris Archibold.

“We are very aware that there are issues in the financial market, but they’re not going to be there forever; it’s in the short term,” he said.

“If you look at the supply that is on offer to the banking and finance community and Grade A central business district (CBD) occupiers, currently of the CBD office stock, 78 per cent is less than 15,000 sq ft.

“If you looked at it in 2005, it was 81 per cent. So, we are slowly growing our pure Grade A office supply, and that’s something we feel we need to do, given the fact that we want to maintain and build our position as a financial hub going forward.”

As many financial firms typically need large spaces for trading and dealing floors, the past three years have seen an increasing proportion of Grade A office space being bigger than 15,000 sq ft to cater to such needs.

On the other hand, property consultancy Chesterton Suntec International would hesitate to plunge into the investment property market now.

Its consultancy and research head Colin Tan feels investors should hold back for the time being, until the market bottoms out, corrects itself and reflects the fundamentals.

“Prices and rentals are still pretty high. I think you have to wait for the indices to be really negative. Right now, we’re just past the turning stage, on our way down. We haven’t quite got the worst of it yet,” said Mr Tan.

Although he said now might be a good time for investors to look around, Mr Tan expects few transactions to be concluded in the next year or so, as property prices and rentals have not corrected much.

Asian markets gain on higher energy stocks - Seattle Post Intelligencer


Julian SiddleScience reporter, BBC NewsNineteenth Century artwork is a useful tool for studying coastal erosion, according to a retired coastal engineer.Robin McInnes assessed the accuracy of geological and topological features in more than 400 paintings of the Isle of Wight and Hampshire coastline.Dr McInnes said such old masters gave engineers the chance to see coastal features before they were changed by industrial development.He was standing in London’s Tate Gallery, admiring a painting entitled Pegwell Bay, Kent - a recollection of October 5th 1858 by Pre-Raphaelite artist William Dyce, when the thought struck him that the detailed accurate depiction of groynes and foreshore, despite being painted 150 years ago, might be of use in his work as a coastal engineer.Over the years, Dr McInnes had amassed quite a collection of paintings, prints and etchings depicting the coastlines of Hampshire and the Isle of Wight, where he ran the island’s coastline management strategy.Combining his interests in paintings of the local environment, geology and coastal erosion, he looked at hundreds of artworks and came up with a method to assess their value as indicators of coastal change - especially erosion.”From the late 18th Century, Europe was cut off by the Napoleonic wars, this resulted in travellers and artists paying greater attention to the picturesque landscapes of the British Isles,” said Dr McInnes.Artists such as William Turner visited the Hampshire coast and produced panoramic paintings in aquatint and water colour. Dr McInnes began to examine images from the 1770s to the 1920s. From more than 400 paintings, prints and illustrations he drew up a scale to asses how useful such artworks were as coastal engineering tools.”The ranking system is based on four or five factors, it is a qualitative assessment,” he said.”I looked at issues such as the material and the nature of the media, oil paintings versus prints; generally, water colour allowed the most accurate depiction.”The next question was what do they actually show, do they provide understanding of the geology or beach levels I gave each a score for that.”Also to time periods, from a coastal engineers point of view, the most relevant period is when rapid coastal development took place.”Dr McInnes said the Victorian era saw a dramatic change in the coastline as towns, such as Portsmouth, grew with the opening up of railway links.He also gave marks for the accuracy of the artistic style, and whether the painting showed the topography.”In Italian landscape style accuracy was not the prime consideration, (whereas) traditional Victorian coastal painting was the most accurate as the idea was to provide an exact image to take home. “Followers of the pre-Raphaelites captured in precise detail this period, it coincided with an interest in geology and natural sciences. “He added that the paintings of the period were not just a tool for categorising physical change, but also environmental and developmental issues.”Many artists returned to the same spot to capture the same scenes over a period of years. “The study shows how Victorian development has radically changed the coastline; it’s nice to strip it back because it helps you understand what might be the underlying problems of erosion and instability.”Natural processes in the past are largely masked by coastal development,” Dr Innes explained.”Looking back 150 years, it’s easier to understand the geography and topography when you don’t have this coastal development covering the slopes.”The study - carried out with help from Portsmouth University, the Crown Estate and the National Maritime Museum - has been well received by organisations concerned with coastal erosion.Dr McInnes recently presented his findings at a coastal engineering conference in Venice, where he learned of similar research that used Caravaggio’s paintings to asses historic water levels in the sinking Italian city.”A lot of people think it can be applied to other parts of the coast that are well illustrated,” he says.The study could be extended, he suggested, to cover areas of south-east England where the erosion of soft rocks, combined with human development, has led to dramatic coastal change.
Source: news.bbc.co.uk

Ex-Taiwan head returned to prison
Taiwan’s ex-President, Chen Shui-bian, has been returned to prison pending his trial on corruption charges, after a court reversed a bail order.The Taipei District Court judges are reported to have said there was a risk he could collude with other suspects, destroy evidence and flee the island.Mr Chen left office in May and denies any wrongdoing.He was taken into custody in November and charged with embezzling government funds, fraud and money laundering.Others among the 12 charged in connection with the case include Mr Chen’s wife, son and daughter-in-law. The 57-year-old former leader was first jailed in Taipei on 12 November while prosecutors probed his affairs.Before being released on bail, he spent 32 days in Tucheng prison, to which he has now been returned.Family allegationsMr Chen and his family have been mired in corruption allegations since July 2006, when his son-in-law was charged with insider trading on the stock market and then jailed for seven years.The following November, his wife faced charges of corruption and forgery.Presidential immunity prevented prosecutors from charging Mr Chen when he was in office, but now they are free to take action.Mr Chen and his wife stand accused of embezzling millions of dollars in public funds and accepting a huge bribe in a land purchase deal.Legal experts say the former leader could face life in prison if convicted of all the charges against him.Mr Chen has maintained his innocence throughout the investigation, insisting his political opponents are mounting a “witch-hunt” against him, and accusing the new administration of making him “a sacrifice to appease China”.He has been a vocal and persistent critic of the new government’s China policies since he left office, at the end of eight years in the presidency.His accusations have been denied by both the Chinese government and Taiwan’s current President Ma Ying-jeou, of the Nationalist Kuomingtang party (KMT).Taiwan has been ruled separately from China since the end of the Chinese civil war in 1949, when the defeated Kuomintang retreated to Taiwan to create a self-governing entity.But Beijing sees the island as a breakaway province which should be reunified with the mainland, by force if necessaryThis article is from the BBC News website. © British Broadcasting Corporation
Source: news.bbc.co.uk

Audio slideshow
Sir Edmund Hillary conquered Everest, Miriam ‘Mama Afrika’ Makeba became a voice for the anti-apartheid struggle, while the life of rising star Heath Ledger was cut short. All three died in 2008.Here is a colourful tribute to them - and some of the other famous names - no longer with us.Please allow a few seconds for audio to load. Click ’show captions’ for photograph information.Featured Music: The Entertainer; Theme from Bagpuss; Truly Madly Deeply; Galley theme from Ben-Hur; Pata Pata; Bad Penny Blues; Theme from Last of the Summer Wine; Theme from Brokeback Mountain.Slideshow production: Paul Kerley and Natasha Gr neberg.Other 2008 deathsSir Arthur C ClarkeSir John Harvey-JonesIsaac HayesPaul ScofieldMark SpeightSir Charles WheelerMore audio slideshows The Wonder of WooliesTalking about LionelInspired by Yiddish
Source: news.bbc.co.uk


Japanese visitors applaud during a ceremony to mark the end of this year’s trading at the Tokyo Stock Exchange, Tuesday morning, Dec. 30, 2008. The benchmark Nikkei Stock Average rose 112.39 points, or 1.28 percent, from Monday to 8,859.56 in the
Source: seattlepi.nwsource.com

Equity markets rise at opening bell - Newstrack India
Mumbai, Dec 30 (IANS) Indian equity markets rose soon after the opening bell with a key index gaining by 0.73 percent about 15 minutes into trade. The sensitive index (Sensex) of the Bombay Stock Exchange (BSE) opened the day at 9,625.13 points
Source: www.newstrackindia.com

Sensex snaps 4-day losing streak, Satyam soars - Business Standard
Satyam Computer, the nation s fourth-biggest software services provider, gained 9.2 per cent, the most in more than two months. The stock rose as much as 18 per cent earlier. The Sensex rose 204.60, or 2.2 per cent, to close at 9,533.52, snapping a
Source: www.business-standard.com

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:Arindam Chaudhuri: Best theories of economics are meaningless if they can’t be practically applied

While year after year, strange economists keep getting the Nobel Prize for Economics for equally strange and meaningless impractical formulas, the man who has been redefining traditional economics and taking it back to where it should belong – the people, especially the poor – has been denied the same and given the Nobel for Peace instead. Though it is irritating, yet, perhaps we could try to find a deeper meaning and rejoice. At a point of time when Muslims are being looked at with suspicion, it sends a clear message to the world – that if you want to have peace, you’ve got to remove the massive poverty that still exists in the world by empowering the poor, especially women… I don’t think there can be a better message for global peace at a point where perhaps the biggest clash of civilizations – that between the Muslims and the Christians – is erupting across the globe.

The erstwhile Professor of Chittagong University is a great example of a man who does believe in walking the talk… To him, the best theories of economics are meaningless if they can’t be practically applied; and that which can remove poverty and give people dignity of existence, is the best economics. He has shown to the world that the poor are creditworthy by having a near-99% repayment record in his Grameen Bank, which alone today diburses more than Rs.3000 crores of loan every year, and has more than two-thirds of its funds as self-generated. His bank reaches more than 66,000 villages in Bangladesh and has till date touched the lives of more than 6 million poor, especially women, through its micro-credit or small loan schemes, given at a realistic interest rate of 20%. The most humble, soft spoken, Nobel Prize winner has shown to the world that poor need no mercy, and keeping the poor as the central focus of economic activities not only is a must to have a humane and ethical society, but also makes sound business sense.Muhammad Yunus’ Nobel Prize reminds me about Dr.Manmohan Singh’s speech at Cambridge that I read with amusement just a few days back. In his speech, while he was being honoured there, our Prime Minister – who is rarely seen speaking or doing anything boldly inside the country – reminded us of something that is being forgotten at a very fast pace within India, that once he was also an intellectual and that he is himself a competent and learned economist.

Making Indians proud for a change, he boldly told the developed countries that their prosperity depended on the well-being of the less developed world. He said that they should not “allow short-term national interests to prevail at the cost of promoting freer trade and combating poverty.” He further stated, “The prosperity of so many cannot be sacrificed for protecting the interests of so few. The price of myopia is heavy on the exchequers of the developed world.”Great words indeed, but the momentary pride of having a well educated Professor of Economics as our Prime Minister ended in no time as a creepy feeling overcame me that it must be mere lip service to get the applause at Cambridge. His deeds indeed have very less similarity with his words. His budgets have hardly reflected true passion and commitment for the poor, and the very next page of the same newspaper had the news of suicides in Vidarbha, which has crossed the 350 mark since the PM visited the place in July this year, and over 962 in the past year… As I write this, my blood boils in pain, restlessness and anger at the insensitivity of our Prime Minister and Indian politicians en masse. They have all the time to get their salaries revised in Parliament, walk out over trivial issues, shamelessly ask the government to pardon terrorists, but they have no time for hundreds dying in the farms of Vidarbha because those poor and helpless have no voice and make no meaningful vote-bank. While Dr.Singh talks about the poor at Cambridge, he allows hundreds to commit suicides due to severe drought in his own country and – though he easily could – he takes no immediate conclusive action to stop the unending pain and agony of these poor and helpless. As a result of his and his predecessor’s policies, today, India is ranked below sub-Saharan African countries in the world malnutrition index at a pathetic 117 out of 119 countries, and the mainstream media, full of conspirators with the high and mighty, smugly ignores this news and places it within insignificant pages to ensure low visibility, because writing about the poor and malnutrition is not sexy enough to grab eyeballs.It’s time our politicians went back to learn some more economics from Muhammad Yunus.

 Economics which teaches true passion for the poor, sensitivity and the commitment to walk the talk. And thanks to the Nobel Committee for recognising efforts to make the world poverty-free. At least for a few days, the media won’t find writing about the poor non-sexy. I only wish Dr.Singh too would find working with true commitment for the poor equally attractive.

Congress to examine Madoff case on Monday

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“Madoff’s actions have further weakened the already battered investor confidence in our securities markets,” Kanjorski said in a statement on Monday.

“These proceedings will help us to discern whether or not the SEC had the resources needed to get the job done, how such a sizable scheme could have evaded detection for so long, and what new safeguards we need to put in place to protect investors,” the lawmaker said. Full read : http://tinyurl.com/7xdvyc

The U.K. pound weakened to a record 98 pence per euro after an industry report said house prices will probably extend declines next year, boosting the case for deeper interest-rate cuts by the Bank of England.

Britain’s currency also dropped versus 14 of its 16 most- traded counterparts, falling for a second day against the Swiss franc and tumbling to a 14-year low against Japan’s yen. Property research company Hometrack Ltd. said U.K. house values slid 8.7 percent this year, led by a 10.1 percent drop in London, and that prices will “inevitably” decline in 2009.

“Parity is ever more likely” between the pound and the euro, said Daragh Maher, deputy head of global foreign-exchange strategy in London at Calyon, the investment-banking unit of Credit Agricole SA. “If there’s going to be a turnaround in euro-sterling it needs to come from the euro.”

The pound depreciated as much as 2 percent to 98 pence per euro, its sixth straight daily drop, and was at 97.47 pence by 5:35 p.m. in London, from 96.10 pence at the end of last week. It sank 25 percent against the European common currency this year, the most since the euro was introduced in 1999.

Britain’s currency dropped as much as 1.3 percent versus the yen to 76.31 pence, the lowest since April 18, 1995, before paring declines to 76.06 pence. It slipped 2.5 percent to 1.5218 francs. The U.K. currency was little changed at $1.4573, near the lowest level in more than three weeks.

“Sterling’s had to contend with the soft house-price numbers overnight” and retailers haven’t “had a particularly good December,” said Maher. http://tinyurl.com/7mjm8z

U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.

Retailers may close 73,000 stores in the first half of 2009, according to the International Council of Shopping Centers. Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. Investors will start seeing a wide variety of chains seeking bankruptcy protection in February when they file financial reports, said Burt Flickinger.

“You’ll see department stores, specialty stores, discount stores, grocery stores, drugstores, major chains either multi- regionally or nationally go out,” Flickinger, managing director of Strategic Resource Group, a retail-industry consulting firm in New York, said today in a Bloomberg Radio interview. “There are a number that are real causes for concern.”

Sales at stores open at least a year probably dropped as much as 2 percent in November and December, the ICSC said last week, more than the previously projected 1 percent decline. That would be the largest drop since at least 1969, when the New York-based trade group started tracking data. Gap Inc. and Macy’s Inc. are among retailers that will report December results on Jan. 8.

Women’s Clothing, Electronics

Consumers spent at least 20 percent less on women’s clothing, electronics and jewelry during November and December, according to data from SpendingPulse.

Retail Metrics Inc.’s December comparable-store sales index will drop an estimated 1.2 percent, or 5 percent excluding Wal- Mart Stores Inc. Retailers’ fourth-quarter earnings may fall 19 percent on average, the seventh consecutive quarterly decline, according to Ken Perkins, president of Retail Metrics, a Swampscott, Massachusetts-based consulting firm.

Probably 50,000 stores could close without any effect on consumer choice, Gregory Segall, a managing partner at buyout firm Versa Capital Management Inc., said this month during a panel discussion held at Bloomberg LP’s New York offices. Only retailers with healthy balance sheets will survive the recession, according to Matthew Katz, a managing director at consulting firm AlixPartners LLP. http://tinyurl.com/9e7nwb

December Confessions #1

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Pricewaterhouse Coopers looks into healthcare crystal ball for 2009

“The coming year will be a watershed for healthcare in the United States,” said David Chin, MD, PricewaterhouseCoopers‘ Health Research Institute Leader.”Severe economic conditions are placing pressure on hospitals, insurers, employers and patients alike. President-elect Obama has called for significant reform for healthcare and will have a Democratic Congress supporting him. The convergence of market and political forces will drive the greatest change in healthcare in a generation, changes that could benefit patients and make the health system stronger.”

The report is an annual review of the most pressing issues for health executives and policy makers. PwC identified nine top issues for 2009:

1. The Economic Downturn Will Hit Healthcare

Although the health industry historically has been less vulnerable to economic downturns than other industries, the disrupted economy will hit healthcare in 2009. Hospitals and other providers, from family physicians to dentists, will experience an increase in bad debt and a drop in elective procedures. Investment portfolios for all health organizations have been affected. The payer mix is shifting away from relatively lucrative commercial insurers and seeing a drop in enrollment and premium revenue - a trend that will likely continue if employment drops further. Charitable donations and investment income are down, and improvement projects involving capital outlays for IT, facilities and equipment, have been put on hold. Pharmaceutical and biotech companies have seen their valuations drop, which could further affect access to additional capital. Health organizations that need to find new sources of capital will have to demonstrate that they’re improving their core businesses, improving efficiencies and delivering value.

2. The Underinsured Will Surpass the Uninsured as Healthcare’s Biggest Headache

The uninsured draw most of the attention, but the number of underinsured is growing even faster - an estimated 25 million adults qualify as underinsured, an increase of 60 percent since 2003. With some but not enough health insurance, the underinsured often can’t or won’t pay the high deductibles and co-pays for the services they need. In 2009, the nation could see more bad debts for hospitals, more cost-shifting to commercial plans and more patients delaying or foregoing care.

With growing unemployment, self-pay is becoming a major part of providers’ revenue cycle processes. Many hospitals have begun to pre-qualify patients. Some are using credit card-like swipe machines to verify eligibility and estimate insurance coverage. Others are using credit cards and extending their own lines of credit. Not-for-profit hospitals must tread carefully, as they don’t want to further complicate the credit for uninsured and low-income patients. Business operations will likely look to technology and processes from the retail, banking and credit industries to manage self-pay patients and the underinsured.

 3. Big Pharma turns to M&A to build the drug pipeline

With revenue from existing pharmaceuticals slowing and a decrease in approved new drugs in the pipeline, Big Pharma is focusing on acquisitions of smaller biotech firms to re-energize the drug pipeline. Cash-rich pharmaceutical companies may be able to find bargains in the mergers and acquisition market as the financial markets continue to hit turbulence.

4. From Vaccines to Regulation, Prevention Is on the Rise

Prevention will get a boost from drug makers, regulators and nonprofit benefactors, making vaccines one of the few bright spots for pharma sales. In addition, more state and local governments are regulating health-related behaviors, such as banning smoking in public areas and trans-fats in foods. Next up for consideration: nutritional posting requirements for fast-food restaurants, limits on where cigarettes may be sold and fees for sugary sodas.

5. Genetic Testing Reaching a Price Point for the Masses

The direct-to-consumer market for genetic testing may take off in the year ahead as costs drop, enabling people to purchase a complete map of their DNA to identify markers for specific diseases such as Alzheimer’s. A federal ban on discriminating against the use of genetic data could accelerate the use of these tests by the public. Research will focus on how genetics can affect pharmaceuticals and enable personalized medicine. The marketing of these tests bypasses traditional clinicians, raising questions about how the information will affect diagnosis and treatment. Regulations regarding genetics at a state and federal level will continue to develop.

6. The Internet and Social Networking Is a Powerful Health Extended

Technology will empower patients in new ways during 2009. The increased information and growing patient-to-patient interaction over social networking platforms and Web sites such as patientslikeme.com and americanwell.com are changing how healthcare is navigated and experienced by consumers, especially as electronic health records become more common.

7. Hospitals Must Perform to Get Paid

Medicare, Medicaid and insurance companies are basing reimbursements to hospitals on performance and, despite resistance, pay-for-performance isn’t going away. In 2009, healthcare providers will have to get serious about not only improving performance but also documenting it. The Centers for Medicare & Medicaid Services (CMS) has proposed adding a new index: the total performance score. It’s part of Medicare’s move to value-based purchasing. If Congress approves, CMS would replace the current quality reporting system with one in which Medicare withholds between 2 percent and 5 percent of its reimbursements to hospitals. They will need to focus on process improvements to improve safety and avoid unreimbursed medical errors, known as “never events.”

 8. Payers and Employers to Give Incentives for Wellness Programs

More employers will give incentives to encourage responsible health behaviors and participation in wellness and disease management programs. Wellness programs don’t work if employees don’t participate, and most of them don’t, according to research by PricewaterhouseCoopersHealth Research Institute, which found that less than 15 percent of eligible individuals enrolled in wellness programs actually participate. However, they found that workers are two to four times more likely to enroll in wellness programs if they receive gift cards or other incentives. In 2009, health plans will begin to play a more active role in wellness program design, tools and support.

9. ICD-10 Will Require a Major Resource Investment

The conversion in 2009 to a new International Classification of Disease code sets, known as ICD-10, will be a painful and costly process. The federal government has proposed an accelerated timetable for increasing the number of code sets used for billing and clinical classifications from 17,000 to 150,000. In addition to clinical process changes, the entire healthcare system - from quality of care to medical records to incentive salary systems to reimbursement - will have to be adapted. The good news: When it’s done, providers and payers will have far more data on which to document diagnosis, decisions and reimbursement.

Gazprom, once mighty, is reeling?

Sar Kheng upbraids police for corruption

30 December 2008

INTERIOR Minister Sar Kheng lashed out at his subordinates, accusing them of mismanagement and corruption in a speech last week.

Sar Kheng told about 300 police officers on Friday that funds earmarked for salaries were being siphoned by corrupt and incompetent officials.

“[Corruption] is a serious mistake and means they are stealing from the ministry and stealing official salaries by enlarging the budget. These mistakes will not be tolerated,” Sar Kheng said.

Cambodia ranks near the bottom of corruption watchdog Transparency International’s Corruption Perceptions Index, at 166 out of 180 countries.

Sar Kheng, who is also a deputy prime minister, lambasted corruption in procurement of uniforms, petrol and rice. He called on all levels of the police financial department to reduce unnecessary spending on electricity, water and building upkeep.

“These were issues the ministry has to be concerned about. We have to reform financial management for 2009,” Sar Kheng said.

“When we get the budget under control, the ministry will be able to increase salaries for police officers.”

He also announced reforms in the ministry’s rice distribution scheme that gave police officers bags of rice on top of their salaries.  

Cynicism as a substitute for scholarship

By Stephen Gowans

Mahmood Mamdani’s largely sympathetic analysis of the Mugabe government, “Lessons of Zimbabwe,” published in the December 4, 2008 London Review of Books, has been met with a spate of replies from progressive scholars who are incensed at the Ugandan academic throwing out the rule book to present an argument based on rigor and analysis, rather than on the accustomed elaboration of comfortable slogans and prejudices that has marked much progressive scholarship on Zimbabwe. Their criticism of Mamdani has been characterized by ad hominem assaults, arguments that either lack substance or sense, and the substitution of cynicism for scholarship.

At the heart of what might be called the anti-Mugabe ideology lays the idea that the Zimbabwean leadership clings to power through crude anti-imperialist rhetoric used to divert blame for problems of it own making. This is an elaboration of elite theory — the idea that a small group seeks power for power’s sake, and manipulates the public through lies and rhetoric to stay on top. For example, one group of progressive scholars [1] complains about “Mugabe’s rhetoric of imperialist victimization,” while Horace Campbell argues that,

”The Zimbabwe government is very aware of the anti-imperialist and anti-racist sentiments among oppressed peoples and thus has deployed a range of propagandists inside and outside the country in a bid to link every problem in Zimbabwe to international sanctions by the EU and USA.” [2]

Contrary to the empty rhetoric school of thought, Mugabe’s anti-imperialist rhetoric is not unattended by anti-imperialist action, but in some extreme versions of anti-Mugabe thought, (for example, that put forward by Patrick Bond), Mugabe is an errand boy for Western capital. [3] The Zimbabwean leader’s anti-imperialist reputation is, according to this view, smoke and mirrors, an illusion conjured by a deft magician.

The Mugabe government’s anti-imperialist and anti-neo-colonial credentials rest on the following:

o In the late 1990s, intervening militarily in the Democratic Republic of Congo on the side of the young government of Laurent Kabila, to counter an invasion by Rwandan and Ugandan forces backed by the US and Britain.

o Rejecting a pro-foreign investment economic restructuring program established by the IMF as a condition for balance of payment support (after initially accepting it.)

o Expropriating farms owned by settlers of European origin as part of a program of land redistribution aimed at benefiting the historically disadvantaged African population.

o Establishing foreign investment controls and other measures to increase black Zimbabwean ownership of the country’s natural resources and enterprises.

Progressive scholars typically avoid mention of these anti-imperialist actions, for to do so would clash violently with the idea that Harare’s anti-imperialism is based on empty rhetoric. A few, however, do acknowledge these actions, but insist they were undertaken to enrich Mugabe and, aping US State Department and New York Times rhetoric, “his cronies.” Zimbabwe is said to have intervened militarily in the DRC to profit from the Congo’s rich mineral resources. Land is said to have been redistributed to reward Mugabe’s lieutenants (in which case, with 400,000 families resettled, Mugabe’s lieutenants comprise a sizeable part of the rural population). And measures to increase black Zimbabwean ownership in Zimbabwe’s economy are said to have no other aim than to enrich Mugabe’s friends. Evidence for none of these claims is offered.

This substitutes cynicism for analysis. Has there been corruption in the land resettlement program? Asbolutely. But what human enterprise is free from corruption? What’s more, is the presence of corruption in a program, proof the program was undertaken for corrupt reasons? Measures to increase black Zimbabwean ownership in the economy are scorned by progressive scholars for being capitalist. Fine, but a failure to be anti-capitalist is not equal to a failure to be anti-imperialist; nor is it proof of being pro-imperialist.

The foreign policy of capitalist governments is based in large measure on protecting their nationals’ ownership rights to foreign productive assets and promoting their access to foreign investment and export opportunities. Under the Mugabe government, ownership rights have not been safeguarded and foreign investment and export opportunities have been limited by tariff policies, foreign investment controls, subsidies and discrimination against foreign investors. Absent in the analyses of progressive scholars is the view of the Mugabe government’s policies from the banks and corporations of the imperialist center. One key US ruling class foundation, The Heritage Foundation, complains that Zimbabwe’s “average tariff rate is high” and that “non-tariff barriers are embedded in the labyrinthine customs service;” that “state influence in most areas is stifling, and expropriation is common as the executive pushes forward its economic plan of resource distribution”; that Zimbabwe has “burdensome tax rates” and that “privatization has stalled”…”with slightly over 10 percent of targeted concerns privatized”…”and the government remains highly interventionist.” Of equal concern is Harare’s practice of setting “price ceilings for essential commodities,” “controls (on) the prices of basic goods and food staples,” and influence over “prices through subsidies and state-owned enterprises and utilities” – odd practices for what we’re to believe is a group of errand boys for Western capital. But perhaps of greatest concern to Western corporations and banks is Harare’s investment policies. “The government will consider foreign investment up to 100 percent in high-priority projects but applies pressure for eventual majority ownership by Zimbabweans and stresses the importance of investment from Asian countries, especially China and Malaysia, rather than Western countries.” [4] This paints a picture of the Mugabe government, not as a facilitator of Western economic penetration, but as economically nationalist, pursuing a program aimed at placing control of Zimbabwe’s land, natural resources and enterprises in the hands of black Zimbabweans. It is, in short, a black nationalist government. Clearly, Western investors don’t think Mugabe is working on their behalf. The only people who do are progressive scholars.

The Mugabe government’s pursuit of black nationalist interests, which clashes in important ways with the interests of Western banks and corporations as well as with the minority population of settlers of European origin, has been met by a strong, multi-faceted response from the US, Britain and the EU. This has included the denial of balance of payment support and development aid, the building up of civil society as a pole of opposition to the Mugabe government, the creation of and subsequent direction of an opposition party, and an international campaign of vilification aimed at discrediting the Mugabe government. [5] Progressive scholars barely acknowledge the Western response, treating it more as an invention of the Mugabe government, used to manipulate the population and to deflect attention from its failings, than as a reality – a bowing to elite theory, rather than to the facts.

Campbell, for example, complains that,

“The Mugabe government blames all of its problems on the economic war launched by the USA and Britain. For the Mugabe regime, at the core of this economic war, are the targeted sanctions against Mugabe’s top lieutenants under its Zimbabwe Democracy and Economic Recovery Act (ZDERA), passed by the Bush administration in 2001.” [6]

Campbell confuses targeted sanctions aimed at senior members of the Mugabe government, with ZDERA, an act which blocks Zimbabwe’s access to international credit, and, therefore, affects all Zimbabweans, not just Zanu-PF grandees. According to the act,

The Secretary of the Treasury shall instruct the United States executive director to each international financial institution to oppose and vote against–

(1) any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe; or

(2) any cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution.” [7]

Zimbabwe’s economy, like that of any other Third World country, was never robust to begin with, and inasmuch as it has always relied heavily on Western inputs and access to Western exports, was never too difficult to push into crisis by Western governments intent on making a point. To pretend Washington, London and Brussels haven’t sought to sabotage Zimbabwe’s economy, or are incapable of it, is absurd. ZDERA effectively deprives Zimbabwe of the foreign exchange it needs to import necessities from abroad, including chemicals to treat drinking water, a significant point in the recent cholera outbreak. Development aid from the World Bank is also cut off, denying the country access to funds to build and repair the infrastructure needed to run a modern economy. Rather than banning the export of goods to Zimbabwe (the popular understanding of sanctions), the US has made importing goods a challenge. This doesn’t mean that Zimbabwe can’t import goods, or that there is no outside investment. What it does mean, however, is that Zimbabwe is denied access to the kind of financial support poor countries depend on to get by. The intended effect is to make Zimbabwe’s economy scream, and it has. Campbell, who, based on his equating ZDERA with targeted sanctions on individuals, doesn’t understand it, or hasn’t read it, dismisses the idea that the West’s economic warfare accounts for Zimbabwe’s economic troubles. He writes that,

“What has been clear from the hundreds of millions of dollars of investments by British, Chinese, Malaysian, South African and other capitalists in the Zimbabwe economy since 2003 is that the problems in Zimbabwe haven’t been caused by an economic war against the country.” [8]

This is like saying anyone exposed to an influenza virus couldn’t possibly be ill because he has received mega-doses of vitamins. Investment from non-Western sources may mitigate some of the problems created by ZDERA, but it doesn’t eliminate them. Chinese investment in platinum mines, for example, will not eliminate a balance of payment problem.

Understating the effects of ZDERA is not the only area in which progressive scholars go wrong; their failure to acknowledge Western efforts to build up a civil society with a mandate to destabilize Zimbabwe is another. This is inexcusable, since the efforts of Western governments to create, nurture, support, direct, and mentor opposition to the Mugabe government, including overthrow movements, is well documented [9] – mainly because these governments have been open about it — and is hardly new. It has been used elsewhere, famously in Chile, and recently in Venezuela, Belarus, and the former Yugoslavia.

One reason for the failure of progressive scholars to acknowledge the role played by Western governments and ruling class foundations in destabilizing Zimbabwe may be because they too benefit from the same sources of funding. Campbell’s critique of Mamdani, for example, was published at Pambazuka News. Pambazuka News is a project of the US ruling class Ford Foundation and of the Open Society Institute [10], a vehicle of billionaire financier George Soros to promote color-coded revolutions, under the guise of democracy promotion, in countries whose governments have been less than open to Western exports and investments. Pambazuka News is also sponsored by Fahamu [11]. While Fahamu no longer lists Western governments as funders, it has, in the past, been funded by the US State Department through USAID, by the British Parliament through the Westminster Foundation for Democracy, by the British government through the British Foreign and Commonwealth Office and the British Department of International Development, and by the European Union. The US, Britain and EU are on record as seeking the overthrow of the Mugabe government. They fund the organizations that disseminate anti-Mugabe analyses and sloganeering. They do so with one aim: to overthrow the Mugabe government. Campbell’s protesting that he is opposed to imperialist interventions is a bit like buying crack on the street while professing opposition to drug dealing, or placing a Think Green sticker on the bumper of your new SUV. Similarly, progressive scholar Patrick Bond, whose anti-Mugabe diatribes can also be found at Pambazuka News, describes the overthrow movement Sokwanele as an independent left, seemingly unaware it is on the US government payroll. [12]

Not only do progressive scholars ignore the links of Zimbabwe’s opposition to imperialist governments and foundations, they celebrate the opposition. Campbell refers to members of Women of Zimbabwe Arise (WOZA) as “brave fighters.” [13] Brave fighters they may be, but Campbell does not let on (or know) what Woza is fighting for. The group’s leader, Jenni Williams, won the State Department’s 2007 International Woman of Courage Award for Africa, a plaudit presented to Williams by Condoleezza Rice in a March, 2007 ceremony in Washington. [14] It shouldn’t have to be pointed out that the US State Department’s priority is to secure the interests of US corporations and banks abroad, not the interests of the women of Zimbabwe. So why is the US State Department recognizing Williams? Not for her service to women’s rights, but because her activities help to destabilize Zimbabwe and bring closer the day the black nationalist program of the Mugabe government can be swept aside to clear the way for the unfettered pursuit of US corporate and banking interests. A US government report on the activities in 2007 of its mission to Zimbabwe reveals that the “US Government continued its assistance to Women of Zimbabwe Arise.” [15] US government assistance to Woza and other civil society organizations is channelled through Freedom House and PACT. Freedom House is interlocked with the CIA and is a “virtual propaganda arm of the (US) government and international right wing,” according to Noam Chomsky and Edward Herman. [16] It is headed by Peter Ackerman. Ackerman runs the International Center on Nonviolent Conflict, of which Stephen Zunes, another progressive scholar, is chair of the board of academic advisors. Ackerman’s wife, Joanne Leedom-Ackerman, is a former director of the Albert Einstein Institute, an organization which trained activists in popular insurrection techniques to overthrow Venezuela’s Bolivarian Revolution, and has consulted with members of Zimbabwe’s civil society opposition on how to use non-violence to overthrow the Mugabe government. [17] Woza supports two US State Department propaganda vehicles: SW Radio Africa, a US State Department funded short-wave radio station that beams anti-Mugabe propaganda into Zimbabwe, and the Voice of America’s Studio 7, also funded by the State Department to broadcast US foreign policy positions into Zimbabwe. [18] Zunes says Woza can by no means be considered American agents [19], echoing the progressive scholars’ line that there are no Western efforts to overthrow the Mugabe government; it’s all part of the anti-imperialist rhetoric Mugabe uses to stay in power.

One of the biggest problems for progressive scholars is that their wish to see the Mugabe government brought down inevitably means its replacement by the Morgan Tsvangirai-led faction of the MDC. If Zanu-PF is deplored by some progressive scholars and demonized from the left for being capitalist, the MDC should have two strikes against it: it’s not only capitalist, it is unquestionably the errand boy of the imperialist center, a point one doesn’t have to twist oneself into knots to make, as is done whenever progressive scholars claim Mugabe, despite being sanctioned and vilified by the West, is kept afloat by and works on behalf of Western capital. The MDC’s subservience to Western corporate and banking interests is amply evidenced in its origins (Britain and British wealth provided the seed money), policy platform (decidedly pro-foreign investment), [20] and its advisors (the John McCain-led international arm of the Republican Party, the IRI [21]). Under an MDC government, the stalled privatization program the Heritage Foundation complains about will quickly be restarted. Foreign investment controls, subsidies, tariffs, and price controls will be terminated. Reversal of land reform, while it may come slowly, will inevitably happen, as a condition of ending ZDERA. IMF and World Bank loans will be extended, and the pro-foreign investment measures which are the inevitable condition of these loans will gladly be acceded to.

So, what do progressive scholars like Campbell offer as an antidote? “That Zimbabweans…oppose the neoliberal forces within the MDC to ensure that the suffering of working people does not continue after the ultimate departure of Robert Mugabe.” [22] There is more naiveté in this single sentence than there is in the average five year old. Please! Neoliberal forces have controlled the MDC from day one [22], and they’ve controlled the party because they hold its purse strings. Their control won’t disappear the moment Mugabe is gone; on the contrary, it is at that moment it will be strongest. But suppose, for a moment, that Campbell’s naive fantasy comes true, and that the forces that provide the funding that is the lifeblood of the MDC, yield to pressure from Zimbabweans, who, at one moment, vote the MDC into power, despite its neo-liberal platform, and at the next, ask the MDC to abandon the platform it was elected on. Were the MDC to yield to this pressure, it would face exactly the same response the Mugabe government faced when it backed away from neo-liberal policies: sanctions, destabilization, demonization and the threat of military intervention. The failure of Campbell to understand this evinces an unsophisticated understanding of the foreign policies of Western countries.

How droll, then, is the pairing of this breathtaking naiveté with the utter arrogance of progressive scholars. They dismiss Mamdani for failing “to look more deeply at the crisis” and for being “fooled by Mugabe’s rhetoric of imperialist victimization,” and then moan that preventing non-experts from falling for Mugabe’s rhetoric is “one of the more difficult tasks for scholars working on Zimbabwe.” And yet a far more difficult task, it would seem, is for the same scholars to acquaint themselves with the basics: what ZDERA is; why the West is waging economic warfare; what the policies of ZANU-PF are compared to the MDC’s and how these policies align, or fail to align, with the interests of Western banks and corporations; and who created and guides the opposition. Indeed, it could be said that one of the most difficult tasks for anti-imperialists working on Zimbabwe is to persuade progressive scholars to look more deeply into the crisis and not be fooled by imperialist rhetoric.

GMAC Gets $6 Billion From Treasury to Revive Lending

 

The fresh capital will enable GMAC to expand lending to car buyers and help save GM. The automaker’s U.S. sales plunged 22 percent this year through November after GMAC ran short on cash and limited loans to people with only the best credit. The Treasury stepped in after Congress failed to pass an auto- industry bailout earlier this month.

“The relationship with GM is probably a key reason it’s being bailed out,” said Thomas Atteberry, who helps manage $3.5 billion in fixed-income assets at First Pacific Advisors in Los Angeles. “Philosophically, I’m not very happy about the fact that the government has to save an auto-finance company because management ran it into the ground.”

In a statement, GMAC said it “intends to act quickly to resume automotive lending to a broader spectrum of customers to support the availability of credit to consumers and businesses for the purchase of automobiles.” The lender financed about 35 percent of GM’s retail customers last year.

New Rescue Program

“This is part of our strategy to position GMAC for long-term stability,” Toni Simonetti, a spokeswoman for GMAC, said about yesterday’s Treasury announcement. “The reason we’re doing this is so we can provide credit to consumers; we’ll put these funds to use right away.”

Rights Offering

GM stock has dropped 86 percent to $3.60 a share this year. The broader Standard & Poor’s 500 Index has slumped 41 percent in 2008 as the U.S. sank into a recession that’s now a year old.

The investment in GMAC is “part of a broader program to assist the domestic automotive industry in becoming financially viable,” the Treasury said in a statement yesterday.

Dividend, Warrants

GMAC will pay an 8 percent dividend on the Treasury’s $5 billion of senior preferred equity. The company will also issue warrants in the form of additional preferred equity that will equal 5 percent of the preferred-stock purchase and pay a 9 percent dividend if exercised.

The Bush administration has already agreed to loan GM $4 billion this month and $5.4 billion next month. If Congress agrees to approve funding of a second $350 billion for TARP, GM would get another $4 billion in February.

A Treasury official said there is no cap or deadline for aid for the auto industry under TARP. Congress “will need to release” the second half of the $700 billion under Treasury’s rescue plan, the official said on condition of anonymity during a conference call with reporters.

The announcement left unresolved the status of GMAC’s $38 billion debt swap. The lender said it has accepted all bonds tendered in the swap designed to reduce its debt load and help it qualify to convert to a bank.

Awaiting Results

“Once the offers are settled, which we expect to do promptly, results will be disclosed,” GMAC spokeswoman Gina Proia said in an e-mail.

The failure of GMAC would leave GM at risk of losing as many as 40 percent of its 6,500 U.S. dealerships, Martin NeSmith, a liaison to the lender as a member of GM’s National Dealer Council, said Dec. 10. The dealerships rely on GMAC to finance cars and trucks on their lots while they wait for consumers to buy them.

With GM selling cars at the slowest pace in 26 years and the country in its worst housing crisis since the Great Depression, GMAC and its Residential Capital LLC mortgage unit have no way to revive their own revenue and have been shut out of credit markets. GMAC has $540 million of bonds due this month and another $11.6 billion that mature in 2009.

Notes Rise

GMAC, which had 26,700 employees as of Dec. 31, 2007, had about $161 billion of unsecured and secured debt as of Sept. 30, according to a filing last month. GMAC’s $2.5 billion third- quarter deficit brought losses over the past five periods to $7.9 billion.

Kerkorian sells last Ford stock - Nashville Tennessean


Duffy and Alexandra Burke were the UK’s top-selling musicians of the year, according to official sales figures.X Factor winner Burke sold 888,000 copies of her version of Hallelujah in the last two weeks of the year to take the year’s biggest-selling single.Duffy’s debut album Rockferry held off a late challenge from Take That to come top of the year-end chart, with 1.685 million copies sold.Kings of Leon, Leona Lewis and Coldplay all sold over a million albums in 2008.TOP SINGLES OF 20081) Hallelujah - Alexandra Burke2) Hero - X Factor finalists3) Mercy - Duffy4) I Kissed A Girl - Katy Perry5) Rockstar - Nickelback6) American Boy - Estelle/ Kanye West7) Sex on Fire - Kings of Leon8) Now You’re Gone - Basshunter9) 4 Minutes - Madonna/ Justin Timberlake10) Black & Gold - Sam SparroSource: Official Charts CompanyOfficial Charts Company (OCC) data shows the X Factor finalists’ version of Hero was the year’s second biggest-selling single, shifting 751,000 copies.Duffy’s Mercy sold 536,000 copies, the only other single to sell over half a million.Katy Perry’s I Kissed A Girl was the fourth biggest-seller, followed by Nickelback’s Rockstar.Other top-selling singles included Estelle and Kanye West’s American Boy, Kings of Leon’s Sex on Fire, Basshunter’s Now You’re Gone and Madonna and Justin Timberlake’s collaboration 4 Minutes.Sam Sparro’s Black & Gold rounded off the year’s top 10 singles.Rihanna, Killers, Girls Aloud, Pink and Scouting For Girls all feature in the top 10 albums of 2008.TOP ALBUMS OF 20081) Rockferry - Duffy2) The Circus - Take That3) Only By The Night - Kings of Leon4) Spirit - Leona Lewis5) Viva La Vida… - Coldplay6) Good Girl Gone Bad - Rihanna7) Day & Age - Killers8) Out of Control - Girls Aloud9) Funhouse - Pink10) Scouting For Girls - Scouting For GirlsSource: Official Charts CompanyThe Mamma Mia soundtrack sold 1.007 million copies to be named the year’s top compilation.The figures include both downloads and physical copies such as compact discs.OCC managing director Martin Talbot said: “Duffy and Alexandra Burke have been the biggest new arrivals on the British music scene over the past year, bar none.”But the biggest selling singles and albums of the year also show that talent, both new and old, can make an impact, if the music is right.”Besides the obvious impact of the X Factor artists, including Burke, Leona Lewis and this year’s finalists, Duffy, Katy Perry, Sam Sparro and Scouting For Girls all scored big to show that new talent can make an impact.”

Tributes to girl after home death
Tributes have been paid to a four-year-old girl who died on Christmas Day following an accident at her home.It is understood Emily Hughes was injured when a television fell on her at her home in Coedpoeth, Wrexham, on Christmas Eve.North Wales Police were called at 1820 GMT, but doctors at Liverpool’s Alder Hey Children’s Hospital were unable to save Emily and she died the next day.Officers said her family were “distraught”.A spokeswoman for North Wales Police said: “As a result of a very sad and tragic accident on Christmas Eve, reported to police at 6.20pm, a four-year-old girl from the Coedpoeth area of Wrexham passed away at Alder Hey Children’s Hospital on Christmas Day."She was just a bubbly little, cute little four year old girl really"Neighbour in Coedpoeth, Wrexham “The family are understandably very distraught by this tragic accident and police are making a plea for the privacy of the family to be respected at this incredibly difficult time.”The North East Wales coroner’s office has taken over the investigation into the death.Emily’s family told BBC Wales that it was a freak tragic accident, and asked to be left in peace to grieve for their daughter.Neighbours in the street have also paid tribute to Emily.Many knew the family well, and were too shocked to say anything.However, one said: “She was just a bubbly little, cute little four-year-old girl really.”I’ve met them a couple of times and obviously I’ve seen the kids and stuff. It’s absolutely terrible… it’s shocking.This article is from the BBC News website. © British Broadcasting Corporation

NHS ‘fast losing its compassion’
By Jane DreaperBBC News health correspondentThere has been a deterioration in the level of compassion in the NHS in recent years, the head of a leading health think-tank has told the BBC.The King’s Fund is running a special project to try to get nurses and other staff to focus on being compassionate.Its chief executive, Niall Dickson, said this was a fundamental issue that should be a top priority for every hospital board.He blames work pressures for staff being less feeling."It’s to do with staff facing very difficult situations - because patients are sicker and hospital stays are shorter - rather than them all turning into nasty people"Mr Dickson’Compassion key to care’Compassion is listed as a core value in the draft constitution for the NHS in England, and the government is developing methods for measuring it.Mr Dickson said: “I have very little doubt that we’ve seen a deterioration in the level of compassion that is shown by staff to patients.”It’s to do with staff facing very difficult situations - because patients are sicker and hospital stays are shorter - rather than them all turning into nasty people.”If we can’t get compassion into our healthcare, the system is failing. It’s as fundamental as that.”The board of every hospital should be looking at this as one of their top priorities - what is it like for someone who’s coming in to be treated, and how can we improve that experience”The King’s Fund is piloting an idea called “Schwartz rounds” at several NHS hospitals.This involves staff from various disciplines getting together every month to discuss the aspects of care that they have found difficult.The Patients’ Association’s head of special projects and research, Vanessa Bourne, said: “Compassion is not an extra - it is an essential of nursing care.”It comes in many forms: privacy, dignity and, above all, caring for others as you would wish to be cared for yourself.”There’s a renewed emphasis on looking at the quality of patients’ experience in the NHS, following Lord Darzi’s review of the health service in England.Ministers are strengthening the emphasis placed on patient views in rating NHS trusts.


Kirk Kerkorian completed selling all his Ford Motor Co. shares, a plan announced in October when the billionaire investor said he would focus his investments on energy, gambling and hotels. Kerkorian’s Tracinda Corp. no longer owns Ford shares
Source: www.tennessean.com

CANADA STOCKS-Toronto index soars on commodity strength - Forbes
CALGARY, Alberta (Reuters) - Toronto’s main stock index jumped nearly 4 percent Monday, led by resource producers, as oil and gold prices rallied on Middle East violence. The Toronto Stock Exchange’s S&P/TSX composite index rose 326.74 points, or 3.9
Source: www.forbes.com

TASE’s main indexes plunge 50%-80% in 2008 - Jerusalem Post
Investments in the main indexes of the Tel Aviv Stock Exchange in 2008 lost 50 percent to 80% of their value. The Tel Aviv Stock Exchange. “If 2007 was marked as one of our best years, 2008 was one of the worst years we have seen, due to the global
Source: www.jpost.com

Blade stock market game offers prizes - Toledo Blade
It has been a bitter year for stock investors in 2008, but readers can try to get a prize next year by entering the 2009 Blade Stock Market Game. The rules and entry form require contestants to submit an entry form by year’s end with four stocks
Source: www.toledoblade.com


The Marxian Interpretation Of History Marx’s interpretation of history constitutes an integral part of Marxian doctrine. It was his intent to peer into the future and to determine
Source: economictheories.org

Economic news and job reports - CNNMoney.com
Up to the minute economic news, expert commentary, economic indicator data and economic calendar from CNNMoney.com.
Source: money.cnn.com

Iowa Department of Economic Development
web site for the Iowa Department of Economic Development YOU’VE ARRIVED. While Iowa has been impacted by the floods of 2008, it is important to know that our spirits are strong
Source: www.iowalifechanging.com

End of post. . . . . . . . . . . . . . . .. . . . .

Malaysiakini

Others have already moved on to the ‘new dawn’ held out by Pakatan Rakyat in the five states that it has administered since the general election on March 8.

The year’s unresolved issues, therefore, revolve around the ‘what now’ of political transition on both sides of the divide. And whether the hitherto silent - from plebian to royalty - can keep politicians in line.

Here are 10 unsolved cases of 2008. This list is by no means complete. And don’t expect answers anytime soon.

Riding high on its successful 30,000-strong people’s rally in Kuala Lumpur the previous November, the Hindu Rights Action Force (Hindraf) started the year on a high despite the absence of five detained leaders and its chairperson who went into self-imposed exile.

Malaysiakini reported in July that two senior officials in government subsidiary Pempena Sdn Bhd were involved in scams that allegedly diverted millions of ringgit in tourism-development funds into private pockets.

Mentari Services Sdn Bhd chairperson Capt (rtd) Zahar Hashim, the former UMNO Petaling Jaya Selatan division chief, exposed ‘irregularities’ in the deal and existence of a cheaper alternative.

Better known for discretion in matters of politics and governance, the palace took active interest over the post-election appointment of the menteri besar in three states - Perlis, Perak and Terengganu.

Tengku Mahkota Kelantan Tengku Muhammad Faris Petra caused a stir with a speech on Malay unity and rights at a forum in Kuala Lumpur on April 12, leading to MCA president Ong Ka Ting and DAP chairperson Karpal Singh lodging police reports.

Controversies over Islamic matters made the headlines almost every month this year.

The religion came into the picture again when about 100 Muslim groups called for Islamic teachings and practices to figure prominently in the election agenda of political parties.

It did not help Pakatan when leading PKR member, Kulim-Bandar Baru MP Zulkifli Noordin, figured prominently in protests against a forum on religious conversions organised in August by the Bar Council.

The controversies mounted, as Muslim students described the school uniform worn by girls as being too sexy and the National Fatwa Council banned the practice of yoga among Muslims.

There is nothing to suggest that religion will not continue to be used to divide and rule.

The once-incontestable notion of ketuanan Melayu (Malay supremacy) came under siege after voters sent out a clearest demand yet for a ‘new Malaysia’.

On April 15, PKR de facto leader Anwar Ibrahim alleged that Malay supremacy is only advocated by Umno leaders to enrich the elite and that ketuanan Rakyat (People’s supremacy) is the way to go.

Former de facto law minister Zaid Ibrahim agreed that the Malay supremacy concept has failed, and that an egalitarian form of democracy must be practised.

Gerakan president Koh Tsu Koon noted that the right term for the special position of the Malays is kedudukan istimewa as stipulated in Article 153 of the federal constitution.

Information Minister Ahmad Shabery Cheek insisted that ketuanan Melayu did not imply a master-slave relationship, but refers to the institution of the Malay monarchy.

When MCA deputy president Dr Chua Soi Lek said the concept is no longer relevant, he was investigated under the Sedition Act 1948.

The debate is far from over.

This fed into the general election and unprecedented loss of faith in the premier, who will step down next March. Umno wanted him out earlier, but he wangled time to set key ‘reforms’ in place.

In tandem with the Bills, proposals were tabled for a code of ethics for judges and for protection of witnesses.

Abdullah is due to re-table the watered-down Special Complaints Commission Bill in February but this is unlikely to be much more than another lame duck.

Gerakan president Koh Tsu Koon and MCA deputy president Dr Chua Soi Lek have told UMNO to discard its ketuanan Melayu mindset, if it hopes to regain non-Malay support.

The year started optimistically enough. In January, the Sabah development corridor was launched to add to the regional projects under the Ninth Malaysia Plan.

Financial troubles, however, were brewing in Europe, Japan and the US. At the end of the first quarter, government-linked research group MIER forecast lower growth of 5.4 percent compared to 6 percent earlier.

The momentary relief brought on by dropping world crude oil prices has yet to filter through to the sale of goods and services. As anxiety levels go up over bread-and-butter issues - and possibly high oil prices again, something will have to give…

PKR de facto leader Anwar Ibrahim must regret having marked Sept 16 as the date for opposition Pakatan Rakyat to take over Parliament and Putrajaya and making extravagant promises.

It all began a month after Pakatan’s powerful showing in the general election. Anwar capitalised on discontent among MPs in BN, especially those from Sabah and Sarawak who felt their loyalty had not been adequately rewarded.

With 82 federal seats in opposition hands, Anwar put about the claim that he had the support of at least 31 defectors to topple the government. BN retorted that Anwar was bluffing and resorting to sneaky tactics to destabillise the administration.

With 2009 stretching before him, Anwar can have his pick of dates on the new calendar if he does not want to wait for the next polls due by 2013. There’s also that secret “list of defectors” to reveal, if it exists.

Ahead of the 12th general election, spray-painted messages in public places urged voters to choose ‘anyone but UMNO’. It was prompted by fury over the arrogance of the Malay-based party, with even its BN partners.

UMNO paid dearly for this in the polls, triggering an instant demand for accountability that led to the door of party president and premier Abdullah Ahmad Badawi. He was told to go, despite his plan to hand over power to deputy Najib Abdul Razak in mid-2010.

The beleaguered Abdullah then brought forward his departure and also said he will not defend his post during the UMNO polls in March. Najib then won the presidency uncontested and, by convention, will become prime minister.

A divided and unrepentant UMNO will see support being further eroded within and without BN.

All eyes are now on Najib and whether he will be able to pull off the party’s great escape - that is, if his lieutenants don’t turn against him.

Global Warming or Global Cooling?

Scientists are going to arguing about this for a long time to come.  The only concensus I have found is that everyone needs to do what they can NOW to help the planet by using less resources and conserving what resources we already have.  The article on the WordPress mainpage says a lot.

Don sent me his AGU paper for publication and discussion here on WUWT, and I’m happy to oblige - Anthony

Abstracts of American Geophysical Union annual meeting, San Francisco  Dec., 2008

Solar Influence on Recurring Global, Decadal, Climate Cycles Recorded by Glacial Fluctuations, Ice Cores, Sea Surface Temperatures, and Historic Measurements Over the Past Millennium

Global, cyclic, decadal, climate patterns can be traced over the past millennium in glacier fluctuations, oxygen isotope ratios in ice cores, sea surface temperatures, and historic observations.  The recurring climate cycles clearly show that natural climatic warming and cooling have occurred many times, long before increases in anthropogenic atmospheric CO2 levels.  The Medieval Warm Period and Little Ice Age are well known examples of such climate changes, but in addition, at least 23 periods of climatic warming and cooling have occurred in the past 500 years. Each period of warming or cooling lasted about 25-30 years (average 27 years).  Two cycles of global warming and two of global cooling have occurred during the past century, and the global cooling that has occurred since 1998 is exactly in phase with the long term pattern.  Global cooling occurred from 1880 to ~1915; global warming occurred from ~1915 to ~1945; global cooling occurred from ~1945-1977;, global warming occurred from 1977 to 1998; and global cooling has occurred since 1998.  All of these global climate changes show exceptionally good correlation with solar variation since the Little Ice Age 400 years ago.

The IPCC predicted global warming of 0.6° C (1° F) by 2011 and 1.2° C (2° F) by 2038, whereas Easterbrook (2001) predicted the beginning of global cooling by 2007 (± 3-5 yrs) and cooling of about 0.3-0.5° C until ~2035.  The predicted cooling seems to have already begun. Recent measurements of global temperatures suggest a gradual cooling trend since 1998 and 2007-2008 was a year of sharp global cooling. The cooling trend will likely continue as the sun enters a cycle of lower irradiance and the Pacific Ocean changed from its warm mode to its cool mode.

Comparisons of historic global climate warming and cooling, glacial fluctuations, changes in warm/cool mode of the Pacific Decadal Oscillation (PDO) and the Atlantic Multidecadal Oscillation (AMO), and sun spot activity over the past century show strong correlations and provide a solid data base for future climate change projections. The announcement by NASA that the Pacific Decadal Oscillation (PDO) had shifted to its cool phase is right on schedule as predicted by past climate and PDO changes (Easterbrook, 2001, 2006, 2007) and coincides with recent solar variations. The PDO typically lasts 25-30 years, virtually assuring several decades of global cooling.  The IPCC predictions of global temperatures 1° F warmer by 2011,  2° F warmer by 2038, and 10° F by 2100 stand little chance of being correct. “Global warming” (i.e., the warming since 1977) is over!

Figure 1.  Solar irradiance, global climate change, and glacial advances. Click to enlarge

The real question now is not trying to reduce atmospheric CO2 as a means of stopping global warming, but rather (1) how can we best prepare to cope with the 30 years of global cooling that is coming, (2) how cold will it get, and (3) how can we cope with the cooling during a time of exponential population increase?  In 1998 when I first predicted a 30-year cooling trend during the first part of this century, I used a very conservative estimate for the depth of cooling, i.e., the 30-years of global cooling that we experienced from ~1945 to 1977.  However, also likely are several other possibilities (1) the much deeper cooling that occurred during the 1880 to ~1915 cool period, (2) the still deeper cooling that took place from about 1790 to 1820 during the Dalton sunspot minimum, and (3) the drastic cooling that occurred from 1650 to 1700 during the Maunder sunspot minimum. Figure 2 shows an estimate of what each of these might look like on a projected global climate curve.  The top curve is based on the 1945-1977 cool period and the 1977-1998 warm period.  The curve beneath is based on the 1890-1915 cool period and 1915-1945 warm period.  The bottom curve is what we might expect from a Dalton or Maunder cool period.  Only time will tell where we’re headed, but any of the curves are plausible.  The sun’s recent behavior suggests we are likely heading for a deeper global cooling than the 1945-1977 cool period and ought to be looking ahead to cope with it.

Figure 2. Global temperature variation 1900 to 2008 with projections to 2100. Click to enlarge.

The good news is that global warming (i.e., the 1977-1998 warming) is over and atmospheric CO2 is not a vital issue. The bad news is that cold conditions kill more people than warm conditions, so we are in for bigger problems than we might have experienced if global warming had continued. Mortality data from 1979-2002 death certificate records show twice as many deaths directly from extreme cold than for deaths from extreme heat, 8 times as many deaths as those from floods, and 30 times as many as from hurricanes. The number of deaths indirectly related to cold is many times worse.

Depending on how cold the present 30-year cooling period gets, in addition to the higher death rates, we will have to contend with diminished growing seasons and increasing crop failures with food shortages in third world countries, increasing energy demands, changing environments, increasing medical costs from diseases (especially flu), increasing transportation costs and interruptions, and many other ramifications associated with colder climate. The degree to which we may be prepared to cope with these problems may be significantly affected by how much money we waste chasing the CO2 fantasy.

All of these problems will be exacerbated by the soaring human population.  The current world population of about 6 ½ billion people is projected to increase by almost 50% during the next 30 years of global cooling (Figure 2).  The problems associated with the global cooling would be bad enough at current population levels.  Think what they will be with the added demands from an additional three billion people, especially if we have uselessly spent trillions of dollars needlessly trying to reduce atmospheric CO2, leaving insufficient funds to cope with the real problems.

Figure 3. Global population.

–>

I doubt it will be published. AGU is fully vested in AGW-”science”…

How come a schmuck like me could look at these graphs back in the early 2000’s and clearly see we were about to go into a cold spell, yet Nobel Prize winners who invented the Internet couldn’t? One has to be blind not to see the cycles. My guess is Al Snore and his crew could see the cycles too, but they have an agenda that they want to get through and know most people are sheep, so they just disregard it.

Good graphics - First report in a long time that has reported on periodic solar changes.

I will get it printed and to my congressman!

Though primarily a political and news analysis web forum, It will reach an additional few million (well - hundreds of thousands per week) more readers over at Free Republic.

So, we are in a warm period due to high solar output, nearly as warm as the Medieval Climatic Optimum. Easterbrook’s projection shows a very minor fluctuation downwards, but we still are in a warm period. Predictions of mass starvation seem unwarranted.

So, my question is, Does anyone think a downward cooling on the order of the Sporer or Maunder Minima is in the cards?

By the way, Easterbrook is using either the UN’s high or medium population projection. The medium projection assumes that all countries, including Europe, China and Japan, have fertility levels at the replacement level, and population growth is driven by the very young Third World age structure. It is more likely that fertility levels in the developed countries will remain well below replacement levels and that those in the Third World, which are now rapidly falling, will continue to fall. In that case, the total world population should peak around 8 billion, or a little less, around 2030 and fall slowly throughout the remainder of the century. No need to promote Ehrlich’s dementia. Read Julian Simon (RIP).

“The IPCC predicted global warming of 0.6° C (1° F) by 2011 and 1.2° C (2° F) by 2038, whereas Easterbrook (2001) predicted the beginning of global cooling by 2007 (± 3-5 yrs) and cooling of about 0.3-0.5° C until ~2035. ”

When was this prediction made?

One of the advantages to having an analysis of climate by a geologist such as Don Easterbrook is that a geologist has a better grasp of the time frame within which climate operates.

The evidence of the PDO is extensive, as is that of glacial fluctuations in the PNW. What is truly amazing to me is that the clique of paleoclimate “experts”, whose knowledge appears solely limited to certain sub-alpine tree-ring collections, could ignore such well documented climate data.

When I was an undergraduate, my paleo prof told an interesting story one day during lecture. He said the typical undergrad knows a little bit about many things in science, but as his studies progress he learns more and more about less and less until finally, when he is awarded a Ph.D., he knows an awful lot about practically nothing.

This appears to be what has happened in the climate field. We have people who, while they have a great deal of knowledge about computer programming, and perhaps even have some training in the physics and chemistry of climate systems, are ignoring a vast sea of empirical observations that contradict the results of their climate models.

The vast amounts of research moneys that have been placed in the hands of the the modelers have been successful in creating ever more complex programs on bigger and better computers, but the models still fail to account for the real data (which many of the modelers dismiss as noise).

Thanks, Dr. Easterbrook, I have followed your work for many years (my first earth science project was a study of the glaciation of the Fraser Valley). Thanks also to Anthony for giving greater distribution of Dr. Easterbrook’s analysis.

I think that should be “20 years of global cooling that is coming”, as the paper indicates that we are 10 years into a 30 year period of global cooling.

Ooops! Close tag!

This is an excellent paper and I feel hits the real issue squarely on the head. Having written and published this paper on this informative blog - Keep Up the great Work Anthony! - do you have any plan to submet it to mass communications, Don? I believe the Washington Post, CNN and The NY Times have all done some alternative AGW articles lately. Fox is always open. Are you going to try these channels as well as scientific journals?

Where do Easterbrook’s numbers for solar irradiance come from?

I think that if a protracted period of cooling does continue then this will cause global population to naturally decline. Historically speaking warming periods have led to population increases and cooling periods- with the corresponding decline in agricultural output and economic prosperity- have led to decreases in global populations. Or at least a stalling of the increase in population.

Cold=drought=famine. John Steinbeck´s “Grapes of Wrath” scenario.

One thing I never q

In the recent decadal warming, thta has now ended, you can see the shift in climate regions here Since 1990 through 2006:

It nicely brackets the 1998 El Nino spike. It is a good resource to figure shifts in reverse in North American agricultural productivity depending on the degree of shift toward cooling. In 16 years of warming there was a 1 degree shift equivalent to a hardiness zone change of about 1.5 degrees latitude at the 30th parallel; 2.0 degrees latitude at the 35th Parallel, and 2.5 -3.0 degrees latitude at about the 40th parallel (with wider shifts inland and narrower toward the coasts.

It would be expected to see the same fall in productivity over a similar period of cooling and climate zones shifting northward again. However, since that rise required structural adjustments that limited the realization of increased natural productivity below its potential gains (capitalized inputs have to be acquired to exploit the potential gains) the loss of natural productivity from cooling will be felt much more sharply and the economic dislocation harsher, because nothing puts a floor on annual productivity loss similar to the structural cap on productivity gain .

Under the scenario of a cooling similar to 1945-1977, the Easterbrook projection shows a continued upward trend in global temperature anomalies over the next century. What is driving this?

Reality settles in.

That certainly covers a lot of ground.

One attack on this study will be that it’s based on mere historical trends rather than magical computer simulations.

Hey, what happened to Global Warming?

Gio-

‘Bob Sykes (06:21:53) :

So, my question is, Does anyone think a downward cooling on the order of the Sporer or Maunder Minima is in the cards?’

Taking a gander at Easterbrooks progression, it only takes 2 decades to hit glacially numbing cold. All that is needed is a comatose Sun.

To improve the paper, I would have added sections explaining each of the forcings mentioned, with scientific study references. The ocean oscillations and solar irradiance needs more than just correlations but also mechanism theories. There are lots of cyclic things that can occur together but do not have a mechanism that demonstrates plausible cause and effect. For example, people always (or should) winterize before winter sets in. That does not mean that doing so causes winter to set in. Without a plausible and standard scientific treatment to the subject this is an opinion paper, not a scientific review of the literature with corresponding mega analysis.

Jason hits this on its head. The increase in TSI in the first half of the 20th century didn’t happen, so if you want to ascribe the wiggles to solar activity, then the higher temps in the last half of the 20th century must be due to other causes. E.g. AGW, which is why the AGW crowd loves the solar connection. There is good evidence now that TSI during the Maunder Minimum was no lower than today [right now], so the solar connection is not so obvious.

It is a pity that Easterbrook hitches his wagon to the Sun, as that weakens his otherwise good case.

oops, meant meta analysis

Anecdotal cooling evidence from Colorado: The AGW alarmists told us that by now ski resorts would be suffering from global warming. I’ve lived in Breckenridge, CO since 2005 and haven’t seen any signs that (a) ski seasons are getting shorter (b) snowfall is decreasing or (c) temperatures are getting warmer. In fact, ski seasons are starting in October and lasting until June, resorts have been setting snowfall records (Beaver Creek just set a record for December snowfall and numerous resorts had record snow last season), and temperatures are downright frigid. I’m looking forward to many more powder days as global cooling continues!

Most solar physicists believe that the interplanetary magnetic field comes out of coronal holes. If so, the IMF strength might be a measure of coronal hole area [assuming same basal field strength], thus suggesting that coronal holes are declining [if you subscribe to the idea that the IMF now is lower than lately].

If you hitch solar changes to ocean changes as the article does then there is no problem explaining all the past and present global temperature observations without involving CO2 at all.

Easterbrook confirms what I have been saying in published articles since April 2008.

For a relevant example see this link:

Woh,

Look at the newest Ocean SST map.

Negative PDO still in place but the developing La Nina trend just got much stronger over the past week.

80% of La Ninas and El Ninos start developing in the early summer and peak around December. This one is starting to look like an atypical 20% one.

Coronal holes form from decaying sunspots, so rather than competing, sunspots feed coronal holes. There are a few exceptions to this: if an active region pops up in the middle of a coronal hole the region may temporarily close the hole, but soon the additional flux wins and the hole opens up again.

Oh great, another La Nina.

TSI is NOT ’some nebulous concept’, it is a very precise measurement of the total solar output of radiant heat, which is what directly heats the Earth’s Surface [including some back-radiation from GHGs].

If you invoke PDO the way you do, you don’t need CO2 nor the Sun.

Deadwood

Your comment is prioceless

“When I was an undergraduate, my paleo prof told an interesting story one day during lecture. He said the typical undergrad knows a little bit about many things in science, but as his studies progress he learns more and more about less and less until finally, when he is awarded a Ph.D., he knows an awful lot about practically nothing.”

I correspond and work with a lot of scientists and am in awe of their depth of knowledge on ‘their’ subject but shocked how narrow that area of interest is. It perhaps illustrates why context and perspective is so often lacking in scientific works.

TonyB

Answer: Easy! Just pretend it’s getting warmer!

TonyB, Deadwood,

….on the other hand a consultant learns less and less about more and more until he knows practically nothing about almost everything.

There are people who can be described as ‘a goldmine of information’… and others who are ‘minefields of information’ (i.e. don’t get them started on a pet subject)

giovanniworld (09:32:35) :

Hey, what happened to Global Warming?

You mean the political movement of the late 20th Century? It was overwhelmed by Climate Realism.

Sorry, Leif.

When I wrote that I was under the impression that ‘Total Solar Irradiance’ was a general term covering all the different solar effects ‘in total’.

Nevertheless my point about the behaviour of others still seems to ring true.

So, my question is, Does anyone think a downward cooling on the order of the Sporer or Maunder Minima is in the cards?’

I think personally that at the moment the odds are less than 25%, however the longer the delay to cycle 24, the more those odds increase. I think you need PDO/AMO forcing, weak sun and maybe volcanoes as well to trigger such an event, however.

Other factors likely to increase probability: continued heavy early winter snowfall across Canada, Northern US and Europe for the next 5 years; a sustained year-on-year recovery of summer ice in the Arctic; a second and third winter/summer like the 2007/08 one in Alaska.

One thing I would say though under such circumstances: expect some deserts to turn into fertile lands. Rainfall in southern Spain and North Africa has been much heavier in the past two years, which clearly will have an effect on their desertification status. Crop cycles will move southward, not be wiped out, just as with increasing heat until recently wine crops in the UK have become much better. It’s up to mankind to adapt innovatively to that, not bleat that the world’s growing areas are wiped out.

Actually Leif the PDO doesn’t seem to quite do it on it’s own but I can live with a solar input of, say, 10% over extended periods of time with the effect amplified upwards or downwards by the net global effects of the oceans from time to time.

I think we would have a problem ascribing the overall warming from 1600 to date on the oceans alone so the sun has to remain in the equation to provide slow longer term background changes.

Any system as complex as the climate has internal oscillations. One may ask: what caused the Sun to vary? The answer [the best we know it - although there are fringe ideas about astrology and galactic center and spiral arm traversals and electric storms from Jupiter, etc] is ‘internal oscillations’. People that cannot accept oscillations of the climate system seem happy to accept oscillations of the Sun. Go figure…

Glaciers and bitter cold seem to come from the North and extend southward, not on a global scale or the other way around. It now seems reasonable to say that when these flip, northern weather is significantly changed. A cold flip brings cold, a warm flip brings warmth. Since the various ocean cycles are not in synch at this moment, it is reasonable to guestimate that occasionally they flip together, just like my oft repeated example of bus windshield wipers. And there is more than just the two major ones. I can see very bitter cold, extensive glacier and sea ice growth, and significant advance into areas unseen by the present generations, and devastation to flora and fauna alike were this to happen. It would happen rapidly with precious little time to prepare, maybe a season or two of early warning for only those watching for it. The rest would be caught unaware of impending extreme danger. I can reasonably think that ocean currents alone would be the cause of such an event. Of course, the discussion would still go on about what causes ocean circulation and flips. And for those of you with a religious bent, what causes the cause.

‘Leif Svalgaard (11:01:07) :

Coronal holes form from decaying sunspots, so rather than competing, sunspots feed coronal holes. There are a few exceptions to this: if an active region pops up in the middle of a coronal hole the region may temporarily close the hole, but soon the additional flux wins and the hole opens up again.’

“the sun has to remain in the equation to provide slow longer term background changes.”

“Actually Leif the PDO doesn’t seem to quite do it on it’s own”

Some might argue that the signals in geomagnetic activity have a comparitve signal to the PDO over similar time windows.

The modeling and theory is reasonably well understood.

Solar minimum is often characterized by the disappearance of long-lived coronal holes as they are disrupted by emerging active regions, but new holes quickly form as the flux is there to allow them to.

Steven G

The sun will drive it. It won’t get as warm though if there is a longer cooling period as observed in the 1800 or 1880 cool periods.

Leif Svalgaard (13:28:44) :

I’m having fun yanking Tamino’s chain with some of Easterbrook’s data.

Good luck with that ;<). I read his blog on occasion and it amazes me how illogical and circuitous his logic is, ie. he just switched position in that thread from regional values to “global” values depending on whether it fits with the data he needs to disprove.

Regarding posts about La Niña signals, ocean temps in Monterey Bay are the coldest they’ve been in at least a few years. About 52-53 farenheit the last few days. I had been getting used to relatively balmy wintertime water temps(55-57), but not anymore. Usually the water doesn’t get really cold here until March-April, when the west coast high pressure gradient causes deepwater upwelling. If this keeps up, spring 2009 Santa Cruz surfing could be brutal. Really bad spring upwelling can see the water drop to the upper/mid 40s. Numb digits.

Clarification: the coldest DECEMBER ocean temps in the last few years.

I( don’t think we were discussing THOSE background changes on the time scale of billions of years, but rather if there were any on a time scale of centuries that are large enough to have any effect.

maksimovitch,

I’ve formed the impression that the oceans behave pretty much as they please and dominate atmospheric temperatures when the various oceanic cycles combine with each other and/or solar changes.

Thus I’m not sure that near bottom ocean temperatures tell us very much since they could vary independently of or negatively with SSTs and atmospheric temperatures.

Can you clarify what you think your link tells us ?

Leif,

If the sun were not a factor I would have expected the recent spell of neutral PDO combined with the postulated CO2 forcing to have caused a bigger bounce back over recent months especially since any CO2 forcing has been suppressed for 10 years now. It didn’t happen and the N. Hemisphere winter seems to be pushing the numbers down again now with a new La Nina developing and cycle 24 still not really evident.

The planet informs and we conform.

Maybe, but such oscillations must have some kind of physical explanation, or else it is just astrology, voodoo or whatever you want to call it.

The best argument against planetary alignments modulating solar activity, is that the physical link does not seem to be there…..hence references to astrology. Explaining solar activity of climate variations as just ‘internal oscillations’ is on par with astrology unless there is an underlying physical explanation.

I’m surprised that no one has mentioned Henrik Svensmark’s work in this discussion.

@Bob Sykes (06:21:53) :

To my knowledge the population growth has be at the upper end of forecasts in the past.

I don’t think the current projections take into account the rapid population growth in the islamic world that is rather independant on development and personal income. So, as the islamic portion of the world population increases rapidly over time, the population growth will pick up again, irrespective of stagnating growth elsewhere.

More evidence of La Nina’s return.

Where’s Mary (no it isn’t) Hinge, if you’ll pardon the expression?

The next minimum is over a century away. The next cold patch is sooner than that. 2009 will be cool/cold but 2010 will have the warmista up in arms again. It will not be until after 2011 that we see a real cooling trend.

What a swamp that tamino site is.

It beggars my belief Leif. I hope you wiped your shoes as you left.

Has anyone got a source for long-term precip.- temperature data from a north African source. I’m intrigued by the greening of the Sahel.

Pamela, what triggers the ‘cold’ - ‘warm’ flips?

This will only motivate the alarmists to implement their agenda ASAP. Once it’s irrefutable that global cooling has occured, they’ll claim victory by saying that their CO2 reductions saved the planet.

Slightly OT (or maybe not), the March 2009 issue of Sky & Telescope is running an article entitled, “The Sun & Global Warming”. The tagline in the ad reads, “Is an increase in solar luminosity heating up our planet?”. I’d be interested in Leif’s take on this… as one of the more balanced popular periodicals, I’m keeping my fingers crossed for an interesting read.

I’ve always thought the TSI was not the cause of global warming or cooling because it seems to only vary by .1% over time. I have yet to hear a discussion on the effects of all those sunspot flares and coronal mass ejections that hit earth during high sunspot years. They surely added a lot of extra energy to the atmosphere. Being a non-linear event, that energy must be almost impossible to measure, but I’m guessing that extra energy from sunpot activity is why sunpots and global temperatures track so well together.

I can hear the interview playing now.

Interviewer: So as a result of your campaigning, temperatures are falling?

Campaigner: Yes! We won! Just like we said all along.

Interviewer: And trillions of pounds were spent?

Campaigner: A price worth paying!

Interviewer: And millions are dying from food shortages?

Campaigner: A price worth pay… what… no… I mean yes… I mean the oil companies must have killed them… or something. Yes, there’s a world wide consensus on that. You know that! You’re just denying that we won! What are your qualifications anyway! I’ve had enough of this. The media has been against us from the start! (Storms off)

Interviewer: OK… Well… we’ll just go now to a new documentary on how electric cars are responsible for accelerating the next Ice Age and why electro-magnetic off-sets should become compulsory and after that we’ll hear from the High Chief Scientist on his plans to support the willful destruction of fridges.

I have nothing but the utmost respect for Lief Svalgaard and honor him as a scientist.

It does rather disturb me when he tries to demonstrate that the output of the Sun has been constant for over 200 years, when other data is not always in agreement.

Have any of you purchased an “Easy Bake Oven” for you daughter? How many watts/meter does that little light bulb put out, while cooking a cake for our little darling?

Something does not smell right….

Leif said:

“Any system as complex as the climate has internal oscillations. One may ask: what caused the Sun to vary? The answer [the best we know it - although there are fringe ideas about astrology and galactic center and spiral arm traversals and electric storms from Jupiter, etc] is ‘internal oscillations’. People that cannot accept oscillations of the climate system seem happy to accept oscillations of the Sun. Go figure…”

The oscillations of solar input to the earth (earth’s rotation and orbit) obviously cause the major “oscillations” of night/day and summer/winter. So the biggest driver for the earth is external. Then there are internal “oscillations” such as storage of heat in the deep ocean, biomass growth etc which modify the external influences. A few details to be worked out here… but in principle it seems pretty obvious that both types of oscillation need to be considered.

old construction worker (19:41:09) :

“Who is arrogant enough to say man can control climate change?”

Does anybody have a link of albedo change versus time? At least over the satellite period?

Nice pendulum demonstration, Leif. One can see what would happen with three or more coupled ones, which is surely closer to what the climate system is .

One would not take out the sun intensity oscillations due to the turning of the earth around it, in these calculations, because they are one of the pendulums probably bouncing off the ocean currents. Day and night might be too fast to affect the inertia of the final oscillating system.

If temperatures fall as we seem to suspect, Al Gore will probably take credit by fudging reported results with his friend Mr. H. They can then keep up the pretense of reducing CO2 and keep all the scientists working until one day in the distant future some smart egg figures it all out. OTOH, I hope temperatures continue to drop enough that in 4 years the American public will have had enough BS to throw out the AGW baby with the IPCC bathwater!

Can anyone give a hint to what actually are the references (Easterbrook, 2001, 2006, 2007) mentioned in the abstract.

Leif said:

And the output has not been ‘constant’. Its variation is just much smaller than we [including me] used to think.

Could it be solar input, as opposed to solar output? Even if sun had been absolutely stable, could something like slow varying distance to the sun, number of asteroids between earth and sun, etc provide enough input power variation to cause all this?

Just to second this notion… We can grow at least 10 times as much food as we do now. How? Hydroponics, Greenhouses, etc. And that is without even taking the minor effort to put gardens in instead of lawns or put greenhouses in deserts and other inhospitable places.

See:

These are a couple of semi-random pages picked from a Google search. There is a bit of un-clarity from the quoting of production and yield but not making clear what’s what. You get about 20% to 50% more crop / acre / planting from just hydroponics. Add the greenhouse with faster crop cycles, more crop cycles, higher yields, more degree days, lack of pests, etc. and you get 10 times as much total yield per year per unit area.

Oh, and you use about 1/10th the water, almost no pesticides, fumigants, etc.

So why don’t we do this now? (Why? don’t ask why… down that path lays insanity and ruin…)

Basically, farmers do not grow for maximum yield, they grow for maximum profit with the least effort (least money & labor). They only move to more intensive farming techniques when market prices justify it. Basically, there is not enough demand to justify it.

(And no, there is no shortage of materials to make greenhouses. The poles and glazing can all be made from plastics made from plants, if desired, and there is no shortage of rock and sand for bricks, cement, glass, whatever.)

All the stories of the form “We are going to run out of {food, fuel, energy, fresh water, living space, …]” are just that; stories to scare the children and the gullible.

This attributes all the gain to more degree days. It isn’t. There have been dramatic improvements from seed development and more precise fertilization regimes. In some cases the newer faster varieties have allowed for two crops to be produced when before there was only time for one. (Old corns, for example, were 120+ days. I have a 50 day corn in my seed locker…)

A more accurate prediction would look at total degree days before vs now and adjust for the availability of seed stock that needed fewer degree days. There could easily be no net change.

(I don’t expect no net change. I expect folks to plant what they always did and have some crop failures before they change over, but I could be wrong. Modern farming is far more computerized and technical than it was just a couple of decades ago; and they might well adjust same season to colder weather predictions. I’ve already started planting ’siberian’ tomatoes instead of brandywine. The siberian sets fruit at 45F where the brandywine sets at about 80F and takes twice as long to grow…)

And here NASA links it to ozone modulation with UV (with obligatory GW nag):

I am a structural engineer. That is just a pair of coupled pendulums that happen to hit eigenvalues for some parameter choices (and some of them are invalid since the theory is valid only for small oscillations).

But this does nothing to explain the physical nature of the oscillations of solar activity or oscillations of the earth’s climate, or whether they are coupled.

How to deal with an increasing world population ???

Wow! Respectfully, how do you explain the fact that we have had almost consistant coronal holes all through this year, yet very few sunspots? Seems to me its time to change your theory on what causes Coronal holes:)

I made k=2 and theta2dot= 2. System was stable for 64 seconds and was quite entertaining, until the sun blew up or maybe the earth plunged into the sun!! Whatever!!

DR M.A. Rose,

I believe some folks at the JPL did a study about a decade ago arguing that changes in both the PDO and AMO lead to the “dust bowl” decade of the 1930s. I don’t think anyone has scientifically tied global temps to changes in the AMO, but medium and long range forecasters both in Europe and North America give this teleconnection a close focus.

I can’t provide a link (it is now gone) to the JPL paper. But, the gist of it said that slightly cooling Pacific waters (mainly Central Pacific) with abnormally warm Central Atlantic waters (the AMO was in its warm phase) caused the Gulf of Mexico fetch to migrate far to the south (Eastern Mexico). The Great Plains therefore lost its main source of moisture. Dry Easterlies dominated the weather patterns from Arkansas through Montanta from 1931-1939. The Bermuda High extended itself into Southern Canada, and the 1930s became the hottest decade of the century.

Currently the AMO is in its positive mode, and has provided Europe with fairly warm climate for the last 15 years. If I am not mistaken, the AMO oscillates every 25 years. So it could remain in a positive mode for antoher decade. As far as I know, we could be stuck ina cold PDO/Warm AMO for the next several years. This may not bode well for precipitation across North America. But again, not all weather analogs play out the same. The AMO could be shifting to a negative mode soon according to some forecasters (most notably Joe Bastardi).

I think we should be clearer when talking of global population(s). For the developed nations, 18 of 20 of them will see stable but aging demographics. And if the demographics do not change, the developed nations will see population decreases by 2030. Most of the developed nations have fertility rates below 1.8 (the lowest are Russia, Japan, Greece, Italy, and Spain, and perhaps China with rates around 1.1). Only the US (2.1) and Austrailia (2.2) have fertility rates at the replacement levels. Scandanavia and France average about 1.8, and the rest of Europe hovers near 1.5. Africa has been ravaged by AIDS and war; India is about 3.4.

This means that the nations that hold 90% of the world’s wealth (and prodcue the vast majority of GHGs) are rapidily aging. I’m not sure how the world can continue its rapid economic growth engine with such aging populations. The developing nations such as Brazil could lead the way, but they too are dependent upon developed nations capital and markets. The US is rapidily losing its apetite for Free Trade and is about to turn inward. Nations like Brazil, Vietnam, and Signapore could be left out in the cold as much of the developed world’s wealth will be spent on geriatrics and social welfare spending.

I would not at all be surprised to see the current CO2 concentrations of 390ppm to drop belwo 370ppm by 2030.

Re: E.M.Smith (01:53:26)

[I have a 50 day corn in my seed locker…)]

50 day corn! I didn’t know such a thing existed. What kind of yields (bu/acre) does it produce? (BTW, just in case you are British, by “corn” you are referring to maize aren’t you?)

[I’d expect at most a one season blip as farmers got the wake up call to shift to faster more cold tolerant crops.]

You seem to be assuming here that the seed supply would exist. Does it? I could envision a rapid increase in demand for varieties that are in little demand today very quickly outstripping the supply. I think a 3-5 year “blip” is more likely.

For people wondering about oscillations and couplings.

If one has all the variables of the climate system, one can write differential equations of what affects what, starting from energy conservation, momenta ( angular and linear) masses + a number of variables that have to do with the climate . These equations will be coupled as the same variables will be shared around. In addition these will not be linear differential equations. The system is not solvable except with approximations.

The GCM models have tried to introduce first order approximations of the solutions, assuming they are linear, and that is the reason they fail: the real solutions can be highly divergent from linearity and this shows up after a number of iterations.

a discussion here:

and links here since the climate audit ones do not work

A good exposition of the use of neural nets in climate is here:

It was not intended as an explanation of solar activity, but simply as an illustration of that oscillations of systems can occur without a direct external driver. Add some randomness to the system and the effects of stochastic fluctuations can be maintained for a long time.

That old paper by Shindell et al. uses [what we now know] an incorrect reconstruction of TSI [Hoyt and Schatten's] that has a variation since the Maunder Minimum that is much too large.

A good illustration of how sunspots help feed the holes. A hole forms whenever there is a large enough area with unipolar magnetic field. If the area shrinks a little, the hole will close, but add a little flux to the area so it expands a little and the hole will reform. The hole forms simply be the corona being ‘drained’ by the solar wind expansion along the ‘open’ magnetic field lines.

“The total magnetic flux in a coronal hole is only that of a single [or perhaps a couple] sunspot.” is less mangled. The point is that the total magnetic flux in coronal holes is small and is easily supplied even by a few spots.

I must admit that Leif’s answers to questions are telling me a great deal about what is known (and more importantly not known ) about the sun.

Surprising how much we still do not know.

Leif, you have a badboy side! Purrrrrrrr

Stephen Wilde (15:00:14) :

I’ve formed the impression that the oceans behave pretty much as they please and dominate atmospheric temperatures when the various oceanic cycles combine with each other and/or solar changes.

Can you clarify what you think your link tells us ?

As we see here ,we can observe there is no “standard model “for paleoclimate/present transformations, each brings a new set of problems and paradox’s due to the non linearity and complexities of the systems (much like the Russian . marushka dolls) the deeper we dig the less we know.

Now this is a problematic problem in climate science, where the average “observables” from a paleo data set have some predictable charecterisitcs, however they also have unstable dynamics. Here climate science assumes that in the absence of anthropogenic forcing climate is in a unique and stable configuration and that in the presence of a forcing the comprehensive knowledge of past history, and of the forcing will allow us to deduce reliably the systems response for all subsequent times.This is clearly not the case.

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STOCKS GAIN AS LATEST AUTO BAILOUT RAISES HOPES - RSI PICKS A BOND FUND

Because of the New Year holiday and shortened trading week, I will only have one more blog posting this week, after the close Friday. So I’ll bid you all a Happy and Safe New Year.

资讯中心 - Hedge fund lost US$100 billion in a month

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What

I think home ownership is an important issue to discuss with respect to how it relates to personal finance and growing one’s wealth.  There’s a lot of glib talk about how “renting is like throwing away money” or that buying a home is good for your financial well-being because “you can deduct your mortgage interest” or “your home is an investment.”  However, I believe that more often than not (especially for singles and couples without kids or other dependants living with them), renting is preferable to owning.

Let’s start by addressing the three home-ownership/renting myths discussed in the first article (all italics mine):

This latter point about the “throw away” costs of owning a home is very important in doing a fair comparison between renting and owning.  Such costs are often overlooked by people who mistakenly assume that every dollar they put into their home will be reflected in the house’s dollar value.  I would add to this list homeowner’s insurance (or at least the amount that exceeds any renter’s insurance you might have), home improvements that don’t permanently increase the value of your home (painting the outside, fixing the roof, replacing major appliances, cleaning the carpets, etc), and also the opportunity cost of the free time you are forced to spend (or the money you would pay someone) to make repairs that a landlord would make if you were renting.

This myth is particularly dangerous.  I think many people have been misled (perhaps willfully) into purchasing a larger, more expensive house than they otherwise would under the faulty justification that “it’s an investment.”  While this is sort of true in that a house generally appreciates with at least inflation over the long term, this doesn’t mean a house is a good investment.  In fact, over the long term, a house is a terrible investment, with average real returns (adjusted downward by 3% for inflation) of 0-2% per year versus 6-7% for stocks.  That means that if you invested $50,000 as a down payment for a home (assuming 0-2% in real returns), that investment would be worth somewhere between $50K and $75K in 20 years.  If you put that same amount in stocks (6-7% assumed), you would have $160K to $195K, a difference of over $100,000.

Another feature that makes a home a poor investment is liquidity, or, the ability to turn your asset into cash.  With stocks, bond funds, and savings accounts, you can liquidate your assets immediately and receive the cash in a matter of days.  With a house, it takes time and effort to sell it, a process which could take months.  As Jack Hough notes: “[h]ome buyers pay around 1% in closing costs when they buy and 6% in broker commissions when they sell.  Share buyers pay $10 trading commissions, which are negligible for buy-and-hold investors.”

Also, the sentence that I italicized in the Myth #2 quote points out that you only realize the gain on a house when you sell it AND move into something cheaper.  My experience is that people are rarely willing to do this, and, if anything, often purchase larger, more expensive residencies as they age (although some retirees may sell their more expensive homes and move into cheaper ones.)

Amen.  Now let’s transition to the SmartMoney article.  In it, Mr. Hough makes the case that the driving force behind the increase above inflation (of about 2% annually) in housing prices since WWII has been favorable legislation:

Hough gives strong evidence for the reasons behind housing’s historic gains since WWII, and why he thinks such gains will not continue.  From a financial perspective, I therefore must agree with Hough that the proper place for the majority of a person’s long-term assets is in stocks (like low-fee index funds.)  This means that it is generally better to rent an affordable home while stashing your savings in tax-advantaged retirement accounts or elsewhere in equities.

All this doesn’t mean that there aren’t any good, non-financial reasons for buying a home instead of renting one.  Perhaps you want to be assured that no landlord can kick you and your family out, or keep you from painting your bedroom wall like a Jackson Pollack.  Maybe that darned American Dream of marriage, kids and property ownership is just too hard to shake off.  After considering everything above and combining your newfound knowledge with that of your personal situation, maybe you’ll still decide that home ownership is preferable to renting.  Just make sure that you don’t try to justify the purchase of a home on faulty financial logic.

Barack Obama: the United States of America’s forty-third, and last, President?

Autonomous: News, Commentary, Humor, Culture, Entertainment

Amid all the hoopla of the campaign mixed with the sober realities of the never ending war(s), a recession that is on the eve of a global depression and the ever increasing possibility that I will never get a job writing for The Daily Show comes the question: what if Barack Obama is not only the next president of the United States, but the last president of the United States?

Bailing Out Shariah Law

Islamofascism: In bailing out AIG, Uncle Sam may have taken on more than he bargained for, including a constitutional fight over the promotion of religion.

31st December 2008 18:29GMT, UK evening news flash

Top Stories:

BBC - The financial brutality of 2008 has been confirmed after the FTSE 100 index recorded its biggest annual decline since its inception in 1984. Britain’s main share index ended 2008 trading down 31.3% compared with a year earlier. With trading closing at 1230 GMT, the FTSE finished 2008 at 4,434 points. A year ago it closed at 6,457. The FTSE indexes, including the FTSE 250, are the benchmark for investors, including institutional funds.

Independent - Israel today said the time was not right for a ceasefire in the Gaza Strip and stepped up preparations for a possible ground offensive after Hamas’s long-range rockets hit another major population centre. “If conditions will ripen and we think there will be a diplomatic solution that will ensure a better security reality in the south, we will consider it. But at the moment, it’s not there,” an aide quoted Prime Minister Ehud Olmert as saying.

ITN - A planned communications database containing details of everybody’s telephone calls, emails and internet use could be run by a private firm, according to reports. The option to tender out the management of the controversial database will be included in a consultation paper to be published next month. The database is designed to help police and the Security Service by ensuring they have access to vital communications information which may not by saved by telephone or internet providers. The plans have already come under fire from civil liberties campaigners and leading critic, the former Director of Public Prosecutions Sir Ken McDonald, has dismissed the notion that additional legal assurances would ensure the information is not misused. He said: “All history tells us that reassurances like these are worthless in the long run. In the first security crisis the locks would loosen.”

Guardian - Campaigners for the elderly have called a 75p rise in the personal allowance of care home residents “Scrooge-worthy” and “insulting”. Care home residents whose accommodation, food and nursing fees are paid by the state will have £21.90 a week from next April to pay for essentials such as clothing, shoes, transport and toiletries from April. However, the Department of Health defended the move, saying the Personal Expenses Allowance (PEA) was being increased in line with changes to all other state benefits. Care home residents must contribute to the cost of their care, usually through savings or pensions, and are entitled to keep the PEA from their own money to pay for the rest of their needs. Gordon Lishman, director general of Age Concern, said the 75p increase was “barely enough to buy a packet of biscuits, let alone any seasonal treats”. “It’s an insult to the vulnerable care home residents who rely on it and it is humiliating for them to have to go with a begging bowl to family or friends just to buy essentials,” he said. “Ministers should be ashamed of themselves for reneging on their promises to Parliament and for burying the bad news over the festive season.”

Business:

Times - Henry Kaufman, the Wall Street economist known as Dr Doom, and Kevin Bacon, the Hollywood actor, have emerged as the latest victims of Bernard Madoff’s $50 billion Ponzi scheme. Mr Kaufman, a prominent economist who came to be regarded as a financial oracle, has lost several million dollars through a brokerage account which he held with Bernard L. Madoff Securities for more than five years, he told the Wall Street Journal. He told the Journal that his loss through Madoff was “no more than a couple per cent of my entire net worth” and “immaterial to my financial wellbeing”. It has also emerged that Kevin Bacon, the actor who recently appeared in Frost/Nixon, and his wife Kyra Sedgwick, an actress, were investors with Mr Madoff.

STV - Straitened Swiss bank UBS AG said on Wednesday it had sold its stake in Bank of China at a discount to institutional investors and would book a gain of a “few hundred million dollars” in the fourth quarter. UBS is struggling to repair its balance sheet after massive investments into risky U.S. assets forced it to make nearly $49 billion (33.7 billion pounds) of writedowns, more than any other European bank.

Also In The News:

Sky - Britain’s sporting heroes have dominated the New Year Honours List with Olympic cycling champion Chris Hoy and racing driver Lewis Hamilton topping the bill. Hoy’s knighthood caps an extraordinary year for the 32-year-old cyclist. This summer he became the first British athlete for 100 years to clinch three gold medals at the same Olympic Games, winning the team sprint, Keirin and match sprint. Hamilton, who receives an MBE, was the first Briton to take the F1 championship since Damon Hill in 1996. And double gold medallist Paralympian swimmer Eleanor Simmonds, 14, becomes the youngest ever person to be given an honour, winning an OBE.

Evening Standard - Revellers will have an extra second to enjoy the New Year celebrations. Drunken partygoers may not notice but, thanks to the Earth’s erratic rotation, the countdown to 2009 will last a moment longer. British physicists and official timekeepers around the world will insert a “leap second” to bring the most accurate atomic clocks in line with the astronomical day. London’s Big Ben, whose bongs bring in the new year across the UK, will be adjusted while the BBC adds an extra “pip” to mark the delayed start to the year. Peter Whibberley, a senior research scientist at the National Physical Laboratory in Teddington which is helping to coordinate the update, said: “The difference between atomic time and Earth time has now built up to the point where it needs to be corrected, so this New Year’s Eve we will experience a rare 61-second minute at the very end of 2008 and revellers all over the UK will have an extra second to celebrate.”

Sun - Pictured: Black and white twins Hayleigh and Lauren Durrant proudly hold their new sisters Leah and Miya — who incredibly are ALSO twins with different coloured skin. Their mixed-race parents Dean Durrant and Alison Spooner repeated the two-tone miracle after a seven-year gap.

Telegraph - An army sergeant has set a world record by sitting on 40,040 seats in 48 hours. Terry Twining, who is a member of the Adjutant General’s Corps and has been in the Army for 18 years, averaged one seat every four seconds at Belgium’s King Baudouin national football stadium, raising more than £4,000 for charity. Sergeant Twining, who lives with his family in Gosport, Hants, completed the challenge just weeks after a triple hernia operation and beat the previous record by 790. He said: “It’s brilliant that I’ve broken the record but my legs are killing me. “It was hard work but such a relief when it was finally over, and the money is going to a great cause, which is very close to my heart. “I knew that sitting in all those seats would be an extreme challenge - that’s why I decided to do it and I’m just overjoyed that I managed it.” The previous record of 39,250 seats was set at the Rose Bowl stadium in California, USA, in 2007.

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Back to 2002

So to speak. I don’t want to be all doom and gloom here on the last day of the year, but this is some sobering news — 2008 saw the loss of six years of market gains. They’ll eventually come back, but the shocking part of this loss is the speed it happened and how it happened across the board.

Petroleum is way down despite the efforts of OPEC. Hedge funds? Investment banking?  Commodities? The only happy folks are those who shorted everything under the sun for the last half of the year.

From the link:

All told, about $7 trillion of shareholders’ wealth — the gains of the last six years — will be wiped out in a year marked by violent market swings.

UBS sells stake in Bank of China

The sale to institutional investors, completed late on Tuesday, will allow UBS to include the gain in its fourth-quarter results when it publishes them on February 10.

RBS had also been rumoured to be mulling a sale of its BoC stake, which was worth about HK$44.4bn ($5.7bn) at Wednesday’s HK2.12 closing price in Hong Kong.

However, BoC said on Wednesday that none of its other major foreign investors had plans to sell their stakes. Wang Zhaowen, Bank of China spokesman in Beijing, told Reuters that it was informed by UBS about a month ago of the plans to sell its stake.

RBS owns 20.94bn shares in BoC, equivalent to 8.25 per cent of its share capital, making it the third-largest shareholder, behind the Chinese state-owned SAFE fund, which has slightly more than two-thirds of the bank’s shares.

UBS sold 3.38bn shares at a slight discount to the market price, generating proceeds of about $850m. It bought the stake for about $500m in 2005.

Temasek, which invested in BoC at the same time as UBS, has a 4.1 per cent stake. The Asian Development Bank and Japan’s Bank of Tokyo-Mitsubishi UFJ also have small stakes of about 0.2 per cent each.

UBS said it would remain “committed to its business relationship with Bank of China and to its businesses in China as a whole, where UBS will continue to develop its already strong client franchise”.

The Swiss bank, which this year received SFr6bn ($5.6bn) in a government bailout, acquired a 1.6 per cent of BoC before advising the Chinese lender on its 2006 public offering. UBS has offices in Beijing and Guangzhou and is licensed to trade Chinese renminbi-denominated A shares.

The sale of the BoC stake is UBS’s second disposal in as many weeks. Last week, it sealed a deal to sell its Canadian energy operations and global agricultural business to JP Morgan for an undisclosed amount.

UBS shares rose SFr0.39, or 2.7 per cent, to SFr14.84. However, they are trading at a fraction of its 52-week high of SFr45.97, or the SFr21 at which it launched a SFr15bn rights issue in May.

1 Day3 Days5 Days10 Days1 Month3 Months6 Months1 Year

Beaten down Kenyan bourse ready to bounce back

id="blog-title">Frontier Markets

id="tagline">random macro musings centered around the frontier

Bad reports - Year 2008

Just a summery of what happened in 2008.

Jan 2 - Asian  markets meltdown in first trading day of the year. What a new beginning !

Mar 16 - Bear Stearns fell from a high of  US$170 a share less than a year ago to US$10 a share.

May 2 - Killer cyclone Nargis wiped out Myanmar, Irrawaddy Delta region with 190km/hr wind and a hugh tidal wave. 134,000 dead or missing and 2.5 million homeless.

May 12 - 88,000 dead or missing and 374,000 injured, 4 million homeless in the infamous Sichuan earth quake.

Jul 3 - Crude Oil hit US$147/barrel

Sept 7 - US mortgage giants Fannie Mae and Freddie Mac who jointly own US$12 trillion of US home mortgage debt  caused financial turmoil.

Sept 15 - Sub-prime mortgage Crisis hit Lehman Bros. The 150 year old investment bank had caused a financial tsunami that sent stock markets into free fall.

Sept 17 - AIG near collapse.  US government intervened with US$85 billion rescue load, a financial disaster was averted.

Sept 19 - Tainted with toxic melamine, China milk killed 6 and caused 300,000 to fall sick. Countries affected include Australia, New Zealand, Thailand, Malaysia and the little red dot, Singapore.

Sept 20 - Marriott Hotel, Islamabad bombed by a suicide bomber, killing 53 and wounded 260. 

Oct 6 - Dow Jones IndustrialAverage dived below 10,000 points, the first time in 4 years.

Oct 27 - Investors dumped regional stocks again in Asia. Hang Seng’s biggest drop in 10 years. Nikkei 225 Index  plunged to a 26 year low. Straits Times Index (Singapore) dropped till 1,473 points. Almost US$6 trillion  was wipe away. World equity markets saw their worst month in history.

Nov 26-29 - Several 5-6 star hotels in Mumbai were attacked by terrorists, including the Taj Mahal Hotel and the  Oberio Trident Hotel.  Brave Singaporean Miss Lo Hwei Yen was among the 200 being killed.  She is Singapore  first terror victim (may she be the last).

Dec 1 - US officially in recession (US has been in recession since a year ago!)

The Euro region and Japan both fell into a slump in 2nd quarter follow by Hong Kong, New Zealand and Singapore.  In fact, it is the first recession with all regions involved.

Dec 11 - Madoff scandal, a pyramid scheme involved US$50 billion losses in cash and securities and a human life (at least), a French fund manager who was directly involved committed suicide.

Dec 16 - Fed cut rate to near zero.

Dec 18 - Automobile manufacturer Chrysler shut down plants in US, Canada and Mexico.

Russia had experienced everage GDP growth of more than 8% since 1991 and amassed some US$3 trillion in national reserved. But they are seeing that wealth shrunk 70% in less than one year!

However, let’s put all that behind us and we shall welcome a brand new 2009.

HAPPY NEW 2009 TO ALL !!

Really Bad Numbers = ?

I’ve tried to lay off my econ-based threads so all those that celebrate national crass consumerism day could stay off the window ledges instead, enjoying the yuletide fireplace.  This year, I’m earning my title as dismal scientist and this post is not full of seasonal cheer.

2008 Yearly Market Performance:  (11 year lows)

Really Bad Numbers = ?

I’ve tried to lay off my econ-based threads so all those that celebrate national crass consumerism day could stay off the window ledges instead, enjoying the yuletide fireplace.  This year, I’m earning my title as dismal scientist and this post is not full of seasonal cheer.

2008 Yearly Market Performance:  (11 year lows)

The Evil Nasty Party-Their Actions Not Their Bullshit Words!! OAPs Love a biscuit-Risen more than 100% in price

 

Tens of thousands of elderly people in care homes are to be given a spending money increase of just 75p a week. 

They will have no more than £21.90 a week to pay for everything from clothes to toothpaste, books and phone calls. 

The below-inflation rise was condemned as ‘Scrooge-worthy’ and ‘an insult’. It means vulnerable elderly people will have less spending money than prisoners in jail. The spending limit applies to all care home residents whose bills are being paid by the state.

Any income they receive - normally a state or private pension - must be handed over to help fund their care. The spending allowance is the only part of their own money they can keep.

At present it is £21.15 a week but Health Secretary Alan Johnson has announced an increase to £21.90 from April. That is a rise of 3.5 per cent - with inflation running at 4.1 per cent on the Government’s favoured Consumer Prices Index.

The decision provoked outrage among MPs and charities. Age Concern said the increase was ‘barely enough to buy a packet of biscuits’ and complained that a string of Government promises to review the system have been broken.

By contrast, prisoners can spend £33 a week of their own money on products available in jail, which include food, cigarettes and toiletries.

Age Concern director Gordon Lishman attacked the Health Department for slipping the news out during the Christmas-New Year holiday.

He said: ‘This Scrooge-worthy increase is barely enough to buy a packet of biscuits. It is an insult to the vulnerable care home residents who rely on it.

‘It is humiliating for them to have to go with a begging bowl to family or friends just to buy essentials. Ministers should be ashamed of themselves.’

 

 

Liberal Democrat MP Paul Burstow said: ‘This derisory increase is symbolic of the Government’s attitude towards elderly people and care homes.

‘The Government promised a consultation on this. They told me in January they would do it during the year. But they have chosen not to.

‘They are happy to trumpet a one-off £60 bonus to the state pension, but they haven’t said anything about the decision to keep the care home allowance low.

‘There is no doubt that to remain a decent society we need to pay far more so that older people can have some dignity.’

The row is the latest twist to the deepening crisis over the care of frail and sick older people, highlighted by the Daily Mail’s Dignity for the Elderly campaign.

A squeeze on spending is cutting back state help for three-quarters of a million people who need either help at home or a place in residential care. A means test system forces more than 70,000 people each year to sell their homes to pay care bills - while the state covers the fees for those who have never saved or worked to buy a house.

When their reserves dip below £22,250 the state takes over their bills, but they have to surrender their pensions and remaining savings - that is where they run into the limit on how much of their own money they can spend.

Around a quarter of a million care home residents are limited to the allowance - just over £3 a day - to pay for all items that are not part of the state-funded care package.

That covers toothpaste, chiropody, toiletries, phone calls, books and magazines, hobbies and transport, shoes and clothing and presents for family and friends.

Ministers have given three undertakings in the past 18 months to organise a consultation process of the allowance.

Outside analysts say it should be at least £40 a week.

The Department of Health said last night that the long-promised review of allowances for care home residents would happen next year.

A spokesman said: ‘The Department of Health will increase the personal expenses allowance in line with changes to all other state benefits.

‘In addition, in 2009, the department will issue a consultation document which will consult on a range of issues related to the charging for residential care.

‘This commitment to consult has been made earlier this year, to a range of organisations.’

The row over care home allowances comes in advance of a Green Paper on the workings of the adult social care system, which was promised by Gordon Brown for next year.

The current means test system has been widely criticised for penalising those in care homes who have worked and saved and denying any state help at all to another 300,000 middle-class people who would benefit from assistance with washing, dressing, cooking and coping in their own homes.

A Health Department consultation on paying for a revamped care system ended last month.

One suggestion from ministers was an ‘ageing tax’ in which every worker would have to pay an extra tax to cover care in their old age.

Sceptics among charities and pressure groups believe the Green Paper may be delayed beyond the next General Election because the Government cannot afford either to levy a new tax or find the billions that would be needed to pay for reforms.

the mail

The Evil Party-Not Just nasty!! Their Actions speak louder than any Bullshit Words

 

Tens of thousands of elderly people in care homes are to be given a spending money increase of just 75p a week. 

They will have no more than £21.90 a week to pay for everything from clothes to toothpaste, books and phone calls. 

The below-inflation rise was condemned as ‘Scrooge-worthy’ and ‘an insult’. It means vulnerable elderly people will have less spending money than prisoners in jail. The spending limit applies to all care home residents whose bills are being paid by the state.

Any income they receive - normally a state or private pension - must be handed over to help fund their care. The spending allowance is the only part of their own money they can keep.

At present it is £21.15 a week but Health Secretary Alan Johnson has announced an increase to £21.90 from April. That is a rise of 3.5 per cent - with inflation running at 4.1 per cent on the Government’s favoured Consumer Prices Index.

The decision provoked outrage among MPs and charities. Age Concern said the increase was ‘barely enough to buy a packet of biscuits’ and complained that a string of Government promises to review the system have been broken.

By contrast, prisoners can spend £33 a week of their own money on products available in jail, which include food, cigarettes and toiletries.

Age Concern director Gordon Lishman attacked the Health Department for slipping the news out during the Christmas-New Year holiday.

He said: ‘This Scrooge-worthy increase is barely enough to buy a packet of biscuits. It is an insult to the vulnerable care home residents who rely on it.

‘It is humiliating for them to have to go with a begging bowl to family or friends just to buy essentials. Ministers should be ashamed of themselves.’

 

 

Liberal Democrat MP Paul Burstow said: ‘This derisory increase is symbolic of the Government’s attitude towards elderly people and care homes.

‘The Government promised a consultation on this. They told me in January they would do it during the year. But they have chosen not to.

‘They are happy to trumpet a one-off £60 bonus to the state pension, but they haven’t said anything about the decision to keep the care home allowance low.

‘There is no doubt that to remain a decent society we need to pay far more so that older people can have some dignity.’

The row is the latest twist to the deepening crisis over the care of frail and sick older people, highlighted by the Daily Mail’s Dignity for the Elderly campaign.

A squeeze on spending is cutting back state help for three-quarters of a million people who need either help at home or a place in residential care. A means test system forces more than 70,000 people each year to sell their homes to pay care bills - while the state covers the fees for those who have never saved or worked to buy a house.

When their reserves dip below £22,250 the state takes over their bills, but they have to surrender their pensions and remaining savings - that is where they run into the limit on how much of their own money they can spend.

Around a quarter of a million care home residents are limited to the allowance - just over £3 a day - to pay for all items that are not part of the state-funded care package.

That covers toothpaste, chiropody, toiletries, phone calls, books and magazines, hobbies and transport, shoes and clothing and presents for family and friends.

Ministers have given three undertakings in the past 18 months to organise a consultation process of the allowance.

Outside analysts say it should be at least £40 a week.

The Department of Health said last night that the long-promised review of allowances for care home residents would happen next year.

A spokesman said: ‘The Department of Health will increase the personal expenses allowance in line with changes to all other state benefits.

‘In addition, in 2009, the department will issue a consultation document which will consult on a range of issues related to the charging for residential care.

‘This commitment to consult has been made earlier this year, to a range of organisations.’

The row over care home allowances comes in advance of a Green Paper on the workings of the adult social care system, which was promised by Gordon Brown for next year.

The current means test system has been widely criticised for penalising those in care homes who have worked and saved and denying any state help at all to another 300,000 middle-class people who would benefit from assistance with washing, dressing, cooking and coping in their own homes.

A Health Department consultation on paying for a revamped care system ended last month.

One suggestion from ministers was an ‘ageing tax’ in which every worker would have to pay an extra tax to cover care in their old age.

Sceptics among charities and pressure groups believe the Green Paper may be delayed beyond the next General Election because the Government cannot afford either to levy a new tax or find the billions that would be needed to pay for reforms.

the mail..

Time to lower home prices ..

Property developers should consider this step to lure back buyers

WHEN a property boom here ends, the first casualty is usually home supply.

Sure enough, the Government put a stop to new land sales early this month, as it did in the last two downturns, making it as good an indicator as any that a property slump had arrived.

Developers have also been cutting supply throughout the year, pushing back en bloc redevelopments and putting some launches on hold indefinitely.

But though reducing supply is necessary to prevent the market from collapsing, it is clearly inadequate as a cure at this point. No land plots have changed hands for months, new launches have slowed to a trickle - and yet buyers are still not biting. Property ads have dried up and showflats are starting to resemble ghost towns.

When sales came to a standstill this year, developers blamed the financial crisis and government policy actions, such as the removal of the deferred payment scheme. But house hunters pointed to just one reason: Home prices are still too high.

The economy has shrunk for the first time since 2001, mass retrenchments are on the cards, and monthly sales of new homes have plummeted so much that experts warn total sales this year could reach an 18-year low. Yet private home prices - at least according to the Urban Redevelopment Authority’s (URA) price index - have not dropped by much.

In the third quarter, the URA’s price data registered a fall of 2.3 per cent from the second quarter, after rising about 4 per cent in the first half of the year. This means prices in September were still higher than in January.

Anecdotally, analysts estimate that prices in the fourth quarter fell by up to 20 per cent in some developments. But prices jumped so much in the recent upturn - 31 per cent last year alone - that even if the URA’s index does log an unlikely 20 per cent drop this quarter, prices at year-end would still be higher than at the start of last year, and far above the pre-boom levels in 2005.

Not all developers can cut prices for their projects without incurring big losses, especially those who bought plots at the peak of the boom last year. But developers who were canny enough to pick up land at the trough of the market have plenty of room to manoeuvre.

One example is CapitaLand’s Latitude condominium at Jalan Mutiara. The developer bought the site for about $500 per sq ft (psf) in 2005 and sold units up to last month at $2,400 to $2,500 psf.

But down the road, Mutiara View is going for under $1,200 psf, while across the street, the new boutique condo RV Suites has been sold for $1,300 to $1,400 psf. According to agents, CapitaLand has quietly lowered prices recently to $2,000 to $2,100 psf.

Hong Leong’s Aalto along Meyer Road is another example. The site was bought for about $410 psf in 2005, but units were sold for well over $2,000 psf last year and this year. No new units have been sold since May, according to URA data.

To be sure, there are valid reasons for developers not to cut prices.

For one thing, selling homes at lower prices could result in a fall in the valuations of their properties, which could in turn hurt their balance sheets and make it more difficult for them to raise funds in an already tight credit market. And some argue that slashing prices could also set off a price war.

But there are also compelling reasons to start lowering prices. Key among them is that the see-who-blinks-first game is clearly turning in favour of buyers. Prices are already falling, pushed down by smaller developers squeezed for cash and individual home sellers anxious to offload their units.

A boutique condominium in the Novena area reportedly gave significant discounts - from over $1,300 psf down to just under $1,000 psf - after the financial crisis hit hard in October. At soon-to-be-completed developments such as City Square Residences in Kitchener Road, prices have fallen from a high of over $1,000 psf last year to less than $800 psf for some units in recent months.

Developers have said for months that they will maintain prices and ride out the storm. But the situation is set to worsen sharply for sellers as the economy contracts sharply. Even developers who can hold out are likely to find their property valuations hit anyway as prices come down throughout the market.

Lowering prices will bring buyers back into the market. Many have been waiting on the sidelines since early last year, when prices starting shooting up beyond their means.

Evania, a 35-unit condo in Upper Paya Lebar, moved 15 units last month after dropping prices from nearly $900 psf in March to just above $600 psf.

More positive news like this is exactly what is needed to restore sentiment in the market.

As for the threat of price wars, there is little basis in the argument. Prices are going to fall in any case, with or without a price war. The suggestion here is not for steep price cuts, just ‘realistic’ prices that will tempt buyers back into the market.

City Developments took some flak from its rivals after it priced its mass market condo Livia in Pasir Ris at an attractive $650 psf on average. But the launch was a huge success - and it has not caused a downward spiral.

Industry players have suggested that the Government step in with demand-boosting measures such as waiving, discounting or deferring stamp duty; resurrecting a fine-tuned version of the deferred payment scheme; and tweaking CPF rules to allow buyers more financing leeway.

Developers themselves have already started absorbing stamp duty and interest for selected projects, and rolled out gimmicks such as renovation allowances and vouchers for electrical appliances.

These measures might help make the buying environment more conducive, but nothing would speak more persuasively to potential buyers than a discount.

In a year when everything is going to go on sale, property developers should consider joining the crowd.

12-31-08 Goodbye 2008

From 2004 to 2008, the Chicago district (District 299) failed to make “Adequate Yearly Progress” (AYP) in key areas, according to the district’s progress report on the Illinois State Board of Education Web site.

The head of an atheist group that has filed a lawsuit against prayer at Barack Obama’s presidential inauguration says the government is picking a winner between “believers” and “those who don’t believe” and subjecting atheists and agnostics to someone else’s religious beliefs.

Dan Barker, co-president of the Freedom From Religion Foundation, has joined with Michael Newdow, who fought to have the words “under God” removed from the Pledge of Allegiance, in a federal lawsuit seeking to enjoin the Presidential Inaugural Committee from sponsoring prayers at the official inauguration.

The 34-page legal complaint similarly seeks to enjoin Supreme Court Chief Justice John Roberts, Jr., from adding the phrase “So help me God” to the presidential oath of office.

(AP) - President-elect Barack Obama’s choice of Rick Warren to deliver the inaugural invocation drew one kind of protest. Whether the evangelical pastor offers the prayer in the name of Jesus may draw another. At George W. Bush’s 2001 swearing-in, the Revs. Franklin Graham and Kirbyjon Caldwell were criticized for invoking Christ. The distinctly Christian reference at a national civic event offended some, and even prompted a lawsuit.

Warren did not answer directly when asked whether he would dedicate his prayer to Jesus. In a statement Tuesday to The Associated Press, Warren would say only that, “I’m a Christian pastor so I will pray the only kind of prayer I know how to pray.”

WASHINGTON (AP) — A House Democrat on Tuesday dared Senate leaders to block the appointment of a black man to succeed President-elect Barack Obama, saying lawmakers should not “hang and lynch” the designee for the alleged misdeeds of his patron, Illinois Gov. Rod Blagojevich.

“Let me just remind you that there presently is no African- American in the U.S. Senate,” Rep. Bobby Rush of Illinois, told reporters.

“I don’t think that anyone — any U.S. senator who’s sitting in the Senate right now — wants to go on record to deny one African-American for being seated in the U.S. Senate,” Rush added.

That man was former state attorney general Roland Burris, 71, named by Blagojevich on Tuesday to fill Obama’s seat.

GAZA CITY, Gaza Strip (AP) — Israel rejected international pressure to suspend its air offensive against Palestinian militants whose rocket barrages are striking close to the Israeli heartland, sending warplanes Wednesday to demolish smuggling tunnels that are the lifeline of Gaza’s Islamic Hamas rulers.

The diplomatic action was set in motion by the scale of destruction in Gaza since Israel unleashed its campaign Saturday, and a casualty toll that Gaza officials now put at 390 dead and some 1,600 wounded. Hamas says some 200 uniformed members of Hamas security forces have been killed, and the U.N. says at least 60 Palestinian civilians have died. Four Israelis have been killed by militant rocket fire, including three civilians.

KAILUA, Hawaii (AP) — A handful of pro-Palestinian activists protested outside President-elect Barack Obama’s vacation home on Tuesday and urged a new approach to the Middle East. Obama did not acknowledge them.

Eight activists marched with signs to the edge of the property’s security perimeter, telling reporters that they want the incoming administration to take a fresh look at the conflict between Israel and the Palestinian territories, especially given the current fighting in the Gaza Strip. They also said Obama needs to take a more active role in the conflict, even though he doesn’t take office until Jan. 20.

One sign the liberal news media live in a plastic Manhattan bubble is their undying ardor for the Kennedy Myth, best known by that public-relations construct “Camelot.” Instead of a president and First Lady, they believe, we had the King and Queen of Glamour. Never mind if their marriage was a joke and his list of presidential accomplishments was short. Never mind if the Republican half of the country feels sickened by the obsession. The media preferred the myth — and they still do to this day. It is why they are promoting the anointment of unaccomplished Caroline Kennedy for the U.S. Senate in New York.

Nero fiddled while Rome burned. The UAW golfed. While carmakers soak up $17 billion in taxpayer bailout funds and demand more for their ailing industry, United Auto Workers bosses have wasted tens of millions of their workers’ dues on gold-plated resorts and rotten investments. The labor organization’s money-losing golf compound is just the tip of the iceberg.

Whoever called politics “the art of the possible” must have had a strange idea of what is possible or a strange idea of politics, where the impossible is one of the biggest vote-getters.

People can get the possible on their own. Politicians have to be able to offer the voters something that they cannot get on their own. The impossible fills that bill perfectly.

As a noted economist has pointed out, nothing “could prevent the California electorate from simultaneously demanding low electricity prices and no new generating plants while using ever increasing amounts of electricity.”

You want the impossible? You got it. Politicians don’t get elected by saying “No” to voters.

Many professors, mostly on the liberal side of the political spectrum, use their classrooms to proselytize students. I have taught economics for the past 40 years and challenge anyone to find even one student, among the thousands who went through my classes, who can say, “Professor Williams used his class to proselytize students.” While acceptable at most universities, it is nothing less than academic dishonesty to do so. Like others I have my own values and opinions, such as those expressed in some of my nationally syndicated columns, but they never become a part of classroom discussion.

Learning how to think straight, as opposed to what values and opinions to hold, is the crucial part of education. Part of that learning is to be able to understand the distinction between subjective statements, for which there are no commonly accepted standards of proof, and positive statements for which there are.

As President-elect Obama vacations with his family in Hawaii and publicly complains about the intrusiveness of the press pool and the intense scrutiny of his Secret Service team, I suspect about now Obama may be recalling George Bernard Shaw’s heartless observation that: “There are two tragedies in life. One is not to get your heart’s desire. The other is to get it.”

The author of the Government’s 2006 report on the economic impact of climate change said that Mr Obama, the US President-Elect, would revolutionise Washington’s approach to the subject.

He said an Obama administration gives hope that a new global agreement could be formulated to take over after the expiration of the Kyoto protocol in 2012.

“He’s night and day on this issue relative to his prehistoric predecessor George Bush,” Lord Stern told BBC Radio 4’s Today programme. “That is a very big change and, while people saw the United States as a obstacle, now people are saying well perhaps the United States could really lead on this.

“And it is going to have to - because the two big ones on this are the United States and China.”

Although President George W. Bush succeeded with some of his policies, the bailout of the Detroit Three is possibly his most significant mistake. The recent damage he’s done to the Republican brand will take leadership with a command focus to repair. The president’s mistake could repeat the hardship Americans experienced the last time we went down this path early in the last century.

Setting aside President Bush’s successes on such fronts as protecting the homeland against terrorists, his failures have been noteworthy. Some, such as the federal response to Hurricane Katrina, came about because Mayor Ray Nagin’s incompetence was surpassed only by that of Governor Kathleen Blanco. Others, such as the nomination of Harriet Miers to the Supreme Court, were entirely his fault.

WASHINGTON (AP) — Lucy and Ethel lose their struggle with a chocolate assembly line. Joe Friday demands “just the facts” with a penetrating gaze. A secret word brings Groucho a visit from a duck.

Folks who grew up as television came of age will delight in a 20-stamp set included in the Postal Service’s plans for 2009 recalling early memories of the medium.

Besides commemorating black-and-white TV, the service’s 2009 postage stamp program ranges from commemorating President Abraham Lincoln to the Thanksgiving Day parade, civil rights pioneers, actor Gary Cooper, poet Edgar Allan Poe, Supreme Court justices and Alaska and Hawaii statehood.

WASHINGTON - Rep. Charles Rangel (D-N.Y.) racked up $1,540 in parking tickets on his Chrysler PT Cruiser and paid for them - legally - with campaign money, his office confirmed Tuesday.

Rangel, who is fighting off a House ethics committee investigation of his taxes, campaign contributions and four rent-stabilized apartments in New York, was hit for multiple parking violations around the District of Columbia since March 2007, Congressional Quarterly reported.

Payments were made from Rangel’s campaign committee and his “leadership” political action committee.

WASHINGTON (AP) — The Brady Campaign to Prevent Gun Violence sued the Bush administration Tuesday in hopes of stopping a new policy that would allow people to carry concealed, loaded guns in most national parks and wildlife refuges.

“The Bush administration’s last-minute gift to the gun lobby, allowing concealed semiautomatic weapons in national parks, jeopardizes the safety of park visitors in violation of federal law,” said Paul Helmke, the group’s president. “We should not be making it easier for dangerous people to carry concealed firearms in our parks.”

An Interior Department spokeswoman refused to comment on the lawsuit, saying the department does not discuss pending litigation.

Malaysiakini

The year’s unresolved issues, therefore, revolve around the ‘what now’ of political transition on both sides of the divide. And whether the hitherto silent - from plebian to royalty - can keep politicians in line.

Here are 10 unsolved cases of 2008. This list is by no means complete. And don’t expect answers anytime soon.

The awakening of the Indian Malaysians and their Makkal Sakthi strategy had a direct impact on the results of the general election - they abandoned BN in droves. However, Hindraf is now outlawed, leaving supporters to mainly target the release of its leaders.

MIC became almost irrelevant - veteran president S Samy Vellu lost his Sungai Siput seat which he had held since 1974 and, consequently, his place in the cabinet. He is trying to keep its grip on the community by rebranding the party as a people-centric one.

However, with the community no better off now, questions abound as to whether MIC can truly claim to represent it in the government.

It did not faze Tourism Minister Azalina Othman, who responded that internal auditors would probe allegations of corrupt practice in the company.

She was forced to reveal in Parliament that “some investments in the company are questionable”. A report released two weeks later revealed that the company had been making dubious investments that will have to be written off.

The report, though, was of limited value, failing to mention the RM10 million e-tourism portal.

The government also announced the purchase of 12 units of Eurocopter’s Cougar EC-725 choppers to replace the ageing fleet of Nuris at a cost that eventually settled at RM1.6 billion.

Mentari Services Sdn Bhd chairperson Capt (rtd) Zahar Hashim, the former UMNO Petaling Jaya Selatan division chief, exposed ‘irregularities’ in the deal and existence of a cheaper alternative.

The Public Accounts Committee jumped in to probe the matter. While it ruled out irregularities, it said there had been no physical examination of the goods - opposition MPs naturally demanded the release of the full report.

So far, all the government has done is to buy time by delaying the purchase until the economic situation permits it. The main questions posed by Zahar remain unanswered.

A similar exercise of constitutional power was seen on Nov 26, when rulers of Selangor, Perak and Negri Sembilan expressed disapproval that the National Fatwa Council had issued a decree against yoga without consulting them in their capacity as heads of Islam.

Meanwhile, young royals chose to speak up on issues that their constituents were robustly debating.

Tengku Mahkota Kelantan Tengku Muhammad Faris Petra caused a stir with a speech on Malay unity and rights at a forum in Kuala Lumpur on April 12, leading to MCA president Ong Ka Ting and DAP chairperson Karpal Singh lodging police reports.

Perak Regent Raja Dr Nazrin Shah addressed several conferences, including the annual Conference of Malaysian Judges on April 9. His views on good governance, Malaysian unity and judicial renaissance won him plaudits.

However, citizens have been less enamoured with a request for immunity from civil and criminal proceedings to be restored to the royalty. It had been withdrawn in 1993.

It is also becoming a norm for groups to petition the royalty to resolve their grievances. But there’s an old story about Pandora’s Box that they would do well to remember.

It started with another tussle over the body of an individual who was said to have died a Muslim. This time, his relatives were able to persuade the Federal Court of the invalidity of the claim.

Prime Minister Abdullah Ahmad Badawi stated the need to ensure that such tussles do not recur, saying that non-Muslims should inform family members before converting to Islam.

The religion came into the picture again when about 100 Muslim groups called for Islamic teachings and practices to figure prominently in the election agenda of political parties.

Later in the year, it was disclosed that PAS had flirted with nemesis Umno over possible collaboration for Malay-Muslim unity, until PAS leaders reiterated their commitment to the policies espoused by the opposition coalition.

It did not help Pakatan when leading PKR member, Kulim-Bandar Baru MP Zulkifli Noordin, figured prominently in protests against a forum on religious conversions organised in August by the Bar Council.

The controversies mounted, as Muslim students described the school uniform worn by girls as being too sexy and the National Fatwa Council banned the practice of yoga among Muslims.

There is nothing to suggest that religion will not continue to be used to divide and rule.

On April 15, PKR de facto leader Anwar Ibrahim alleged that Malay supremacy is only advocated by Umno leaders to enrich the elite and that ketuanan Rakyat (People’s supremacy) is the way to go.

Many ordinary Malays accepted his point of view, which has become a rallying call for increasingly resentful non-Malays.

Former de facto law minister Zaid Ibrahim agreed that the Malay supremacy concept has failed, and that an egalitarian form of democracy must be practised.

Kelantan Mentri Besar Nik Aziz Nik Abdul Mat pointed out that Islam is neutral and that Muslims who place nationalism and race ahead of religion are “disillusioned followers”.

Gerakan president Koh Tsu Koon noted that the right term for the special position of the Malays is kedudukan istimewa as stipulated in Article 153 of the federal constitution.

Information Minister Ahmad Shabery Cheek insisted that ketuanan Melayu did not imply a master-slave relationship, but refers to the institution of the Malay monarchy.

When MCA deputy president Dr Chua Soi Lek said the concept is no longer relevant, he was investigated under the Sedition Act 1948.

The debate is far from over.

This fed into the general election and unprecedented loss of faith in the premier, who will step down next March. Umno wanted him out earlier, but he wangled time to set key ‘reforms’ in place.

His two ‘reform’ Bills placed before Parliament were disappointing. The Malaysian Commission on Anti-Corruption Bill and Judicial Appointments Commission Bill revealed that the status quo will not change, but these were rushed through Parliament anyway.

In tandem with the Bills, proposals were tabled for a code of ethics for judges and for protection of witnesses.

Abdullah is due to re-table the watered-down Special Complaints Commission Bill in February but this is unlikely to be much more than another lame duck.

Premier-in-waiting Najib Abdul Razak will have a firm hand over the country’s most important institutions for accountability. What he will do with this is anybody’s guess.

BN component parties realised quickly that UMNO had dragged them down, so they decided that they could no longer play second fiddle to the dominant party.

Gerakan president Koh Tsu Koon and MCA deputy president Dr Chua Soi Lek have told UMNO to discard its ketuanan Melayu mindset, if it hopes to regain non-Malay support.

Even MIC, seen as the most docile in the coalition, has been critical of UMNO and urged it to change its stance, especially in regard to the predicament of Indian Malaysians.

There was a hurricane in the east - Sabah’s Sapp declared that it no longer had confidence in the BN and threatened to pull out of the coalition if the federal government did not heed its complaints - and withdraw it eventually did.

PPP then threatened to leave BN if the loathed Internal Security Act is not amended substantially by the next election. The response was, in effect, ‘expect no change, do as you like’.

MCA, at its annual assembly, demanded a second deputy premier’s post for its president to assist in expediting reform and to allow its representatives to head cabinet committees.

BN chairperson and premier Abdullah Ahmad Badawi has hinted at a scheme to allow supporters to become direct members of the coalition, without going through component parties. This is to respond to restlessness against race-based politics among those who see themselves as Malaysian first and last.

Whether BN can really walk its talk remains uncertain, as does the outcome of its special meeting in February since decisions will depend on consensus being reached.

There was confidence that the economy would maintain its momentum, with some predicting that the second half of the year would “outshine” the first half, due to the high prices of palm oil and mineral oil.

Financial troubles, however, were brewing in Europe, Japan and the US. At the end of the first quarter, government-linked research group MIER forecast lower growth of 5.4 percent compared to 6 percent earlier.

By July, Bursa Malaysia’s composite index had registered the worst performance in the Asia-Pacific region. The government cut back on fuel subsidies and tabled a ‘stimulus package’ to the disgust of opposition parties, which came up with their notions of how the economy should be managed.

Bad news has kept coming in from all corners of the world, with no end in sight. It will take joint action to work out solutions.

But BN leaders have taken their eyes off administration since March, to secure their political future.

The momentary relief brought on by dropping world crude oil prices has yet to filter through to the sale of goods and services. As anxiety levels go up over bread-and-butter issues - and possibly high oil prices again, something will have to give…

The day came and went without the promised change of federal government, amidst high anticipation among his supporters and panic in the BN ranks.

It all began a month after Pakatan’s powerful showing in the general election. Anwar capitalised on discontent among MPs in BN, especially those from Sabah and Sarawak who felt their loyalty had not been adequately rewarded.

With 82 federal seats in opposition hands, Anwar put about the claim that he had the support of at least 31 defectors to topple the government. BN retorted that Anwar was bluffing and resorting to sneaky tactics to destabillise the administration.

The mind-games and spin-doctoring continued into September 16. When the day passed, Anwar blamed various factors for the failure to make good his claims and has since repeatedly said he is in “no hurry” to take over.

To date, the only ‘defections’ have been two Sabah Progressive Party MPs who became Independents when their party left BN after a vote of no-confidence.

Worse still, Pakatan is expected to lose one of its MPs after a disgruntled S Manikavasagam, its representative for Kapar, vowed to quit the party and join the growing number of Independents by December 31.

With 2009 stretching before him, Anwar can have his pick of dates on the new calendar if he does not want to wait for the next polls due by 2013. There’s also that secret “list of defectors” to reveal, if it exists.

UMNO paid dearly for this in the polls, triggering an instant demand for accountability that led to the door of party president and premier Abdullah Ahmad Badawi. He was told to go, despite his plan to hand over power to deputy Najib Abdul Razak in mid-2010.

The beleaguered Abdullah then brought forward his departure and also said he will not defend his post during the UMNO polls in March. Najib then won the presidency uncontested and, by convention, will become prime minister.

But the public finger-pointing by leaders and members has revealed serious fissures that have left the party’s future open to question. Both long-serving and younger leaders are impatient to step into slots being vacated - or which they feel should be vacated sooner rather than later.

A divided and unrepentant UMNO will see support being further eroded within and without BN.

All eyes are now on Najib and whether he will be able to pull off the party’s great escape - that is, if his lieutenants don’t turn against him.

Reports prepared by the Malaysiakini team.

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Robert J Shiller: 01-01-09 Economist of the Day

We choose Bob Shiller as Economist of the Day because he is now almost daily in the limelight with the housing crisis with the Standard & Poor’s/Case Shiller Home Price Indices; in many ways we all wish he was not with home values coninuing to collapse but there must be a point when people begin to buy!

Below is a brief biography. After the biography, we have two interviews from YouTube, online data and Bob’s publication list.

Bob on the Housing Crisis

Bob on “More Tough Times Ahead for US”

Search YouTube if you are interested in more of Bob’s views.

Robert J. Shiller is the Arthur M. Okun Professor of Economics, Department of Economics and Cowles Foundation for Research in Economics, Yale University, and Professor of Finance and Fellow at the International Center for Finance, Yale School of Management. He received his B.A. from the University of Michigan in 1967 and his Ph.D. in economics from the Massachusetts Institute of Technology in 1972. He has written on financial markets, financial innovation, behavioral economics, macroeconomics, real estate, statistical methods, and on public attitudes, opinions, and moral judgments regarding markets.

His 1989 book Market Volatility (MIT Press) is a mathematical and behavioral analysis of price fluctuations in speculative markets. His 1993 book Macro Markets: Creating Institutions for Managing Society’s Largest Economic Risks (Oxford University Press) (available via subscribing libraries on Oxford Online) proposes a variety of new risk-management contracts, such as futures contracts in national incomes or securities based on real estate that would permit the management of risks to standards of living. His book Irrational Exuberance (Princeton 2000, Broadway Books 2001, 2nd edition Princeton 2005) is an analysis and explication of speculative bubbles, with special reference to the stock market and real estate. His book The New Financial Order: Risk in the 21st Century (Princeton University Press, 2003) is an analysis of an expanding role of finance, insurance, and public finance in our future. His book Subprime Solution: How the Global Financial Crisis Happened and What to Do about It, published in September 2008 by Princeton University Press, offers an analysis of the housing and economic crisis and a plan of action against it.He co-authored, with George A. Akerlof, Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism published in March 2009 by Princeton University Press.

His repeat-sales home price indices, developed originally with Karl E. Case, are now published as the Standard & Poor’s/Case Shiller Home Price Indices. The Chicago Mercantile Exchange now maintains futures markets based on these indices.

He has been research associate, National Bureau of Economic Research since 1980, and has been co-organizer of NBER workshops: on behavioral finance with Richard Thaler since 1991, and on macroeconomics and individual decision making (behavioral macroeconomics) with George Akerlof since 1994.

He served as Vice President of the American Economic Association, 2005 and President of the Eastern Economic Association, 2006-07.

He writes a regular column “Finance in the 21st Century” for Project Syndicate, which publishes around the world, and “Economic View” for The New York Times.

He is co-founder and chief economist of MacroMarkets LLC.

Online Data

The data collection effort about investor attitudes that I have been conducting since 1989 has now resulted in a group of Stock Market Confidence Indexes produced by the Yale School of Management. These data are collected in collaboration with Fumiko Kon-Ya and Yoshiro Tsutsui of Japan. Some of our earlier results are also noteworthy.

Stock market data used in my book, Irrational Exuberance [Princeton University Press 2000, Broadway Books 2001, 2nd ed., 2005] are available for download, Excel file (xls). This data set consists of monthly stock price, dividends, and earnings data and the consumer price index (to allow conversion to real values), all starting January 1871. The price, dividend, and earnings series are from the same sources as described in Chapter 26 of my earlier book (Market Volatility [Cambridge, MA: MIT Press, 1989]), although now I use monthly data, rather than annual data. Monthly dividend and earnings data are computed from the S&P four-quarter tools for the quarter since 1926, with linear interpolation to monthly figures. Dividend and earnings data before 1926 are from Cowles and associates (Common Stock Indexes, 2nd ed. [Bloomington, Ind.: Principia Press, 1939]), interpolated from annual data. Stock price data are monthly averages of daily closing prices through January 2000, the last month available as this book goes to press. The CPI-U (Consumer Price Index-All Urban Consumers) published by the U.S. Bureau of Labor Statistics begins in 1913; for years before 1913 1 spliced to the CPI Warren and Pearson’s price index, by multiplying it by the ratio of the indexes in January 1913. December 1999 and January 2000 values for the CPI-Uare extrapolated. See George F. Warren and Frank A. Pearson, Gold and Prices (New York: John Wiley and Sons, 1935). Data are from their Table 1, pp. 11–14. For the Plots, I have multiplied the inflation-corrected series by a constant so that their value in january 2000 equals their nominal value, i.e., so that all prices are effectively in January 2000 dollars.

The Case-Shiller U.S. Home Price Indices, which Karl Case and I originally developed, which were produced 1991-2002 by our firm Case Shiller Weiss, Inc. under the direction of Allan Weiss, are now produced by Fiserv Lending Services in Cambridge MA under the direction of Linda Ladner and David Stiff. Many of these price indices, including twenty cities, low- medium- and high- tier home price indices, condominium indices, and a U.S. national index, are now managed by Standard & Poor’s, and are available to the public on http://www.metroarea.standardandpoors.com. Eleven of these indices are traded at the Chicago Mercantile Exchange, which provides data on these contracts.

Historical housing market data used in my book, Irrational Exuberance [Princeton University Press 2000, Broadway Books 2001, 2nd edition, 2005], showing home prices since 1890 are available for download [Excel file (xls)] and are updated quarterly.

An annual series is also available here, long term stock, bond, interest rate and consumption data since 1871 that I in collaboration with several colleagues collected to examine long term historical trends in the US market. This is Chapter 26 from my book Market Volatility, 1989, and revised and updated.

Karl Case and I have collected some data sets on prices of houses, which show for a sample of homes that sold twice between 1970 and 1986 in each of four cities Atlanta, Chicago, Dallas, and Oakland, the first sale price, second sale price, first sale date, and second sale date. These data are somewhat outdated, and of interest only to researchers.

Other related links

Information Site for Irrational Exuberance

Publications

Tools for Financial Innovations: Neoclassical versus Behavioral Finance,” The Financial Review (2006), 41: 1-8 [CFP 1180

"Behavioral Economics and Institutional Innovation," Southern Economic Journal (2005), 72(2): 269-283 [CFP 1150]

Comparing Wealth Effects: The Stock Market vs. the Housing Market,” with Karl E. Case and John M. Quigley, Advances in Macroeconomics (2005) 5(1): 1–34. [CFP 1181, CFDP 1335]

The Invention of Inflation-Indexed Bonds in Early America” in William N. Goetzmann and Geert K. Rouwenhorst, editors, The Origins of Value: The Financial Innovations that Created Modern Capital Markets Oxford: Oxford University Press, 2005.

The Life-Cycle Personal Accounts Proposal for Social Security: A Review,” NBER Working Paper No. 11300, April 2005. [CFDP 1504]

Life-Cycle Portfolios as Government Policy,” Economists’ Voice (2005), 2(1), Article 14. [CFP 1182]

Samuelson’s Dictum and the Stock Market,” with Jeeman Jung, Economic Inquiry (2005). [CFP 1183, CFDP 1386]

“Valuation Ratios and the Long Run Stock Market Outlook: An Update” with John Y. Campbell, in Richard H. Thaler, Advances in Behavioral Finance II, Princeton: Princeton University Press, 2005.

“The Design and Regulation of Income-Linked Loans,” in An Executive Briefing on Financing Human Capital, Cambridge: Cambridge University Press, 2004.

“Home-Buyers, Housing, and the Macroeconomy” (with Karl E. Case and John M. Quigley), in Anthony Richards and Tim Robinson, eds., Asset Prices and Monetary Policy, Reserve Bank of Australia, 2004, pp. 149–88

“Macro Markets: Managing Risks to National Economies,” in Public Finance in a Globalizing World: Innovations in Theory and Practice, New York: United Nations Development Program, 2004.

Radical Financial Innovation,” for Entrepreneurship, Innovation and the Growth Mechanism of the Free Market Economies, in Honor of William Baumol, Princeton University Press, 2004.

From Efficient Markets to Behavioral Finance,” Journal of Economic Perspectives (2003), 17(1) [CFP 1055]

Is There a Bubble in the Housing Market?“, Brookings Papers on Economic Activity (2003), 2: 299-362 [CFP 1089]

Social Security and Individual Accounts as Elements of Overall Risk-Sharing,” AEA Papers and Proceedings (2003), 93(2) [CFP 1061]

“Bubbles, Human Judgment and Expert Opinion,” Financial Analysts Journal (May/June 2002), 58(3): 18–26; reprinted in The ICFAI Journal of Behavioral Finance (India) (September 2004), 1(3): 7–17.

Defining Residual Risk-Sharing Opportunities: Pooling World Income Components,” with Stefano Athanasoulis, Research in Economics 56: 61–84, 2002.

Exuberant Reporting.” Harvard International Review (Spring 2001), 23(1): 60-65

World Income Components: Measuring and Exploiting Risk Sharing Opportunities” (with Stefano Athanasoulis), American Economic Review (September 2001), 91(4): 1031–54 [CFP 1029]

Measuring Bubble Expectations and Investor Confidence,” Journal of Psychology and Financial Markets (2000), 1(1): 49–60, 2000. [CFDP 1212, CFP 1004]

Moral Hazard and Home Equity Conversion” (with Allan Weiss), Real Estate Economics (2000), 28(1) [CFP 1014]

The Significance of the Market Portfolio” (with Stefano G. Athanasoulis), The Review of Financial Studies (Summer 2000), 13(2): 301–329. [CFP 997]

Evaluating Real Estate Valuation Systems” (with Allan N. Weiss), Journal of Real Estate Finance and Economics (1999) 18(2):147–61. [CFP 983]

Home Equity Insurance” (with Allan Weiss), Journal of Real Estate Finance and Economics (1999), 19(1): 21–47 [CFDP 1074, CFP 1007]

Human Behavior and the Efficiency of the Financial System,” in J.B. Taylor and M. Woodford, eds., Handbook of Macroeconomics, Vol. 1, pp.1305–40, 1999. [CFP 1025]

Macro Markets and Financial Security,” with Stefano Athanasoulis and Eric van Wincoop, Economic Policy Review, Federal Reserve Bank of New York, Vol. 5 No. 1, pp. 21–39, April 1999

Social Security and Institutions for Intergenerational, Intragenerational and International Risk Sharing,” Carnegie–Rochester Series in Public Policy (June 1999), 50:165–204. [CFDP 1185, CFP 993]

“Designing Indexed Units of Account,” presented at American Economic Association Meetings, Chicago Illinois, January, 1998. [CFDP 1179]

“Indexed Units of Account: Theory and Analysis of Historical Experience,” in Fernando Lefort and Klaus Schmidt-Hebbel, Indexation, Inflation, and Monetary Policy, Central Bank of Chile, Santiago Chile, 2002. Also appeared as National Bureau of Economic Research Working Paper #6356, Cambridge, MA, 1998. [CFDP 1171]

Labor Income Indices Designed for Use in Contracts Promoting Income Risk Management” (with Ryan Schneider), Review of Income and Wealth (June 1998), Series 44(2):163–182. [CFDP 1110, CFP 964]

“Macro Markets: Motivations, Techniques, and Proposals,” Conference Proceedings, 22nd Annual Spring Research Seminar, Chicago Board of Trade, May 12, 1998.

“Macro Markets and Financial Security,” with Stefano Athanasoulis and Eric van Wincoop, unpublished paper, 1998.

Valuation Ratios and the Long-Run Stock Market Outlook” (with John Y. Campbell), Journal of Portfolio Management (Winter 1998), 24(2):11–26.

“Expanding the Scope of Individual Risk Management: Moral Hazard and Other Behavioral Considerations,” Economic Notes (1997), 26(2): 361–78. [CFDP 1145]

“A Scorecard for Indexed Government Debt” (with John Y. Campbell), in Ben Bernanke and Julio Rotermberg, eds., NBER Macroeconomics Annual. Cambridge, MA: MIT Press, pp. 155–197. [CFDP 1125]

“Indexed Units of Account for the United States,” 1997. [http://www.econ.yale.edu/~shiller/uf-usa4.html]

Public Resistance to Indexation: A Puzzle,” for Brookings Panel on Economic Activity (1997). (Formerly entitled, “Why Are People So Indifferent to Indexation?”) [CFP 946]

“A Decade of Boom and Bust in Single Family Home Prices: Boston and Los Angeles, 1983–1993″ (with Karl E. Case), Revue D’Economie Financiere (December 1993), pp. 389–407. Reprinted in New England Economic Review (March/April 1994), 40–51

“Mortgage Default Risk and Real Estate Prices: The Use of Index-Based Futures and Options in Real Estate” (with Karl E. Case), Journal of Housing Research (1996), 7(2): 243–258. [CFDP 1098]

“Speculative Booms and Crashes,” Henry B. Thornton Lecture, City University, London, 1989, in Forrest Capie and Geoffrey E. Wood (eds.), Monetary Economics in the 1990s., Macmillan, 1996, pp. 58–74.

Why Did the Nikkei Crash? Expanding the Scope of Expectations Data Collection” (with Fumiko Kon-Ya and Yoshiro Tsutsui), Review of Economics and Statistics (1996), 78: 156–64. [CFDP 1012, CFP 922]

“Why Do People Dislike Inflation?” in Christina Romer and David Romer, eds., Reducing Inflation: Motivation and Strategy, National Bureau of Economic Research and University of Chicago Press, 1996. [CFDP 1115]

Aggregate Income Risks and Hedging Mechanisms,” Quarterly Review of Economics and Finance (1995). [CFDP 1048]

Conversation, Information, and Herd Behavior,” American Economic Review (1995), 85(2): 181–85. [CFDP 1092 & CFP 909]

“Hedging Inflation and Income Risks,” Manchester School of Economic and Social Studies (1995), 63: 1–21 (supplement “Papers in Money, Macroeconomics and Finance)

“Speculative Behavior and the Functioning of Risk Markets,” Moneda y Crédito (1995).

“World Income Components: Measuring and Exploiting International Risk Sharing Opportunities” (with Stefano Athanasoulis), NBER Working Paper No. 5095, April 1995. [CFDP 1097]

Actual and Warranted Movements in Asset Prices” (with Andrea Beltratti), Oxford Economic Papers (1993), 45: 387–402. [CFDP 970, CFP 859]

“Index-Based Futures and Options Trading in Real Estate” (with Karl E. Case and Allan N. Weiss), Journal of Portfolio Management (Winter 1993). [CFDP 1006]

Measuring Asset Value for Cash Settlement in Derivative Markets: Hedonic Repeated Measures Indices and Perpetual Futures,” Journal of Finance (1993), 48(3): 911–931. [CFDP 1036, CFP 856]

“The Theory of Index-Based Futures and Options Markets,” Estudios Económicos (El Colegio de México) (July–December, 1993), 8(2): 163–78.

Hunting for Homo Sovieticus: Situational versus Attitudinal Factors in Economic Behavior” (with Maxim Boycko and Vladimir Korobov), Brookings Papers on Economic Activity (1992), pp. 127–194. Reprinted (in Russian translation) in Constants (Ukraine) (1994), 1(1): 1. [CFP 817]

Stock Prices and Bond Yields: Can Their Comovements Be Explained in Terms of Present Value Models?” (with Andrea Beltratti), Journal of Monetary Economics (August 1992), 30. [CFDP 953, CFP 833]

“Volatility in U.S. and Japanese Stock Markets,” Journal of Applied Corporate Finance (1992), 5(1): 25–29. Excerpt reprinted in Stephen Lofthouse (ed.), Readings in Investments, Wiley, Chichester, 1994, pp. 315–318.

Arithmetic Repeat Sales Price Estimators,” Journal of Housing Economics (1991), 1: 110–26. [CFP 781]

“Investor Behavior in the October 1987 Stock Market Crash: The Case of Japan” (with Fumiko Kon-Ya and Yoshiro Tsutsui), Journal of the Japanese and International Economies (1991), 5: 1–13, 1991.

Popular Attitudes Towards Free Markets: The Soviet Union and the United States Compared” (with Maxim Boycko and Vladimir Korobov), American Economic Review (1991), 81(3): 385–400. Also published (in Russian) as “Rinok v Vospriyatii Sovyetskoi i Amerikanskoi Obshchestvennosti (Sravnitelnii Analyz),” in Mirovaya Ekonomika i Mezhdunarodniye Otnosheniya, 2/1992, pp. 39–54. Abridged version published in textbook The Road to Capitalism, Harcourt Brace Jovanovich, 1992. [CFP 787]

“The Significance of the Growth of Institutional Investing,” in New York Stock Exchange, Institutional Investor Fact Book 1991, New York, pp. 21–26.

“Yield Spreads and Interest Rate Movements: A Bird’s Eye View” (with John Y. Campbell), Review of Economic Studies (1991), 58: 495–514.

“Cointegration and Tests of Present Value Models,” (with John Campbell), Journal of Political Economy (1987), 95: 1062–1088. Reprinted in R.F. Engle and C.W.J. Granger, eds., Long-Run Economic Relationships. Oxford University Press, 1991. [CFDP 785]

Comparing Information in Forecasts from Econometric Models” (with Ray C. Fair), American Economic Review (1990), 80(3): 375–389. [CFDP 833R, CFP 754]

“Forecasting Prices and Excess Returns in the Housing Market” (with Karl E. Case), AREUEA Journal (1990), 18(3): 253–273.

“Market Volatility and Investor Behavior,” American Economic Review, Papers and Proceedings (1990), 80(2): 58–62.

“A Scott-Type Regression Test of the Dividend–Ratio Model,” Review of Economics and Statistics (1990), 72(2): 356–361.

“Speculative Prices and Popular Models,” Journal of Economic Perspectives (Spring 1990), 4(2): 55–65.

“Comovements in Stock Prices and Comovements in Dividends,” Journal of Finance (July 1989), 44: 719–729.

“Causes of Changing Financial Market Volatility,” in Financial Market Volatility, Federal Reserve Bank of Kansas City, 1988, pp. 1–22.

“The Dividend Ratio Model and Small Sample Bias: A Monte Carlo Study” (with John Campbell), Economics Letters (1989), 29: 325–331.

“The Dividend–Price Ratio and Expectations of Future Dividends and Discount Factors,” (with John Campbell), Review of Financial Studies (1988), 1(3): 195–228. [CFDP 812]

“The Efficiency of the Market for Single Family Homes” (with Karl E. Case), American Economic Review (March 1989), 79(1): 125–37. Reprinted in John M. Quigley, ed., The Economics of Housing, Cheltenham, UK: Edward Elgar, 1997.

The Informational Content of Ex Ante Forecasts” (with Ray C. Fair), Review of Economics and Statistics (1989), 71(2): 325–331. [CFDP 857, CFP 736]

“Initial Public Offerings: Investor Behavior and Underpricing,” NBER Working Paper, 1989.

“Price Conditional Vector Autoregressions and Theories of Stock Price Determination,” in Rui M.C. Guimarañes, Brian G. Kingsman, and Stephen J. Taylor (eds.), A Reappraisal of the Efficiency of Financial Markets. Springer-Verlag, NATO Advanced Science Institute Series, Berlin Heidelberg, 1989, pp. 409–429.

“Survey Evidence on the Diffusion of Interest and Information Among Investors” (with John Pound), Journal of Economic Behavior and Organization (1989), 12: 47–66. [CFDP 794]

The Term Structure of Interest Rates,” in Benjamin Friedman and Frank Hahn (eds.), Handbook of Monetary Economics. North Holland, 1989. [CFP 766]

“The Volatility Debate,” American Journal of Agricultural Economics (1988), 70(5): 1057–1063.

“The Behavior of Home Buyers in Boom and Post-Boom Markets,” (with Karl E. Case), New England Economic Review (November/December, 1988), pp. 29–46. Reprinted in Russian in Constants (Ukraine) (1993), 1(2): 1–20.

“Interpreting Cointegrated Models” (with John Campbell), Journal of Economic Dynamics and Control, Special Issue, Masanao Aoki, ed., “Economic Time Series Models with Random Walk and Other Nonstationary Components” (June/September 1988), 12: 505–522.

“Portfolio Insurance and Other Investor Fashions as Factors in the 1987 Stock Market Crash,” in Stanley Fischer, ed., NBER Macroeconomics Annual, 1988.

“Stock Prices, Earnings and Expected Dividends” (with John Campbell), Journal of Finance (July 1988), 43(3): 661–676. [CFDP 858]

“Are Institutional Investors Speculators?” Journal of Portfolio Management (1987), 13(3): 46–52.

“Conventional Valuation and the Term Structure of Interest Rates,” in Rudiger Dornbusch, Stanley Fischer and John Bossons, eds., Macroeconomics and Finance: Essays in Honor of Franco Modigliani. Cambridge, MA: MIT Press, 1987, pp. 63–88.

“Estimating the Continuous-Time Consumption-Based Asset-Pricing Model” (with Sanford J. Grossman and Angelo Melino) Journal of Business and Economic Statistics (1987), 5(3): 315–27.

“Expectations,” in John Eatwell, Murray Milgate and Peter Newman (eds.), The New Palgrave, New York: Stockton Press, 1987.

“Fashions, Fads and Bubbles in Financial Markets,” in Jack Coffee, ed., Knights, Raiders and Targets: The Impact of the Hostile Takeover. Oxford University Press, 1987.

“Prices of Single-Family Homes Since 1970: New Indexes for Four Cities” (with Karl E. Case), New England Economic Review (September/October 1987), 46–56. [CFDP 851]

“Ultimate Sources of Aggregate Variability,” American Economic Review, Papers and Proceedings (1987), 77(2): 87–92. [CFDP 816]

The Volatility of Stock Market Prices,” Science (January 2, 1987), 235: 33–37. [CFP 670]

“Financial Markets and Macroeconomic Fluctuations,” in James L. Butkiewicz, ed., Keynes Economic Legacy. Praeger, 1985.

“The Marsh–Merton Model of Managers’ Smoothing of Dividends,” American Economic Review (1986), 76(3): 499–503.

“Testing the Random Walk Hypothesis: Power Versus Frequency of Observation” (with Pierre Perron), Economics Letters (1985), 18: 381–386. [CFDP 732]

The Determinants of Interest Rates: Old Controversies Reopened” (with John Y. Campbell), AEA Papers and Proceedings (May 1984), 74(2): 44-48 (with John Y. Campbell) [CFP 595]

“Expectations and the Prices of Long-Term Assets,” in Pierre Malgrange and Pierre–Alain Muet (eds.), Contemporary Macroeconomic Modelling. Basil Blackwell, Oxford, 1984.

“A Simple Account of the Behavior of Long-Term Interest Rates” (with John Y. Campbell), American Economic Review Papers and Proceedings (1984), 74(2): 44–48.

Smoothness Priors and Nonlinear Regression,” Journal of the American Statistical Association (1984), 79(387): 609–615. [CFP 593]

Stock Prices and Social Dynamics,” Brookings Papers on Economic Activity (1984), 2: 457–498. [CFDP 719R, CFP 616]

“Theories of Aggregate Stock Price Movements,” Journal of Portfolio Management (1984), 10(2): 28–37.

“Forward Rates and Future Policy: Interpreting the Term Structure of Interest Rates” (with John Y. Campbell and Kermit L. Schoenholtz), Brookings Papers on Economic Activity (1983), 173–224. [CFDP 667]

“Consumption, Asset Markets and Macroeconomic Fluctuations,” Carnegie–Rochester Conference Series on Public Policy, Vol. 17. North-Holland Publishing Co., 1982, pp. 203–238.

“Consumption Correlatedness and Risk Measurement in Economics with Nontraded Assets and Heterogeneous Information” (with Sanford Grossman), Journal of Financial Economics (1982), 10: 195–210.<

“Alternative Tests of Rational Expectations Models: The Case of the Term Structure,” Journal of Econometrics (1981), 16: 17–87.

“The Determinants of the Variability of Stock Market Prices” (with Sanford Grossman), American Economic Review (1981), 71: 222–227.

“Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?”, American Economic Review (June 1981), 71(3): 421–436. Reprinted in Paul Whitely, ed., Economic Policy, Cheltenham, UK: Edward Elgar Publishing Ltd., 1996, and in The History of Management Thought, Aldershot Hants, UK: Dartmouth Publishing Company, 1997

“The Use of Volatility Measures in Assessing Market Efficiency,” Journal of Finance (1981), 36: 291–304.<

“Can the Federal Reserve Control Real Interest Rates?”, in Stanley Fischer (ed.), Rational Expectations and Economic Policy, National Bureau of Economic Research and University of Chicago Press, 1980.

“Distributed Lag Estimators Based on Linear Coefficient Restrictions and Bayesian Generalizations of These Estimators,” IHS Journal (1980), 4:163–180.

“Coupon and Tax Effects on New and Seasoned Bond Yields and the Measurement of the Cost of Debt Capital” (with Franco Modigliani), Journal of Financial Economics (1979), 7: 297–318.

“The Volatility of Long Term Interest Rates and Expectations Models of the Term Structure,” Journal of Political Economy (1979), 87: 1190–1219.

“Rational Expectations and the Dynamic Structure of Macroeconomic Models: A Critical Review,” Journal of Monetary Economics (1978), 4: 1–44.

“The Gibson Paradox and Historical Movements in Real Long Term Interest Rates” (with Jeremy J. Siegel), Journal of Political Economy (1977), 85(5): 891–898.

“A Distributed Lag Estimator Derived from Smoothness Priors,” Econometrica (1973), 41: 775–788. Also in Feinberg and Zellner, eds., Studies in Bayesian Econometrics and Statistics, North Holland, 1975.

“Inflation, Rational Expectations and the Term Structure of Interest Rates” (with Franco Modigliani), Economica (1973), 40(157): 12–43.

“Rational Expectations and the Term Structure of Interest Rates,” Journal of Money, Credit and Banking (1973), 3: 856–860.

PUBLIC POLICY AND OP-ED PIECES [Index]

“American Casino: The Promises and Perils of Bush’s Ownership Society,” The Atlantic, 295(2): 33–35, March 2005.

“How Wall Street Learns to Look the Other Way,” New York Times, Op-Ed Page (A25), February 8, 2005.

“Macro Markets: Managing Risks to National Economies,” in United Nations Development Program, The New Public Finance: Responding to Global Challenges. 2005.

“The Next Bubble (or Bust)” World Economic Forum Global Agenda, Issue No. 3, Annual Meeting 2005, Davos, Switzerland, pp. 106-107.

“People Are Talking …,” Wall Street Journal, Opinion Page, June 2, 2005

“Behavioral Finance, Irrational Markets, and the Search for Value,” Greenwich Roundtable Quarterly, 2:5-8, 2004.

“Figuring out Financial Markets: More Psychology than Economics,” IMF Survey (April 2004), 33: 11–12 (interviewed by Prakash Loungani).

An Interview with Robert Shiller,” [by John Y. Campbell] Macroeconomic Dynamics (2004), 8: 649–83.

“Irrational Exuberance and Behavioral Finance: A Conversation with Robert J. Shiller, Ph.D., about Integrating Investing with Social Sciences,” Journal of Investment Consulting (Summer 2004), 7(1): 10–20

“Long-Term Contracts Covarying with the Price of Goods,” Nihon Keizai Shimbun, April 27, 2004, p. 23. (in Japanese).

“Me Casa Es Su Housing Bubble,” Wall Street Journal Augsust 24, 2004, A13.

“Unlocking the Liquidity of New Asset Classes,” The 2004 Indexing Almanac, New York: Institutional Investor News and Information Management Network, 2004, pp. 31–32.

“A Conversation with Robert Shiller” (interview by Peter Passell) The Milken Review (Second Quarter 2003), 5(2): 76–83.

“Democratizing Capitalism,” Project Syndicate, May 2003.

“Diverse Views on Asset Bubbles,” in William C. Hunter, George C, Kaufman and Michael Pomerleano, editors, Asset Price Bubbles: The Implications for Monetary, Regulatory and International Policies, Cambridge MA: MIT Press, 2003, pp. 35–40.

“Financial Markets and Risk: Solving Social Problems” (interview by Jeffrey Madrick) Challenge (May–June 2003) 46(3): 124–34.

“Finance, Optimization, and the Irreducibly Irrational Component of Human Behavior,” The Handbook of the Economics of Finance Edited by George Constantinides, Milton Harris and René Stulz, Elsevier/North Holland, 2003, pp. 1125–28

“Financial Radar,” in Risk, Control and Performance, McKinsey & Company, 2003, pp. 34–35.

“In Memory of Franco Modigliani, 1918-2003,” Macroeconomic Dynamics, 2003.

“Insure your pay packet, house price and country,” The Guardian, March 31, 2003, p. 25.

“The Market’s Most Valuable Stock is Trust,” Wall Street Journal September 25, 2003, p. A18.

“Mind the Gap,” The New York Times, May 15, 2003, p. A35.

“Periods of Turmoil Bring the Promise of Innovation,” Financial Times, August 1, 2003, p. 19.

“Risk Management for the Masses,” The Economist, March 22, 2003, pp. 70–71.

“The Technology Deflator,” Wall Street Journal, June 12, 2003, p. A16.

“Will the Bond Bubble Burst?” Project Syndicate, June 2003.

“Wir brauchen grundsätzliche Veränderungen,” Handelsblatt, September 23, 2003, p. 9.

Celebrity CEOs Share the Blame for Street Scandals,” Wall Street Journal, op-ed page, June 27, 2002, A20.

“A Different Role for Government” (review of David Moss, When All Else Fails: Government as the Ultimate Risk Manager) Challenge 132-5, July-August 2002.

“Safe as Houses?” Wall Street Journal, op-ed page, December 17, 2002, reprinted in Japanese in Nomura Securities Fixed Income Research, December 24, 2002.

“Which Way for the Stock Market?” (with Jeremy J. Siegel) The Frank M. Engle Lecture, Bryn Mawr Pennsylvania: The American College, 2002.

The Fed Can’t Prop Up the Falling Markets,” Wall Street Journal, op-ed page, March 16, 2001, p. A18(Also translated in Handelsblatt, Germany, “Die Fed kann die Aktienkurse nicht nach oben treiben,” March 20, 2001.

“How Markets React to a Crisis,” The Observer (London), September 16, 2001.

“Irrational Exuberance: What Brought the Bubble to Japan and the US,” Diamond Magazine, Japan, February 24, 2001, pp. 104–5 (in Japanese).

“Just Another Super-Highway,” Financial Times, op-ed page, August 1, 2001, p. 13

“The Mystery of Economic Recessions,” New York Times, op-ed page, February 4, 2001.

“Lowered Expectations Could Topple Economy,” San Jose Mercury News, Perspectives Section, February 25, 2001, p. 1C.

“Paradigmenwechsel in der Finanzmarktforschung,” Neue Zürcher Zeitung, August 5, 2001. (reprinted in Ernst Fehr and Gerhard Schwarz, editors, Psychologische Grundlagen der Öknomie, Zürich: Verlag Neue Zürcher Zeitung, 2002 pp. 83–90.

“A Recession Unlike Any Other,” Wall Street Journal, op-ed page, November 27, 2001, p. A22

“A Safety Net for our Future,´Financial Times, op-ed page, January 12, 2001, p. 17.

“The Ascent of Mount Irrational,” Financial Times (London), Front Page, Weekend Money, April 8, 2000.

“Margin Calls: Should Fed Step In? No, Meddling Makes Things Worse,” Wall Street Journal, Op-Ed Page, April 10, 2000.

“Pffffffft! The Bubble Won’t Burst … But It Will Deflate Over Time. You Can

Year in Review - 2008

I wasn’t going to do a year-in-review article this year - it was a weird year, but Dave Barry, syndicated columnist for the Miami Herald also thought 2008 was weird - and wrote about it - the year in review, present in Dave Barry style and written like no one else can [partly transcribed, links provided by LPJ Editor]…

Indeed, let’s have a better year that will make most of us happy.

Universities struggle as value of endowments falls

Tough decisions need to be made about how to cut costs.

Eric Hand

 

Some large research universities have suffered double-digit declines in their multibillion-dollar endowments since the autumn credit crunch and stock market collapse. The endowments have also become increasingly cash-poor precisely when they might be expected to compensate for downward pressures on academic budgets. The declines are presenting universities with tough choices: fire sales of endowment assets, or budgetary trimming in the form of pay cuts, freezes on hiring and deferred construction projects.

“It’s a very big problem,” says John Walda, president of the National Association of College and University Business Officers (NACUBO) in Washington DC. “A good number [of endowments] are seeing about a 30% decline since last year.”

Harvard University announced in December that its endowment, the world’s largest and worth $36.9 billion at mid-year, had dropped 22% from that amount by the end of November - with worse expected to come. As of mid-December, the world’s second-largest endowment, that of Yale University, had fallen 25% since mid-year, when it stood at $22.9 billion.

In some ways, the big universities have been a victim of their own success. As endowments experienced double-digit increases nearly every year through the 1990s and 2000s, universities have become ever more dependent on them in their overall budgets - even as endowment payouts remained roughly constant at around 5% per year. Ten years ago, Harvard’s endowment paid for a third of the operating budget of the school of arts and sciences; now it covers more than half of the $1.16-billion budget.

Endowments are suffering now partly because of the very investment methods they used to beat the broader markets year after year. Universities with endowments bigger than $1 billion - there were 76 of them in the United States in 2007, according to NACUBO - kept much of their money in more volatile ‘alternative’ investments that are ‘illiquid’, or difficult to convert into cash quickly, such as hedge funds and venture capital. By comparison, institutions with endowments of less than $25 million had a nearly opposite, more conservative approach, with much of their money being kept in cash and fixed-income assets (see chart).

“When are we going to be forced to sell some of these assets in the down market?”

But alternative investments, in addition to being illiquid, can also suck up cash from elsewhere. Hedge-fund managers, for example, require periodic new investments known as ‘cash calls’. These represent a problem at a time when universities need cash for salaries and construction projects and credit is hard to come by. “The tough choice that endowment managers face now is, ‘when are we going to be forced to sell some of these assets in the down market?’” says Nelson. Some managers, such as those at Harvard, are already trying to sell assets off for far less than they had been worth, according to reports in The New York Times and The Wall Street Journal.

Even knowing what the alternative assets are worth is a challenge. Yeshiva University in New York City revealed that $110 million in investments - 8% of the university’s endowment - had evaporated in the investment scheme created by Bernard Madoff, who was arrested on 11 December and charged with fraud that may have cheated investors of $50 billion (see ‘Medical charity folds after investment losses’). The current climate, says Walda, “will lead to more scrutiny of the underlying value of investments”.

The effects on departmental hallways have been varied and will probably play out over several years, as most endowments base their payouts on a principal amount smoothed by a three-year rolling average. Harvard has put a partial hiring freeze in place. Stanford University in Palo Alto, California, will trim its budget next year by 5% by postponing new construction, controlling salaries and cutting some jobs. The chancellor of Washington University in St Louis, Missouri, has promised to take a symbolic pay cut of nearly 10% off his half-a-million-dollar salary. The Georgia Institute of Technology in Atlanta is trimming its landscaping budget; the University of Hawaii is turning off its weekend air-conditioning; and the Field Museum of Natural History in Chicago, Illinois, is cutting its budget by 15% after the value of the museum’s endowment plunged by nearly US$100 million (31%) in the past six months (see ‘Downturn hits Chicago’s natural history museum’).

Making do

At the California Institute of Technology in Pasadena, endowment managers had started putting more money into cash and cash-equivalent assets in September, says spokesman Jon Weiner, and the university expects to weather the storm without a hiring freeze.

Few, however, are as optimistic about their prospects. In a survey released on 18 December by the National Association of Independent Colleges and Universities, half of the 371 college and university presidents who responded reported freezing new hiring. In addition, 22% reported freezing salaries, and more than two-thirds were planning to raise tuition fees for the next academic year. Their manoeuvres stem partly from falling endowments, but also from concerns such as greater difficulty in raising funds and declining student enrolment numbers.

The endowment phenomenon is largely American, where there is a long tradition of private fund-raising in higher education. In Europe, the only two universities with multibillion-dollar endowments are Oxford and Cambridge in the United Kingdom. By and large, big research universities outside the United States are much more dependent on public funding, says Thomas Estermann of the European University Association in Brussels. “Losing a higher percentage of public funding will be much worse for them,” he says. That is also the case for small universities in the United States, which are worried about budget cuts at the state level because their endowments won’t be bailing them out. The 1,600 private US institutions have a median endowment of only $16 million, according to 2007 data from the US Department of Education. Most public universities have similarly small endowments, with the exception of a handful of monster-sized ones, such as those of the University of Texas and the University of California systems.

Nearly a year ago, in a very different climate, universities were facing scrutiny in the US Congress. Representatives wanted to know why college tuition fees kept rising even though some universities, bolstered by successful endowments, seemed to be getting richer. They proposed legislation that would mandate state universities to spend 5% of the value of their endowment assets each year - for instance to reduce tuition fees - as is the case for private foundations. But that legislation has not yet got anywhere. Many will be watching to see if endowments, the cash cows for universities for so long, can sustain them through the long economic winter

 

S$400b in Singapore market cap wiped out in 2008

SINGAPORE, Jan 1 — If there has ever been a year investors would like to forget, the slow motion train wreck of 2008 must surely be it.

It has been 12 months of unprecedented carnage, with the Straits Times Index (STI) plunging 50 per cent to 1,761.56 — the biggest annual fall in its 42-year history.

Massive sell-offs and fund redemptions wiped out almost S$400 billion (RM960 billion) from the combined market value of the 783 companies listed here.

The total value of shares of those firms at the market close yesterday was S$393.04 billion — less than half the S$790.3 billion on Dec 31, 2007, and the lowest since the end of 2004, where it stood at S$360.7 billion.

Much of the damage was done in October, when S$123 billion of value disappeared into thin air.

Most corporations have also shrunk significantly, although SingTel retained its crown as the biggest listed firm in terms of value despite its market capitalisation shrinking 36.2 per cent to S$40.6 billion. Market capitalisation is calculated by multiplying the company’s share price by the total number of shares.

Membership of the so-called billion-dollar club, or firms with a market capitalisation exceeding S$1 billion, has shrunk to 62 from 115 in 2007 and 97 in 2006.

“This is a record drop in stock market value for Singapore,” said Westcomb Securities research head Goh Mou Lih, who expects market value to shrink further in the first half of this year, marked by a severe economic downturn and nasty surprises in corporate earnings.

Export-oriented sectors, as well as those in consumer goods, excluding basic necessities, may be particularly vulnerable, he said.

However, Goh said that things may take a turn for the better in the second half, which may prop up growth.

Malaysian palm oil giant Wilmar International, which muscled its way into second place in 2007 in terms of market capitalisation, has fallen to fourth after its value dropped 48.2 per cent to S$17.8 billion.

A falling property sector marked by poor sales of new homes and concerns about potential asset write-downs has stripped more than 50 per cent off the market capitalisation of developers like CapitaLand and City Developments.

Bourse operator Singapore Exchange, whose fortunes are tied to market turnover and derivatives volume, saw its market capitalisation slump more than 60 per cent to S$5.43 billion.

Banks, viewed as a proxy of the economy, were hammered as well. Their market value has been slashed by almost 40 per cent, dogged by slowing loans growth, lower non-interest income and rising non-performing loans.

DBS Group Holdings, which was the smallest of the three banks in October, managed to overtake OCBC Bank in market value after its S$4 billion rights issue. United Overseas Bank is still the largest bank, with a market value of S$19.7 billion.

Some of the more prominent China shares, including Cosco Corp, Yangzijiang and property developer Yanlord, have declined by more than 70 per cent.

So what to do for 2009? Analysts maintain that sticking to defensive plays is the best bet until the economy shows some signs of recovery.

SMRT is among the best performers, having lost only 1.7 per cent in value last year, while climbing 30 notches to 32nd place in terms of market capitalisation.

DBS Vickers expects the STI to trade within a range of 1,450 to 2,180.

“Companies backed by relatively resilient earnings, strong cash flows and cashed-up balance sheets are in a favourable position to acquire cheap assets,” it said, citing SIA Engineering, Singapore Press Holdings and Singapore Technologies Engineering as preferred picks. — The Straits Times

Zaagkii Wings

(Marquette, Michigan) - Northern Michigan teens are on a mission to protect pollinators by helping butterflies and restoring native plants to areas of the Upper Peninsula.

Perhaps the best know pollinators are bees - like honey bees and bumble bees.

Billions of these bees are dying across the world in a syndrome called Colony Collapse Disorder.

Zaagkii Project artwork created by a teen volunteer

Bees are disappearing and its not clear why - although human impact on the environment are among the suspected causes like pesticides and global warming.

A world without bees would mean world without food. - as was dramatically pointed out in the Jerry Seinfield 2007 comedy - Bee movie.

Bees go on strike causing plants across the world die - that means no food, no flowers, no trees - the death of civilization.

After bees, the next best pollinators are butterflies.

Marquetee teens build a butterfly house in July 2008 in the parking lot of the Grace United Methodist Church.

The butterfly houses are longer than the better known birdhouses and are lined with bark.

Marquette, Michigan area teens and Native American youth spent the summer of 2008 building butterfly houses - that are longer and slimmer than birdhouses and are lined with bark.

Teens participating in the Keweenaw Bay Indian Community Summer Youth Program built and painted the houses at the tribes Natural Resource Department along Lake Superior.

KBIC Natural Resource Department Director Todd Warner said the Zaagkii Project is a good way for youth to become aware of their connection to natural resources and nature.

The butterfly houses offer protection to butterflies that can enter thru tiny slits.

Butterfly houses, pictured above on poles, also offer rest to migrating monarchs and can be used for reproduction.

Marquete teens and two Zaagkii Propject volunteers are pictured in July 2008 planting native plant seeds at the Hiawatha National Forest Green House in Marquette, MI

Marquette teens have planted or distributed 26,000 native plant including at the Hiawatha National Forest greenhouse in Marquette.

In the spring of 2009 some of the plants will be planted at several areas across northern Michigan including at Sand Point - a beach that the Keweenaw Bay Indian Community has been repairing from the effects of copper mining.

The mine dumped copper processing waste into Lake Superior in the late 1800s and early 1900s - polluting miles of shoreline.

KBIC Photo of Sand Point

The tribe capped the pollution and the native plants will be used to attract wildlife and restore the ecosystem.

The Zaagkii Wings and Seeds Project will enter its second year in the summer of 2009.

This is the first of several videos on the many aspect of the Zaagkii Project that was founded by the non- profit Cedar Tree Institute in Marquette that has sponsored numerous environment projects.

The three-year Zaagkii Project is sponsored by the CTI, Marquette County Juvenile Court, Keweenaw Bay Indian Community (KBIC) and the United States Forest Service (USFS).

Future videos will include a look at a bee farm in Marquette County that fascinated Zaagkii Project teens who received a close look at the hives and learned about the importance of pollinators.

Pictured above, the Cedar Tree Institute held a BBQ in July 2008 to honor the Zaagkii Project teens at Presque Isle Park in Marquette, MI.

The teens visited a KBIC pow-wow where they were recognized. And amongst numerous news stories done on project Jan Schultz of the USFS was interviewed by a California radio station about Zaagkii Project.

All this in future videos.

The Zaagkii Project is made possible by contributors like the Marquette Community Foundation, the Negaunee Community Fund, the Negaunee Community Youth Fund, the M.E. Davenport Foundation, the Kaufman Foundation, the Phyllis and Max Reynolds Foundation, with assistance from the Upper Peninsula Children’s Museum in Marquette, Mich. and the Borealis Seed Company in Big Bay, Mich.

Im Greg Peterson and you are watching Zaagkii TV

Eternal God, your amazing power to innovate goes on forever, but in our time we are seeing your glorious Creation slipping away.

Continue to touch our hearts with a concern for Creation; continue to give us wisdom and insight into Creation’s healthy parameters; continue to draw us together on Creation’s behalf and well-being.

Consider a (local) live plant gift, or perhaps even a contribution to purchase and preserve rain forest or some other wilderness place!

email EarthWords

Austin, Texas Honeybee video courtesy: Johnnie Hargrave

Photos by Richard Burkmar; Paul Billiet & Shirley Burchill

Wikipedia photos by (Usernames when real name not available): Tübingen-Hagelloch, Björn Appel, Warden, Debi Vort, Kristof Van der Poorten, John Severns, Waugsberg, Kenneth Dwain Harrelson, Derek Ramsey, John O’Neill

USFS Official Jan Schultz speaks to Zaagkii Project supporters and volunteers in July 2008 at a Cedar Tree institute BBQ at Presque Isle Park in Marquette, MI

http://www.wildlife-gardening.org.uk/default.asp?gallery=Galleries\Animals\Insects\Bumblebees\bombus-pascuorum-040616.xml

A Concerning Note to end the Year on

Stocks close out worst year since 1931; Dow drops 33.8%

Wall Street closed out its worst year since the Great Depression Wednesday — wiping out $6.9 trillion in stock market wealth — after the bursting of the housing bubble began a long chain of events culminating in the worst credit crisis in a generation and a dreadful economic outlook that left investors questioning their faith in stock markets.

Six years of stock gains disappeared as the economy crumbled and markets crashed around the globe, shaking the confidence of professional and individual investors alike.

For the year, the Dow Jones industrial average fell 33.8%, its bleakest since 1931; the Standard & Poor’s 500 index skidded 38.5%; and the Nasdaq composite index posted its worst year ever, with a 40.5% drop.

But the year’s chaos went far beyond the stock market. Credit markets that drive lending became paralyzed, plunging the country further into recession and touching off an unprecedented rush for the safety of Treasury bills, notes and bonds.

Commodities markets, usually ignored by most investors, soared on speculative buying and then collapsed when it became clear that the world economy was in trouble and that record high prices, including oil’s peak above $147 a barrel, were unjustified.

“It was a feeling of flailing,” said Jerry Webman, chief economist at Oppenheimer Funds. “People couldn’t get a grasp because there were not obvious historical precedents.”

A string of financial disasters culminating in the collapse of Lehman Brothers in the middle of the night in September precipitated the third biggest percentage loss ever for the Dow industrials and the broad S&P 500.

By Nov. 20, the S&P had hit an 11-year low, destroying more than a decade of returns for many Americans and wiping out memories of record highs reached just 13 months earlier.

“It was plain ugly out there,” said Kurt Brunner, a portfolio manager with Swarthmore Group in Philadelphia. “All in all, it’s something that I truly hope is once-in-a lifetime thing.”

A deep mistrust grew between banks while growing doubts among investors about the American banking model crippled financial stocks and yanked a key pillar supporting U.S. equity markets.

As the shortage of credit seeped into the broader economy, unemployment rose and consumer spending dived.

Analysts said many investors were looking forward to the start of 2009. Still, there are many unknowns about the economy that could make Wall Street’s recovery from a terrible 2008 a difficult one.

Wall Street is hoping for signs of recovery by the second half of 2009, including evidence the housing market has hit bottom, increased lending by banks and a drop in unemployment accompanied by increased consumer spending.

Full Story Here

Graduating in a Bear Market? Wall Street

With graduation approaching for the Class of 2009, college seniors nationwide are scrambling to find jobs by the spring.  Let’s hope they don’t have their hearts set on Wall Street.  By the time the big unwind is through, The financial services industry (and peripheral sectors) will probably have lost more than a quarter of a million jobs.  Unlike ‘87 or ‘01-’02, most of these jobs won’t be coming back.

The business of Wall Street used to be effecting transactions and facilitating investment, but over the last few decades it became more about inventing products than anything else.  Selling products of one’s own making was the path to higher profit margins, so Wall Street firms focused on making products for their sales forces.

When there was demand for a way to invest in the internet and the high tech boom 10 years ago, The Street (conspiring with venture capitalists) met that demand by launching a thousand purposeless dot com IPO’s, some were just domain names with a handful of employees.  During the bear market of 2001-2002, scores of mutual fund companies pumped out “principle protection” funds, essentially a way to buy a stock index with a guarantee against losses.  The catch was that your upside was limited to only 1% of the S&P 500’s gain per month; a joke, because most of the move an index makes happens in short bursts, within a month, for example.

In a dramatic shift of cause and effect, however, the latest crisis was actually created by Wall Street products.  The Street wasn’t just a victim of the crime, it was the perpetrator as well, both the seller of toxic mortgage and debt products and the buyer.  Money was cheap, everyone had too much of it, and boy, you can sure make a fortune by levering up $100 million 20-to-1 and then taking your “management” fee on the $2 billion you’ve created.

That was then, this is now.  No one is going to be able to get leverage like that again, and so fees will be coming down on whatever products still exist, once Wall Street has finished shutting down entire lines of business outright.  The big investment banks have all either disappeared or become regular banks.  Regular banks don’t pay the way the Lehman guys were accustomed to.  The hedge fund industry will probably shrink by at least 50%, if not more.  The biggest or best performing funds will still be around, but will probably not be able to justify 2 and 20 fees. Mutual fund families will remain under siege by the ETF industry as individual investors continue to prefer the index to the manager, the simple to the opaque.  Sell side research departments will continue to disappear as traders and investors keep ignoring their discounted cash flow analysis, which, as everyone knows, has no bearing at all on where stocks will trade.

All of this adds up to a shrinking pie which will in turn, lead to less need for expansion and hiring.  Once hiring freezes thaw, it will become a buyer’s market for talent and compensation will become more rational in light of the new-found austerity of the banking community.

Successful risk taking will still be rewarded, but over longer periods of time and in smaller denominations.  Now that the US government and the American taxpayer are part owners of many of these companies, the compensation of executives and employees will undoubtedly come back to Earth (or at least in-line with the rest of the corporate world).  Wall Street is the only industry that pays its employees over 50% of it’s revenues, and this will probably be a thing of the past.

College students need to face a few realities about the future of Wall Street.  There will always be opportunities for the hardworking and intelligent on The Street, but the days of just showing up and becoming a multi-millionaire because your uncle is a VP are over.  As long as people have money, there will be a need for guidance from an advisor, but the price of this advice will (and should) be commensurate with it’s actual value.  If recent graduates are willing to come here and actually earn the money they make, there is a place for them, but the days of big, easy money for everyone, have come to a close.

Further Reading:

Newsday - Few job prospects for ‘09 graduating class

The Fund for Peace - Failed States Index Scores 2006

The Fund for Peace - Failed States Index Scores 2006.

FIGHT TO SAVE THE AUTOWORKERS AND THE UAW

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Roger Biduk; Wall Street Higher to Finish Brutal Year

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The Last Roundup

Knowledge is the antidote to fear. - Ralph Waldo Emerson

ARE YOU ON THE LIST? The federal government has been developing a highly classified plan that will override the Constitution in the event of a major terrorist attack (Photo: Illustration by Brett Ryder)

In the spring of 2007, a retired senior official in the U.S. Justice Department sat before Congress and told a story so odd and ominous, it could have sprung from the pages of a pulp political thriller. It was about a principled bureaucrat struggling to protect his country from a highly classified program with sinister implications. Rife with high drama, it included a car chase through the streets of Washington, D.C., and a tense meeting at the White House, where the president’s henchmen made the bureaucrat so nervous that he demanded a neutral witness be present.

The bureaucrat was James Comey, John Ashcroft’s second-in-command at the Department of Justice during Bush’s first term. Comey had been a loyal political foot soldier of the Republican Party for many years. Yet in his testimony before the Senate Judiciary Committee, he described how he had grown increasingly uneasy reviewing the Bush administration’s various domestic surveillance and spying programs. Much of his testimony centered on an operation so clandestine he wasn’t allowed to name it or even describe what it did. He did say, however, that he and Ashcroft had discussed the program in March 2004, trying to decide whether it was legal under federal statutes. Shortly before the certification deadline, Ashcroft fell ill with pancreatitis, making Comey acting attorney general, and Comey opted not to certify the program. When he communicated his decision to the White House, Bush’s men told him, in so many words, to take his concerns and stuff them in an undisclosed location.

Comey refused to knuckle under, and the dispute came to a head on the cold night of March 10, 2004, hours before the program’s authorization was to expire. At the time, Ashcroft was in intensive care at George Washington Hospital following emergency surgery. Apparently, at the behest of President Bush himself, the White House tried, in Comey’s words, “to take advantage of a very sick man,” sending Chief of Staff Andrew Card and then–White House counsel Alberto Gonzales on a mission to Ashcroft’s sickroom to persuade the heavily doped attorney general to override his deputy. Apprised of their mission, Comey, accompanied by a full security detail, jumped in his car, raced through the streets of the capital, lights blazing, and “literally ran” up the hospital stairs to beat them there.

Minutes later, Gonzales and Card arrived with an envelope filled with the requisite forms. Ashcroft, even in his stupor, did not fall for their heavy-handed ploy. “I’m not the attorney general,” Ashcroft told Bush’s men. “There”—he pointed weakly to Comey—”is the attorney general.” Gonzales and Card were furious, departing without even acknowledging Comey’s presence in the room. The following day, the classified domestic spying program that Comey found so disturbing went forward at the demand of the White House—”without a signature from the Department of Justice attesting as to its legality,” he testified.

What was the mysterious program that had so alarmed Comey? Political blogs buzzed for weeks with speculation. Though Comey testified that the program was subsequently readjusted to satisfy his concerns, one can’t help wondering whether the unspecified alteration would satisfy constitutional experts, or even average citizens. Faced with push-back from his bosses at the White House, did he simply relent and accept a token concession? Two months after Comey’s testimony to Congress, the New York Times reported a tantalizing detail: The program that prompted him “to threaten resignation involved computer searches through massive electronic databases.” The larger mystery remained intact, however. “It is not known precisely why searching the databases, or data mining, raised such a furious legal debate,” the article conceded.

Another clue came from a rather unexpected source: President Bush himself. Addressing the nation from the Oval Office in 2005 after the first disclosures of the NSA’s warrantless electronic surveillance became public, Bush insisted that the spying program in question was reviewed “every 45 days” as part of planning to assess threats to “the continuity of our government.”

Few Americans—professional journalists included—know anything about so-called Continuity of Government (COG) programs, so it’s no surprise that the president’s passing reference received almost no attention. COG resides in a nebulous legal realm, encompassing national emergency plans that would trigger the takeover of the country by extra-constitutional forces—and effectively suspend the republic. In short, it’s a road map for martial law.

While Comey, who left the Department of Justice in 2005, has steadfastly refused to comment further on the matter, a number of former government employees and intelligence sources with independent knowledge of domestic surveillance operations claim the program that caused the flap between Comey and the White House was related to a database of Americans who might be considered potential threats in the event of a national emergency. Sources familiar with the program say that the government’s data gathering has been overzealous and probably conducted in violation of federal law and the protection from unreasonable search and seizure guaranteed by the Fourth Amendment.

According to a senior government official who served with high-level security clearances in five administrations, “There exists a database of Americans, who, often for the slightest and most trivial reason, are considered unfriendly, and who, in a time of panic, might be incarcerated. The database can identify and locate perceived ‘enemies of the state’ almost instantaneously.” He and other sources tell Radar that the database is sometimes referred to by the code name Main Core. One knowledgeable source claims that 8 million Americans are now listed in Main Core as potentially suspect. In the event of a national emergency, these people could be subject to everything from heightened surveillance and tracking to direct questioning and possibly even detention.

Of course, federal law is somewhat vague as to what might constitute a “national emergency.” Executive orders issued over the past three decades define it as a “natural disaster, military attack, [or] technological or other emergency,” while Department of Defense documents include eventualities like “riots, acts of violence, insurrections, unlawful obstructions or assemblages, [and] disorder prejudicial to public law and order.” According to one news report, even “national opposition to U.S. military invasion abroad” could be a trigger.

Let’s imagine a harrowing scenario: coordinated bombings in several American cities culminating in a major blast—say, a suitcase nuke—in New York City. Thousands of civilians are dead. Commerce is paralyzed. A state of emergency is declared by the president. Continuity of Governance plans that were developed during the Cold War and aggressively revised since 9/11 go into effect. Surviving government officials are shuttled to protected underground complexes carved into the hills of Maryland, Virginia, and Pennsylvania. Power shifts to a “parallel government” that consists of scores of secretly preselected officials. (As far back as the 1980s, Donald Rumsfeld, then CEO of a pharmaceutical company, and Dick Cheney, then a congressman from Wyoming, were slated to step into key positions during a declared emergency.) The executive branch is the sole and absolute seat of authority, with Congress and the judiciary relegated to advisory roles at best. The country becomes, within a matter of hours, a police state.

Interestingly, plans drawn up during the Reagan administration suggest this parallel government would be ruling under authority given by law to the Federal Emergency Management Agency, home of the same hapless bunch that recently proved themselves unable to distribute water to desperate hurricane victims. The agency’s incompetence in tackling natural disasters is less surprising when one considers that, since its inception in the 1970s, much of its focus has been on planning for the survival of the federal government in the wake of a decapitating nuclear strike.

Under law, during a national emergency, FEMA and its parent organization, the Department of Homeland Security, would be empowered to seize private and public property, all forms of transport, and all food supplies. The agency could dispatch military commanders to run state and local governments, and it could order the arrest of citizens without a warrant, holding them without trial for as long as the acting government deems necessary. From the comfortable perspective of peaceful times, such behavior by the government may seem far-fetched. But it was not so very long ago that FDR ordered 120,000 Japanese Americans—everyone from infants to the elderly—be held in detention camps for the duration of World War II. This is widely regarded as a shameful moment in U.S. history, a lesson learned. But a long trail of federal documents indicates that the possibility of large-scale detention has never quite been abandoned by federal authorities. Around the time of the 1968 race riots, for instance, a paper drawn up at the U.S. Army War College detailed plans for rounding up millions of “militants” and “American negroes,” who were to be held at “assembly centers or relocation camps.” In the late 1980s, the Austin American-Statesman and other publications reported the existence of 10 detention camp sites on military facilities nationwide, where hundreds of thousands of people could be held in the event of domestic political upheaval. More such facilities were commissioned in 2006, when Kellogg Brown & Root—then a subsidiary of Halliburton—was handed a $385 million contract to establish “temporary detention and processing capabilities” for the Department of Homeland Security. The contract is short on details, stating only that the facilities would be used for “an emergency influx of immigrants, or to support the rapid development of new programs.” Just what those “new programs” might be is not specified.

In the days after our hypothetical terror attack, events might play out like this: With the population gripped by fear and anger, authorities undertake unprecedented actions in the name of public safety. Officials at the Department of Homeland Security begin actively scrutinizing people who—for a tremendously broad set of reasons—have been flagged in Main Core as potential domestic threats. Some of these individuals might receive a letter or a phone call, others a request to register with local authorities. Still others might hear a knock on the door and find police or armed soldiers outside. In some instances, the authorities might just ask a few questions. Other suspects might be arrested and escorted to federal holding facilities, where they could be detained without counsel until the state of emergency is no longer in effect.

It is, of course, appropriate for any government to plan for the worst. But when COG plans are shrouded in extreme secrecy, effectively unregulated by Congress or the courts, and married to an overreaching surveillance state—as seems to be the case with Main Core—even sober observers must weigh whether the protections put in place by the federal government are becoming more dangerous to America than any outside threat.

Another well-informed source—a former military operative regularly briefed by members of the intelligence community—says this particular program has roots going back at least to the 1980s and was set up with help from the Defense Intelligence Agency. He has been told that the program utilizes software that makes predictive judgments of targets’ behavior and tracks their circle of associations with “social network analysis” and artificial intelligence modeling tools.

“The more data you have on a particular target, the better [the software] can predict what the target will do, where the target will go, who it will turn to for help,” he says. “Main Core is the table of contents for all the illegal information that the U.S. government has [compiled] on specific targets.” An intelligence expert who has been briefed by high-level contacts in the Department of Homeland Security confirms that a database of this sort exists, but adds that “it is less a mega-database than a way to search numerous other agency databases at the same time.”

A host of publicly disclosed programs, sources say, now supply data to Main Core. Most notable are the NSA domestic surveillance programs, initiated in the wake of 9/11, typically referred to in press reports as “warrantless wiretapping.”

In March, a front-page article in the Wall Street Journal shed further light onto the extraordinarily invasive scope of the NSA efforts: According to the Journal, the government can now electronically monitor “huge volumes of records of domestic e-mails and Internet searches, as well as bank transfers, credit card transactions, travel, and telephone records.” Authorities employ “sophisticated software programs” to sift through the data, searching for “suspicious patterns.” In effect, the program is a mass catalog of the private lives of Americans. And it’s notable that the article hints at the possibility of programs like Main Core. “The [NSA] effort also ties into data from an ad-hoc collection of so-called black programs whose existence is undisclosed,” the Journal reported, quoting unnamed officials. “Many of the programs in various agencies began years before the 9/11 attacks but have since been given greater reach.”

The following information seems to be fair game for collection without a warrant: the e-mail addresses you send to and receive from, and the subject lines of those messages; the phone numbers you dial, the numbers that dial in to your line, and the durations of the calls; the Internet sites you visit and the keywords in your Web searches; the destinations of the airline tickets you buy; the amounts and locations of your ATM withdrawals; and the goods and services you purchase on credit cards. All of this information is archived on government supercomputers and, according to sources, also fed into the Main Core database.

Main Core also allegedly draws on four smaller databases that, in turn, cull from federal, state, and local “intelligence” reports; print and broadcast media; financial records; “commercial databases”; and unidentified “private sector entities.” Additional information comes from a database known as the Terrorist Identities Datamart Environment, which generates watch lists from the Office of the Director of National Intelligence for use by airlines, law enforcement, and border posts. According to the Washington Post, the Terrorist Identities list has quadrupled in size between 2003 and 2007 to include about 435,000 names. The FBI’s Terrorist Screening Center border crossing list, which listed 755,000 persons as of fall 2007, grows by 200,000 names a year. A former NSA officer tells Radar that the Treasury Department’s Financial Crimes Enforcement Network, using an electronic-funds transfer surveillance program, also contributes data to Main Core, as does a Pentagon program that was created in 2002 to monitor antiwar protesters and environmental activists such as Greenpeace.

If previous FEMA and FBI lists are any indication, the Main Core database includes dissidents and activists of various stripes, political and tax protesters, lawyers and professors, publishers and journalists, gun owners, illegal aliens, foreign nationals, and a great many other harmless, average people.

A veteran CIA intelligence analyst who maintains active high-level clearances and serves as an advisor to the Department of Defense in the field of emerging technology tells Radar that during the 2004 hospital room drama, James Comey expressed concern over how this secret database was being used “to accumulate otherwise private data on non-targeted U.S. citizens for use at a future time.” Though not specifically familiar with the name Main Core, he adds, “What was being requested of Comey for legal approval was exactly what a Main Core story would be.” A source regularly briefed by people inside the intelligence community adds: “Comey had discovered that President Bush had authorized NSA to use a highly classified and compartmentalized Continuity of Government database on Americans in computerized searches of its domestic intercepts. [Comey] had concluded that the use of that ‘Main Core’ database compromised the legality of the overall NSA domestic surveillance project.”

If Main Core does exist, says Philip Giraldi, a former CIA counterterrorism officer and an outspoken critic of the agency, the Department of Homeland Security (DHS) is its likely home. “If a master list is being compiled, it would have to be in a place where there are no legal issues”—the CIA and FBI would be restricted by oversight and accountability laws—”so I suspect it is at DHS, which as far as I know operates with no such restraints.” Giraldi notes that DHS already maintains a central list of suspected terrorists and has been freely adding people who pose no reasonable threat to domestic security. “It’s clear that DHS has the mandate for controlling and owning master lists. The process is not transparent, and the criteria for getting on the list are not clear.” Giraldi continues, “I am certain that the content of such a master list [as Main Core] would not be carefully vetted, and there would be many names on it for many reasons—quite likely including the two of us.”

Would Main Core in fact be legal? According to constitutional scholar Bruce Fein, who served as associate deputy attorney general under Ronald Reagan, the question of legality is murky: “In the event of a national emergency, the executive branch simply assumes these powers”—the powers to collect domestic intelligence and draw up detention lists, for example—”if Congress doesn’t explicitly prohibit it. It’s really up to Congress to put these things to rest, and Congress has not done so.” Fein adds that it is virtually impossible to contest the legality of these kinds of data collection and spy programs in court “when there are no criminal prosecutions and [there is] no notice to persons on the president’s ‘enemies list.’ That means if Congress remains invertebrate, the law will be whatever the president says it is—even in secret. He will be the judge on his own powers and invariably rule in his own favor.”

The veteran CIA intelligence analyst notes that Comey’s suggestion that the offending elements of the program were dropped could be misleading: “Bush [may have gone ahead and] signed it as a National Intelligence Finding anyway.”

But even if we never face a national emergency, the mere existence of the database is a matter of concern. “The capacity for future use of this information against the American people is so great as to be virtually unfathomable,” the senior government official says.

In any case, mass watch lists of domestic citizens may do nothing to make us safer from terrorism. Jeff Jonas, chief scientist at IBM, a world-renowned expert in data mining, contends that such efforts won’t prevent terrorist conspiracies. “Because there is so little historical terrorist event data,” Jonas tells Radar, “there is not enough volume to create precise predictions.”

The overzealous compilation of a domestic watch list is not unique in postwar American history. In 1950, the FBI, under the notoriously paranoid J. Edgar Hoover, began to “accumulate the names, identities, and activities” of suspect American citizens in a rapidly expanding “security index,” according to declassified documents. In a letter to the Truman White House, Hoover stated that in the event of certain emergency situations, suspect individuals would be held in detention camps overseen by “the National Military Establishment.” By 1960, a congressional investigation later revealed, the FBI list of suspicious persons included “professors, teachers, and educators; labor-union organizers and leaders; writers, lecturers, newsmen, and others in the mass-media field; lawyers, doctors, and scientists; other potentially influential persons on a local or national level; [and] individuals who could potentially furnish financial or material aid” to unnamed “subversive elements.” This same FBI “security index” was allegedly maintained and updated into the 1980s, when it was reportedly transferred to the control of none other than FEMA (though the FBI denied this at the time).

FEMA, however—then known as the Federal Preparedness Agency—already had its own domestic surveillance system in place, according to a 1975 investigation by Senator John V. Tunney of California. Tunney, the son of heavyweight boxing champion Gene Tunney and the inspiration for Robert Redford’s character in the film The Candidate, found that the agency maintained electronic dossiers on at least 100,000 Americans that contained information gleaned from wide-ranging computerized surveillance. The database was located in the agency’s secret underground city at Mount Weather, near the town of Bluemont, Virginia. The senator’s findings were confirmed in a 1976 investigation by the Progressive magazine, which found that the Mount Weather computers “can obtain millions of pieces [of] information on the personal lives of American citizens by tapping the data stored at any of the 96 Federal Relocation Centers”—a reference to other classified facilities. According to the Progressive, Mount Weather’s databases were run “without any set of stated rules or regulations. Its surveillance program remains secret even from the leaders of the House and the Senate.”

Ten years later, a new round of government martial law plans came to light. A report in the Miami Herald contended that Reagan loyalist and Iran-Contra conspirator Colonel Oliver North had spearheaded the development of a “secret contingency plan,”—code-named REX 84—which called “for suspension of the Constitution, turning control of the United States over to FEMA, [and the] appointment of military commanders to run state and local governments.” The North plan also reportedly called for the detention of upwards of 400,000 illegal aliens and an undisclosed number of American citizens in at least 10 military facilities maintained as potential holding camps.

North’s program was so sensitive in nature that when Texas congressman Jack Brooks attempted to question North about it during the 1987 Iran-Contra hearings, he was rebuffed even by his fellow legislators. “I read in Miami papers and several others that there had been a plan by that same agency [FEMA] that would suspend the American Constitution,” Brooks said. “I was deeply concerned about that and wondered if that was the area in which he [North] had worked.” Senator Daniel Inouye, chairman of the Senate Select Committee on Iran, immediately cut off his colleague, saying, “That question touches upon a highly sensitive and classified area, so may I request that you not touch upon that, sir.” Though Brooks pushed for an answer, the line of questioning was not allowed to proceed.

Wired magazine turned up additional damaging information, revealing in 1993 that North, operating from a secure White House site, allegedly employed a software database program called PROMIS (ostensibly as part of the REX 84 plan). PROMIS, which has a strange and controversial history, was designed to track individuals—prisoners, for example—by pulling together information from disparate databases into a single record. According to Wired, “Using the computers in his command center, North tracked dissidents and potential troublemakers within the United States. Compared to PROMIS, Richard Nixon’s enemies list or Senator Joe McCarthy’s blacklist look downright crude.” Sources have suggested to Radar that government databases tracking Americans today, including Main Core, could still have PROMIS-based legacy code from the days when North was running his programs.

In the wake of 9/11, domestic surveillance programs of all sorts expanded dramatically. As one well-placed source in the intelligence community puts it, “The gloves seemed to come off.” What is not yet clear is what sort of still-undisclosed programs may have been authorized by the Bush White House. Marty Lederman, a high-level official at the Department of Justice under Clinton, writing on a law blog last year, wondered, “How extreme were the programs they implemented [after 9/11]? How egregious was the lawbreaking?” Congress has tried, and mostly failed, to find out.

In July 2007 and again last August, Representative Peter DeFazio, a Democrat from Oregon and a senior member of the House Homeland Security Committee, sought access to the “classified annexes” of the Bush administration’s Continuity of Government program. DeFazio’s interest was prompted by Homeland Security Presidential Directive 20 (also known as NSPD-51), issued in May 2007, which reserves for the executive branch the sole authority to decide what constitutes a national emergency and to determine when the emergency is over. DeFazio found this unnerving.

But he and other leaders of the Homeland Security Committee, including Chairman Bennie Thompson, a Mississippi Democrat, were denied a review of the Continuity of Government classified annexes. To this day, their calls for disclosure have been ignored by the White House. In a press release issued last August, DeFazio went public with his concerns that the NSPD-51 Continuity of Government plans are “extra-constitutional or unconstitutional.” Around the same time, he told the Oregonian: “Maybe the people who think there’s a conspiracy out there are right.”

Congress itself has recently widened the path for both extra-constitutional detentions by the White House and the domestic use of military force during a national emergency. The Military Commissions Act of 2006 effectively suspended habeas corpus and freed up the executive branch to designate any American citizen an “enemy combatant” forfeiting all privileges accorded under the Bill of Rights. The John Warner National Defense Authorization Act, also passed in 2006, included a last-minute rider titled “Use of the Armed Forces in Major Public Emergencies,” which allowed the deployment of U.S. military units not just to put down domestic insurrections—as permitted under posse comitatus and the Insurrection Act of 1807—but also to deal with a wide range of calamities, including “natural disaster, epidemic, or other serious public health emergency, terrorist attack, or incident.”

More troubling, in 2002, Congress authorized funding for the U.S. Northern Command, or NORTHCOM, which, according to Washington Post military intelligence expert William Arkin, “allows for emergency military operations in the United States without civilian supervision or control.”

“We are at the edge of a cliff and we’re about to fall off,” says constitutional lawyer and former Reagan administration official Bruce Fein. “To a national emergency planner, everybody looks like a danger to stability. There’s no doubt that Congress would have the authority to denounce all this—for example, to refuse to appropriate money for the preparation of a list of U.S. citizens to be detained in the event of martial law. But Congress is the invertebrate branch. They say, ‘We have to be cautious.’ The same old crap you associate with cowards. None of this will change under a Democratic administration, unless you have exceptional statesmanship and the courage to stand up and say, ‘You know, democracies accept certain risks that tyrannies do not.’”

As of this writing, DeFazio, Thompson, and the other 433 members of the House are debating the so-called Protect America Act, after a similar bill passed in the Senate. Despite its name, the act offers no protection for U.S. citizens; instead, it would immunize from litigation U.S. telecom giants for colluding with the government in the surveillance of Americans to feed the hungry maw of databases like Main Core. The Protect America Act would legalize programs that appear to be unconstitutional.

Meanwhile, the mystery of James Comey’s testimony has disappeared in the morass of election year coverage. None of the leading presidential candidates have been asked the questions that are so profoundly pertinent to the future of the country: As president, will you continue aggressive domestic surveillance programs in the vein of the Bush administration? Will you release the COG blueprints that Representatives DeFazio and Thompson were not allowed to read? What does it suggest about the state of the nation that the U.S. is now ranked by worldwide civil liberties groups as an “endemic surveillance society,” alongside repressive regimes such as China and Russia? How can a democracy thrive with a massive apparatus of spying technology deployed against every act of political expression, private or public? (Radar put these questions to spokespeople for the McCain, Obama, and Clinton campaigns, but at press time had yet to receive any responses.)

These days, it’s rare to hear a voice like that of Senator Frank Church, who in the 1970s led the explosive investigations into U.S. domestic intelligence crimes that prompted the very reforms now being eroded. “The technological capacity that the intelligence community has given the government could enable it to impose total tyranny,” Church pointed out in 1975. “And there would be no way to fight back, because the most careful effort to combine together in resistance to the government, no matter how privately it was done, is within the reach of the government to know.”

UPDATE: Since this article went to press, several documents have emerged to suggest the story has longer legs than we thought. Most troubling among these is an October 2001 Justice Department memo that detailed the extra-constitutional powers the U.S. military might invoke during domestic operations following a terrorist attack. In the memo, John Yoo, then deputy assistant attorney general, “concluded that the Fourth Amendment had no application to domestic military operations.” (Yoo, as most readers know, is author of the infamous Torture Memo that, in bizarro fashion, rejiggers the definition of “legal” torture to allow pretty much anything short of murder.) In the October 2001 memo, Yoo refers to a classified DOJ document titled “Authority for Use of Military Force to Combat Terrorist Activities Within the United States.” According to the Associated Press, “Exactly what domestic military action was covered by the October memo is unclear. But federal documents indicate that the memo relates to the National Security Agency’s Terrorist Surveillance Program.” Attorney General John Mukasey last month refused to clarify before Congress whether the Yoo memo was still in force.

Meanwhile, congressional sources tell Radar that Congressman Peter DeFazio has apparently abandoned his effort to get to the bottom of the White House COG classified annexes. Penny Dodge, DeFazio’s chief of staff, says otherwise. “We will be sending a letter requesting a classified briefing soon,” she told Radar this week.

Christopher Ketcham writes for Harper’s, GQ, and Mother Jones, among other publications. He splits his time between Utah and Brooklyn, NY.

Friday

Mike: I hope you all had a fine New Year’s holiday and I wish you all the best in 2009.

* The following few paragraphs are some of my thoughts on what may occur in 2009. I’m not a financial expert, so I leave it to the financial experts to make the calls, but I try and read and analyze the latest information and add it to the conversation. I have discovered over the past couple years that listening to most of the main stream media (MSM) is usually misleading and disappointing (with a few exceptions). I learned most of my MSM skepticism from the Great Financial Sites links listed on the right side of the page. These experts do not seem to have any agenda other than dissecting the MSM spin and presenting an informative financial analysis for their loyal readers. If nothing else, I learned to not trust the spin of MSM.  On that note, here are some end of year and new year thoughts:

 

* The employment news in the upcoming weeks is likely to be very disappointing for both job losses and job hunting, especially in any of the housing related fields, such as textiles, furniture, lumber, appliances, real estate, and new home construction. Other areas related to autos will continue to shed jobs, and even energy related jobs will suffer due to low prices. Tech jobs won’t be immune to job losses as people cut back on discretionary spending for items like mp3 players, PCs, mobile phones, and other chip intensive gadgets. Many will be saving more and spending less in these uncertain economic times.

 

The fine analysts at - RGE Monitor - offer the following graphs that show the ever worsening jobs picture. I recommend that you read Edward Harrison’s review of the jobless numbers at

* The actual unadjusted number of 718,468 was actually higher than last week’s actual unadjusted 716,576.

via RGE - Jobless claims end year nicely under 500,000.:

 

 

- To amplify the deteriorating jobs picture, the Conference Board posits the following:

 

 * The Conference Board Employment Trends Index (ETI)™ declined further in November. The index fell to 102.9, down 1.6 percent from the October revised figure of 104.5, and down over 13 percent from a year ago.

“Thus far the U.S. economy has lost 1.9 million jobs and the declines in the ETI suggest job losses could very well surpass 3 million by mid 2009,” said Gad Levanon, Senior Economist at The Conference Board. “The continued deterioration in the labor market will exert significant downward pressure on wages,” noted Levanon.

via Employment Index - The Conference Board. *

 

Mike: The following from Jon Markman presents a realistic forecast for 2009. What I find refreshing is that he includes the discouraged job seekers in his unemployment forecast. The discouraged job seekers number was removed form the unemployment report during the Clinton administration and that change has since skewed the numbers to the positive:

 

* No. 2: The unemployment rate will approach 10%.

Even if an infrastructure spending law dashes through Congress, it will be months before the money is spent and jobs are created. In the meantime, companies will see their borrowing costs rise even faster than their revenue shrinks — a toxic cocktail that leads to layoffs.

By the end of the year, the U.S. unemployment rate will rise from its current 6.7% to about 8.5%, en route to 10%-plus in 2010. The broadest measure of unemployment, which includes part-timers and discouraged job seekers, which is now at 12.5%, will approach 17% by 2010. In the spring, a single month will record a loss of 1 million jobs.

via Financial forecast: 11 bets for ‘09 - MSN Money.

 

* While there is bound to be bad news for employment in 2009, some expect the job picture to brighten in 2010, although slowly. Some say an Obama job stimulus package needs to be more than shovel ready jobs. There will be many 40-60 somethings that won’t be able to learn heavy equipment operation or even know what end of a shovel to use. Created jobs must also include professions such as health care, engineering, environmental remediation, renewable energy, teachers, credit and mortgage counseling, tech and medical R&D, and protective services such as police and firefighters

 

* Many laid off workers will need to be retrained . While in training these individuals could be paid a minimum wage. Possibly a four-hour training schedule followed by four-hours of community service would be acceptable. After all, with only about 37% of laid off workers being eligible for unemployment benefits and few jobs for the remaining 63% that can’t collect, there will be many who won’t be able to financially survive without some means of income. Paying a salary for training and community service is better than having thousands more homeless or having them turn to less than desirable outlets such as crime

 

Mike: This may be a very difficult year in the job market, so best of luck with keeping your job or finding another one.  That’s my long-winded rant for the year, so let’s get to those layoff and economic announcements:

 

 

 

 

More speculation on Microsoft layoffs, contractor cuts *

Keeping a Simple Budget

Since one of my New Year’s goals was to start a budget and another was to live a more simplistic life, starting a simple budget seemed like a great idea.  My simple budget now consists of a simple spreadsheet that keeps track of my expenses, loan balances, investments, cash funds, and poker balances.

Keeping it Simple

Americans Under 70 May Find 2008 Was Their Least Favorite Year

From Bloomberg:

This wasn’t just a bad year for the economy. By some measures, it was the worst year any American under age 70 has ever seen.

The loss of jobs in the U.S. may be the biggest since the end of World War II. This year’s declines in stock and home prices haven’t been exceeded since the Great Depression. The slump in holiday spending may set a record; foreclosures already have. Credit markets seized, halting the longest expansion in consumer purchases.

Europe and Japan also sank as U.S. demand faltered, marking the first simultaneous recessions since the Second World War ended. High-flying emerging economies, such as China and India, weren’t immune, signaling the world economy is just as interconnected in bad times as in good.

“It was the year we wish it wasn’t,” said Harvard University professor Kenneth Rogoff, a former International Monetary Fund chief economist. “The global scale and magnitude” of the financial crisis and recession “is much greater than those we’ve seen before.”

The National Bureau of Economic Research this month determined the U.S. economy had been contracting for 12 months, already the longest downturn in a generation, with no end in sight.

The length and depth of the slump leave even the most experienced economists at a loss for superlatives.

“We’ve never seen this before and we don’t really have a sense of where the bottom is going to be,” Nobel laureate economist Edmund Phelps, 75, said in a Dec. 23 interview with Bloomberg Television.

Housing’s Collapse

Housing led the downturn. Sales of single-family homes dropped in November by 7.6 percent, the biggest decline in two decades, to an annual rate of 4.43 million, a 12-year low. A 13 percent decline in the median resale price from a year earlier was likely the largest since the 1930s, according to the National Association of Realtors.

The share of mortgages 30 days or more overdue hit an all- time high 6.99 percent in 2008, and the proportion already in foreclosure jumped to a record 2.97 percent, according to the Mortgage Bankers Association, whose statistics go back 29 years.

Problem loans morphed into toxic securities that brought down Wall Street banks and forced more than $700 billion in writeoffs worldwide this year. Bear Stearns Cos., which survived the 1929 crash, collapsed in March. Lehman Brothers Holdings Inc., founded in 1850, filed for bankruptcy in September. Merrill Lynch & Co. sold itself to Bank of America Corp. to avert a similar meltdown.

“There’s no more Wall Street,” Alan “Ace” Greenberg, former chief executive officer of Bear Stearns, declared in a Dec. 8 Bloomberg Television interview.

Credit Freeze

Panicked lenders froze credit to businesses and consumers, who slammed the brakes on spending. Consumer spending dropped 3.8 percent in the third quarter, the biggest drop since 1980. Business investment in equipment and software fell 7.5 percent, the most since 2002.

The Federal Reserve opened a new era this month by cutting its target interest rate to as low as zero for the first time in its 95-year history and signaling it would buy unlimited amounts of securities to jump-start borrowing and spending.

The holiday season was a bust, as November and December sales probably dropped as much as 2 percent, the most since at least 1969, according to the International Council of Shopping Centers.

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, sought bankruptcy protection in 2008.

“Every aspect of the industry has been gutted,” said Richard Hastings, consumer strategist at Global Hunter Securities LLC of Newport Beach, California.

Skidding Profits

U.S. corporate profits probably skidded for the sixth quarter in a row in the final months of 2008, the longest streak in at least 20 years, sending the stock market reeling. The Standard & Poor’s 500 Index, down 39 percent for the year, and the Dow Jones Industrials, down 35 percent, are poised for their worst year since 1931. Some $7.6 trillion of investor wealth disappeared.

The statistics that matter most to many Americans, those on jobs, were also the worst in decades. U.S. job losses this year, 1.9 million through November, may finish the year above 2.3 million, the most since 1945.

The recession spilled over U.S. borders to infect most of the industrial world. The 15-nation euro-area is in its first contraction since the single currency started a decade ago, while Japan’s economy will probably shrink at an annual 12.1 percent pace this quarter, the sharpest drop since 1974, estimates Barclays Capital.

China’s Exports Decline

China’s exports declined in November for the first time in seven years, while output contracted by the most on record. India’s industrial production fell for the first time in 15 years, and exports plunged 12 percent.

“Severe weakness throughout the advanced world is dragging down much of the developing world,” Goldman Sachs Group Inc. chief economist Jim O’Neillsaid in a Dec. 12 Bloomberg Television interview.

The worst part about the 2008 economy, economists say, is that the deterioration is likely to last well into the new year.

“The recession will stretch for at least the next six months,” Marc Faber, managing director of Marc Faber Ltd. in Hong Kong and publisher of the “Gloom, Boom and Doom Report,” told Bloomberg TV Dec. 26. “2009 will be a write-off in terms of economic activity.”

To contact the reporter on this story: Matthew Benjamin in Washington atmbenjamin2@bloomberg.net

Portfolio results for Dec 2008 - up .4%

And so ends one of the most brutal market years in history - for some markets the worst ever, others the 2nd or 3rd worst ever.  At the end of November, the portofolio was down 5.4% for 2008, and during December flirted with an 11% loss at the low point.  However, commodities began to firm up towards the end of the month, and the portfolio’s relatively high commodity weighting was enough for it to eke out a tiny .4% monthly gain as the market rallied in the final weeks.  In fact, the difference was essentially the large December distributions paid out by the various investment trusts and high-yielding ETFs - especially the  i-Shares Australia fund (EWA) which paid all of its annual distribution in a lump sum on Dec 31st, about 7% or so.  So the loss on the year amounted to “only” 5% after the final tally.   I’ll take it.

More significantly, REAP  beat the S&P500 total return index by 12.4% (in Canadian dollar terms, the portfolios home currency is in $C).  This was in the face of steep losses in world stock markets, even larger losses in some individual securities, and a drubbing of the Canadian dollar, negatively affecting half the portfolio holdings vs the US dollar denominated S&P500 total return index (the benchmark I use to compare performance).

The reason I use the S&P500 total return index as my reference is that most mutual fund managers use this as the basis of comparing their performance, and it also represents what an index fund would do.  If I can beat the the S&P500 consistently, then I am (a) beating indexing, proving that you can beat the “market”, and (b) beating most professional fund managers because few consistently beat the market themselves due to over-diversification and management fees.

Here’s the tally at the end of December and 2008 …

And a summary of how this year played out:

The next post sets the stage for 2009.

Copyright 2009 - all rights reserved.

Journal of a Plague Year: Faith in Markets Cracks Under Losses

It has been a year of record misery: the largest bankruptcy, bank failure and Ponzi scheme in U.S. history; $720 billion in writedowns and losses by financial institutions; $30.1 trillion in market valuation wiped out.

The biggest loss and the hardest thing to recover, though, may be something that can’t be precisely measured — confidence in the markets and the firms that rely on them.

“The wholesale funding model lost its credibility,” said David Hendler, senior analyst at New York-based CreditSights Inc. “That started the semi-nationalization of funding in the financial markets. It’s a real chink in the armor of capitalism as supposedly the best process for allocating capital. The government is now deciding who gets access to capital.”

For Paul DeRosa, a principal of Mount Lucas Management Corp., a $1 billion hedge fund in Princeton, New Jersey, most unnerving was that the credit crisis revived something that, like the bubonic plague, was supposed to be a relic of the past.

“We had what was for all intents and purposes a systemic bank run for the first time in 70 years,” said DeRosa, whose fund is up 25 percent this year. “This ended our belief that financial panics were a thing of the past. That’s why this is a transcendent event.”

The price tag has been transcendent, too. Global stock markets lost about half of their value in 2008, or $30.1 trillion dollars. In the U.S., $7.2 trillion of shareholder value was wiped off the books, as the Standard & Poor’s 500 Index fell 39 percent through Dec. 30 and the Nasdaq Composite Index dropped 42 percent.

Madoff Swindle Continue reading . . .

YSR - Chief Minister Of Andhra Pradesh - English news paper articels on 02 January 2009

 

 

 

 

PAULSON THINKS CHINA CONTROLS OUR FEDERAL RESERVE

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The Raw Story | Paulson ‘blames global imbalances for credit crisis’

Outgoing US Treasury Secretary Henry Paulson said that a failure to address the rise of emerging markets and resulting imbalances was partly to blame for the global financial crisis, according to an interview published Friday.

Paulson told the Financial Times that imbalances between fast-growing nations which save, such as China, and those who spent were at the root of the problem.

He said that in the years leading up to the crisis, savings from nations such as China and oil exporters — at a time of low inflation and booming trade and capital flows — exerted downward pressure on yields everywhere.

This pushed down interest rates and drove investors to riskier assets, sowing the seeds of a global credit bubble that extended beyond the US subprime or high-risk home loan market and eventually burst.

 

Paulson delivered this speech in his usual dead-panned way.  Like Greenspan, he can actually tell us what is real but not explain his role in all this reality nor his failures which made this reality a total hell.  Bush does this a lot, too.  I expect Obama to do the same stupid thing.  ’I see dead people’, may be a start for people who are delusional.  But it does nothing about how these drivers of events creating dead people, are operating.  

 

So, according to the guy who is bailing out all his banking gnome buddies, one element of the fiscal meltdown is ‘the rise of emerging markets.’  HAHAHA.  Not free trade.  ’Emerging markets’ didn’t unbalance US trade.  The US trade problem began some time back.  When China was embroiled in the Cultural Revolution, for example.  Back at the dawn of our deepening trade crisis, it was specifically Germany and Japan who were running ever-bigger trade surpluses in value-added manufactured goods beginning in 1968.

 

Paulson, of course, will not mention this history nor the fact that these two nations were some of the world’s biggest manufacturing giants of the first half of the 20th century.  In the second paragraph of this idiotic story, Paulson continuously attacks China.  Not Germany nor Japan.  Both Germany and Japan have had nearly continuous trade surpluses with the US since 1968.  China didn’t have one until after 1996.  Eh?  That is recent.  

 

Next, the criminal gnome blames China AGAIN…for saving too much.  And blames OPEC, while he is at it.  And, as always, does not mention the #1 saver, Japan, who was #1 until 2004 when China finally overtook Japan.  And only this year, did China beat Japan when it came to buying US government debts.  Next, Paulson goes totally off the cliff:

 

The Chinese caused our own interest rates to fall!  And that squeezed savers here so they had to be more ‘risky’!  HAHAHA.  My god.  Paulson says this with a straight face because an army of idiots running the media machines all bellow this sort of bilge.  Are they claiming that Greenspan dropped interest rates at the Fed from January, 2001- 2004 because China was saving money?  How bizarre is this?  

 

China never dropped their own interest rates to below 4%.  But Japan was at ZIRP during all this time!  And still are!  And when the US raised interest rates, our economy began to tank, rapidly.  And when the Japanese carry trade began to unwind in 2007, the Chinese were still saving money in their FOREX reserves and so were the Japanese.  But the yen became stronger vis a vis the dollar.

 

Paulson mentions none of this.  And hell’s bells, neither do 90% of US economics professors talk about Japan’s huge, bloated FOREX reserves and US debts as well as the damn carry trade business.  So in summary: Paulson’s entire take on why we are going into a global depression is utterly wrong, totally backwards and extremely irresponsible.  And what else is new?

 

Our leaders are set on this path that denies more than one vital reality. Including, the reality that we are bailing ourselves out of this debt mess by creating infinite debt.

Statue stolen from Madoff found with message - CNN.com

Maybe I should steal the Statue of Liberty and then return it with a message attached: ‘Bernanke the Swindler, Lesson: Return stolen dollars to rightful owners’.  Heh.  Now, all I need is a really big helicopter…maybe Bernanke can let me borrow the one he is using to dump dollars into the Atlantic Ocean.

 

The Raw Story | US rescue averted ‘financial collapse’: Treasury

Massive rescue efforts by the US government and central bank in recent months helped avert a “financial collapse” and are working to stabilize the economy, a Treasury report said Wednesday.

The Treasury report to a congressional panel overseeing the 700-billion-dollar rescue plan passed in early October said the extraordinary actions probably averted deeper problems.

“Treasury, working with the Federal Reserve, the FDIC (Federal Deposit Insurance Corp.) and other regulators, has taken the necessary steps to prevent a financial collapse,” the report said.

“The most important evidence that our strategy is working is that Treasury’s actions, in combination with other actions, stemmed a series of financial institution failures. The financial system is fundamentally more stable than it was when Congress passed the legislation.”

 

2008-12-22-12-54-39-29105: Treasury Continuing Actions to Strengthen Economy

Nearly nothing, of course.  Just the usual swill.  Note that they ‘want to increase SPENDING.’  Not saving, spending.  And to do this, they and the Fed have worked hard as hell to…DROP INTEREST RATES!  Um, they should talk to Paulson but Paulson is head of the Treasury!  So what gives here?

 

Or rather, what are they giving away, here?  

 

Treasury Opens Door to Array of Companies, Industries to Help Automakers

 

The steel industry is demanding billions.  Everyone is demanding billions.  And billions are being handed out.  No one and I do mean, no one in the US system is saving anything except their own asses.  TARP is going to cover our entire economy.  And we are now officially in ZIRP territory here.  Are the thieves looting our nation blaming the Chinese for our ZIRPacious mess here?  

 

Of course!  The Chinese put a gun to our heads and told us to spend and not save.  And to have no return on savings, of course.  If so, who let the Chinese do this?  Now, we have to begin to arrest and maybe put a gun to the heads of all the lunatics who created this situation, eh?

 

HAHAHA.  No, they want us to have them stay in control, of course.  But even in their own narratives, they take no blame and blame the Chinese, totally.  So, this means the Chinese control the United State economy from top to bottom.  HAHAHA.  I hope the Chinese are happy.  Congratulations.  And we should cheer all the goofy idiots who enabled this.  Starting with Nixon.  Who negotiated Bretton Woods II in order to make the dollar cheaper against the yen and deutsche mark because both defeated imperial powers were flooding the US with their imports.

 

I like the last line here, Mr. Poole of the rapacious and stupid  Federal Reserve wonders ‘Where does this process [of bailing out absolutely everyone, using funny money] is going to end?’  HAHAHA.  It will end when the Chinese order us to end it.  Silly boy.  Remember: they run our nation.  We don’t.   Of course, we actually do sort of run this nation…into the ground.  We want infinite debt from Asia so we can buy and buy and not pay anyone any interest on these loans, of course.

 

While whining like babies.  Boo hoo hoo.  At this point, I think we will do better if we were run by the Chinese. The Chinese are not trying to take over Muslim lands in the Middle East. So they have no reason to start one war after another there.  So maybe we can be run by ruthless but efficient people who don’t care about complex tribal European ethnic politics.  Heh.  That will fix everything.

 

Look at China this week: the industrialists who let poisons into the food chain were put on trial, plead guilty and will pay the price!  And who is in jail here?  Madoff?  HAHAHA.  He would already have been dispatched in China.  Trade negotiators who are treasonous are shot, too.  I don’t see a parade of criminals being brought to trial here.  Arrest them all!

 

U.S. Stocks Post Steepest Yearly Decline Since Depression; Dow Plunges 34%

 

 

FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

In the Media

Roundup of stories about philanthropy and nonprofits in the local and national media:

Economy:

Local:

National:

Transparency

Roger Biduk; Energy Leads Wall Street Higher

Roger Biduk writes:

New years!

The new year brings hope for bigger and better things, and I am no different!

My new years resolution is to write everyday.  Well, at least 6 of the 7 days a week.  Decent enough, right?  Also - I’m attempting to get a domain name for this, as I’d like to have more control over the look and feel of my presentation.

Let’s start off - 

Some ideas I would like to explore: 

Anyone else have any suggestions? 

Also - a little FYI for my reader(s), another personal new years resolution is to get into a PhD program (or, the very least, a master’s) in economics.  I’ve signed up for the GRE exam for the end of February, as well as linear algebra (beyond calculus) at Harvard (extension school, mind you) to firm up my application.  I plan on refreshing my stats and calculus as well, and hopefully do another research project, like that of the FHLB exploration.  Schools I’m looking at are University of Washington, Suffolk University, Goethe University in Frankfurt, CERGE in Prague, University of Chicago (a reach, I know), and maybe UC San Diego, MIT (streeeetttcchhh) and another safety and/or international school.  Anyone know of any other good schools for economics?  

Cheers!

The $25,000 lesson

I did a review today (I pulled all of the data from yodlee into Excel and did a bunch of monkeying) of my 2008 financial performance. That is, how much I started with, how much I made, what I did with it, and where I ended the year. This is what it looked like.

After taxes, I made about $80k. About $20k of that went to things that I think of as functional — rent, groceries, and so on. Another $25k went to things that I think of as discretionary — eating out, alcohol, charity and the like. The remaining $35k went into savings. Of that $35k, I have about $10k left. I lost $25k — more than 70% — of what I “saved” this year.

Relative comparisons to market indexes are dubious, but I make one to underscore how lousy this performance is: the S&P was down 36%.

So how did I do it?

With all of those added to the “do not do” bin, what am I doing in 2009? Investing, which in common parlance means some cockeyed combination of “playing the stock market” and “saving for the long term” is also going in the “do not do” bin. The phrase I am switching to is “Wealth Management” (tongue-in-cheek for the present, but good practice for an imagined future involving cars like this). I make three important distinctions between Wealth Management and investing.

Never Lose Money.

PAULSON THINKS CHINA CONTROLS OUR FEDERAL RESERVE

The Raw Story | Paulson ‘blames global imbalances for credit crisis’

 

Outgoing US Treasury Secretary Henry Paulson said that a failure to address the rise of emerging markets and resulting imbalances was partly to blame for the global financial crisis, according to an interview published Friday.

Paulson told the Financial Times that imbalances between fast-growing nations which save, such as China, and those who spent were at the root of the problem.

He said that in the years leading up to the crisis, savings from nations such as China and oil exporters — at a time of low inflation and booming trade and capital flows — exerted downward pressure on yields everywhere.

This pushed down interest rates and drove investors to riskier assets, sowing the seeds of a global credit bubble that extended beyond the US subprime or high-risk home loan market and eventually burst.

 

Paulson delivered this speech in his usual dead-panned way.  Like Greenspan, he can actually tell us what is real but not explain his role in all this reality nor his failures which made this reality a total hell.  Bush does this a lot, too.  I expect Obama to do the same stupid thing.  ’I see dead people’, may be a start for people who are delusional.  But it does nothing about how these drivers of events creating dead people, are operating.  

 

So, according to the guy who is bailing out all his banking gnome buddies, one element of the fiscal meltdown is ‘the rise of emerging markets.’  HAHAHA.  Not free trade.  ’Emerging markets’ didn’t unbalance US trade.  The US trade problem began some time back.  When China was embroiled in the Cultural Revolution, for example.  Back at the dawn of our deepening trade crisis, it was specifically Germany and Japan who were running ever-bigger trade surpluses in value-added manufactured goods beginning in 1968.

 

Paulson, of course, will not mention this history nor the fact that these two nations were some of the world’s biggest manufacturing giants of the first half of the 20th century.  In the second paragraph of this idiotic story, Paulson continuously attacks China.  Not Germany nor Japan.  Both Germany and Japan have had nearly continuous trade surpluses with the US since 1968.  China didn’t have one until after 1996.  Eh?  That is recent.  

 

Next, the criminal gnome blames China AGAIN…for saving too much.  And blames OPEC, while he is at it.  And, as always, does not mention the #1 saver, Japan, who was #1 until 2004 when China finally overtook Japan.  And only this year, did China beat Japan when it came to buying US government debts.  Next, Paulson goes totally off the cliff:

 

The Chinese caused our own interest rates to fall!  And that squeezed savers here so they had to be more ‘risky’!  HAHAHA.  My god.  Paulson says this with a straight face because an army of idiots running the media machines all bellow this sort of bilge.  Are they claiming that Greenspan dropped interest rates at the Fed from January, 2001- 2004 because China was saving money?  How bizarre is this?  

 

China never dropped their own interest rates to below 4%.  But Japan was at ZIRP during all this time!  And still are!  And when the US raised interest rates, our economy began to tank, rapidly.  And when the Japanese carry trade began to unwind in 2007, the Chinese were still saving money in their FOREX reserves and so were the Japanese.  But the yen became stronger vis a vis the dollar.

 

Paulson mentions none of this.  And hell’s bells, neither do 90% of US economics professors talk about Japan’s huge, bloated FOREX reserves and US debts as well as the damn carry trade business.  So in summary: Paulson’s entire take on why we are going into a global depression is utterly wrong, totally backwards and extremely irresponsible.  And what else is new?

 

Our leaders are set on this path that denies more than one vital reality. Including, the reality that we are bailing ourselves out of this debt mess by creating infinite debt.

Statue stolen from Madoff found with message - CNN.com

Maybe I should steal the Statue of Liberty and then return it with a message attached: ‘Bernanke the Swindler, Lesson: Return stolen dollars to rightful owners’.  Heh.  Now, all I need is a really big helicopter…maybe Bernanke can let me borrow the one he is using to dump dollars into the Atlantic Ocean.

 

The Raw Story | US rescue averted ‘financial collapse’: Treasury

 

Massive rescue efforts by the US government and central bank in recent months helped avert a “financial collapse” and are working to stabilize the economy, a Treasury report said Wednesday.

The Treasury report to a congressional panel overseeing the 700-billion-dollar rescue plan passed in early October said the extraordinary actions probably averted deeper problems.

“Treasury, working with the Federal Reserve, the FDIC (Federal Deposit Insurance Corp.) and other regulators, has taken the necessary steps to prevent a financial collapse,” the report said.

“The most important evidence that our strategy is working is that Treasury’s actions, in combination with other actions, stemmed a series of financial institution failures. The financial system is fundamentally more stable than it was when Congress passed the legislation.”

 

2008-12-22-12-54-39-29105: Treasury Continuing Actions to Strengthen Economy

Nearly nothing, of course.  Just the usual swill.  Note that they ‘want to increase SPENDING.’  Not saving, spending.  And to do this, they and the Fed have worked hard as hell to…DROP INTEREST RATES!  Um, they should talk to Paulson but Paulson is head of the Treasury!  So what gives here?

 

Or rather, what are they giving away, here?  

 

Treasury Opens Door to Array of Companies, Industries to Help Automakers

 

 

The steel industry is demanding billions.  Everyone is demanding billions.  And billions are being handed out.  No one and I do mean, no one in the US system is saving anything except their own asses.  TARP is going to cover our entire economy.  And we are now officially in ZIRP territory here.  Are the thieves looting our nation blaming the Chinese for our ZIRPacious mess here?  

 

Of course!  The Chinese put a gun to our heads and told us to spend and not save.  And to have no return on savings, of course.  If so, who let the Chinese do this?  Now, we have to begin to arrest and maybe put a gun to the heads of all the lunatics who created this situation, eh?

 

HAHAHA.  No, they want us to have them stay in control, of course.  But even in their own narratives, they take no blame and blame the Chinese, totally.  So, this means the Chinese control the United State economy from top to bottom.  HAHAHA.  I hope the Chinese are happy.  Congratulations.  And we should cheer all the goofy idiots who enabled this.  Starting with Nixon.  Who negotiated Bretton Woods II in order to make the dollar cheaper against the yen and deutsche mark because both defeated imperial powers were flooding the US with their imports.

 

I like the last line here, Mr. Poole of the rapacious and stupid  Federal Reserve wonders ‘Where does this process [of bailing out absolutely everyone, using funny money] is going to end?’  HAHAHA.  It will end when the Chinese order us to end it.  Silly boy.  Remember: they run our nation.  We don’t.   Of course, we actually do sort of run this nation…into the ground.  We want infinite debt from Asia so we can buy and buy and not pay anyone any interest on these loans, of course.

 

While whining like babies.  Boo hoo hoo.  At this point, I think we will do better if we were run by the Chinese. The Chinese are not trying to take over Muslim lands in the Middle East. So they have no reason to start one war after another there.  So maybe we can be run by ruthless but efficient people who don’t care about complex tribal European ethnic politics.  Heh.  That will fix everything.

 

Look at China this week: the industrialists who let poisons into the food chain were put on trial, plead guilty and will pay the price!  And who is in jail here?  Madoff?  HAHAHA.  He would already have been dispatched in China.  Trade negotiators who are treasonous are shot, too.  I don’t see a parade of criminals being brought to trial here.  Arrest them all!

 

U.S. Stocks Post Steepest Yearly Decline Since Depression; Dow Plunges 34%

 

 

* FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

Victor Burgin,

Johnny Thomas Mitchell Jr., 21, 102 Dakar Drive, Shelby, faces one count each of first-degree murder and robbery with a dangerous weapon. He is in Gaston County Jail without bond, and declined a request for an interview.

But police don’t think Mitchell was the person who shot Howard Ford ‘Sonny’ Neill Sr., 59, at his 2268 Highway 150 business. Cherryville Police Detective Sgt. Burgin said Edward Hopper, 24, of Edna Drive, Waco, shot the business owner after he and Mitchell robbed him.

Police contacted Hopper by phone and asked him to turn himself in, but he refused, Burgin said. Late Wednesday night they were still looking for Hopper …

Science fiction writers have posited parallel worlds closely similar to the world we know, but in which our counterpart selves pursue lives very different from our own. The story of Detective Sgt. Burgin in pursuit of a murderous Edward Hopper left me with the uncanny sense of such a world. But then there is a real sense in which the work of Edward Hopper constitutes a world parallel to our own: a latent presence in the interstices of the present.

We need not look for Hopper in order to find him. We may encounter him by chance at random places where his world intersects our own. We might ask whether or not this photograph by the American documentary photographer Larry Sultan, was taken with Edward Hopper’s paintings consciously in mind. But the question is irrelevant. To know Hopper’s work is to be predisposed to see the world in his terms, consciously or not.

Hopper made extraordinary pictures of ordinary situations. Nothing is more ordinary a part of Western modernity than the office, and nothing more typical than the couple formed by secretary and boss. Hopper’s image of this couple may not bring any particular other image to mind, but it does suggest the kind of vague cliché situations hinted at in the original title that Hopper and his wife ‘Jo’ (the painter Josephine Nivison) gave to Office at Night: ‘Confidentially Yours, Room 1005’. To confirm for myself that the old stereotypes have survived into the age of the internet, having completed my search on ‘Hopper’ and ‘Burgin’, I made another search on the words ‘secretary’ and ‘boss’.

The cartoon is from the first of the websites on the list provided by Google. The photograph is from the second on the list of websites, one of several with names like ‘SecretaryBabes.com’. It is the first image in a pornographic narrative sequence. The stereotypical scenarios of secretarial incompetence and sexual impropriety are united in a recent film, Secretary, directed by Steven Shainberg and starring Maggie Gyllenhaal and James Spader (2002). The publicity synopsis of the film reads: ‘A young woman, recently released from a mental hospital, gets a job as a secretary to a demanding lawyer, where their employer-employee relationship turns into a sexual, sadomasochistic one.’ Both the screenplay and the short story on which it is based were written by women.1 Nevertheless the sexual politics of Secretary are cheerfully post-feminist. A sado-masochistic relationship in which the male boss inflicts physical and mental pain on his female employee is shown as a source of physical gratification and personal salvation for the woman.

The film Secretary post-dates feminist workplace and cultural activism of the 1960s and 1970s. Edward Hopper’s painting Office at Night, made in 1940, precedes this particular historical resurgence of feminism. No wind of change has yet blown through this office, although there is a strong breeze. I am reminded of the current that blows through such other Hopper images as, for example, his etching Evening Wind, 1921. It is rarely fanciful to interpret Hopper’s ‘realism’ allegorically. The sudden current that disturbs here is as much sensual as meteorological. Perhaps it is the same evening wind that has blown a paper to the floor.

In the film Secretary, the woman returns the paper to her boss on all fours, with the document held between her teeth. Spontaneous associations between disparate images owe more to the dream-work than to the work of the historian. We should more responsibly refer Hopper’s Office at Night to the cinema of its own time. The cinema of Hopper’s time was self-governed by the 1930 Motion Picture Production Code, the so-called ‘Hays Code’. Section II, item 4, of the Hays Code states simply: ‘Sex perversion or any inference to it is forbidden’. The Hays Code was abandoned in 1967 after MGM released Michaelangelo Antonioni’s film Blow-Up, in spite of its having been denied Production Code approval.2 Hopper died that same year. The sexuality in Hopper’s images is that of the Hays Code era – one of inference, implication and innuendo.

His Private Secretary, directed by Phil Whitman and starring Evalyn Knapp and John Wayne, was released in 1936. A synopsis of the story reads: ‘The playboy son of a millionaire businessman falls in love with a secretary who is a minister’s daughter. The playboy’s father believes the girl is a gold-digger.’ What if the father is right about the girl? Sharing a double-bill with a romantic comedy there might have been a film noir. In the 1946 Otto Preminger movie Fallen Angel Linda Darnell plays a character called ‘Stella’. Stella reminds me of the secretary in Office at Night – the woman Hopper’s wife Jo called ‘Shirley’. Writing in The New Biographical Dictionary of Film, David Thomson describes Darnell as, ‘dark-eyed and sultry … one of the sirens of the 1940s whose rose-at-twilight looks seemed to stimulate every Fox cameraman’. Also starring in Fallen Angel was Dana Andrews, who, Thomson writes, ‘could suggest unease, shiftiness, and rancor … He did not quite trust or like himself and so a faraway bitterness haunted him.’

It seems to me that all Hopper’s men are haunted by a faraway bitterness, and Hopper’s women all have ‘rose-at-twilight’ looks. The summer wind blowing in at the window stirs them to leave their rooms. But even in youth and sunlight a twilight of age and experience falls on their features.

In my book Between, which accompanied the exhibition, I speak of my work on Hopper’s painting as continuing a process of ‘re-viewing art through a prism of contemporary concerns’.3 The writer and film-maker Laura Mulvey has referred to the year 1986 as the culmination of ‘a fifteen-year period that saw the Women’s Movement broaden out from a political organization into a more general framework of feminism’.4 My 1986 re-reading of Hopper’s 1940 painting was conducted within this framework.5 Here is what I wrote about Hopper’s Office at Night in Between:

AUTOWORKERS CALL FOR RALLY AT THE DETROIT AUTO SHOW - Jefferson Avenue (in front of Cobo Hall) Detroit, Sunday, January 11, 1PM

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Auto workers have called for a rally on January 11 at 1 pm on Jefferson Ave. outside of press day of the North American International Auto Show. With news of the Bush administration’s $17.4 billion loan to the auto industry being tied to game-changing concessions that could erode wages across the board, auto workers will rally for long-term solutions for the auto industry’s problems that don’t unfairly blame workers for failed corporate policies.

WTH are derivatives?

Who isn’t interested in making money? Here’s one possibility. Derivatives. Think of it as just betting on the future price of something, perhaps oil or rice etc. It can also be very elaborate, say betting on some other fund, or some other bet. Hence the term “derived”. It is derived from other finanial instruments.

Let’s learn from as simple example found here.

Say there is some real estate index currently 100. “Experts” predict that it will be between 105 and 115 after two years. You can take a “long” position by looking for some contract offered by some guy B. B is in the “short” position and both of you agree on a forward price of 105, and that B will pay you $500000 multiplied by actual index - 105. At present, you hardly need to pay anything, so you can really bet a lot. You call this leveraging? Anyway, if after 2 years, the index is 115, then you earn 5m. If it is 95, you LOSE 5m. This is nothing but a gamble between you and B on the RE index after 2 years.

Why would B want to do such a thing? Perhaps he doesn’t believe in those “experts”. Or here’s a slightly more complicated scenario. Perhaps B is a real estate investor. He has lots of properties and he believes he always do better than the index. If the index turns out to be 115, he is confident that his properties would have appreciated even more, say 20% and say he would earn 10m this way. Then even after losing 5m to me, he still earns 5m. If the index turns out to be 95, B is confident his properties would not depreciate as much, say it depreciates 2% only and he loses 1m this way. Then he still earns 5m from me. His net earning is 4m. Because he is confident of always beating the index, by gambling with me he ensures that he always earns quite a lot whether the market is good or bad. I suppose you can call this “hedging”.

Another scenario may be farmers trying to ensure that their crops fetch a decent price when they are ready for harvest. Hedging against fluctuations in the prices of commodities is an advantage that proponents of derivatives trading, usually greedy and rich investors, highlights. These are the ones who encourages gambling and probably try to manipulate the markets to help in their investments, e.g. saying oil-producing countries unstable, oil running out etc in order to drive up oil prices and reap profits from their oil derivatives. Also when they buy oil at a higher future price, oil producers will be tempted to hoard their oil to sell a bit later at higher price. This is one way the oil prices will be driven up. Greedy people who are making consumers with a fixed salary pay more. I am a little swayed by this article. Is it ever possible to regulate the trading so that the theoretical assumption that derivatives do not affect prices of whatever they are derived from is satisfied?

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NATIONAL CONSTRUCTION UNEMPLOYMENT RATE REACHES 12.7%

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Steel industry hopes for big stimulus shot

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The steel industry, having entered the recession in the best of health, is emerging as a leading indicator of what lies ahead. As steel production goes, and it is now in collapse, so will go the national economy.

That maxim once applied to the Big Three car companies. Now they are losing ground in good times and bad, and steel has replaced autos as the industry to watch for an early sign that a severe recession is beginning to lift.

The industry itself is turning to government for orders that, until the collapse, came from manufacturers and builders.

Its executives are waiting anxiously for details of President-elect Obama’s stimulus plan and adding their voices to pleas for a huge public investment program — up to $1 trillion over two years — that will lift demand for steel to build highways, bridges, power grids, schools, hospitals, water-treatment plants and rapid transit.

“What we are asking,” said Daniel R. DiMicco, chairman and CEO of Nucor, a giant steelmaker with a Seattle plant, “is that our government deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a ‘buy America’ clause.”

Economists in the Obama camp said the proposals to Congress will include significant infrastructure spending that draws on heavy industry.

New spending should provide an immediate jolt to the steel business, which has already gone through the painful makeover now demanded of the Big Three.

Mills were closed, companies were consolidated, hundreds of thousands lost their jobs and the survivors agreed to concessions. As a result, productivity shot up and so did profits, to record levels in the first nine months of this year. Full http://tinyurl.com/83mt6c

U.S. stocks climbed to a two-month high, following the market’s worst annual drop since the Great Depression, as General Motors Corp. got its first cash infusion from the government and rising oil prices lifted energy shares.

GM, the largest U.S. automaker, rallied 14 percent after receiving $4 billion in rescue loans from the Treasury to help the company avoid collapse. Exxon Mobil Corp. and Chevron Corp. led a gauge of energy producers to a sixth straight advance. Starwood Hotels & Resorts Worldwide Inc. jumped 16 percent on takeover speculation after agreeing to notify one of its largest investors of any offers.

“Wall Street is starting a new year, and there’s always more money at the beginning of the year,” said James Swanson, chief investment strategist at Boston-based MFS Investment Management, which oversees $160 billion. “The markets will see beyond the current bad economic data and begin a broad-based move upward in the next three or four months.”

The S&P 500 rose 3.2 percent to 931.8, capping its first three-day gain in five weeks and best start to a year since 2003. The Dow Jones Industrial Average increased 258.3 points, or 2.9 percent, to 9,034.69. The Russell 2000 Index of small U.S. companies advanced 1.3 percent.

Both the S&P 500 and Dow climbed to their highest closes since the first week of November. About 7.2 billion shares changed hands on all U.S. exchanges, 29 percent fewer than the three-month daily average as trading slowed at the end of the holiday-shortened week.

Stocks in Europe and Asia rose today, trimming losses from last year’s record slump in the MSCI World Index, as investors speculated governments will step up efforts to revive the global economy. http://tinyurl.com/9c9j4r

Now that we’re mired in the worst economic crisis since the Depression, forecasters who didn’t see it coming are consoling themselves by saying, “no one saw it coming.” This is hogwash. Many people saw it coming: Gary Shilling, Nouriel Roubini, Jeremy Grantham, Dean Baker, Peter Schiff, Robert Shiller, et al. They just don’t happen to work for major investment banks.

It is true that the folks who work for major investment banks didn’t see it coming. Historians will eventually determine whether this is because the major investment banks uniformly employ boneheads, or, more likely, because, when you work for an investment bank, it is easier to conclude that now is always a good time to buy stocks.

In any event… the New York Times reports that economists who work for major investment banks now think that prosperity is just around the corner.  Hard to tell whether this is good news or bad news. For what it’s worth, Nouriel Roubini thinks that prosperity is a good deal farther down the road. 2009 will be a washout, says Nouriel. And even 2010 will be crappy. Full read : http://tinyurl.com/78web8

Year end review pieces hold few surprises

From the Wall Street Journal:

Venture capitalists got squeezed by the financial crisis in 2008. That squeeze is likely to continue in 2009.

Returns for these investors, who invest in start-ups with the aim of profiting when the companies go public or are sold, got crunched last year by a dearth of initial public offerings of stock and few mergers and acquisitions. The outlook isn’t much brighter, as the recession is likely to continue to weigh on the IPO and M&A markets.

Meanwhile, the venture industry’s investors, such as pension funds or university endowments, were hurt by gyrating markets, crimping sources of funding. Some venture-capital firms are having a tough time raising new money, which will affect the pace of new investments this year and may call into question the survival of some venture firms.

“The economic turmoil will engender a fair amount of Darwinian change,” said Mark Heesen, president of the National Venture Capital Association, a trade group. He calls 2009 “a year of anticipation for the venture-capital industry.”

From the New York Times:

A decade of too much money and dismal performance has finally caught up with the venture capital industry. Only a few well-connected firms can now raise money. This means higher returns for the survivors, but tougher times for most investors and start-ups.

Venture capital firms currently manage some $260 billion, or 14 percent more than they did during the waning days of the Internet bubble in 2000. The glut of capital ensured pitiful returns for a decade. Money was wasted on below-par ideas. Competition was fierce, so promising companies received ludicrously favorable terms.

For funds established since 1998, the best-performing fund vintage was 2002 — and it returned a measly 5.7 percent, according to Cambridge Associates, an investment adviser. In many years, funds posted negative returns.

Reeling equity markets worldwide have put an end to the cash gusher. Only 55 firms raised new capital last quarter, down 30 percent from the year before. And firms that were unable to sell portfolio companies in 2006 and 2007 probably haven’t had a single sizable exit since 2000. That could make raising new money nearly impossible for many firms.

The industry’s best-connected firms, however, still seem to be able to find investors. Sequoia Capital, which financed Apple and Google, raised $930 million for a new fund in September. And this month Accel Partners, the firm behind Facebook and RealNetworks, raised two funds totaling $1 billion.

The V.C. crash will eventually mean higher returns for the survivors. They will have their pick of ideas and won’t have to enter bidding wars with lesser firms.

But as the number of new venture funds decreases, investors will find it harder to get access. And start-ups will find that, with less competition, deal terms will be tighter. The coming years are likely to be tougher for both venture capitalists and the companies they seek to finance. Full : http://tinyurl.com/7ejqex

My investments in 2008: a reckoning

I’ve been thinking about laying out an investment strategy for 2009. But first, I thought I’d review the performance of my IRA and 401(k) last year. The bottom line: I didn’t do nearly as terribly as I thought–my returns were roughly equal to those of the S&P 500. Still, there are things I should have done differently, which I’ll discuss in a future post.  

IRA. My IRA actually performed reasonably well in 2008, though it certainly didn’t feel that way. According to E*Trade, I’m down 38.52 percent for the year, compared with 38.48 percent for the S&P 500. I actually beat the market in the first three quarters of the year. Then, in Q4, I was down 30 percent compared with roughly 22 percent for the S&P. Even my bond index fund is down 8 percent. I’ll get into the nitty gritty of my investments later.

401(k). Overall, my portfolio was down 35.6 percent for 2008, compared with 37 percent for the S&P 500 (that’s according to Fidelity, which has slightly different numbers than E*Trade). It makes me feel a little better about my IRA’s dismal performance in Q4. For the last few months, my contributions have been as follows:  

I thought about taking money out of the small cap fund and putting it into an index. Index funds track the market, so you do no better and no worse than the market as a whole. Overall, I’ve been trying to put more of my money in index funds, partly because expenses are low. There’s also a psychological benefit: if my portfolio tanks, I won’t feel that it’s my fault. But I don’t want to miss out if small caps do well when the market recovers, so I decided to keep all of my investment elections the same this year.

More details to come … meanwhile, how are your investments faring?

Bet 362-Buffet vs. Protege

The Arena for Accountable Predictions

A lot of very smart people set out to do better than average in securities markets. Call them active investors.

Their opposites, passive investors, will by definition do about average. In aggregate their positions will more or less approximate those of an index fund. Therefore the balance of the universe—the active investors—must do about average as well. However, these investors will incur far greater costs. So, on balance, their aggregate results after these costs will be worse than those of the passive investors.

Costs skyrocket when large annual fees, large performance fees, and active trading costs are all added to the active investor’s equation. Funds of hedge funds accentuate this cost problem because their fees are superimposed on the large fees charged by the hedge funds in which the funds of funds are invested.

A number of smart people are involved in running hedge funds. But to a great extent their efforts are self-neutralizing, and their IQ will not overcome the costs they impose on investors. Investors, on average and over time, will do better with a low-cost index fund than with a group of funds of funds.

Mr. Buffett is correct in his assertion that, on average, active management in a narrowly defined universe like the S & P 500 is destined to underperform market indexes. That is a well-established fact in the context of traditional long-only investment management. But applying the same argument to hedge funds is a bit of an apples-to-oranges comparison.

Having the flexibility to invest both long and short, hedge funds do not set out to beat the market. Rather, they seek to generate positive returns over time regardless of the market environment. They think very differently than do traditional “relative-return” investors, whose primary goal is to beat the market, even when that only means losing less than the market when it falls. For hedge funds, success can mean outperforming the market in lean times, while underperforming in the best of times. Through a cycle, nevertheless, top hedge fund managers have surpassed market returns net of all fees, while assuming less risk as well. We believe such results will continue.

There is a wide gap between the returns of the best hedge funds and the average ones. This differential affords sophisticated institutional investors, among them funds of funds, an opportunity to pick strategies and managers that these investors think will outperform the averages. Funds of funds with the ability to sort the wheat from the chaff will earn returns that amply compensate for the extra layer of fees their clients pay.

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Roger Biduk; Wall Street Higher for Third Session

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Chapter Two

Chapter Eight

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Chapter Five

Chapter Nine

It used to be that a man could jack into cyberspace without fear of reprisal or ending up flatlined. Electrons of life tickled the back of what Harlan assumed to be his brain, enabling the senses, and rekindled something inside of him he didn’t even know existed. He was naked. White light. Semi-translucent points of influx converged in strings of binary code. Thoughts became the ocean where Harlan was the foci. He didn’t even care about rescuing Luna at this point, avenging his own death by killing Hosaka, the Was.

Subprime mortgage crisis felt everywhere in the US

Subprime mortgage crisis felt everywhere in the US

Savannah Cries Over Bicycle Lost After Subprime Reset

By Bob Ivry - Bloomberg

When California homeowner Christopher Aultman stopped writing mortgage checks, Charles Prince of Citigroup Inc. paid.

Some of the $16.6 billion that Prince’s New York-based bank estimates it lost on wrong-way subprime bets flowed to investors who for the first time were able to wager that U.S. mortgages would collapse. The subprime derivatives market created in 2005 by a group of Wall Street bankers made that payday possible.

The derivatives were based on subprime mortgages, given to borrowers with bad or incomplete credit. Securities firms packaged and sold that debt in structured financial products where the risk was hidden by investment-grade ratings and the values proved impossible to calculate.

“These structured products were crazy profitable for Wall Street until they blew up,” says Randall Dodd, senior financial sector expert for the International Monetary Fund in Washington. “Ultimately it’s about excessive risk-taking and greed.”

The risks were amplified by the derivatives, contracts whose values are derived from packages of home loans and are used to hedge risk or for speculation. The vehicles allowed investors to bet against particular pools of mortgages.

The magnified losses caused by derivatives made it possible for a small number of defaulting subprime borrowers to freeze world credit markets.

Credit Squeeze

That’s what happened in July after payments in the first quarter stopped on 13.8 percent of subprime mortgages representing 4.8 percent of total U.S. borrowers.

The defaults caused demand for subprime securities to dry up. Uncertainty over the value of the financial products spread to investment funds globally. Corporate lending stopped because no one knew what collateral was worth. By Aug. 10, the Federal Reserve and the European Central Bank were forced to inject a combined $275 billion into the banking system to keep money flowing.

The hedging offered by derivatives made investors feel invulnerable, says Paul Kasriel, chief economist at Northern Trust Co. in Chicago.

“Derivatives don’t reduce risk, they shift risk,” Kasriel says. “The development of the derivatives market enabled investors to shift risk at a lower cost, and that encouraged them to take on more risk.”

Wagering Against Mortgages

From 2001 to 2006, as U.S. home prices rose 50 percent nationally, owning the debt and guessing that borrowers would keep current paid off. Since July 2006, however, when housing supply began to outstrip demand and the number of late payments started to rise, the short position, or wagering against the performance of mortgages, has prevailed.

Many of those responsible for the economic upheaval caused by subprime derivatives have also been its victims.

Inadequate lending standards permeated residential and commercial real estate and corporate credit, said David Einhorn, co-founder of Greenlight Capital LLC in New York and a former director of New Century Financial Corp., the second-biggest subprime lender in 2006. In comments at an investors conference in October, he criticized loan standards in areas besides subprime, including the lending in two Manhattan commercial real estate deals.

“These are loans based on the borrowers’ ability to refinance rather than the borrowers’ ability to repay,” Einhorn said.

If the borrowers defaulted when adjustable-rate mortgages reset, the mortgage salesmen still got their commissions. Now many of them are jobless and broke.

Sadek Closes Shop

Daniel Sadek, who says his Costa Mesa, California, subprime lender Quick Loan Funding catered to borrowers with credit scores as low as 420 out of 850, had to close shop in August when Citigroup cut the company’s $400 million credit line.

“I’m surprised they went under,” says borrower Kathy Cleeves of Tenino, Washington. “They made a fortune off us.”

Borrowers bought houses and took out equity loans they couldn’t afford. That didn’t matter. As home prices kept rising they could always refinance. Now many of them face foreclosure.

Aultman, a Union Pacific Railroad mechanic with an average credit score of 465, took $21,000 in cash out of a 2005 refinance with Quick Loan Funding. The payments on his house in Victorville, California, adjusted to $2,650 this month, almost double what he was paying for the fixed-rate mortgage he had before the refinance. He was planning to refinance again before he discovered that he couldn’t qualify.

Bankers bought loans to turn into securities that gave them the highest yield. If the borrowers defaulted, the bankers still got their fees. Now the losses are piling up.

Billions Lost

The biggest securities firms worldwide are collectively expected to write down about $89 billion in subprime-related losses in the second half of 2007.

Citigroup, the biggest U.S. bank, said it will write down as much as $11 billion in assets on top of $5.6 billion already announced. Citigroup was one of a “group of five” Wall Street firms that created the subprime derivatives market.

Morgan Stanley, the second-biggest U.S. securities firm, wrote down $9.4 billion in mortgage-related investments this week.

“Our assumptions included what at the time was deemed to be a worst-case scenario,” Chief Financial Officer Colm Kelleher said on Dec. 19. “History has proven that that worst-case scenario was not the worst case.”

Bear Stearns Cos. announced a $1.9 billion writedown on mortgage losses yesterday, sending the New York-based firm to its first quarterly loss since it went public in 1985.

`The Risk Remained’

Merrill Lynch & Co., the world’s largest brokerage, and UBS AG, Europe’s biggest bank by assets, dismissed their chief executives after they reported a combined $11.4 billion in subprime-related losses in the third quarter. Merrill may post an additional $8.6 billion in losses for the fourth quarter, David Trone, an analyst at Fox-Pitt Kelton Cochrane Caronia Waller, said yesterday.

“Derivatives led a lot of people to believe that risk was being dispersed in a way that made things safer, but the risk remained after people thought they’d moved it off their balance sheets,” says Bose George, a mortgage industry analyst at Keefe, Bruyette & Woods Inc. in New York.

Investors didn’t know what they were buying, says Sylvain Raynes, a principal in New York-based R&R Consulting Inc. and co- author of the book, “The Analysis of Structured Securities.” It didn’t matter if a certain number of borrowers defaulted because the returns on some parts of the financial instruments were as much as 3 percentage points higher than 10-year Treasury yields.

Losses Worldwide

Now the losses are spreading. Florida schools and cities pulled almost half their deposits from a $27 billion state investment pool linked to subprime mortgages.

A hospital management company in suburban Melbourne, Australia, lost a quarter of its portfolio in July on subprime- linked investments.

Japan’s 36 banks booked combined losses of 244 billion yen ($2.17 billion) in the fiscal first half on subprime-related assets, according to the Financial Services Agency.

Sumitomo Trust & Banking Co., Japan’s fifth-largest bank by market value, says fiscal first-half profit fell 41 percent on higher provisions for bad loans.

Eight towns in northern Norway, including Hattfjelldal, a village where reindeer outnumber the 1,500 residents, lost a combined 350 million kroner ($64 million) on securities containing subprime mortgages.

“We are a stoic people, used to fighting against the forces of nature, so we’ll manage,” says Hattfjelldal Mayor Asgeir Almaas. “We won’t let this break us.”

`Not Bedtime Reading’

Information about investments in derivatives, such as so- called synthetic collateralized debt obligations, was voluminous and available. A lot of it was also unread.

“These documents are not bedtime reading,” Gerald Corrigan, managing director in charge of risk management at Goldman Sachs, told a U.K. parliament committee. “You have to work at it.”

The three biggest ratings companies — Moody’s Investors Service, Standard & Poor’s and Fitch Ratings — were forced to lower ratings on a record number of CDOs last month, according to a Morgan Stanley report, as subprime-backed securities deteriorated.

S&P says it downgraded 16 percent of subprime vehicles issued in 2005 and 29 percent of the 2006 vintage. By comparison, the company says it upgraded 0.07 percent of its 2005 securities and 0.08 percent of 2006.

Sniffing Out the Worst

Those who bet against the mortgage industry fared better.

J. Kyle Bass of Hayman Capital Partners in Dallas hired private investigators to help him sniff out the worst lenders. He says he turned a $110 million stake into about $600 million.

Deutsche Bank AG’s writedowns on subprime losses were 2.16 billion euros ($3.09 billion) — less than they would have been if not for the offsetting short trades of Greg Lippmann, the bank’s global head of asset-backed securities trading.

Goldman Sachs avoided the losses other banks suffered by betting that U.S. homeowners would walk away from their debts.

John Paulson of New York-based Paulson & Co. made similar bets. One of his hedge funds returned 436 percent in the first nine months of 2007, based on data compiled by Bloomberg.

“The people who dug deep and analyzed the underlying collateral of the securities made a lot of money betting against them,” says Girish Reddy, former co-head of equity derivatives at Goldman Sachs and managing partner of Prisma Capital Partners LP in Jersey City, New Jersey.

Savannah Loses a Bicycle

Nobody paid more dearly than Savannah Nesbit. The six-year- old and her family lost their house in Boston’s Dorchester neighborhood last month after failing to pay a subprime mortgage that adjusts higher every six months.

Savannah got her first bicycle for her birthday in August, pink with streamers dangling from the handlebars. She decorated the present from her grandmother with stickers of Dora the Explorer, her favorite animated character.

When sheriff’s deputies emptied the house and changed the locks, they left Savannah’s bike behind.

“She cries about that bike every night, and she wants me to buy her another one, but I can’t afford it right now because I have my own financial problems,” says Savannah’s grandmother, Anne Marie Wynter, whose home is also in foreclosure.

Sadek `Under Water’

Sadek’s Quick Loan Funding had 700 employees at its 2005 peak. Now Sadek is making payments on three residential properties he mortgaged in a failed attempt to keep his firm afloat. He also owns a restaurant in Newport Beach, California.

“I’m under water,” he says, puffing on a Marlboro Light. “I’m trying to sell everything, and nothing is being sold.”

His attempts to bankroll a film career for his former fiancee, soap opera actress Nadia Bjorlin, came to naught. Last month, Bjorlin returned to her role as Chloe Lane on “Days of Our Lives.”

Aultman, the railroad mechanic, teeters on the brink of foreclosure. He has been trying to modify his loan terms with Countrywide Financial Corp., which now owns his mortgage.

“It’s scary, very scary,” Aultman says. “Sometimes I’ll walk through the house and touch the walls and say to myself, `This is mine.”’

Moody’s, S&P and Fitch continue to be arbiters of the quality of securities, though their reputations have suffered.

State, SEC Probes

The Connecticut attorney general is investigating the three companies, including whether they rank debt against issuers’ wishes and then demand payment, whether they threaten to downgrade debt unless they win a contract to rate all of an issuer’s securities, and the practice of offering ratings discounts in return for exclusive contracts.

The Securities and Exchange Commission and two other states, New York and Ohio, have launched separate investigations of the ratings companies. Moody’s also faces a shareholder lawsuit.

Deutsche Bank recently began meetings to create a new index on another security, Alt-A mortgage bonds. It will allow hedging against defaults by Alt-A borrowers, who have prime credit and get mortgages without verifying their incomes.

Investors will also be able to wager that Alt-A homeowners will quit making payments, potentially turning losses into more and bigger paydays.

Living happily ever after!

Ever since I turned 18, everyone’s best wish has been for me to get married!

 I pass an important exam, get admission to a university, win a scholarship, find a job and the response would be: “Congratulations! But when is the marriage?”…I serve tea to our guests and the response would be: “insha-allah the tea of your wedding”…I help a relative moving into their new house and the response would be: “insha-allah we will compensate at your wedding!”…I attend a wedding and the response would be: “Yours is next insha-allah!”…

On September 13 1992, I turned 18 and our phone started ringing:

“There is this Mr. X, very handsome, very successful, an engineer (or something similar!)”… “There is this Mr. Y, a dentist, lives in the US”… “There is this Mr. Z…”

On September 13th 1992, I turned 18 and ever since that day one of my hobbies was to sit on a coach in our living room watch my mother struggle on the phone to turn the suitors down…She had strict instructions from me that “no suitor is welcomed in our house”… As a mother she had resisted a bit but she knew that this was not a battle she could win- not least because she herself had married out of love…And so my poor mother had to deal with the relatives or parents of Mr. Xs, Ys, and Zs!!

“Well, Nazanin is too young now!”… “Thank you. But she is studying now”… “Wow! What a great son you have! Unfortunately Nazanin is planning to go abroad”…

At first it was fun watching my mother finding her way out of these awkward situations, but after a while I lost patience…So I came up with new instructions: “Just tell them I don’t want to get married. That’s it! You don’t need to press yourself to come up with new excuses. Tell them I don’t want to get married. Period!”…

And so the phone stopped ringing…And people’s best wish for me has yet to be realized!!

I was 8 years old when I first met Gelareh. The classes had already started when she first came to our school. In the courtyard of our school, where other children used to play games, I used to sit at a quiet corner with Gelareh listening to her tell me stories about her divorced parents. Gelareh’s sad face was how I would picture divorce for a long time.

Later in my life I heard many divorce stories. I heard about the misfortunes of those women who got divorced and the misfortunes of those who did not find the courage to terminate their marriage…

*

“I sacrificed my youth for them”, she says. She is talking about her children. She has a daughter who is in Canada, married to a Canadian and a son who has “wasted” all that she had managed to save by teaching history to highschool students for more than 30 years.

She is my highschool history teacher. She used to be the most popular teacher in our school. With her words, she used to take us back in time to the places where the most important historical events had happened. I was all ears and eyes in her class trying not to miss a word, a gesture…I used to take notes of everything she would say. She would cough and I would write: “she coughed!”…I used to stay in school after hours to discuss with her subjects that we had not covered in class and this was how we became closer and closer, and so ever since my graduation I have kept in touch with her…We talk on the phone when I am away and I visit her a few times per year when I am around…Over the past 17 years, however, I have come to realize that behind her strong face hides a fragile woman who has put up with an abusive husband…History it seems was her haven and teaching it to us her only way of getting recognition, a recognition that her own children had denied her…

“I thought my children will give me gold medals when they grow up”, she says… But instead they have accused her of being the source of all their failures. “Had I gotten a divorce, they would have been happier they say” she adds.

Her husband was an army general during the Shah who withdrew from all sorts of social activities after the revolution. A loner, he found his peace in drinking alcohol. “You don’t want to know what a drunken husband is capable of. I am ashamed to tell you. Nothing of that image you had of me will remain if I tell you what my personal life was like”… “And why didn’t you get a divorce?” I ask. And the woman who used to symbolize independence, courage and knowledge for me tells me: “because I was afraid of divorce”…She was afraid she says…

The rest of our conversation revolves around his abuses and her fears both of living with him and of living without him, “of living without a husband” she says…

I listen to her wholeheartedly, calm her down by telling her that her life has not been wasted and that we –all the students she has had- are partly the creature of her inspirational words…and just when I am about to kiss her good bye, she smiles and asks: “and how long shall I wait to get an invitation to your wedding?”…

*

My aunt has two sons but no daughter. “You have always been like a daughter to me”, she says. And it is with this daughter of hers that she feels comfortable talking. My mother is the first feminist I encountered in my life, but she always resists the label. My aunt, on the other hand, would welcome the label: “feminist”. She used to work with the National Women’s Organization under the Shah and managed to find herself a secure (albeit marginal) place within the women’s movements after the revolution as well. Ever since the revolution happened my uncle decided to sit at home and satisfied himself with contributing to the household his retirement money which was not even enough to pay the rent. My aunt wanted their sons to get the best education, wear the best cloths and do the best sports activities and so she started her own home-business. Since the country was at war and since there was hardly any channel for Iranians outside Iran to stay connected with what was being published in Iran, she decided to export Farsi books. She started her business by providing a list of the recently published books in Iran, translating it, and sending it to the departments of Near Eastern and Middle Eastern Studies, and to the Iranian professors and friends and relatives abroad. She would buy the books, wrap them up and send them to her customers. She started earning dollars at a time when the conversion rate was high. Her list of customers grew longer and longer and thankfully she managed to provide the best life for her two sons- one is a doctor and the other a mechanical engineer who owns his own company.

My uncle wanted a different wife, a housewife who would light up the house with her smiles. My aunt had no time to be a good housewife. Her life was formed in between book markets, post offices, and banks.

“I thought when my two sons become ‘somebody’ they would appreciate all my hard work and so I never cared about your uncle’s complaints”, she tells me over a cup of coffee that we share in her garden in a small town to the north of Tehran.

My uncle’s philosophy was that their sons need not wear Nike shoes and Benetton sweaters, they need not play tennis, they need not have private tutors to pass the university’s entrance examination. His idea was that they should lower their standards so that the family can live on his retirement money and that his wife should be a good housewife and a kind mother. My aunt believed in order to be a good housewife she doesn’t need to do the cooking and cleaning herself. She can earn enough money and hire someone to do the house chores. She believed in order to be a kind mother she should make sure that their sons get the best of everything. And so they did.

She put up with my uncle hoping that when the sons grow up they will recognize her for her endless efforts. “I was running around under the rain and under the sun with heavy packages of books, collecting dollars penny by penny, thinking that they would appreciate my work”, she says. But instead her younger son- the doctor- has told her last week that he would have rather had a kind mother who would light up the house with her smiles!

And now my aunt is crying in front of my face regretting her past, her marriage, her “fear of divorce”…I give her a glass of water and calm her down…She reminds me of my history teacher, of all the other women whose stories I have heard while working for Zanan (the feminist monthly magazine I used to work for)…She reminds me of Simone De Beauvoir’s “A Woman Destroyed.”

I am thinking about the complications of marriage, of motherhood, of family…She interrupts my thoughts and says: “Forget about me! Let’s talk about you! How is your love life? Are you going to get married and settle down any time soon?”…

Legal problems add to the complication of marriage as well. A few years ago, on a friend’s blog, I read: “Why should I even think about marriage when I know that the moment I sign the marriage contract I will lose the few rights that I have as a single woman?”…

I am not sure if this statement is correct, single women need their father’s permission and married women their husband’s permission for many things that they might want to do. For example in order to get a passport, a woman must have her father’s (if she is single) or her husband’s (if she is married) signature authorizing the state to issue the passport. According to the law a woman’s father (if she is single) and her husband (if she is married) can prevent her from going to work, going to school, or even going outside her home. However, if you are single and you have lost your father, no one can legally prevent you from doing any of the above and you can live happily ever after!!!

The worst part, however, is that the right to terminate the marriage contract, the right to divorce, belongs solely to the man. The woman can initiate a divorce only under extreme circumstances that are stated in the law.

As a result of this law, women could easily find themselves in a situation where after 10, 20 or even 30 years of marriage the husband decides to divorce them (according to the law no reason is needed for a man to initiate a divorce process). The woman is then left alone with nothing to live on or live for.

The only thing that a woman receives in case of a divorce is the Mahr. Mahr (the marriage gift) is an essential part of the marriage contract. It is a token commitment of the husband’s responsibility and may be paid in cash, property or movable objects to the bride herself. The amount of Mahr is not legally specified and is based on the consensus between the bride and the groom. The Mahr may be paid immediately to the bride at the time of marriage, or deferred to a later date. The deferred Mahr falls due in case of death or divorce.

The women’s rights activists have long struggled to change the divorce law but their efforts have only resulted in minor changes in other laws that could indirectly impede the divorce process.

One of these minor changes occurred in 1997, when a law was passed requiring courts to calculate the Mahr according to an index updated for inflation. This law was supposed to both increase the costs of divorce for men (and impede the initiation of the divorce process), and to provide the divorcee with a financial backing.

This was an important move. However, women had already learned not to ask for cash as their Mahr. Women had started asking for gold coins; 500, 1000, and sometimes even 2000 gold coins (each=200$). Women had already learned that the Mahr could be used as a tool to level the ground. They could use a high Mahr to buy their divorce, or prevent a divorce, or to use it as a financial support after the divorce.

Mahr is part of the marriage ritual which previously had only a symbolic importance. “No one demands it, and no one gives it” the saying goes. However, due to the legal discriminations, Mahr has lost its symbolic importance and instead has gained a material importance.

Recently the Iranian state realized that the high Mahrs are becoming a social problem. High Mahr discourages young men to start a family because they are afraid that they might be pressed by their wives to pay the Mahr, the gift which they might accept at the time of the wedding but cannot afford to pay for. I should search for the figures but I recall that the Iranian state released some figures about the high numbers of men who are in prison because they have not been able to pay their Mahr dues [just imagine that the Islamic Republic’s prisons are filled with men who have not been able to pay their dues to their wives! So anti-cliché!!]

To deal with this problem, the TV has started showing programs which encourage low Mahrs. Last week I saw on TV a cleric who was advising women to care less about the materiality of the Mahr. He was suggesting that a high Mahr does not guarantee a successful marriage. I wondered why they are asking women to give up the only tool that they own. Why not teach women about the conditions they can set before signing the marriage contract (these conditions include the right to divorce, to custody, to travel, etc. and provide women with equal rights with men. The judiciary has given some of the marriage registrar offices the authority to include these extra rights in the marriage contract. In other words, if the bride and the groom reach a consensus the bride can get all the rights that the law has denied her)?

Yesterday a law was passed according to which the registrar offices are now required to include a new phrase in the marriage contracts: the contract now gives the groom the option of choosing between a contract that says Mahr is his immediate due and a contract which says Mahr is his immediate due only if he has the funds for it. This is the state’s initiative to keep men out of prison.

For some reason, the state avoids dealing with the cause and satisfies itself with modifying the effect. Many have interpreted this act as a sign of the state’s anti-woman attitude. I, on the other hand, think it has less to do with state’s gender ideology and more to do with the fact that the state could not continue filling in its prison cells with men who are not able to pay their Mahr dues. The reason I don’t see this as a sign of state’s anti-woman attitude is that the same state passed a law in 1997 which required courts to calculate Mahrs according to an updated index of inflation, a law which favored women over men.

In my family Mahr has never had any significance except for its symbolic importance for the marriage ritual. Mahr is not seen as a gift by us, but as a price the groom pays to buy his wife. And so, my grandmother’s Mahr was composed of flowers and Hafiz Poetry Collection, my mother’s was the same and so was my aunt’s. Instead all the women in my family have always had the groom sign the contract with the extra conditions that level the ground between the bride and the groom.

My mother believes that there is no difference between her daughters and the woman who is marrying my brother. However, it turned out that my brother’s in-laws did care about the Mahr. What was interesting for me was how the law can shape the most intimate moments of our lives. Here is the discussion between my brother and my mother, and my mother and I:

My brother: P. has told me that her parents believe in Mahr and so we should discuss it.

My mother: Well, you know that we don’t believe in Mahr. They really want to put a price on their daughter?!!

My brother: I don’t believe in it either but I love P. and I don’t want to lose her by insisting that I will not accept the Mahr.

My mother: Well you know that neither I, nor my mother had a Mahr. No one in this family believes in it and so I will never accept to do so. Unless you want to leave me out of this and decide for yourself.

My brother: I know. I have told P. that Mahr is an insult, not a sign of my love for her. But what can I do if her family insists?

My mother: OK then what would you say if they ask you to accept both the Mahr and the contract with the extra conditions?

At this point, I lost patience, and asked my mother:

What? Did you really say that? It is our duty to sign the contract with extra conditions. If the law had not denied women equal rights these rights would have been non-negotiable.

What if they insist on a high Mahr? You know that if anything happens she can both get a divorce and demand her Mahr which will ruin your bother’s life?

Rights are non-negotiable. If we don’t believe in Mahr that’s what we should tell them. You can insist on not accepting the Mahr but I would not bargain over a woman’s rights. That’s against my principles and yours too I believe!

In any case, the two families met and discussed the details. The result was for P. to have a Mahr similar to what all the women in my family have had: flowers with Hafiz Poetry Collection.

P. and her family wanted to make sure that P. will continue her studies when she joins my brother in the US and that she will have equal rights. To all of which my family’s response was positive.

At the night of their engagement party, when the guests were gone, P. and my brother were discussing the details of their trip to the North. P. wanted to stay in the North for only 4 days because she wanted to attend her friend’s graduation. My brother wanted to stay longer because he could not care less about P’s friend and wanted to extend his honey moon. P’s mother and I were witnessing their conversation. I was silent knowing that their decision is none of my business. P’s mother, however, interjected and told P: “You are now married. Nothing matters more than your plans with your husband. You have to learn to adapt to this new situation!”

And I thought to myself that “equal rights are not enough to make us equals!!”

 

10 Predictions for 2009

After a year like the one that has just concluded, it is more difficult than ever to see clearly into our dark and murky future, but that doesn’t seem to have stopped people from making predictions of one sort or another about what might lie ahead.

Such is the case here, despite the brightly glowing orb to the right.

After taking a close look at last year’s predictions the other day, it’s pretty clear that things would have been a lot easier to call if it was known in advance that Armageddon was finally going to arrive.

Discounting Armageddon has been a profitable investment strategy up until last year.

The question today is whether what happened in 2008 was Armageddon - Part I, or just plain Armageddon. As you’ll see below, from my vantage point, it looks more like the latter.

Off we go…

1. Another Bad Year for Housing

Once again, more pain in housing seems inevitable with liar loans and option ARM products reaching their critical years. If it already hasn’t, that second home/investment property that seemed like such a good idea back in 2004 will turn into a nightmare in 2009.

As was the case last year, only real estate sales types will be predicting a rebound for home prices in 2009 though home sales will probably make a lasting bottom. Late-2009 and 2010 will be the time to start looking to buy property again, but there will be no need to hurry - contrary to what real estate sales types tell you, prices are not headed back up anytime soon. They may not go too much lower in 2010, but, except for places like Washington D.C. where the bailout business is booming, prices will be mostly flat through 2011 or 2012.

Next year, housing prices will fall another 10 percent nationally, based on the year-over-year change to the 20-city S&P Case Shiller Home Price Index for October 2009 (this report gets released at the end of December and showed an 18 percent decline last week.) It seems that home price declines have to ease up. For example, based on their current trajectory, by the end of next year the median home price in Los Angeles would be below $200,000, down from a high of $550,000 in 2007.

2. The Dollar Will Go Down

The trade weighted U.S. dollar rose in 2008, but that was an anomaly. There are many bad currencies in the world (most of them are bad, actually, the pound now probably the worst) but the greenback will have a hard time looking good on a relative basis after big negative GDP numbers are reported along with even bigger job losses.

The source of most of the world’s financial market troubles over the last year or so will finally be appreciated by those who’ve been buying U.S. Treasuries and, despite the best efforts of the big players at the Comex, many of these people will buy gold instead.

By year-end, the U.S. Dollar Index will be at 70, after dipping into the 60s briefly, and economists will again marvel at how the trade deficit is shrinking due to higher U.S. exports, helping the U.S. economy to recover.

3. Broad Equity Markets will Rise

The Dow (DIA) and the S&P 500 Index (SPY) will gain 10 percent and most investors will be happy about this, not realizing that it would have to repeat this performance for the next four or five years to make up for the losses seen in 2008. It won’t.

Foreign stocks will do much better than U.S. stocks - up about 20 percent on average by year end - and stocks in China will rise 30 percent. Here too, most investors will fail to appreciate the cruel nature of large declines and advances expressed in percentage terms - this will leave Chinese stocks 55 percent below where they began 2008 (i.e., before last year’s 65 percent decline).

Gold and silver mining stocks will outperform all other equities in 2009 (this process is already well underway) and many retail investors will add gold stocks to their portfolio for the first time only to sell in a panic during the first correction.

4. Short-Term Interest Rates Will Stay at Zero

Short-term interest rates in the U.S. will end the year where they began - at zero.

Instead of the Fed funds rate, the new metric that will be used to gauge what the Federal Reserve is doing will be the Fed’s balance sheet. Now at $2.2 trillion, this will grow to over $4 trillion by year-end, by which time the weekly H.4.1 report will become a major news event.

Ben Bernanke aged five years over the last twelve months - over the next twelve months he will only age two years.

5. Energy Prices Will Rebound

After dipping below $30 a barrel in the spring, the price of crude oil will rise to $100 by the time Hurricane season is over (hey, there’s no election in ‘09) and end the year at $85.

Just when people were getting used to $1.50 gasoline, taking advantage of dealer incentives to buy Suburbans and Escalades again, the price at the pump will be back up over $3 and they won’t be happy about it.

6. Gold and Silver Will Soar

The price of silver will double before ending the year at around $20 an ounce and gold will again surpass the $1,000 mark, finishing the year at $1,150. Inventory at the SPDR Gold Shares ETF (GLD) will increase to over 1,000 tonnes and there will be 10,000 tonnes of silver in the iShares Silver Trust ETF (SLV). We still won’t be sure whether the ETFs really have the metal, but no one will care.

An increasing number of retail investors will buy gold and silver for the first time and they’ll sell in a panic during the first correction they encounter. They’ll look back and think, “Precious metals are no more volatile than that S&P 500 Index fund I sold last year. Why did I sell in a panic again? Maybe I should just invest in Hummels.”

People will start talking about junior mining stocks at cocktail parties - just like internet stocks in 1997. (As noted the last couple years, I’m going to keep saying this until it’s true).

7. The U.S. Economy and its Consumer Engine will Hit Rock Bottom

The personal saving rate will rise to four percent and both layaway programs and Christmas savings clubs will grow in popularity. This won’t be good for the U.S. economy which will contract during the first two quarters and post anemic growth rates in the last two.

Much of the Christmas savings money will be raided late in the year as many consumers will think they’ve served their penance and, with money gushing out of the government and central bank, they will regain their spendthrift ways before year-end making for a spectacular Christmas shopping season as compared to the one that just concluded.

8. Reported Inflation will Dip into Negative Territory

We’ll hear lots of talk about deflation as the overall Consumer Price Index dips into negative territory on a year-over-year basis by mid-year. At this point, we’ll all be bathing in a virtual government money shower as policymakers desperately try to avoid the ignominious honor of being the first group to ever cause real deflation within a fiat money system (no, what Japan had was not real, hard-money style deflation - that was just baby-deflation).

The policymakers will succeed.

By the time the leaves start falling, we’ll all be talking about inflation again as energy prices rise in what will look like an inverse, smaller magnitude version of what happened last year.

9. Four Million Jobs will be Lost

Nonfarm payrolls will decline by three million in 2009 and there will be downward revisions of about one million to prior years’ payrolls data as the Labor Department grapples with its birth-death modeling once again, publicly confessing that it has utterly failed to provide any meaningful statistics about the labor market in real time.

Health care will be the only employment sector that adds jobs in 2009.

Teenagers all across the country will become disillusioned after having lived their formative years during the biggest financial bubble in the history of Mankind and then seeing it come to an abrupt end as home equity withdrawals are relegated to the history books. They will actually go out and seek work, though few will find any this year.

10. Websites will not Wise-Up

A growing number of websites will continue to annoy readers by automatically playing video clips when the page is opened (didn’t we already go through this process about four years ago?). They’ll believe their marketing staff that this really is an effective advertising technique, but they will fail to understand just how many readers are leaving, never to return, after having to search so many times for that damn Pause button.

Untapped - The Scramble for Africa

Before reading Untapped, I knew how oil was impacting the outlook of the continent, but never heard the details of the dealings between the supermajors in the oil business and how they dealt with national governments and their populations. These revealing stories that Ghazvinian tells in his book should be of particular interest to those who wish to see how oil is interacting with the national politics of many African nations.

The book is a must read for anyone interested in the continent of the Oil Producing business, but is critical for anyone researching potential national security concerns for those countries of the West. As Ghazvinian shows in  the book, the cheque book of the Chinese could replace some of the stalwarts in international finance such as the IMF and the World Bank when it comes to dealing with aid in Africa. For so long the International Monetary Fund and the World Bank have attached strict conditions to any aid or loans received by African governments from these two institutions. With the Chinese government willing to attach significant aid packages, without any preconditions or stipulations, to their bids on oil blocks, the dynamics in Africa could change significantly for the worse. Or rather more frightening may remain just as corrupt as they currently stand. However, another perspective could be put forth that less outside interference from Monetary Institutions and Foreign governments could lead to a greater degree of sovereignty for these African petro-states. However, if they continue to degrade the democracy that exists, or block the voices and concerns of their own citizens, the world must be seriously concerned about the use of petrodollars to pad politicians’ bank accounts and the purchasing of military equipment.

Ghazavinian makes no subjective judgements on the African leaders and the actions of the Oil Companies, which makes the book such a strong review of the continent’s ’black gold’. However, the overall tone that is found from the book says that if significant changes are not made by the way African petrostates spend and use their money from oil profits, the ‘Dutch Disease’ and ‘curse of oil’ will propagate throughout these oil producing states benefitting the wallets of the gas guzzling West and corrupt African politicians rather than any improvement in the lives of those Africans living on less than $1 a day.

Academic Resource:

Untapped has a solid index, from which to quickly surf the book’s contents, but what sets this book apart is the solid list of sources and further reading that Ghazvinian provides at the end. A map showing his visited countries is in the front of the book, which proves useful for those unfamiliar with the region, but no other media is presented. A quick read due to Ghzavinian’s writing style should make it very accessible for students needing to use it as a resource

Overall Rating: A

CARBON BUSINESS BUSINESS CARBON

 

Calcutta served as the capital of India during the British Raj until 1911. Once the centre of modern education, industry, science, culture and politics in India, Kolkata has witnessed intense political violence, clashes and economic stagnation since 1954. Since the year 2000, economic rejuvenation has spurred in the city’s growth. Like other metropolitan cities in India, Kolkata continues to struggle with the problems of urbanisation: poverty, pollution and traffic congestion.

Thirteen  die after drinking spurious liquor! Very sad news indeed. The system may not feed the masses but it may well pour LIQUOR in your mouth. The people are predestined to die with the legacy of INHERENT INJUSTICE and INEQUALITY.

I know that the Galaxy Manusmrit Aparteid Order does not allow us to focus on local issues anywhere. it is Post Modern globalisation of International WAR and Genocide Culture. But the complicating circumstances compell me the issues apparently Localised. But these issues also tend to be global and are intensely associated with the GALAXY Order.

Some people feel very irritated while we VOICE our people. They brand our version of the story as PROPAGANDA while their version of the stories do consist of the HOLY SCRIPTS never to be violated. Thus they sustain the Ruling Brahaminicla zionist HEGEMONIES worldwide. Illuminiti has also taken over India. It is a COMBINED ILLUMINITY called INDIA INCs! Which threaten to transform into ROTHCHILDS legacy with the legacy of the ageold companies like TATAs and Reliance in Upsurge!

The BRAHAMINICAL has no LOGIC to defend the HEGEMIONIES arouns so they pose to OPPOSE it and HIJACK our Resistance as well as ISSUES! While we speak out. They simply use ABUSIVE Language or seeks ESCAPE ROUTE to kill the DEBATE which rather exposes them!

The MARXIST ruled INDIAN state of WEST Bengal may be an EXCELLENT case to understand how the ZIONIST HINDU WHITE GALAXY HEGEMONY holds all they keys of every worldly or DIVINE affairs!

We support NANDIGRAM, SINGUR and LALGARH insurrections full heartedly!

But doing so, we support the RESISTANCE HEGEMONY led by BRAHMINS only. We become MIND CONTROLLED and BRAINWASHED by the Brahaminical CIVIL Society and INTELLIGENTSIA which HATE us, the Indigenous, Aboriginal, SC, ST, OBC, Minorities most!

Suppose we witness a CHANGE in WEST Bengal what kind of CHANGE it would be! Simply Fire BRAND BRAHMIN Ms MAMATA Bannerjee would replace another set of RULING BRAHMINS led by BUDDHADEB and see would form the LETHAL TRIO with PRANAB and ADWANI once again to continue the GENOCIDE MACHINE running!

Recent AUTO RIOTS in Kolkata may be described in a single PHRASE: CARBON BUSINESS. It is neither POLITICS nor ECONOMY. It happens to be outright BUSINESS only. That, too, CARBION Business. NONE of the sides involved into the GAME may claim whiteness in the affiars of DARKNESS. It is an EXCELLENT EXPOSURE of GESTAPO CULTURE, ORGANISED VANDALISM!

Only this morning, a Vetaran CPIM Leader, an aged friend intercepted me on my way in the locality.

He asked,` DEKHECHHEN?’

Even after the AUTO RIOTS in Kolkata, the Police and Administration never did react as they had been well aware of the MARXIST VOTE BANK MOBILisation CADRES involved.Thus, despite the HIGH COURT order, the government of West Bengal does not COMPLY!

West bengal and specially KOLKATA live on, bank on CARBON BUSINESS so extremely, that we may not dare to dream any Change whatsoever! It has been always a STATUS QUO despite so many judicial interfereances!

I just llanded in the COALFIELDS of JHARKHAND in April, 1080 from my HOMELAND, NAINITAL in the HIMALYAS via ALLAHABAD and New Delhi. I had to understand the difference in Pollution level.

Our friend, eminent writer SANJEEV, the editor of HANS used to live in KULTI. He was working a s a scientist in ISCO. At the time, he was writing a NOVEL on CHASNALA Disaster. What he did, he just ambushed our rooms in Masterpara, hirapur and convinced us, me and eminent Poet MADAN KASHYAP to accompany him in his journey to CHASNALA situated in Jharia coalfields. We visited Jharia, Lodhna and CHASNALA. We travelled by Trekker. It was a trilling experience for a FRESHER in the Coalfields as i was seeing Coal Mines and MINING first time in my life! I also witnessed the UNDERGROUND FIRE in Mines and also the INNUNDATED mines, too. Returning home, I immediately fell ill as my clothes and within me it was nothing but Coal Dust not to mention the CARBON DI OXIDE, CARBON MONO OXIDE and METHANE gases inhaled! I had been  working as an Environment ECO Activist in the HIMALYAN region throughout my student life. I could feel the suffering of the people . But it was rather shocking to witness the DETACHEDNESS of the People of Coalfields and Jharkhand as they were HABITUAL to inhale POISON extremely.

In a new report titled ‘Hiding behind the poor’, Greenpeace has called for a special tax for higher carbon emissions on the nation’s wealthy consumers, who, it says, are nearly at par with consumers in some of the developed nations in terms of per capita greenhouse gas emissions.

It says the economic divide within India is translating into a widening emission divide, with some 150 million Indians, who are splurging on luxury goods and air travel, producing 4.5 times more carbon emissions than the 800 million poor.

Greenpeace India’s Executive Director, Mr G. Ananthapadmanabhan, said the Government should not use its average low carbon per capita emissions as a reason not to try to bring down the amount of carbon dioxide released.

Thirteen persons, including three women, have been arrested so far.

However, angry residents raided the liquor dens and smashed bottles. They alleged that the police had turned a blind eye to those selling the spurious brew.

The police said they were looking for others who may have been taken ill at their homes after drinking the liquor.

The area is loosing greenery as more and more trees are being cut, Bhatti said.

The Japanese Meteorological Agency earlier issued tsunami warnings for a wide swath of Japan’s southeast coast for tsunamis up to 50 centimetres high, prompting city officials to warn people to stay away from the ocean.

A huge quake off western Indonesia caused the 2004 Indian Ocean tsunami that killed about 230,000 people, more than half of them in Sumatra.

Failing to get job, IIT student commits suicide in KANPUR, UP, INDIA AMERICANISED!

kanpur:Upset over not getting a job through campus recruitment, a post graduate IIT student allegedly committed suicide in Kanpur by hanging himself. G Suman, a second year M-tech student hailing from Nellore district of Andhra Pradesh, was found hanging from a ceiling fan in his hostel room this afternoon, said Sanjay Govind Panday, Director of IIT Kanpur. Suman, who was pursuing electrical engineering, was upset after he failed to get a job offer during a recent campus recruitment by several multi-nationals, Panday said. He would rarely meet anyone and would lock himself in his room. However, when he did not come to the mess for breakfast and lunch on Saturday, his friends went to his room which was locked from inside.

Unchecked vehicular pollution is nullifying the effects of a reduced level of industrial pollution in Kolkata. A study by the West Bengal Pollution Control Board reveals that there has been a reduction in the levels of suspended particulate matter (SPM) and respiratory particulate matter (RPM) — two major air pollutants since 1997, though they are still above the danger mark.

The SPM level in 2002 was 173 mg/m3 against a permissible limit of 140 mg/m3, though in 1997 the level was 283 mg/m3 . The RPM level in 2002 was 90 mg/m3 against a permissible limit of 60 mg/m3 though in 1997 the level was 173 mg/m3. The sulphur dioxide, ni-trogen dioxide and lead content in the air have also reduced. “Vehicular pollution contributes to 50 per cent of the air pollution, while industrial pollution contributes to 48 per cent. The remaining two per cent can be attributed to domestic and other sources,” said Ravi Kant, member-secretary of the Board told TNN. Corrective measures taken by the CESC at its Cossipore thermal power plant was one factor which went a long way to check indus-trial pollution.

Of the total industrial pollution, 53 per cent was caused by the Cossipore plant, 44 per cent by small units, and three per cent by big industries. “The CESC plant is old and had not installed pollution checking devices. We issued stricture orders forcing it to take corrective measures. We have similarly found that 130 small scale units out of a total of 294 are still causing pollution despite our repeated warnings. We have given closure orders to these”, Kant informed. Most of the industrial pollution is caused by coal fired boilers and the Board has given directives for a switch-over to oil fired boilers.

For all such corrective measures the units are being given 50 per cent subsidy by the Board as part of the India-Canada Environment Facility, a joint venture. As one of the five most polluted cities of the country, (the others are Delhi, Kanpur, Ahmedabad and Pune) the Supreme Court had asked the state government for an action plan to counter air pollu-tion in Kolkata, last year.

An action plan was submitted to the Supreme Court and the Board started working on it and hence this reduction, Kant said.

To define, air pollution is the human introduction into the atmosphere of chemical, particulates or biological materials that leaves negative impact in the lives of lives. Air pollution can bring disasters including death. Air pollution is caused due to emission by the automobiles mainly. Climate scientists have identified Co2 as the main pollutant.

India is one of the worse affected countries in the world. The country with second largest population in the world suffer a lot due to air pollution. It can be mentioned that Kolkata is the highest polluted cities among the metro and major cities in the country. Last year Kolkata has recorded a highest level of air pollution among the metro cities in India.

Studies show that air pollution in kolkata increases during the winter days. It happens mainly due to inversion, low wind speed and high level of congestion. Data available on the suspended particulate matter (SPM), for the last two years, shows that the SPM is continuously increasing during the winter in last few years. Lead concentration in SPM during winter for kolkata was high in comparison to other cities of the world. Concentration of some components like benzene, toluene and xylene are found in kolkata in a level much higher than the any other places in the world.

‘Sea water may submerge Kolkata in 100 years’

New Delhi based environmental scientist V Subramanian warned on Tuesday that a large part of Kolkata may be lost at the end of this century if the sea continues to rise.

Subramanian, who teaches at the Jawaharlal Nehru University in New Delhi and is in Patna to deliver a lecture, said that according to the latest data available, the sea is rising at the level of 1cm per year. At this rate the Bay of Bengal would engulf some part of West Bengal, including Kolkata, in the next 100 years.

According to him thermal power plants emit gases like carbon dioxide, sulphur dioxide and methane, which deplete the ozone layer. This causes the ultraviolet rays to penetrate the atmosphere and melt glaciers, which raises the sea level. Thirty per cent of glaciers have already melted, he said and if this continues there would be no glaciers left in the next five decades.

He shocked students, teachers and researchers by revealing that Bangladesh has touched the sea level and is set to submerge. Similarly, he said the Maldives islands would not last more than 100 years and Thailand’s capital Bangkok has already started sinking.

Bangalore Six prominent IT companies in the city, including Infosys and Wipro, have received e-mails threating to blow up their buildings, a top police officer said. Joint Commissioner of Police B Gopal Hosur said that the companies received e-mails threatening to blow up their establishments two days ago and immediately informed the police. The police have already begun investigations, he said, but did not divulge further details.

India inks largest-ever defence deal with US

4 Jan 2009, 2124 hrs IST, Rajat Pandit, TNN

TOI had reported on December 27 that the huge deal was finally on the verge of being inked after protracted negotiations and clearance from the Cabinet Committee on Security.

The actual signing took place on January 1, with defence ministry’s joint secretary and acquisitions manager (maritime systems) Preeti Sudan and Boeing integrated defence systems vice-president and country head Vivek Lall signing the contract, sources said.

But, strangely enough, the defence ministry is keeping the deal under wraps. Incidentally, the previous NDA regime had also signed a flurry of mega defence deals — like the $1.5 billion one for Russian aircraft carrier Admiral Gorshkov and $1.1 billion one for three Israeli ‘Phalcon’ AWACS (airborne warning and control systems) — in the run-up to the April-May 2004 general elections.

Sources said the P-8I contract was “a direct commercial agreement with Boeing”, with “some issues of end-use verification yet to be fully sorted out” with the US government.

As reported earlier, India and US are negotiating the End-Use Verification Agreement (EUVA) and the Communication Interoperability and Security Memorandum of Agreement (CISMOA), which are required under American laws to ensure compliance with sensitive technology control requirements.

The two pacts are required since India is now increasingly turning to US to buy military hardware and software. Though India does not have problems with safeguards, it does not want them to be “intrusive”.

In terms of the contract size, the P-8I deal supplants the $962 million deal signed with US in 2007 for six C-130J `Super Hercules’ aircraft for Indian special forces.

India will get the first P-8I towards end-2012 or early-2013, with the other seven following in a phased manner by 2015-2016. The contract also provides an option for India to order four to eight more such planes.

Armed with torpedoes, depth bombs and Harpoon anti-ship missiles, the P-8I will also be capable of anti-submarine warfare and anti-surface warfare. They will replace the eight ageing and fuel-guzzling Russian Tupolev-142M turboprops currently being operated by Navy.

The P-8I planes will help in plugging the existing voids in Navy’s maritime snooping capabilities, having as they will an operating range of over 600 nautical miles, with `5.5 hours on station’.

Customised for India and based on the Boeing 737 commercial airliner, the P-8I will actually be a variant of the P-8A Poseidon multi-mission maritime aircraft currently being developed for US Navy, which has ordered 108 of them to replace its P-3C Orion fleet. India, of course, remains unhappy over the US decision to sell more P-3C Orions, armed with Harpoon missiles, to Pakistan.

At present, the Navy uses the TU-142Ms, IL-38SDs and Dorniers for surveillance operations in the Indian Ocean region. It is also now in the hunt for six advanced medium-range maritime reconnaissance planes, for around Rs 1,600 crore, to further boost its snooping capabilities.

In a statement issued from Raj Bhavan, Gandhi said: “I deplore the destruction of public property and disruption of public life that we have witnessed in the last few hours. It does not enhance the interests of autorickshaw owners or drivers; nor it protects the interests of the poorest of the poor for they suffer from air pollution the most.”

He also said that the protests following the government’s attempts “to implement the high court order” were “taking a very undesirable shape”.

“The judiciary has taken an unavoidable step by ordering the phasing out of certain types of autorickshaws that were causing deterioration to air quality in Kolkata. The autorickshaw owners are in need of advice and assistance to implement the change.”

The statement has a message for both the opponents of the auto ban and the government. The governor has made it clear that the people of Calcutta deserve to breathe clean air and that it shouldn’t do anything that goes against the court’s order to rid the city of pollution.

 

Central forces and police were maintaining logs of all vehicles plying in the area and interrogating drivers. Central forces were deployed in all the rural market areas.

“All our arrangements are complete and we expect free and fair polls. We will allow nobody other than polling agents and voters inside the booths,” she said.

Lama said as all the booths have been declared sensitive, the polling process in all of them will be recorded on camera. Each booth would have a micro observer and six senior observers would monitor them. The DM would personally supervise the polling process.

The by-poll has been necessitated after the resignation of CPI MLA Muhammad Ilyas following a sting operation exposing his alleged involvement in a corruption case.

The by-poll, scheduled for December 30 but postponed due to security considerations, will decide the fate of six contestants. The main contenders are Parmananda Bharati of CPI and Firoza Bibi of Trinamool Congress, which led the agitation against the acquisition of farmland for industries in 2007.

There are 135 booths in Nandigram I and 41 in Nandigram II and the total electorate is 1,08,000 and 1,79,416 in both the booths respectively.

Meanwhile,The US has blocked an attempt in the powerful UN Security Council to express serious concern over the Israeli ground offensive in Gaza after eight days of air strikes and to call for an immediate ceasefire, asserting that it would ‘not be adhered to and have no underpinning for success’.

‘FBI hands over 26/11 attacks evidence to Pak’

London The FBI has given to Pakistan evidence amassed by it on involvement of elements based in that country in the Mumbai strikes, including on the LeT handlers’ warning to the attackers about the arrival of Indian commandos while watching the mayhem live on TV, a media report in London said on Sunday. Stating that evidence is growing to prove that the Mumbai strikes were orchestrated by militants based in Pakistan, ‘The Sunday Times’ reported that Zarar Shah, a communications specialist of Lashkar-e-Toiba, has admitted under interrogation in Pakistan that he advised the terrorists by phone as the attacks unfolded. Controllers in Pakistan watched live television and warned the gunmen of the arrival of Indian commandos, the report said, citing evidence amassed by the FBI and handed over to the Pakistani government.

Moily said the Sri Lankan government would do an excellent service to India if it hands over the LTTE chief after catching him. “We want his extradition. The request is pending,” he said.

“Guarantees have to come from those who control the levers of power and that means, the elected civilian government, plus the army. These are not guarantees that you can execute on a piece of paper. These are guarantees that have to be given to the international community,” he told a television news channel.

Environmental Scientists in Kolkata speak out against Chemical Hub in Noyachar

Environmental Scientists in Kolkata speak out against Chemical Hub in Noyachar

Translated by Soumya Guhathakurta, Sanhati. Sept. 5, 2007

According to environmentalists, the flowing and mixing of effluent from the chemical plant at Noyachar with the waters of river Ganges cannot be ruled out. During high tides it is possible for the contaminated water to flow upstream for a considerable distance. The possibility of the water flowing into waterways connected to Ganges cannot also be ruled out.

The previous head of the Department of Marine Science, University of Calcutta, and an expert on the Sunderbans, Amalesh Choudhury, opines that the decision to build a chemical hub at Noyachar cannot be taken by politicians and administrators. He believes that the last word on this issue can only be pronounced by environmental scientists. Presently, Amalesh Choudhury is a specialist member of ‘Sunderbans Mangrove Wetland Development Board’ and ‘ Sunderbans Biosphere Reserve Development Board’. According to him, the environment of Noyachor should be left in its present virgin state, in the interests of the Haldia industrial area. There are 10 to 12 varieties of grasses growing in Noyachor which protect the said industrial area. Further, they absorb a portion of the chemical pollution that is generated by Haldia. Environmentalist Shubhash Datta has gone on record saying that in case a hurried decision is forced upon the state then he will seek legal redressal.

Retired professor Manju Bandopadhyay of the Department of Botany, University of Calcutta, has worked extensively on the flora and fauna of the Sunderbans delta. She asserts that the existence or the absence of human settlements cannot be the only criterion for the project. She feels that none can guarantee that chemical effluents from the hub will not flow into the Ganges and pollute the water upstream and that of water bodies connected to the ganges, during high tides.

Retired professor Manosh Joardar, Department of Applied Physics, University of Calcutta, is apprehensive that a fate similar to the well known disaster incident in Japan (the presence of mercury in chemical effluents which flowed into the sea) awaits the ganges. He states that the river Ganges is presently heavily polluted and the government and its administration are in no position to enforce environmental norms on industries or management, whose index is profit and not environmental protection. No one is in a position to guarantee that the pollution of Noyachor will leave untouched the banks of the Ganges.

This article originally appeared in Bartaman, September 5, 2007

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Developing news:

Sept. 4: Island in zone of no development

Experts today warned that setting up a mega chemical hub on the mud island of Nayachar would violate coastal and environmental laws.

Although seen as relatively stable and gradually growing in size, as an uninhabited island it falls under Coastal Regulation Zone 1 (CRZ 1) where development is banned.

“No development work can be undertaken in such uninhabited coastal zones unless specifically cleared by the Centre,” said Sugata Hazra, the director of the School of Oceanographic Studies in Jadavpur, who is also a member of the state Coastal Zone Management Authority.

The estuarine island, 3km east of Haldia and 15km from the sea, comes under the coastal authority since it has a salinity level of little under 10ppt (parts per thousand). Areas with salinity levels of 5ppt and above fall under the coastal authority.

Development is allowed in already developed CRZ 2 areas like Digha. It is also permitted to a small extent in partially built-up CRZ 3 areas like New Digha and Sankarpur or CRZ 4 areas like the Andamans, which are detached islands and need some development to be self-sufficient. But it is banned in the uninhabited CRZ 1 areas.

“The island is also home to five varieties of mangroves, which have played a major role in stabilising it and preventing coastal erosion over the years. It has a sizeable forest cover,” Hazra added.

Officials said cutting down mangroves to build a chemical hub would not be ecologically sound.

In need of around 10,000 acres of contiguous land near Haldia, Buddhadeb Bhattacharjee’ s government is banking on Nayachar as its lone hope, especially after yesterday’s meeting with political parties where the island was declared the “obvious choice”.

The government has concluded that acquisition of 10,000 acres in any other area would be impossible at this point. The search for an alternative site began after the choice of Nandigram fell through.

Yesterday, asked about reports that the island ran the risk of instability, industry minister Nirupam Sen said the soil could be technologically modified to make it suitable for development.

The 16,000-acre island is home to a tourist bungalow and a prawn cultivation project. Some 400 fishermen’s families live here, of whom 500 work in the prawn project. Another 200 come from outside to work every day.

The state has to get the proposal vetted by the coastal authority, which will forward it to the Central Coastal Zone Regulation Authority for clearance. Clearance from the Union forest ministry would also be required.

The state environment minister, Mr Sailen Sarkar, expressed his worries about the possible negative impact the chemical hub would make on Nayachar island. Mr Sarkar told reporters, after attending a seminar, that his department hasn’t been contacted for carrying out an environmental impact study of the proposed hub on the island.

The former director of the Zoological Survey of India, Dr Ashish Ghosh, said GSI geologists should be informed about the nature of the proposed industrial units before assessing the land stability. Dr Ghosh said the government would have to strictly monitor the environmental factors. “The chances of dumping chemical waste into the waters surrounding the island are high. Proper technology should be in place for air, solid waste and effluent management,” he said. According to environmental experts, if chemical waste mixes with water, the rich fishing ground in the sandheads, off the Digha coast, will be poisoned.

Sept. 4: Congress reservations over Nayachar

State Congress leaders have expressed reservations over setting up of a chemical hub on Nayachar island, citing topographical reasons. “Nayachar is away from the mainland though it is a newly developed island. And it is only 1.5 metre above the water level. The island located at the confluence of the Haldi and the Hooghly rivers is newly formed and is topographically unsuitable for a chemical hub,” PCC working president Mr Pradeep Bhattacharjee said today.

“We are happy that the state government has finally shifted from their stand of acquiring farmland for setting up a chemical hub,” he said. Mr Bhattacharya said that Nayachar situated off Haldia, though is a possible site for the mega chemical hub, is sparingly inhabited and faces threat from soil erosion.

The Assembly Standing Committee on Commerce and Industries had already visited Nayachar before the state government decided to select it for the chemical hub. In all South East Asian countries such as Singapore and Indonesia, chemical hubs are situated off the main island and as per that logic, Nayachar may be an ideal choice. But the newly developed island would not be an ideal place for setting up a chemical hub.

Yesterday, chief minister Mr Buddhadeb Bhattacharjee and commerce and industry minister Mr Nirupam Sen informed the all-party meeting at Writers’ Buildings that the outlying area of Haldia Petrochemical complex would not be selected for setting up a chemical hub as the land there was fertile. Nayachar was opted for the chemical hub as most of its 14,000 acres belong to the state fisheries department and Haldia Development Authority.

With the Congress buoyed over the poll victory in three states and being part of government in Jammu and Kashmir, Gandhi was hailed as the ‘third pole’ in Congress after Party President Sonia Gandhi and Prime Minister Manmohan Singh.

“The Congress is now on the threshold of 3-G technology; we have stood for third generation leaders who are progressive and dynamic and who can provide good governance,” party spokesman Abhishek Singhvi says.

But the party appears in no hurry to pitchfork him to the front as one who may be taking over. Sonia Gandhi had answered the question on Independence Day that “certainly” Manmohan Singh will be the Prime Minister if the UPA comes back to power.

In fact, early 2008 saw the AICC not approving senior leader Arjun Singh’s statement that there was no harm in projecting Rahul as the PM candidate. That time, party leaders had made it known that Manmohan Singh did not like the idea when he was occupying the prime ministerial chair.

Gandhi, who was inducted as the General Secretary of the AICC in September 2007 and made in-charge of the frontal organisations of NSUI and the IYC, took the opportunity head on.

Gandhi started the process of democratising the functioning of the NSUI and the IYC holding organizational elections for the NSUI in Uttarakhand and IYC in Punjab, to be replicated in these organisations in the rest of the country.

Even though the adoption of the same model in the parent party may not be anyday soon, the 38-year old leader, in a candid admission, described patronage, money, dynasty and relatives as a “bane” which prevents the youth from joining politics.

He described himself as someone who benefited from it as his father, grandmother and great grandfather were the Prime Ministers of the country at a meeting in Uttarakhand.

“The West should be tougher on Pakistan. It is trying to play both ends against the middle — to look like the friend of the revolutionaries on the one hand and a friend of the West in the fight against terrorism. It can’t be both things,” he said.

“This country should make clear that as long as Pakistan harbours terrorists it’s not going to get any Western aid.”

Mumbai saw a demonstration of the ‘extraordinary barbarism’ that people are prepared to unleash on the world, the controversial author said. “How many of these attacks do we need before we understand what’s going on?”

Recalling his days in Mumbai, Rushdie said he watched with horror as flames tore through the Taj Mahal Palace hotel in Mumbai.

“Those are the streets I grew up on. Two of the characters in my novel ‘Midnight’s Children’ consummate their love affair in the Palace, as so many of us did.”

“What is now happening in West Bengal is a well-planned onslaught against the CPI-M. These activities - happenings in Lalgarh in the name of tribal agitation, growing Maoist attacks on the communists, the Gorkhaland movement in northern West Bengal - are targeted to weaken the Left Front in the state,” Karat maintained.

“We’ve to constantly fight against all the opposition forces. Our party is not addressing this as a problem of West Bengal alone. It’s a national issue. Our party has been built through a class struggle and we’ve to see to it so that this conspiracy against the communists is defeated,” Karat said.

Alleging that the spate of troubles in West Bengal were the result of a ”well planned conspiracy’, CPI(M) General Secretary Prakash Karat today said the party was ready to accept the challenge.

Striking a similar chord, Chief Minister and CPI-M politburo member Buddhadeb Bhattacharjee said: “We’ve to move forward facing all the hurdles set by our opposition. There’s no scope to look back.

The CPI-M state secretary, Mr Biman Bose attacked the Trinamul chief. “How can a responsible Opposition organise a sit-in demonstration? Pulling up a chair and hurling invectives at the chief minister will not solve the problem,” he said.

 

The switch to LPG has to be “painless” for auto operators rendered jobless on New Year’s Day, he said. On this, he has Governor Gopalkrishna Gandhi by his side. After parting ways over Nandigram and Singur, Gandhi and the CM found common ground on the HC move to clean up the air. Polluting autos have to go, they agree, but not at the cost of livelihoods.

In a press release, the Governor said: “The judiciary has taken an unavoidable step by ordering the phasing out of certain types of autos that were causing deterioration to air quality in Kolkata. The government should take steps to see that the changeover is painless for the affected auto operators.”

Condemning the violence, Gandhi said: “I deplore the destruction of public property and disruption of public life. It does not enhance the interests of auto owners or drivers. Nor does it protect the interests of the poor — they suffer from air pollution the most.”

Sen said Bhattacharjee would take a final call on Sunday after talks with the transport minister and police chief Gautam Mohan Chakrabarti.

Three buses were torched and several vehicles damaged in Kolkata in a rampage by Trinamool Congress-backed autorickshaw operators A state-owned bus set afire by autorickshaw operators in Kolkata protesting a court ban on ageing public transport vehicles in the city and to demand the release of 18 arrested protesters. The buses were burnt in around Park Circus in south Kolkata as a large contingent of police stood by but could do little as the auto operators, protesting a ban by the Calcutta High Court on two-stroke autos from January 1, indulged in violence. They not only damaged and set ablaze the buses but also snatched cash and valuables from passengers and conductors of the buses during a 12-hour strike called by the Trinamool Congress-backed Auto Bachao Committee and the Progressive Taximen’s Union.

There are over 60,000 autos, mainly two-stroke, in the metropolis of which 25,000 to 30,000 have valid permits.

Chief secretary Asok Mohan Chakraborty said the state government was bound to implement the high court order.

“What can we do? It is the verdict of high court. We have a sense of responsibility to auto operators. We will appeal to the high court,” CM Buddhadeb Bhattacharjee said.

In his first such exercise after taking over the reins of Home Ministry, Union Home Minister P Chidambaram will elicit views from all state governments on measures to beef up the security machinery to check terrorism in the wake of Mumbai terror carnage.

The meeting will focus on strengthening intelligence network and toning up of coastal security, particularly in view of the fact that the terrorists involved in Mumbai attacks used the sea route to sneak into the metropolis.

Security of key installations, including nuclear power plants, will also figure prominently at the meeting to be addressed by the Prime Minister.

The Tuesday’s conclave will be followed by a meeting of chief ministers of nearly a dozen Naxal-affected states, including Jharkhand, Chhattisgarh and Orissa, on Wednesday.

The Wednesday’s meeting is expected to give emphasis on how to fight the menace through development and security. Besides reviewing the security preparedness of the Maoists-infested states, the Union Home Ministry is also likely to take note of the progress of development projects initiated in 33 districts across nine states.

Immediate filling up police vacancies, setting up of the Police Network (POLNET) connecting all police stations through a computer-based system for sharing of information and videos of crime scenes and swift action on police reforms are other issues which the chief ministers will deliberate in the Tuesday’s meeting.

The issue of strengthening intelligence collection and sharing mechanism (Subsidiaries of Multi Agency Centre), modernisation of police forces, setting up of commando units in all states/Union territories police forces and discussion on the modalities of the working of the newly-formed National Investigation Agency are also on the agenda of the first meeting.

In a letter sent recently, Chidambaram had suggested all chief ministers to set up round the clock control rooms to receive and disseminate intelligence/information pertaining to terrorism and other forms of organised crime, setting up an analysis group within the state intelligence wing, forwarding intelligence inputs to Intelligence Bureau and taking urgent steps to get rid of mafia, extortion gangs and land sharks among others.

The Home Minister advised the states to immediately identify major establishments, installations and symbolic or iconic structures and conduct a thorough review of the security arrangements there.

Dear Sirs,

This is an urgent appeal to you for taking immediate action on the issue of vehicular pollution in Kolkata.

Kolkata’s air quality is in a perilous state, and there are enough scientific data available to substantiate this fact. However, we choose not to furnish them in this forum. Instead, we would just like to point out that this is a non-negotiable issue that cuts across all possible forms of boundaries, e.g., social, economic, age, gender etc. The black fumes that come out from the vehicles affect everyone alike – the auto-rickshaw driver, the traffic sergeant, the office commuter, the street hawker, the school children, and almost everyone who is on the road, except the ones who travel in private car with the glass windows rolled up and the air-conditioner turned on.

There are people already fighting for clean air in the city, and thanks to their relentless hard work, we now have a High Court order, passed on the 18th of July 2008, by which the following measures need to be implemented:

We are aware that a committee, consisting of senior government officials and academicians, has already been formed to implement this; but as concerned citizens of this city we just want to see to it that the efforts to do not fizzle out with time. The objective of this petition is to express the common citizen’s solidarity with the ones actively associated with anti-pollution campaign and to convey to the government that clean air is a demand of the mass, not just a handful of environmentalists.

We appeal to the West Bengal government to do the following:

The Undersigned

 

In the book, Doing their Share to Save the Planet, author Donna Lee King interviewed numerous children to ask their opinions about environmental issues.  The conversation above exhibits the innocence and naiveté of a young child, who will eventually inherit mother earth, in regards to the ozone layer.  Although the adult reader may chuckle at this young girl?s lack of knowledge, the average adult is virtually as uneducated.  With such a life affecting issue as the ozone layer, it is essential that society be well informed about the danger ozone depletion poses to earth.

 There are many issues one must explore when educating himself/herself about the ozone layer.  The goal of this paper is to provide the layman with a general knowledge of important components of ozone education.  First, a general overview will be provided.  Next, the reader will learn scientific aspects of the ozone layer such as factors responsible for ozone depletion, and then he/she will explore the ozone hole over Antarctica.  To continue, societal aspects that will be addressed include health risks, crop/plant damage, and organism damage.  Finally, actions that government has taken to attempt to solve the problem will be discussed.  The paper will conclude with a discussion of the importance of ozone education.

The ozone layer:  What is it?

*Correspondence to Surajit Chattopadhyay, Department of Information Technology, Pailan College of Management and Technology, Kolkata 700 104, India.

 

Summary

Contamination of groundwater by arsenic may be due to industrial discharges, mining operations, or mobilization of naturally occurring arsenic in sedimentary aquifers. Such contamination has been reported in China (Province of Taiwan), USA (Millard Country, Utah), Chile, Argentina and Japan (Tokyo).

Between 1983 and 1985, 14 villages in South Bengal were affected by chronic arsenic toxicity. A high level of arsenic was detected in the water from shallow tubewells (24-36 meters deep) used by those affected, but the cause of the contamination could not be ascertained. During the period July-September 1989, some residents of P.N. Mitra Lane, Behala. South West Calcutta, attended the S.S.K.M. Hospital and were found to have signs of chronic arsenic toxicity. This led us to study the problem from an environmental, clinical and epidemiological point of view.

Due to the discharge of industrial effluent after production of the insecticide Paris-Green [Copper acetoarsenite Cu(CH3COO)2 3Cu(AsO2)2] by a local factory at the P.N. Mitra Lane, Behala, ground water has become contaminated with arsenic. More than seven thousand people were using this arsenic contaminated tube-well water for drinking and house-hold purposes. Many people of the area were hospitalized and symptoms of arsenic toxicity were visible amongst a large number of the population. Analytical study reveals that soil around the area of effluent dumping point, which is at the middle of the locality, contains a very high concentration of arsenic and copper. For the last 20 years this factory had been producing 20 tons of Paris-Green pe

GRIPE SESSIONS vs CLASS STRUGGLE

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I attended the rally in 1996 as did many other supporters of auto workers from around the country and Canada. It was well attended but I was a bit surprised that the event was a rally held some distance from the entrance to the auto show. I was not the only one in attendance that day that wondered why we were picketing one thousand feet or so from the entrance to the event and a couple of them told me that this was an agreement the organizers had with the police and authorities.  There was no attempt to picket in front of the place or in any way disrupt the event which I thought was a mistake.  But it was good to be there.  I had gotten some support from my Local for the Soldiers of Solidarity and we donated $500 to their efforts.

Auto workers have called for a rally on January 11 at 1 pm on Jefferson Ave. outside of press day of the North American International Auto Show. With news of the Bush administration’s $17.4 billion loan to the auto industry being tied to game-changing concessions that could erode wages across the board, auto workers will rally for long-term solutions for the auto industry’s problems that don’t unfairly blame workers for failed corporate policies.

THE WORLD today!

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1. Barack Obama wins Presidential Election and becomes the 44th President of the United States starting January 20 - Hope for a Change - Yes we can -

130 Million Americans, more than in any other election since 1960, voted for a change and choose Obama, obtaining a historic victory to become the first black President of the United States, congratulating and celebrating world leaders, expressing hope, expectations and confidence in a fresh approach to the world’s challenges. Obama won the popular vote with 52% to 46% of McCain and the decisive electoral vote with 365 to 173 of McCain, requiring the Presidential election 270 electoral votes and the Democratic Party is strengthening its majorities in both Houses of Congress, in the House reaching 257 seats/up 21 seats remaining 178 seats for the Republican Party and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota, falling disapointed Democrats short to obtain a 60-vote majority in the Senate. Obama has to confront as he starts Presidency on January 20, 2009, inherited big problems like how to revive economy and the wars in Iraq and Afghanistan, and one has to accept that there are no quick and easy solutions and it will take time to solve them, nevetherless it seems to be important that he keeps promises made during his campaign and helps to overcome divides bringing the country together. The President-elect is already moving ahead to choose his team for the transition process, to take place in complete cooperation with the Bush administration, and to form his cabinet, nominating Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team are cooperating as close as possible with President Bush to inject confidence into the market, coordinating the rescue plan for Citigroup and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats had shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Obama talked also about a redistribution of the tax burden to reduce economic inequality, a real plan focusing on fairness and growth. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1 Trillion considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by President-elect Obama, who said his economic team is working on an ambitious and significant economic recovery plan including permanent middle-class tax cuts and the creation and preservation of up to 3 Million jobs during the next two years, through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, which could cost $675 Billion to $775 Billion, 5% to 6% of the US gross domestic product, or more, to enter into effect as soon as possible after his inauguration on January 20, 2009.  To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department is asking Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position President Bush said he would be open to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance, pulling Kirk Kerkorian, the billionaire investor out of the company, selling his remaining shares. It seems nearly unbelievable that President Bush apparently conditioned his support to some of the  important initiatives to help the contracting US economy to Democrats dropping their opposition to the free trade pact with Colombia. The President-elect is frustrated that the actual administration refuses to discuss a now needed second economic stimulus package  and worried as Bush issues a record of so-called ‘midnight regulations’, last minute regulations designed to reward supporters, enraging opponents and undermining his new administration, like coal waste dumping into valleys and streams  and easing the building of coal-fired power stations nearer to national parks, having  his transition team already a list of controversial measures that will take months to undo. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a more measured response from Obama and a forcefully demand from President Bush, blaming Moscow for invading its neighbor and requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, making it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. As Russia is demonstrating to be the sole military power in the strategically vital Caucasus region, NATO foreign ministers urged Russian President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops are withdrawing from Georgia, a provocative move, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict will move from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. After the NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, is prepared to resume a constructive dialogue with Russia through French President Sarkozy, current President of the Council of the European Union, saying after an emergency Georgia summit it would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia, but did not threaten to impose sanctions considering French-German unified political position opposing such measures! President Sarkozy and President Medevedew agreed on a complete pull out of Russian troops from Georgia by the second week of October and after the deployment of at least 200 EU-observers up to the beginning of October, retreating to the two enclaves of Abkhazia and South Ossetia, having Russia established diplomatic relations with both. Rumors are currently circulating that US-VP Cheney may have sparked the crisis in Georgia as a favor to the Republican candidate, confirming eventually Prime Minister Putin’s suspicion, and there is a lot of evidence to support such a theory, as one of Cheney’s most experienced advisors, Joseph R. Wood, was in Tbilisi shortly before the Georgian army launched its military operation. McCain, who lost the Presidential election, is also a close friend of Georgian President Saakashvili, who apparently lied 100% to the world, and ordered the assault on South Ossetia before the Russian tanks entered the province, not respecting the cease-fire, attacking the civilian population while they were asleep in their beds, according to OSCE reports. Cheney confirmed during a visit to the Georgian capital that the US are donating $1 Billion to rebuild the country after Russian’s invasion! US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama Administration to restore relationship. Meanwhile President Bush concentrating on the weakening US economy, addressed the nation to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act/EESA, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The Bush Administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks.  The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans, announcing  the Federal Reserve  it will take a stake of $5 Billion in GMAC  against preferred shares paying a dividend of 8%, lending another $1 Billion to GM to help GMAC to reorganize itself as bank holding company, enabling GMAC to improve its financing offers to vehicle buyers. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies. The Treasury Department disclosed guidelines for Systemically Significant Failing Institutions/SSFI program, it uses to justify emergency aid under the Emergency Economic Stabilization Act/EESA  out of the $700 Billion bailout fund, preventing disruption of financial markets to limit impact on the economy, protecting American jobs, savings and retirement security.

http://www.BarackObama.com/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Excessively indebted Government & Overindebted Households & Undercapitalized Banks & Oversized Financial Sector& Underregulated Markets & Speculations & Contracting Economy Wordwide in 2008 & Deepening Global Recession in 2009 - Market Adjustment - New Opportunities -

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. President Bush has signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25% and lowering the federal discount rate to 0,5%,  coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, expecting the weakest Christmas shopping season in decades, dropping consumer confidence 23,4 points to an all time low of 38 the same month, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 5,7% in July, increasing to 6,1% in August, remaining steady at 6,1% in September, reaching 6,5% in October and jumping the jobless rate to a 15-year high of 6,7% in November loosing American economy another 533.000 jobs, climbing claims for unemployment benefits to the highest level in 26 years. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Manufacturing activity suffers declines worldwide, dropping in the United States in December to its lowest level in 28 years. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US global car sales fell more than 40% in November in comparision with one year earlier, increasing concerns about the prospects for survival of General Motors, Ford and Chrysler requesting urgently federal financial aid, dropping retail sales 2,8% in October, falling compared with one year earlier 4,1%. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,96 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles.  US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and is expected to slow down even more in the fourth quarter of this year and also at least in the first quarter of 2009. The IMF sees a weak 0,5% US growth for 2008 lowering its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand. The US one year inflation increased to 5,60% in July (including food and energy), but declined to 4,94% in September, 3,66% in October and 1,07% in November. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 16-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling to 2,1% in November, where it is expected to average 2,2% in 2009. The European Central Bank/ECB had raised its main interest rate from 4% to 4,25%, alarmed about inflation trends combined with lower growth increasing stagflation fears in the Eurozone, holding the rate steady at 4,25% in September as inflation risks have fallen but not disappeared, insisting that it is crucial to bring Eurozone inflation back within the target of an annual rate of 2%, but in a joint emergency decision with the world’s most important central banks lowered its key rate to 3,75%, also reducing direct lending rates. The financial crisis has changed economic outlook slowing growth worldwide, falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, lowering the European Central Bank its key rate by another half percentage point to 3,25% and with inflation falling and Europe already in recession decided a new interest rate cut by 0,75% to 2,5%. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 4,8% and 7% respectively lower growth rates in 2008, while the somewhat frenetic growth in China and India, both commodity consumers, could slow down temporarely but will continue with estimated 9,9% and 8,5% respectively in 2008. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standads Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday. In another deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. Merrill Lynch reported for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital the company encouraged by the Federal Reserve, which now officially approved the acquisition, advanced its merger talks with Bank of America and agreed to be bought in a rescue take over for about $50 Billion, making BofA the second largest bank in the world. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion, reporting stronger than expected third quarter earnings of $1,64 Billion, while J.P.Morgan Chase posted for the same period a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw at least $43 Billon in September from US hedge funds, which lost already more than $200 Billion in value this year, borrowing also heavily money, and as hedge fund outflows increase they will have to sell assets, estimating analists that the hedge fund industry, which managed at its peak beginning 2007 about $2.200 Billion in assets, is going to shrink according to estimates by more or less 45%/$1.000 Billion due to withdrawals and investment losses. Also smaller regional lenders are becoming increasingly vulnerable, practicing American banks a new found caution reducing even business loans! The credit crisis has conduced also to a tightening in lending terms of credit card issuers with consumers to lower risk profile, owing US households about $971 Billion ($8.299,- per household) in credit card debts, increasing charge-offs to 6,82% in

US Asks Arab States For $300B To Save Economy -

Décryptage, Analyses, Veille - Downside The World News

http://www.nowpublic.com/tech-biz/us-asks-arab-nations-300-billion-fund-auto-bailout

Corruption is the greatest stumbling block to infrastructure development in India

India has not improved it’s image where corruption is concerned, not if one goes by the recent survey by Transparency International. The TI corruption index is calculated by taking into account people’s perceptions. This year India fared worse than last year, having scored 3.4 as against 3.5 in 2007 (marks are out of 10, with 10 being the highest score meaning the least corrupt). The scores for all countries for 2008 are given here. There is no major difference in the scores of various countries from the previous year, which you can read about here, and not surprisingly the poor countries tend to be the most corrupt.

There is also a state-wise survey for India, again based on perceptions. Indian states have been ranked on a scale of Alarmingly Corrupt, Very Highly Corrupt, Highly Corrupt to Moderately Corrupt. The poorer states fare badly and nor surprisingly, Bihar is perceived to suffer from the most corruption followed by J&K.

However no state in India is free from corruption and here’s a small list of projects all over the country which are riddled with corruption.  The list covers some of the recent charge-sheets or recent revelations and not all states/projects are listed. In this sense the list is not comprehensive. Also, older cases are not listed.  The corrupt deals listed here in any case are just the tip of the iceberg as no  government-run project anywhere in India is squeaky clean, whether it’s infrastructure building, dispersal of aid or giving permissions for any works. And as the nexus between the politicians, the criminals and the police tends to cover up a lot of scams, the public will never really what is the real extent of the rot. This list just gives an idea of some of the corrupt projects in the country and reminds us why the infrastructure/health in our country is not up to the mark, despite money being earmarked for it.

So here is the list, with the states being listed alphabetically:

(Photo copywrited to me and the map is from the Economist)

31 December 2008 Newz Bits

HIGHLIGHTS

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

All city housing projects to leave space for poor

New Delhi: Lakhs of people working as maids, helpers, security guards, sweepers and vendors in the capital can finally hope to have their own houses near the affluent colonies they provide services to.

Delhi, along with 40 other cities, has agreed to a new Union housing ministry policy to ensure “adequate reservation” of developed land for economically weak and low income groups in housing projects.

Asian stocks advance for eighth day on policy expectations

TOKYO: Asian stocks rose, pushing the regional benchmark index to its longest streak of gains since 2004, on optimism tax cuts and government asset purchases will alleviate the global recession.

The MSCI Asia Pacific Index rose 1.2 percent to 91.20 as of 12:31 a.m. in Tokyo, set for the highest since Nov. 5 and an eighth-consecutive gain, the longest-winning streak since August 2004. The gauge posted a record 43 percent slide last year, the worst annual performance in its two-decade history.

China’s benchmark CSI 300 Index snapped an eight-day losing streak after the government said it will support the steel and automobile industries. Baoshan Iron & Steel Co., China’s biggest steelmaker, rose 4.5 percent to 4.85 yuan. Chongqing Iron & Steel Co. jumped 10 percent to 3.80 yuan.

India’s central bank lowered interest rates late on Jan. 2 for the fourth time since October. The government also doubled the amount overseas investors can hold in local bonds and extended capital to the nation’s banks. Futures on the Nifty Index rose 1.5 percent in Singapore today.

South Korean financial shares rallied after the nation’s foreign-exchange reserves rose for the first time in nine months in December and as the won strengthened, boosting confidence banks will be able to service foreign debt. Woori Finance Holdings Co., which controls South Korea’s second-biggest bank, surged 11 percent to 6,970 won. Hana Financial Group Inc., which controls the fourth-biggest bank, climbed 6 percent to 20,200 won. “The stabilizing won as well as high hopes for the Bank of Korea’s additional support measures are also driving bank stocks higher,” said Park Seong Min, a fund manager at LS Asset Management Co. in Seoul, which oversees the equivalent of $724 million in assets.

Taiwan’s Hon Hai Precision Industry Co. rose by its daily limit of 6.9 percent to NT$68.60. Chairman Terry Gou told the Commercial Times on Jan. 1 that the world’s largest contract maker of electronics will be the exclusive seller of Apple Inc.’s products in China.

source : jang.com.pk

Methinx the underscore has something to do

aj golf
Looking for Serious Investors to Make Real Money
I CAN DOUBLE YOUR MONEY!!!!
I’ve got a million to invest
^^SPAM^^^OR SCAM^^^
AMR … from Michael -Liar’s Poker- Lewis
pauslon is a cocksu liar
reason to buy the SAME index fund?
“margin of safety”
The Bogle Answer
Kind of a strange question
same index, different fund
FED is only delaying the recession and problems
$ Open to other ways of Making MONEY? $
What American auto exec fat cats should drive
Personal Loans
tag heuer
why not work another job or lie within your
Good vid Argentina’s hyperinflation
that will be the US a year from now
I loved it.
I have capital. How can I make $ during the
goddamn, you are a ing moron
ohhh yeah!!
donkey kong
Start getting the animal porn yet at your yahoo
i can give you my address
opportunities
build Disney Canada
Looking for investor / partner for Ent. company
Take a look here and ignore the Negative ones
Say hi to the other moron spammer when you
Not with a response…We’re just better than you
A suggestion
Gold & Silver taking a dive…..back down
Silver still going up
The govt is ing over the prudent
The dollar was meant to be spent or invested
That is not the way it used to be.
What is still “the way it used to be”?
I wasn’t saying those days were
According to whom??
Because our financial policy does not encourage
No ! … I guess +230 years is a long time
politicians are morons. they mortgage the future
he should find something of value
Craig knows the truth
Looks like the Moose got hit by a car
why doesn’t it copy right??
Methinx the underscore “_” has something to do

2008 review and 2009 plan

2009 - The plan. The outlook of 2009 is permissic but I will keep investment in stock.  If the HSI is under 15000, I will buy more tracker fund (2800) every month. If the US end Europe  market rebound (a big if), I will sell some Lyxor world ETF (2812).  My target asset location is 50% tracker fund, 30% small-cap stock and 20% cash.  However, I don’t think I will get there in 2009 or even a few years. My main focus is buy more tracker fund in 2009.  Hopefully I will buy 5000 shares of tracker fund at $14-$15 every month.

TAMING THE CELTIC TIGER

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IT’S 3 a.m. at Doheny & Nesbitt, a favorite watering hole of Dublin’s political and business elite, and the property tycoon Sean Dunne stoops to retrieve a penny from the pub’s grimy floor.

One would think that Mr. Dunne, Ireland’s best-known building developer, would be in bed at this hour. It’s a weeknight, after all, and he has meetings that begin before first light.

What’s more, the Irish economy, pummeled by the most severe housing bust in Europe, has collapsed. And the gossip around town is that Mr. Dunne, whose brazen deal-making and Donald Trump-like lifestyle epitomized the country’s euphoric boom, might be going bankrupt.

But, no matter, a penny is a penny.

“I am never, never too proud to pick a penny up from the floor,” Mr. Dunne said. He is on perhaps his fifth pint of Guinness, capping a rollicking night of Champagne cocktails, followed by a wine-soaked dinner — yet his thick brogue is clear of even the faintest slurring.

“I grew up with nothing and I know the value of money,” he adds. “The Celtic Tiger may be dead and if the banking crisis continues I could be considered insolvent. But the one thing that I have is my wife and children — that they can’t take away from me.”

It is not known whether Mr. Dunne will fall victim to today’s world financial catastrophe, but there is no doubt that his country has.

Everything, it seems, has grown worse here. The recession started earlier and its bite has been deeper. Housing prices have fallen by as much as 50 percent. Bank shares have plummeted by more than 90 percent. Unemployment is approaching 10 percent.

The roots of Ireland’s fall date to more than 20 years ago, when a clutch of economists, politicians and civil servants put their heads together in this very pub and planted the philosophical seeds for the Irish economic miracle.

Known widely as the “Doheny & Nesbitt School of Economics,” these beery musings soon became government policy that chopped taxes in half, sharply reduced import duties and embraced foreign investment — a radical transformation that gave birth to the Celtic Tiger and perhaps the most open and vibrant economy in Europe.

But beyond the glow of this sudden efflorescence that made Ireland the fourth most-affluent country in the Organization for Economic Cooperation and Development, a housing bubble had begun to form. Low interest rates, a wave of inward immigration and a bank lending spree drove housing’s share of the economy to 14 percent, the highest in Europe, from 5 percent.

Developers like Mr. Dunne became multimillionaires and — much like the hedge fund and private-equity elite in America — became visible public and cultural figures. They were living large in a country just coming to grips with its ability to show a little swagger.

Ireland’s policy makers, like their counterparts in the United States and Britain, were seduced by record tax inflows and a full-employment economy. They paid little heed to the lonely voices that warned of the crash that finally came over the summer, when interest rates in Europe began to rise. Banks that had steered more than 60 percent of their loans toward property stopped lending, and asset values plummeted.

“We have repeatedly warned that the government’s housing policy was extremely dangerous,” said John Fitz Gerald, an economist at the Economic and Social Research Institute, a leading policy center in Dublin, who has long urged that the government stanch housing demand by raising taxes. “You will now see unemployment going to 10 percent and we will experience a sharp drop in output.”

He shakes his head and sighs: “This was predictable, but the government just did not deal with it.”

BY wide consensus here, two events have come to define — both culturally and financially — the sweep and excess of the Irish property boom. Both revolve around Sean Dunne.

In July 2005, Mr. Dunne paid 379 million euros for a seven-acre plot in the exclusive Ballsbridge neighborhood of Dublin and promptly announced that he would tear down the two luxury hotels on the site to build a high-end commercial and residential development.

That deal amounted to 54 million euros an acre, one of the highest amounts ever paid for land in Europe. His subsequent architectural plan featured a soaring Dubai-like office tower cut in the shape of a diamond that anchored a futuristic community of expensive houses and glamorous shops, and the price tag of one billion euros shocked Dubliners with its gall and ambition.

Hobbled by delays and vocal neighborhood opposition, the project sits before a local planning board that on Jan. 30 will either approve or scrap the plan.

The second moment occurred in 2004 when Mr. Dunne, who is now 54, celebrated his second marriage, to Gayle Killilea, a former gossip columnist 20 years his junior, by inviting 44 of his friends on a two-week Mediterranean wedding cruise on the yacht Christina O, on which Aristotle Onassis and Jacqueline Kennedy married.

Much as the $3 million birthday party for Stephen A. Schwarzman, the Blackstone Group founder, came to be seen as a crass display of private equity’s manifold riches, the Dunne wedding was viewed similarly in Ireland: as a conspicuous and garish expression of the man and his business.

That a billion euro property plan and a gaudy wedding celebration should be held up as cautionary exemplars of Ireland’s pursuit of money angers Mr. Dunne. In his view, it speaks to what some call the Irish disease.

“Jealousy and begrudgery are still alive and well in Ireland, and whoever eradicates them should be prime minister for life,” he says as he tucks into a heaping plate of gravy-drenched turkey and mashed potatoes in the restaurant of one of the two hotels he owns — and is hoping to raze. “It’s part of the Irish psyche and it is the result of 800 years of being controlled by other people, of watching everything the master or landlord is doing.”

Mr. Dunne’s compact paunch, reddish cheeks and mischievous grin — which he occasionally deploys with a wink of his eye — can give him the air of a department store Santa. But his business methods are far from jolly: he is notorious for taking legal action against all who cross him, from local newspapers to rival property developers.

He defends his purchase of the Ballsbridge site as responsible, not reckless, as his critics have deemed it. He points out, too, that his winning bid was just slightly more than the second-highest offer and that subsequent property sales had far exceeded his submission of 54 million euros an acre.

Still, he recognizes that times have changed. Just recently, he pruned staff at his development company, and some of his senior executives agreed to take 50 percent pay cuts.

Asked where he will find the 600 million euros that he needs to tear down the two hotels, dig a massive hole in the ground and erect his vision of a new Dublin, he ruefully remarks: “It is fair to say that there is not a queue of bankers lining up to lend to me right now.”

But he says the project will be completed, assuming that it wins approval of the planning board. “If anyone wants to bet I can’t do this, I will take that bet,” he says, citing, without specifics, talks with Asian banks and a sovereign wealth fund. “You have to have steel in a certain part of your body to do this job, and as one of my bankers recently said to me, ‘Sean, the only thing that will take you out is a stray bullet.’ ”

IN many ways, the ups and downs of Mr. Dunne’s life and career mirror the Irish economy’s own rise and fall. Born into a house without electricity or running water in the small provincial town of Tullow, outside Dublin, Mr. Dunne studied construction economics at a technical college in the 1970s.

Along with many of his countrymen, he forsook the stagnant Irish economy — in his case, choosing bartending in New York City and working on an oil rig in Canada.

With the Irish economy still afflicted by an unemployment rate of about 20 percent in the 1980s, and a punitive overall tax rate, he began his real estate career in London. He moved back to Ireland in 1990 and began a string of property deals.

He initially focused on government-sponsored housing projects. But as the Irish economy began its true take-off, demand came from the growing corps of newly wealthy Irish, many of whom were returning to Ireland from abroad. They were joined by a wave of foreign workers.

After years of emigration and economic stagnation, Ireland’s housing stock was depleted, precipitating a housing euphoria. Capital gains taxes were low, as were interest rates. Banks stood ready to lend, offering mortgages with no money down to a house-hungry population.

The projects of Mr. Dunne and a small circle of developers grew in size and scope until the skyline of Dublin, never known for its tall buildings, began to fill with cranes and great shiny towers.

Signs of a bubble were everywhere: a family home in Dublin cost as much as a similar abode in Beverly Hills; house prices more than doubled over a 10-year period; and household debt as a percentage of G.D.P. jumped to 160 percent from 60 percent during the same period.

Irish banks, unlike those in the United States, didn’t dole out that many subprime loans. Rather, they lent furiously to big property developers who themselves were liberated to build pell-mell by government-imposed tax breaks.

Mr. Dunne, who says he put 35 percent cash down — or about 125 million euros — for the Ballsbridge project, says that even with the drop in asset values, he still has hope that the project can be completed.

“This is the way God made me, with heavy shoulders and an ability to carry a great load,” he says, forcefully rejecting the rumors of his financial demise buzzing around Dublin. (One of the more fantastic claims was that his financial troubles had forced him to take a month’s recuperation in a mental institution.)

“Failure is not an option for me,” he says. But others aren’t so sure.

The Irish government recently announced a $7.5 billion bank bailout and took majority stakes in the country’s largest banks, a move that followed the government’s earlier promise to guarantee all bank deposits.

Analysts are uncertain that the government will allow the banks to continue to support the type of high-risk, high-reward projects that have become the bane of their financial existence.

“The banks in Ireland did not lend recklessly to individuals; they lent recklessly to developers,” says Ronan Lyons, an economist at Daft, Ireland’s largest property Web site. As for the Ballsbridge project, he may well take Mr. Dunne’s bet.

“I would be surprised if it gets built,” Mr. Lyons says. “The migrants are going home, there is a surplus of properties for sale, and even though this is a landmark project there is just not an appetite for large projects now.”

WHILE the pain is acute in Dublin, at least the city has the small comfort of having enjoyed the full benefit of the boom.

Such is not the case in the city of Limerick. Traditionally one of Ireland’s more depressed cities, Limerick was a latecomer to the property party. While there were some good times, the downturn has had a more wrenching effect there, with unemployment over 14 percent — among the highest rates in Ireland.

The layoffs have picked up speed around Limerick in the last month, as construction companies have stopped work, seemingly on a dime, sending such a procession of jobless to seek assistance that the local unemployment office became the second busiest in the country.

The waiting room in the office is dank and gloomy, and Dale McNamara, 20, wonders how a professional life once so charmed came to be so hopeless. Since graduating from high school as an electrician, flourishing building work in the area kept him more than busy and flush enough to buy a new car, start a family and consider buying a house.

Then, without warning on Dec. 5, he was told that it would be his last day of work, just six months before he would have received his certificate as an independent electrician.

Since then, he has been frantically knocking on doors, but to no avail. Now, as rent, heating bills and car payments pile up, he is beginning to feel desperate, unable to afford a night out or a Christmas present for his 20-month-old baby.

“If I don’t get a job in the next two weeks, I am worried about losing my house,” he says. “We have no money.”

He looks at his number in the unemployment lines and grimaces — he has been waiting four hours now and his name has still not been called.

“My grandfather says this reminds him of the 1930s when everyone left for America and Australia,” he adds. “There is just no work here.”

More dire, however, is the condition of the permanently unemployed in Limerick’s festering ghettoes, where experts say the unemployment rate touches 70 percent. During the early years of the economic revival, the government did its best to spread money to such areas, which are a feature of urban life all over Ireland.

IN fact, it was through social housing projects like these that Mr. Dunne got his start as a developer. But as the investment returns in the private sector became quite obviously more lucrative, the attention paid to so-called social estates like Moyross, on the northern outskirts of Limerick, wavered.

Crime, gangland disputes and a sense of anomie flourished as Moyross and other similar projects evolved as cocoons of poverty and hopelessness amid the riches and celebration of the Irish miracle.

“This place missed out entirely on the moment,” says Stephen Kinsella, an economist at the University of Limerick. “There has been no accumulation of wealth here.”

Walking through the garbage-strewn, empty roads on a cold, misty afternoon, Mr. Kinsella points to the shuttered houses and the mothers still dressed in pajamas taking their children home from school. Social workers in Moyross refer to the “pajama index”: the more men and women one sees who do not take the time and care to dress for the day, the worse the economic situation tends to be.

The Irish government has recently begun a regeneration project in Moyross that would result in large new investments in housing and infrastructure, but the going so far has been slow.

For Brother Shawn O’Connor, a Franciscan monk who has been living and working with the poor in Moyross for more than a year now, the vicissitudes of the Irish property market are a notion as distant as is his hometown, Red Hook, a village in the Hudson Valley of New York.

Brother O’Connor is the local superior of the community of Franciscan Friars, who do their work in some of the world’s most destitute communities. He and his fellow monks extend day-care assistance and spiritual counseling to the needy. They survive themselves on four hours of daily prayer and food handouts from neighbors — as Franciscans, they take a vow of chastity, poverty and obedience and thus do not spend money on any personal items, including food.

He recognizes that the deprivation of his community is severe, but suggests that it may be an easier hardship than the experiences of many Irish who have seen their riches disappear.

“There was this one story of a guy who shot his wife, son and daughter,” he says. “He had overextended himself. There is this desperation for wealth and people go after it — only to find out that it is not enough.”

TSP Funds All Up in December

The reality is that the Dow Jones Industrial Average was down 33.8% in 2008. That is the worst year of returns since 1931. The S&P 500 (the index used for the TSP’s C fund) ended down 38.5% for 2008.

The result is the worst year the C fund has experienced since the Thrift Savings Plan was initiated.

For those readers looking for better news, December was an “up” month for all of the TSP funds. The I fund actually head a good month, moving up 7.66% in December although still down 42.43% for the year. That was the worst performance for any of the TSP funds. In an awful year of returns for investors, the F fund was the brightest spot: it finished up 5.45% for the year–ahead of the G fund which returned 3.75% for the past twelve months.

After five straight years of positive returns for all of the TSP funds, 2008 was certainly a disappointment.

What We

January 2, 2009

By Paul Muolo

Capitalism is a wild and wacky game. And it’s not for those with weak guts, which brings me to the case of IndyMac whose long awaited sale was announced by the Federal Deposit Insurance Corp. Friday afternoon. The new “owners” of IndyMac are essentially a bunch of hedge funds that are well known for some of their contrarian bets in financial services. First and foremost among those private hedge funds is Paulson & Co., led by hedge fund guru John Paulson, who made a killing (a $15 billion killing) by shorting the ABX Index back in 2007 and early 2008. The ABX gauges the value of subprime bonds and we all know what happened there, don’t we? For some reason the FDIC didn’t mention Mr. Paulson’s $15 billion winning bet against the B&C market in its press release. The FDIC’s original investment banker on the sale of IndyMac was Lehman Brothers, which went bust a few months after getting the assignment. The advisor to the consortium? That would be Merrill Lynch & Co., which helped cause the subprime crisis by financing dozens of subprime lenders, buying their loans and packaging them into securities (CDOs) for sale to institutional investors in the U.S. and overseas. (Lehman did that too.) Like I said, capitalism is a wild and wacky game. But who knows any more, really? If John Paulson is putting his reputation (and a little bit of his money) on the line, maybe this actually signals a “bottom” in the mortgage and credit crisis. For the full story on the sale of IndyMac visit: http://www.nationalmortgagenews.com/…

How’s the refi boom looking these days? Answer: it depends on who you ask. On Friday I interviewed Brian F. Benjamin who runs Two River Mortgage & Investment of Red Bank, N.J. Last week, Brian said he received 15 calls for jumbo mortgages where the loan amount was north of $1.5 million. But of those 15 it looks like he will only be able to close two loans. Brian, who operates as a broker, said many lenders have tightened jumbo guidelines by so much that borrowers don’t have a chance. “Some will only do the loans if the LTV is 50% or better,” he said. He also complained about Fannie Mae “adders” where the GSE charges extra points and fees for low FICO score mortgages. He gave an example on a $275,000 mortgage where the borrower has a 659 FICO. The total “adders” (fees) came to 2.55 points. I asked him if the fees were going to the lender or Fannie. His reply: “It’s going to Fannie one way or the other — directly or indirectly,” he said. Meanwhile, one rank and file retail LO for a top ten ranked lender — who requested his name not be used — told us he’s getting “lots of calls” on refinancings via the company’s 800-number. But it’s not a slam dunk by any means. The biggest problem with the applicants who are looking to refinance is “not enough equity,” he said, “or poor credit.” Stay tuned…

Looking Around - TIME.com

Over the New Year weekend, David Ross, former director of the Whitney Museum in New York and then the San Francisco Museum of Modern Art, attached an interesting comment to my post from last week about museums selling off work from their permanent collections to stabilize their finances. Here's most of what he had to say:

I understand what he means. Collections are a snapshot of the taste of their time, taste which may have been overtaken by later judgments but may still have something to tell us. Reputations are always being reassessed, big names deflated, neglected artists rediscovered, Guido Reni put in storage and Jacob Lawrence dusted off. One other dimension of that issue that I've been wondering about lately is the extent to which collections also reflect the economic ups and downs of previous eras. What I mean is that museums collect most heavily when trustees and other donors are prospering, so the taste of economic boom times is likely to be magnified in the collection. Ross should know. He acquired quite a bit during his three years at SFMOMA, years when the Bay area was booming, before the collapse of the dot.com bubble in 2001. Among many other things, Ross brought in nearly two dozen Ellsworth Kellys, Warhol's Red Liz and Rauschenberg's wicked Erased de Kooning Drawing.

Bliss to be a museum director in good times. Think of Sherman Lee, who came to the top of the Cleveland Museum of Art in the late 1950s just in time to enjoy the bequest of the local philanthropist Leonard C. Hanna. With Hanna's money Lee brought to the Cleveland Poussin's The Holy Family on the Steps, David's Cupid and Psyche and truckloads of the Asian art that was his specialty. At the same time he famously didn't acquire much of what was the contemporary art of his day, like Pop. Which is just another way of saying that in any given period a museum collection is a combination of available funds plus curator/director taste. I was back up at the Metropolitan Museum last week to catch the last day of the great exhibition devoted to the Chinese painter Wang Hui and took the opportunity to revisit the show of works that came into the Met's collection during the years when Philippe de Montebello was director. It crossed my mind that it would be interesting some day to see the growth of that collection over the years charted against the fluctuations of the Dow.

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Golden State Hooverism: How the Republican Party is Destroying California

California’s state government has been vandalized and those responsible for the damage are not difficult to identify.

The culprits are Governor Arnold Schwarzenegger and his Republican colleagues in the state legislature.

Nobel Prize economist Paul Krugman wrote recently in the New York Times that while “No modern American president would repeat the fiscal mistake of 1932, in which the federal government tried to balance its budget in the face of a severe recession . .  . the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future.”

Of the nation’s fifty governors, Krugman singled out California’s Republican Governor Arnold Schwarzenegger for special criticism: “Arnold Schwarzenegger, in particular, deserves some jeers. He became governor in the first place because voters were outraged over his predecessor’s budget problems, but he did nothing to secure the state’s fiscal future — and he now faces a projected budget deficit bigger than the one that did in Gray Davis.”

The cause of Cailifornia’s budget crisis is the fundamental policy assumptions of the Republican Party:

· No to government regulation of markets and the economy. 

·  No to taxes, even in order to fund essential government programs. 

Nearly every crisis that California and the nation is now facing can be traced to Republican adherence to these principles – including our current budget gridlock, our crumbling infrastructure, our failing schools, our exploding prison and homeless populations, our shameful neglect of children and elders, and our inequitable and dysfunctional heath care system.

Here in Southern California’s Orange County – which, while it can no longer legitimately call itself “America’s Most Republican County,” voted this November for John McCain and returned local Republicans to office despite the the havoc caused by the failed economic and social policies of the Republican Party – Republican policies are devastating local communities and crippling public schools and social services.

Especially hard hit have been Orange County’s children.  Governor Schwarzenegger has proposed to balance the state’s budget by cutting billions of dollars from our public schools and community colleges, resulting in thousands of teacher layoffs and severe reductions in much needed programs and services. 

As Diane Grey, a teacher in the Capistrano Unified School District, said, the budget cuts have already left her with and her fellow teachers with “No copy paper. No ink cartridges for computers. No hall passes for kids to go to the bathroom. No index cards for activities/learning. No scantrons for tests. No pens. No overhead transparencies. No nothing! In other words, nothing to do our jobs!”  Or as Susan Ross, a teacher from Northern California, said, “What more can we cut? Heat? Light? Water?”

The Republican economic and budget crisis has also lead to a drastic increase in homeless school children in Orange County. The latest figures from the Orange County Department of Education show that for the 2007-2008 school year there were 16,422 homeless students – a 20 percent increase from the previous school year’s total of 13,130.

Yet now comes the news that our Republican officials are expected this week to order crippling layoffs in the Orange County Social Services Agency, where Republican budget cutters are seeking to eliminate $30 million from the department that serves the region’s neediest and most vulnerable.

According to the Orange County Register, “Of the 4,218 Social Services employees, 193 vacant positions will be eliminated. Another 110 probationary employees and 100 permanent workers will be pink slipped as well, effective Jan. 19. The remaining employees may be forced to take off two weeks sans pay to balance the books. The jobs that will be hit the hardest are the ones that work directly with the disadvantaged.” 

As a result,  Orange County will soon cut or eliminate programs that help prevent child and senior abuse and neglect, find jobs for people on welfare, and provide child care services to working parents.

As Paul Krugman noted, the Obama administration will not be able to rescue America from recession (or worse) so long as state government – and in particular, the government of California — is still dominated by the failed policies of the Republican Party.

It’s time to end Hooverism in The Golden State.

Sell Annuities

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Eddie Franklins’ Cash Flow Note Sales
Annuity may refer to:Annuity (finance theory), (Payout phase) any recurring periodic series of payments
Annuity (finance theory) (Accumulation phase) a tax deferred savings vehicle
Annuity (financial contracts), an insurance-like contract providing Monthly, Quarterly, Semi-Annual or Annual paymentsAnnuity (US financial products)Annuity (European financial arrangements)Life annuity (also single payment annuity), a financial contract providing payments for a person’s lifetimeAnnuity, a maintenance fee (patent) in patent law
An annuity that has no definite end is called a perpetuity
This disambiguation page lists articles associated with the same title
If an internal link led you here, you may wish to change the link to point directly to the intended article

Perhaps confusingly, the majority of modern annuity customers use annuities only to accumulate funds and to take lump-sum withdrawals without using the guaranteed-income-for-life feature
Annuity contracts in the United States are defined by the Internal Revenue Code and regulated by the individual states
Variable annuities have features of both life insurance and investment products
, annuity contracts may be issued only by life insurance companies, although private annuity contracts may be arranged between donors to non-profits to reduce taxes
Insurance companies are regulated by the states, so contracts or options that may be available in some states may not be available in others
Their federal tax treatment, however, is governed by the Internal Revenue Code
Variable annuities are regulated by the Securities and Exchange Commission and the sale of variable annuities is overseen by FINRA(The largest non-governmental regulator for all securities firms doing business in the United States)
There are two possible phases for an annuity, one phase in which the customer deposits and accumulates money into an account (the deferral phase), and another phase in which customers receive payments for some period of time (the annuity or income phase)
During this latter phase, the insurance company makes income payments that may be set for a stated period of time, such as five years, or continue until the death of the customer(s) (the “annuitant(s)”) named in the contract
Annuitization over a lifetime can have a death benefit guarantee over a certain period of time, such as ten years
Annuity contracts with a deferral phase always have an annuity phase and are called deferred annuities
An annuity contract may also be structured so that it has only the annuity phase; such a contract is called an immediate annuity
The term “annuity,” as used in financial theory, is most closely related to what is today called an immediate annuity
This is an insurance policy which, in exchange for a sum of money, guarantees that the issuer will make a series of payments
These payments may be either level or increasing periodic payments for a fixed term of years or until the ending of a life or two lives, or even whichever is longer
It is also possible to structure the payments under an immediate annuity so that they vary with the performance of a specified set of investments, usually bond and equity mutual funds
Such a contract is called a variable immediate annuity
The overarching characteristic of the immediate annuity is that it is a vehicle for distributing savings with a tax-deferred growth factor
A common use for an immediate annuity might be to provide a pension income
, the tax treatment of an immediate annuity is that every payment is a combination of a return of principal (which part is not taxed) and income (which is taxed at ordinary income rates, not capital gain rates)
When a deferred annuity is annuitized, it works like an immediate annuity from that point on, but with a lower cost basis and thus more of the payment is taxed
This type of immediate annuity pays the annuitant for a designated number of years (i
, a period certain) and is used to fund a need that will end when the period is up (for example, it might be used to fund the premiums for a term life insurance policy)
Thus this option is not necessarily suitable for an individual’s retirement income, as the person may outlive the number of years the annuity will pay
A life or lifetime immediate annuity is used to provide an income for the life of the annuitant similar to a defined benefit or pension plan
A life annuity works somewhat like a loan that is made by the purchaser (contract owner) to the issuing (insurance) company, which pays back the original capital or principal (which isn’t taxed) with interest and/or gains (which is taxed as ordinary income) to the annuitant on whose life the annuity is based
The assumed period of the loan is based on the life expectancy of the annuitant
In order to guarantee that the income continues for life, the insurance company relies on a concept called cross-subsidy or the “law of large numbers”
Because an annuity population can be expected to have a distribution of lifespans around the population’s mean (average) age, those dying earlier will give up income to support those living longer whose money would otherwise run out
A life annuity, ideally, can reduce the “problem” faced by a person that he/she doesn’t know how long he/she will live, and so he/she doesn’t know the optimal speed at which to spend his/her savings
Life annuities with payments indexed to the Consumer Price Index might be an acceptable solution to this problem, but there is only a thin market for them in North America
For an additional expense (either by way of an increase in payments (premium) or a decrease in benefits), an annuity or benefit rider can be purchased on another life such as a spouse, family member or friend for the duration of whose life the annuity is wholly or partly guaranteed
For example, it is common to buy an annuity which will continue to pay out to the spouse of the annuitant after death, for so long as the spouse survives
The annuity paid to the spouse is called a reversionary annuity or survivorship annuity
However, if the annuitant is in good health, it may be more advantageous to select the higher payout option on his or her life only and purchase a life insurance policy that would pay income to the survivor
The pure life annuity can have harsh consequences for the annuitant who dies before recovering his or her investment in the contract
Such a situation, called a forfeiture, can be mitigated by the addition of a period-certain feature under which the annuity issuer is required to make annuity payments for a least a certain number of years; if the annuitant outlives the specified period certain, annuity payments continue until the annuitant’s death, and if the annuitant dies before the expiration of the period certain, the annuitant’s estate or beneficiary is entitled to the remaining payments certain
The tradeoff between the pure life annuity and the life-with-period-certain annuity is that the annuity payment for the latter is smaller
A viable alternative to the life-with-period-certain annuity is to purchase a single-premium life policy that would cover the lost premium in the annuity
Impaired-life annuities for smokers or those with a particular illness are also available from some insurance companies
Since the life expectancy is reduced, the annual payment to the purchaser is raised
Life annuities are priced based on the probability of the annuitant surviving to receive the payments
Longevity insurance is a form of annuity that defers commencement of the payments until very late in life
A common longevity contract would be purchased at or before retirement but would not commence payments until 20 years after retirement
If the nominee dies before payments commence there is no payable benefit
This drastically reduces the cost of the annuity while still providing protection against outliving one’s resources
The second usage for the term annuity came into being during the 1970s
Such a contract is more properly referred to as a deferred annuity and is chiefly a vehicle for accumulating savings with a view to eventually distributing them either in the manner of an immediate annuity or as a lump-sum payment
All varieties of deferred annuities owned by individuals have one thing in common: any increase in account values is not taxed until those gains are withdrawn
This is also known as tax-deferred growth
A deferred annuity which grows by interest rate earnings alone is called a fixed deferred annuity (FA)
A deferred annuity that permits allocations to stock or bond funds and for which the account value is not guaranteed to stay above the initial amount invested is called a variable annuity (VA)
A new category of deferred annuity, called the equity indexed annuity (EIA) emerged in 1995
[2] Equity indexed annuities may have features of both fixed and variable deferred annuities
The insurance company typically guarantees a minimum return for EIA
An investor can still lose money if he or she cancels (or surrenders) the policy early, before a “break even” period
An oversimplified expression of a typical EIA’s rate of return might be that it is equal to a stated “participation rate” multiplied by a target stock market index’s performance excluding dividends
Interest rate caps or an administrative fee may be applicable
Deferred annuities in the United States have the advantage that taxation of all capital gains and ordinary income is deferred until withdrawn
In theory, such tax-deferred compounding allows more money to be put to work while the savings are accumulating, leading to higher returns
A disadvantage, however, is that when amounts held under a deferred annuity are withdrawn or inherited, the interest/gains are immediately taxed as ordinary income
A variety of features and guarantees have been developed by insurance companies in order to make annuity products more attractive
These include death and living benefit options, extra credit options, account guarantees, spousal continuation benefits, reduced contingent deferred sales charges (or surrender charges), and various combinations thereof
Each feature or benefit added to a contract will typically be accompanied by an additional expense either directly (billed to client) or indirectly (inside product)
Deferred annuities are usually divided into two different kinds:Fixed annuities offer some sort of guaranteed rate of return over the life of the contract
In general such contracts are often positioned to be somewhat like bank CDs and offer a rate of return competitive with those of CDs of similar time frames
Many fixed annuities, however, do not have a fixed rate of return over the life of the contract, offering instead a guaranteed minimum rate and a first year introductory rate
The rate after the first year is often an amount that may be set at the insurance company’s discretion subject, however, to the minimum amount (typically 3%)
There are usually some provisions in the contract to allow a percentage of the interest and/or principal to be withdrawn early and without penalty (usually the interest earned in a 12-month period or 10%), unlike most CDs
Fixed annuities normally become fully liquid upon the owner’s death
Most equity index annuities are properly categorized as fixed annuities and their performance is typically tied to a stock market index (usually the S&P 500 or the Dow Jones Industrial Average)
These products are guaranteed but are not as easy to understand as standard fixed annuities as there are usually caps, spreads, margins, and crediting methods that can reduce returns
These products also don’t pay any of the participating market indices’ dividends; the trade-off is that contract holder can never earn less than 0% in a negative year
Variable annuities allow money to be invested in insurance company “separate accounts” (which are sometimes referred to as “subaccounts” and in any case are functionally similar to mutual funds) in a tax-deferred manner
[3] Their primary use is to allow an investor to engage in tax-deferred investing for retirement in amounts greater than permitted by individual retirement or 401(k) plans
In addition, many variable annuity contracts offer a guaranteed minimum rate of return (either for a future withdrawal and/or in the case of the owner’s death), even if the underlying separate account investments perform poorly
This can be attractive to people uncomfortable investing in the equity markets without the guarantees
Of course, an investor will pay for each benefit provided by a variable annuity, since insurance companies must charge a premium to cover the insurance guarantees of such benefits
Variable annuities are regulated both by the individual states (as insurance products) and by the Securities and Exchange Commission (as securities under the federal securities laws)
The SEC requires that all of the charges under variable annuities be described in great detail in the prospectus that is offered to each variable annuity customer
Of course, potential customers should review these charges carefully, just as one would in purchasing mutual fund shares
People who sell variable annuities are usually regulated by FINRA, whose rules of conduct require a careful analysis of the suitability of variable annuities (and other securities products) to those to whom they recommend such products
These products are often criticized as being sold to the wrong persons, who could have done better investing in a more suitable alternative, since the commissions paid under this product are often high relative to other investment products
There are several types of performance guarantees, and one may often choose them a la carte, with higher risk charges for guarantees that are riskier for the insurance companies
The first type is comprised of guaranteed minimum death benefits (GMDBs), which can be received only if the owner of the annuity contract, or the covered annuitant, dies
GMDBs come in various flavors, in order of increasing risk to the insurance company:Return of premium (a guarantee that you will not have a negative return)Roll-up of premium at a particular rate (a guarantee that you will achieve a minimum rate of return, greater than 0)Maximum anniversary value (looks back at account value on the anniversaries, and guarantees you will get at least as much as the highest values upon death)Greater of maximum anniversary value or particular roll-up
Insurance companies provide even greater insurance coverage on guaranteed living benefits, which tend to be elective
Unlike death benefits, which the contractholder generally can’t time, living benefits pose significant risk for insurance companies as contractholders will likely exercise these benefits when they are worth the most
Annuities with guaranteed living benefits (GLBs) tend to have high fees commensurate with the additional risks underwritten by the issuing insurer
Some GLB examples, in no particular order:Guaranteed minimum income benefit (a guarantee that one will get a minimum income stream upon annuitization at a particular point in the future)Guaranteed minimum accumulation benefit (a guarantee that the account value will be at a certain amount at a certain point in the future)Guaranteed minimum withdrawal benefit (a guarantee similar to the income benefit, but one that doesn’t require annuitizing)Guaranteed-for-life income benefit (a guarantee similar to a withdrawal benefit, but will pay you for as long as you live and does not require annuitization)
Deferred annuities are generally sold by financial professionals, some of whom may work directly for an insurance company
Most financial professionals, however, are independent agents of the insurance company, not employees
The financial professional who sells an annuity collects a commission from the insurance company
This commission will be a percentage of the total premium paid by the investor
This percentage can be as little as 1% and as high as 12%; the average is 6%
Since these commissions appear high and there are deferred sales charges on annuities, many financial gurus have criticized annuity products
The investor will, generally, not pay any of this commission directly to the financial professional; the commission is paid by the insurance company to the financial professional up front
The insurance company will recapture the commission paid to the financial professional through the fees charged to the customer (in a variable or equity indexed annuity) or the spread in the interest rate market (for a fixed annuity)
There are also deferred back-end charges that will be applied if the investor closes out his or her contract before the agreed-upon time frame, usually 8 years
These charges can last for as little as 1 year or as many as 20 years, depending on the type of annuity and issuing company
These back-end charges concern many financial professionals and financial gurus
Some annuities do not have any deferred surrender charges and do not pay the financial professional a commission, although the financial professional may charge a fee for his or her advice
These contracts are called “no-load” variable annuity products and are usually available from a fee-based financial planner or directly from a no-load mutual fund company
Of course various charges are still imposed on these contracts, but they are less than those sold by commissioned brokers
It is important that potential purchasers — of annuities, mutual funds, tax-exempt municipal bonds, commodities futures, interest-rate swaps, in short, any financial instrument — understand the fees on the product and the fees a financial planner may charge
Variable annuities are controversial because many believe the extra fees (i
, the fees above and beyond those charged for similar retail mutual funds that offer no principal protection or guarantees of any kind) may reduce the rate of return compared to what the investor could make by investing directly in similar investments outside of the variable annuity
A big selling point for variable annuities is the guarantees many have, such as the guarantee that the customer will not lose his or her principal
Critics say that these guarantees are not necessary because over the long term the market has always been positive, while others say that with the uncertainty of the financial markets many investors simply will not invest without guarantees
Past returns are no guarantee of future performance, of course, and different investors have different risk tolerances, different investment horizons, different family situations, and so on
The sale of any security product should involve a careful analysis of the suitability of the product for a given individual
A controversial practice of insurance sales is the selling of insurance contracts within an IRA or 401(k) plan
Since these investment vehicles are already tax deferred, investors do not receive additional tax shelters from the annuities
The benefit of the annuity contract is the guaranteed lifetime income that all annuity contracts must have by state law
Approximately 90% of annuitants, however, have not taken the life annuity upon retirement
If an investor does not intend to take the life income option from an annuity contract at retirement he or she may want to consider a low-cost deferred annuity
If an investor needs to take lifetime income at retirement, on the other hand, he or she may want to try to buy an annuity upon retirement or might consider selecting a 401(k) plan account with an option to buy the annuity just before retirement
[4] examined the effects of taxation on annuities relative to other investment vehicles
The author found that annuities are generally not effective as a tax-deferral vehicle and that there are significant flaws in the use of annuities for financial planning during the accumulation phase
Internal Revenue Code, the growth of the annuity value during the accumulation phase is tax-deferred, that is, not subject to current income tax, for annuities owned by individuals
The tax deferred status of deferred annuities has led to their common usage in the United States
tax code, the benefits from annuity contracts do not always have to be taken in the form of a fixed stream of payments (annuitization), and many of annuity contracts are bought primarily for the tax benefits rather than to receive a fixed stream of income
If an annuity is used in a qualified pension plan or an IRA funding vehicle, then 100% of the annuity payment is taxable as current income upon distribution (because the taxpayer has no tax basis in any of the money in the annuity)
If the annuity contract is purchased with after-tax dollars, then the contractholder upon annuitization recovers his basis pro-rata in the ratio of basis divided by the expected value, according to the tax regulation Section 1
(This is commonly referred to as the exclusion ratio
) After the taxpayer has recovered all of his basis, then 100% of the payments thereafter are subject to ordinary income tax
Since the Jobs and Growth Tax Relief Reconciliation Act of 2003, the use of variable annuities as a tax shelter has greatly diminished, because the growth of mutual funds and now most of the dividends of the fund are taxed at long term capital gains rates
This taxation, contrasted with the taxation of all the growth of variable annuities at income rates, means that in most cases, variable annuities shouldn’t be used for tax shelters unless very long holding periods apply (for example, more than 20 years)
Also, any withdrawals before an investor reaches the age of 59 ½ are generally subject to a 10% tax penalty in addition to any gain being taxed as ordinary income
[edit] Insurance company default risk and state guaranty associations
An investor should consider the financial strength of the insurance company that writes annuity contracts
Major insolvencies have occurred at least 62 times since the conspicuous collapse of the Executive Life Insurance Company in 1991
Insurance company defaults are governed by state law
The laws are, however, broadly similar in most states
Annuity contracts are protected against insurance company insolvency up to a specific dollar limit, often $100,000, but as high as $500,000 in New York[6], New Jersey[7], and the state of Washington[8]
This protection is not insurance and is not provided by a government agency
It is provided by an entity called the state Guaranty Association
When an insolvency occurs, the Guaranty Association steps in to protect annuity holders, and decides what to do on a case-by-case basis
Sometimes the contracts will be taken over and fulfilled by a solvent insurance company
The state Guaranty Association is not a government agency, but states usually require insurance companies to belong to it as a condition of being licensed to do business
The Guaranty Associations of the fifty states are members of a national umbrella association, the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA)
The NOLHGA website provides a description of the organization, links to websites for the individual state organizations, and links to the actual text of the governing state laws
A difference between guaranty association protection and the protection e
of bank accounts by FDIC, credit union accounts by NCUA, and brokerage accounts by SIPC, is that it is difficult for consumers to learn about this protection
Usually, state law prohibits insurance agents and companies from using the guaranty association in any advertising and agents are prohibited by statute from using this Web site or the existence of the guaranty association as an inducement to purchase insurance(e
Presumably this is a response to concerns by stronger insurance companies about moral hazard
Deferred annuities, including fixed, equity indexed and variable, typically pay the advisor or salesperson 1 percent to 12 percent of the amount invested as a commission, with possible trail options of 25 basis points to 1 percent
Sometimes the advisor can select his payout option, which might be either 7 percent up front, or 5 percent up front with a 25 basis point trail, or 1 percent to 3 percent up front with a 1 percent trail
Some firms allow an investor to pick an annuity share class, which determines the salesperson’s commission schedule
The main variables are the up-front commission and the trailing commission
“No-load” variable annuities are available on a direct-to-consumer basis from several no-load mutual fund companies
“No-load” means the products have no sales commissions or surrender charges
Even these lower cost variable annuities often make sense only after an investor has exhausted all other forms of tax shelters, and only if being held for quite some time
Fixed and Indexed Annuity commissions are paid by the insurance companies the licensed agent represents
Commissions are not paid out of the clients principal
An examination of variable annuity investment versus investing outside of annuitiesRetrieved from “http://en
An annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments
In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date
Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will pay your beneficiary a guaranteed minimum amount, such as your total purchase payments
There are generally two types of annuitiesfixed and variable
In a fixed annuity, the insurance company guarantees that you will earn a minimum rate of interest during the time that your account is growing
The insurance company also guarantees that the periodic payments will be a guaranteed amount per dollar in your account
These periodic payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse
In a variable annuity, by contrast, you can choose to invest your purchase payments from among a range of different investment options, typically mutual funds
The rate of return on your purchase payments, and the amount of the periodic payments you will eventually receive, will vary depending on the performance of the investment options you have selected
An equity-indexed annuity is a special type of annuity
During the accumulation period when you make either a lump sum payment or a series of payments the insurance company credits you with a return that is based on changes in an equity index, such as the S&P 500 Composite Stock Price Index
The insurance company typically guarantees a minimum return
After the accumulation period, the insurance company will make periodic payments to you under the terms of your contract, unless you choose to receive your contract value in a lump sum
Variable annuities are securities regulated by the SEC
Fixed annuities are not securities and are not regulated by the SEC
Equity-indexed annuities combine features of traditional insurance products (guaranteed minimum return) and traditional securities (return linked to equity markets)
Depending on the mix of features, an equity-indexed annuity may or may not be a security
The typical equity-indexed annuity is not registered with the SEC
You can learn more about variable annuities by reading our publication, Variable Annuities: What You Should Know
You can learn more about equity-indexed annuities by reading our online brochure, which explains equity-indexed annuities and provides resources for obtaining additional information
Before you buy a variable annuity, you should know some of the basics – and be prepared to ask your insurance agent, broker, financial planner, or other financial professional lots of questions about whether a variable annuity is right for you
This is a general description of variable annuities – what they are, how they work, and the charges you will pay
Before buying any variable annuity, however, you should find out about the particular annuity you are considering
Request a prospectus from the insurance company or from your financial professional, and read it carefully
The prospectus contains important information about the annuity contract, including fees and charges, investment options, death benefits, and annuity payout options
You should compare the benefits and costs of the annuity to other variable annuities and to other types of investments, such as mutual funds
A variable annuity is a contract between you and an insurance company, under which the insurer agrees to make periodic payments to you, beginning either immediately or at some future date
You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments
A variable annuity offers a range of investment options
The value of your investment as a variable annuity owner will vary depending on the performance of the investment options you choose
The investment options for a variable annuity are typically mutual funds that invest in stocks, bonds, money market instruments, or some combination of the three
Although variable annuities are typically invested in mutual funds, variable annuities differ from mutual funds in several important ways:First, variable annuities let you receive periodic payments for the rest of your life (or the life of your spouse or any other person you designate)
This feature offers protection against the possibility that, after you retire, you will outlive your assets
Second, variable annuities have a death benefit
If you die before the insurer has started making payments to you, your beneficiary is guaranteed to receive a specified amount – typically at least the amount of your purchase payments
Your beneficiary will get a benefit from this feature if, at the time of your death, your account value is less than the guaranteed amount
That means you pay no taxes on the income and investment gains from your annuity until you withdraw your money
You may also transfer your money from one investment option to another within a variable annuity without paying tax at the time of the transfer
When you take your money out of a variable annuity, however, you will be taxed on the earnings at ordinary income tax rates rather than lower capital gains rates
In general, the benefits of tax deferral will outweigh the costs of a variable annuity only if you hold it as a long-term investment to meet retirement and other long-range goals
Other investment vehicles, such as IRAs and employer-sponsored 401(k) plans, also may provide you with tax-deferred growth and other tax advantages
For most investors, it will be advantageous to make the maximum allowable contributions to IRAs and 401(k) plans before investing in a variable annuity
In addition, if you are investing in a variable annuity through a tax-advantaged retirement plan (such as a 401(k) plan or IRA), you will get no additional tax advantage from the variable annuity
Under these circumstances, consider buying a variable annuity only if it makes sense because of the annuity’s other features, such as lifetime income payments and death benefit protection
The tax rules that apply to variable annuities can be complicated – before investing, you may want to consult a tax adviser about the tax consequences to you of investing in a variable annuity
Remember: Â Variable annuities are designed to be long-term investments, to meet retirement and other long-range goals
Variable annuities are not suitable for meeting short-term goals because substantial taxes and insurance company charges may apply if you withdraw your money early
Variable annuities also involve investment risks, just as mutual funds do
How Variable Annuities Work A variable annuity has two phases: an accumulation phase and a payout phase
During the accumulation phase, you make purchase payments, which you can allocate to a number of investment options
For example, you could designate 40% of your purchase payments to a bond fund, 40% to a U
stock fund, and 20% to an international stock fund
The money you have allocated to each mutual fund investment option will increase or decrease over time, depending on the fund’s performance
In addition, variable annuities often allow you to allocate part of your purchase payments to a fixed account
A fixed account, unlike a mutual fund, pays a fixed rate of interest
The insurance company may reset this interest rate periodically, but it will usually provide a guaranteed minimum (e
Example: Â You purchase a variable annuity with an initial purchase payment of $10,000
You allocate 50% of that purchase payment ($5,000) to a bond fund, and 50% ($5,000) to a stock fund
Over the following year, the stock fund has a 10% return, and the bond fund has a 5% return
At the end of the year, your account has a value of $10,750 ($5,500 in the stock fund and $5,250 in the bond fund), minus fees and charges (discussed below)
Your most important source of information about a variable annuity’s investment options is the prospectus
Request the prospectuses for the mutual fund investment options
Read them carefully before you allocate your purchase payments among the investment options offered
You should consider a variety of factors with respect to each fund option, including the fund’s investment objectives and policies, management fees and other expenses that the fund charges, the risks and volatility of the fund, and whether the fund contributes to the diversification of your overall investment portfolio
Another SEC online publication, Invest Wisely: An Introduction to Mutual Funds, provides general information about the types of mutual funds and the expenses they charge
During the accumulation phase, you can typically transfer your money from one investment option to another without paying tax on your investment income and gains, although you may be charged by the insurance company for transfers
However, if you withdraw money from your account during the early years of the accumulation phase, you may have to pay “surrender charges,” which are discussed below
In addition, you may have to pay a 10% federal tax penalty if you withdraw money before the age of 59½
At the beginning of the payout phase, you may receive your purchase payments plus investment income and gains (if any) as a lump-sum payment, or you may choose to receive them as a stream of payments at regular intervals (generally monthly)
If you choose to receive a stream of payments, you may have a number of choices of how long the payments will last
Under most annuity contracts, you can choose to have your annuity payments last for a period that you set (such as 20 years) or for an indefinite period (such as your lifetime or the lifetime of you and your spouse or other beneficiary)
During the payout phase, your annuity contract may permit you to choose between receiving payments that are fixed in amount or payments that vary based on the performance of mutual fund investment options
The amount of each periodic payment will depend, in part, on the time period that you select for receiving payments
Be aware that some annuities do not allow you to withdraw money from your account once you have started receiving regular annuity payments
In addition, some annuity contracts are structured as immediate annuities, which means that there is no accumulation phase and you will start receiving annuity payments right after you purchase the annuity
The Death Benefit and Other Features A common feature of variable annuities is the death benefit
If you die, a person you select as a beneficiary (such as your spouse or child) will receive the greater of: (i) all the money in your account, or (ii) some guaranteed minimum (such as all purchase payments minus prior withdrawals)
Example: You own a variable annuity that offers a death benefit equal to the greater of account value or total purchase payments minus withdrawals
You have made purchase payments totaling $50,000
In addition, you have withdrawn $5,000 from your account
Because of these withdrawals and investment losses, your account value is currently $40,000
If you die, your designated beneficiary will receive $45,000 (the $50,000 in purchase payments you put in minus $5,000 in withdrawals)
Some variable annuities allow you to choose a  “stepped-up” death benefit
Under this feature, your guaranteed minimum death benefit may be based on a greater amount than purchase payments minus withdrawals
For example, the guaranteed minimum might be your account value as of a specified date, which may be greater than purchase payments minus withdrawals if the underlying investment options have performed well
The purpose of a stepped-up death benefit is to “lock in” your investment performance and prevent a later decline in the value of your account from eroding the amount that you expect to leave to your heirs
This feature carries a charge, however, which will reduce your account value
Variable annuities sometimes offer other optional features, which also have extra charges
One common feature, the  guaranteed minimum income benefit, guarantees a particular minimum level of annuity payments, even if you do not have enough money in your account (perhaps because of investment losses) to support that level of payments
Other features may include long-term care insurance, which pays for home health care or nursing home care if you become seriously ill
You may want to consider the financial strength of the insurance company that sponsors any variable annuity you are considering buying
This can affect the company’s ability to pay any benefits that are greater than the value of your account in mutual fund investment options, such as a death benefit, guaranteed minimum income benefit, long-term care benefit, or amounts you have allocated to a fixed account investment option
You will pay for each benefit provided by your variable annuity
Carefully consider whether you need the benefit
If you do, consider whether you can buy the benefit more cheaply as part of the variable annuity or separately (e
, through a long-term care insurance policy)
Variable Annuity Charges You will pay several charges when you invest in a variable annuity
Be sure you understand all the charges before you invest
These charges will reduce the value of your account and the return on your investment
Surrender charges – If you withdraw money from a variable annuity within a certain period after a purchase payment (typically within six to eight years, but sometimes as long as ten years), the insurance company usually will assess a “surrender” charge, which is a type of sales charge
This charge is used to pay your financial professional a commission for selling the variable annuity to you
Generally, the surrender charge is a percentage of the amount withdrawn, and declines gradually over a period of several years, known as the “surrender period
” For example, a 7% charge might apply in the first year after a purchase payment, 6% in the second year, 5% in the third year, and so on until the eighth year, when the surrender charge no longer applies
Often, contracts will allow you to withdraw part of your account value each year – 10% or 15% of your account value, for example – without paying a surrender charge
Example: You purchase a variable annuity contract with a $10,000 purchase payment
The contract has a schedule of surrender charges, beginning with a 7% charge in the first year, and declining by 1% each year
In addition, you are allowed to withdraw 10% of your contract value each year free of surrender charges
In the first year, you decide to withdraw $5,000, or one-half of your contract value of $10,000 (assuming that your contract value has not increased or decreased because of investment performance)
In this case, you could withdraw $1,000 (10% of contract value) free of surrender charges, but you would pay a surrender charge of 7%, or $280, on the other $4,000 withdrawn
Mortality and expense risk charge – This charge is equal to a certain percentage of your account value, typically in the range of 1
This charge compensates the insurance company for insurance risks it assumes under the annuity contract
Profit from the mortality and expense risk charge is sometimes used to pay the insurer’s costs of selling the variable annuity, such as a commission paid to your financial professional for selling the variable annuity to you
Example: Your variable annuity has a mortality and expense risk charge at an annual rate of 1
Your average account value during the year is $20,000, so you will pay $250 in mortality and expense risk charges that year
Administrative fees – The insurer may deduct charges to cover record-keeping and other administrative expenses
This may be charged as a flat account maintenance fee (perhaps $25 or $30 per year) or as a percentage of your account value (typically in the range of 0
Example: Your variable annuity charges administrative fees at an annual rate of 0
Your average account value during the year is $50,000
You will pay $75 in administrative fees
Underlying Fund Expenses – You will also indirectly pay the fees and expenses imposed by the mutual funds that are the underlying investment options for your variable annuity
Fees and Charges for Other Features – Special features offered by some variable annuities, such as a stepped-up death benefit, a guaranteed minimum income benefit, or long-term care insurance, often carry additional fees and charges
Other charges, such as initial sales loads, or fees for transferring part of your account from one investment option to another, may also apply
You should ask your financial professional to explain to you all charges that may apply
You can also find a description of the charges in the prospectus for any variable annuity that you are considering
tax code allows you to exchange an existing variable annuity contract for a new annuity contract without paying any tax on the income and investment gains in your current variable annuity account
These tax-free exchanges, known as 1035 exchanges, can be useful if another annuity has features that you prefer, such as a larger death benefit, different annuity payout options, or a wider selection of investment choices
You may, however, be required to pay surrender charges on the old annuity if you are still in the surrender charge period
In addition, a new surrender charge period generally begins when you exchange into the new annuity
This means that, for a significant number of years (as many as 10 years), you typically will have to pay a surrender charge (which can be as high as

Another Example Why Unrestricted Free Market Capitalism Doesn

id="blog-title">The Valley Progress Report

id="tagline">The Meeting Place for Forward Thinking Minds in the Shenandoah Valley

Jan. 5 (Bloomberg) — Italy did for retirement financing what President George W. Bush couldn’t do in the U.S.: It privatized part of its social security system. The timing couldn’t have been worse.

The global market meltdown has created losses for those who agreed to shift their contributions from a government severance payment plan to private funds meant to yield higher returns. Anger is rising both at the state, which promoted the change, and money managers such as UniCredit SpA and Arca Previdenza, which stood to profit.

Prime Minister Silvio Berlusconi’s administration is now considering ways to compensate as many as 1.2 million people who made the switch, giving up a fixed return for private plans linked to financial markets. It’s also letting people delay redemptions on retirement funds to avoid losses after Italy’s benchmark stock index fell 50 percent in 2008, destroying 300 billion euros ($423 billion) in wealth.

“The reform didn’t help anyone,” said Gabriele Fava, who heads the Fava & Associati law firm in Milan and writes about labor law. “Not the government, which was hoping everyone would make the switch to take the strain off its coffers, nor the workers who have not resolved the problem of needing a supplement to their social security pensions.”

to think Bush wanted to do this to us…

story

Bankruptcy listings

If your marketing is done properly it can be a reliable long term source of revenue for years to come. Coincides with bankruptcy lead listings with same uses and consumer to proprietory relationships. Firms on Bankruptcy Leads and other firms on bankruptcy mortgage leads gather infos thru this listings and resolve for the framework of bankruptcy. Herien follows firms on bankruptcy lists.

Health Care: The New Castle in the Air

Back on September 25th, I advised anyone reading this blog to get out of the stock market ASAP and to put any assets they had in something as “real” as possible, preferably a diversified mix of precious metals. Although the market had already begun its perciptuous decline, those (if any) who had followed my advice would have saved a lot of money. Yes, me pointing this out is a bit of both confirmation bias and self-calling, but part of the reason I started this blog was to keep any projection I had permanent both to keep myself honest and to increase my credibility.

In the previously linked-to blog, I claimed that it would be my only investment advice ever. I suppose that was untrue. Despite the recession, I believe a new bubble is forming. Like the housing bubble, tech stocks, tulips, or what have you, semi-informed people have become enamored with this industry. Supposedly, it is fundamentally “different” from any other group of firms, immune to downturn, and about to take advantage of rapidly expanding demand. This industry is health care.

This is not to say that health care has nothing going for it. Certain factors mentioned, such as the coming surge in demand, are in every sense real. However, since everyone is aware of these factors, a sober, rational adjustment has already been made to the prices of those stocks. Further increases in price in the absence of other information will not match the firm’s “fundamental” value (after taking into account a simple “normalization” of the prices of all stocks should overall economic conditions improve). Despite this, health care stocks are poised to increase rapidly in value if confidence can be restored in the economy. In contrast to the “alchemy” of financial firms, hospitals, drug companies, and related firms do something tangible and “real”. With the collapse of both real estate and finance, health care may well appear to be an excelletn place to park one’s money as the population ages.

The conditions necessary for a bubble to spontaneously manifest are met. Common people, who only get wrapped up in active portfolio managing during bubbles, are happily perpetuating stories about how getting training in health care is a “smart” move. That may well be the case, but the awareness alone of the growth potential of a certain industry unnnecessarily directs attention and dollars in its direction. Wallstreet and the unarticulated market have already made its judgment on the growth potential of health care firms. Any attention by the non-professional will only skew pricing. Compare your attitude towards health care firms today to what your attitude towards tech firms was in 1997, right before the bubble formally began taking shape. The parallels are likely striking.

This is not to say that I believe that a bubble in health care stocks is inevitably going to form. Systematic errors by the market are exceedingly difficult to identify; as such, my observation here is only anecdotal and conjecture. Regardless, a tactic of taking a small portion of your assets and putting them in a mutual fund built around health care right now seems like a low relatively low cost move. If I’m wrong, which, I’ll face it, with projecting something like this, is a strong possibility, you might lose compared to what you would have made in an index fund. The gains, on the other hand, of getting in right before a bubble forms are staggering. Ultimately, what I recommend is to invest a small portion of your savings into such a mutual fund (or a well-diversified collection of stocks, if you can manage it), and sell it two years from now, no matter what happens. If a bubble is going to form, it will form by then, and it’s better to get out half way through a bubble then after it pops.

STOCKS SLIP ON TELECOM, FINANCIALS

RSI picked another bond fund today. MBB holds US Government mortgage securities and pays a current yield of 3.11%. There are a lot of Talking Heads that are saying we are in a bond bubble. Just in case they are right, maybe it would be prudent to monitor your bond positions closely and set stops.

Gambling Stocks a Bad Bet

From Business Week 1-05-09

Companies that make money from sin and vice may be naughty, but that rarely prevents investors from trying to profit from them. Such stocks—especially alcohol, tobacco, and gambling companies—are often touted as great investments during economic downturns. Other vice stocks include weapon makers, defense contractors, and sex businesses.

In the current downturn, however, the naughty are still waiting for their reward. Though the recession—which started December 2007—is still underway, sinful stocks so far haven’t matched their past performance. In 2008, the S&P 500 fell 39%; some vice stocks have barely kept pace while others have plunged deeply into the gutter.

There are several theories as to why sinful stocks haven’t held up. Many companies were hurt by high debt levels while investors worried about exposure by others to troubled emerging markets.

The effect on casino revenues has been striking. In October, gaming revenue at Las Vegas Strip casinos dropped a record 26% from the year before, according to the Nevada Gaming Control Board. In addition to the weak economy, an aggravating factor was the high price of gas, which discouraged drives from California to Sin City.

Some investors might be worried that alcohol and tobacco makers will see a slowdown in a key growth area: emerging markets. But despite the global recession, newly affluent consumers continue to upgrade to premium cigarette or alcohol brands, Norton says. “Even though these are premium brands, they’re still highly affordable compared to other consumer products,” he says.

It’s wise to bear in mind that, on average, alcohol, tobacco, and gambling earnings have held up in recessions. During downturns since 1970, as the Merrill Lynch study recently found, earnings growth for the group was 25% greater than for the market as a whole.

Because of the shocks to the global economy in the last few months of 2008, investors are still waiting to learn their impact on end-of-the-year results. Looking ahead, few economists foresee much improvement until at least the middle of 2009, with Hembre predicting “a fairly meager pace” of growth in the second half of the year.

So it remains to be seen if alcohol, tobacco, and other vices continue to prosper as affordable luxuries for many people. Or if, desperate to cut costs, consumers decide to clean up their act.

County seeks funding to help homeowners avoid foreclosure

CUMBERLAND — The Allegany County commissioners are expected to apply for more than a half million dollars to help low- to moderate-income residents avoid foreclosure.

Jim Williams, development coordinator for the county’s Department of Community Services, will provide information during a public hearing today at 9:30 a.m. at the County Office Complex about the Maryland Neighborhood Conservation Initiative.

Maryland has been awarded $26.7 million of Neighborhood Stabilization Program funding from the federal Department of Housing and Urban Development. The county is seeking $660,000 to address abandoned and foreclosed homes in neighborhoods that have been impacted by foreclosure and subprime lending.

A foreclosure activity index map shows Allegany County has fared better than much of central and metro Maryland. Still, homes in ZIP codes 21502 (Cumberland) and 21562 (McCoole) have had a “high” level of foreclosure activity between the first quarter of 2007 to third quarter 2008.

Frostburg’s 21532 ZIP code has a “moderate” activity index while the rest of the county has a “low” rating. The state Department of Housing and Community Development will administer the funds, $17.3 million of which will be grants awarded to eligible jurisdictions in a competitive process.

The grants are to be awarded to “middle-income” homeowners — those who are between 80 percent and 120 percent of the area median income based on the number of people in a household.

Eligible uses include establishing financing mechanisms for purchase and redevelopment of foreclosed-upon homes and residential properties. Those mechanisms can include soft-seconds — which increase home buyers’ purchasing power by avoiding having to pay private mortgage insurance and include lower down payments, lower closing costs and home buyer support — loan loss reserves, and shared-equity loans for low- and moderate-income home buyers.

Boston and Charleston, S.C., have similar programs. The funds also can be used to purchase and rehabilitate homes that have been abandoned or foreclosed upon in order to sell, rent or redevelop those properties. The grants also can be used to establish land banks for homes that have been foreclosed upon, demolish blighted structures, and to redevelop demolished or vacant properties.

For more information on the state Neighborhood Conservation Initiative, visit www.neighborhoodrevitalization.org.

January 6 - Microsoft Mum? - Logitech Trims 525 - No Apple for 3000 LA Teachers? - Wind Blows Cold for 20% at DMI - 350 Gone at R.L. Stowe - IRS Files Away 711

Mike: States throughout the country are facing difficult financial times. Some states are running low on operating funds, such as CA (see below video). States like SC and now MO are exhausting their benefit funds at this early stage of the recession. Many states have understaffed unemployment offices which leads to many not receiving benefits for weeks. Without some immediate financial help from the feds, many states will be forced to increase taxes AND institute draconian job and service cuts. Police and fire departments are already being decimated with layoffs. Prison guards are being dismissed along with the prisoners they once guarded because prison funding is being chopped. Substandard schools are losing funding, which means fewer teachers teaching more students per class. These are just a few examples of the troubles facing states. What follows are a couple of stories which show the dire straights of state funds for unemployment and general operating expenses

 

- Let’s start with CA where the governator recently told the state that they are facing a dire financial situation:

 

 

Mike: Not only is Michigan getting crushed with job losses, as the story below shows, but the unemployed are having a tough time getting timely benefits:

 

* MID-MICHIGAN (WJRT) — (01/05/09)–A Mid-Michigan man has been laid off and is on hold.

Cases like his are on the rise as the state’s government tries to keep up.

Michigan’s automated phone system for unemployment benefits is backed up. And it’s leaving some families struggling to survive.

via Unemployment system flooded with calls for help - 1/05/09 - Flint News and Saginaw News - abc12.com.

 

 

Mike: Missouri’s unemployment fund is broke and needs to be replenished:

 

* JEFFERSON CITY | Missouri may soon have to borrow money to pay benefits to the rising number of unemployed people.

State Labor Director Todd Smith said Monday that Missouri may have to borrow about $40 million from the federal government before April to pay jobless benefits.

via Missouri jobless benefits fund going broke — again - Kansas City Star.

 

Mike: Unemployed South Carolinians were caught in an audit squabble between the governor and and the state’s Commerce Department. Funding was restored, but it shows how the unemployed are not showed any respect for their needs:

 

* More than 70,000 out-of-work South Carolinians caught up in a fight between the governor and the Employment Security Commission were relieved when the state’s chief executive agreed to an 11th-hour action that continues their benefit checks.

Gov. Mark Sanford agreed to sign off on a request for a $146 million federal loan just as unemployment benefits were set to run out. But he demanded that the commission meet certain requirements.

via Sanford comes through on state jobless benefits.

 

Mike: And FL is feeling the budget heat in all areas:

 

* On Monday Miami-Dade school superintendent Alberto Carvalho told CBS4’s Michael Williams, “Florida ranks 47th in the nation in per pupil funding. To make additional cuts is just unthinkable. We are destroying public education.”

 

 

Mike: While the Obama stimulus plan is expected to bring states some relief, the Republicans in congress won’t be in any hurry to make Obama look good, so don’t think the states will be bailed out quickly:

 

Many parts of Obama’s plan would infuse money quickly into the economy, according to budget experts. These include up to $200 billion for recession-hit state governments to avoid layoffs, cutbacks in services and raising their own taxes. Expanded food stamp and unemployment benefits would arrive mostly in 2009. The Obama team says the measure will include up to $300 billion in federal tax cuts, about half taking effect almost immediately by withholding less from paychecks of most workers.

via The Associated Press: Analysis: Can Uncle Sam spend cash fast enough?.

 

 

Mike: Needless to say, this will be a very trying time for many states and their residents. We can hope for better times sometime during 2009, but that’s being optimistic, especially after reading and hearing from Nobel Prize winning economist Paul Krugman:

 

 

Mike: In closing, things are bad and likely to get worse for the next year, but the US and world economies have seen difficult financial conditions in the past and fought their way to prosperity. Keep those fingers crossed….

- Onto the latest layoff announcements and economic news:

 

 

Bloggers and analysts on Monday poured cold water on rumors that Microsoft plans to lay off a substantial number of its employees. The rumors, which surfaced in late December, suggested that the company might shave off as much as 17 percent of its 95,000-plus workforce.

via Redmond Channel Partner Online | News: Microsoft Mum on Rumored Layoffs .

 

* In an e-mail to Edge, a Microsoft spokesperson stopped short of denying the report, stating the company “does not provide comment on rumor and speculation.” He did not offer any color on how the games division could possibly be affected.

via News: Microsoft tight-lipped on layoff rumors - ComputerAndVideoGames.com.

 

Windows — the cornerstone of Microsoft’s software portfolio — was hard hit toward the end of the year. In early December, analysts announced that the OS’s market share had dipped below 90 percent for the first time. Then its share declined yet another percentage point over the Holiday Season. Most of those Windows machines were replaced with computers running Apple’s Mac OS X, but some also went to Microsoft’s most hated rival, the open source Linux OS.

 

* According to comments made by numerous IBM workers on several discussion boards, the outfit is planning a massive job cut in January.

Workers believe IBM announce the move in the first half of January, before it posts its quarterly results. The outfit currently employs 386,000 workers worldwide, and according to some of them who took part in the discussions, as many as 4 percent, or 16,000, will get their notice on January 23.

 

- General Economic News -

The grim numbers underscore how matters went from bad to worse for automakers last year as jittery consumers stayed out of showrooms. Those woes are expected result in even lower sales for 2009, with automakers expected to ratchet back incentives starting in the spring and financing remaining tighter than had been the norm.

aram name='movie' value='http://www.youtube.com/v/0-JBGqYRHkU&rel=1&fs=1&showsearch=0' />  

 

Orange County handed out layoff notices to 210 social service workers Monday, the first of a wave of cuts intended to trim more than $32 million from this year’s budget.

Another 100 vacant positions in the agency were also eliminated.

via OC lays off 210 county workers | county, services, year, orange, cuts - News - OCRegister.com.

 

* Eyeing an ever-widening budget gap, Los Angeles Unified School District officials said Monday they could soon send nearly 3,000 nonpermanent teachers notices warning of imminent layoffs.

via-3,000 LAUSD teachers face layoffs

 

Lincoln is the latest city in the region to face a wave of layoffs, and city workers, including police and firefighters, have been notified that their jobs could be gone.

What was once one of California’s fastest growing cities is now racking up substantial debt, and city leaders say layoffs may be in the works as early as this week.

“We don’t have enough money to provide the same level of service as we have in the past,” said city councilman Tom Cosgrove. “I think [layoffs] are the toughest. They’re also the last resort.”

via cbs13.com - Lincoln City Workers Facing Layoffs This Week .

 

* RENO - Citing the loss of 17 flights since last year, the Reno-Tahoe International Airport is announcing 11 people are being laid off, and other measures taken to save $2.5 million dollars.

In addition to the layoffs, the budget cuts will also include freezing positions, a voluntary salary freeze, buyouts, and program eliminations.

 

* BROOKSVILLE - The downturn in the local construction industry has claimed the jobs of six more building department employees, the county announced Monday.

 

* COLUMBIA — The South Carolina Education Department says most of a potential $349 million budget cut that legislators may need would fall on local school districts………

Meanwhile, the department said it would cut 107 jobs and the biggest reductions would affect bus operations, jobs and salaries. But it would also look to eliminate school nurse slots, reduce teacher incentive pay and text book spending as well as dropout and assessment programs.

 

Sacramento on Monday announced it has laid off eight workers in the city’s development services department due to falling revenue.

The affected workers, civil engineers and technicians within the department, were notified Friday.

 

* BROOKSVILLE — Six workers in Hernando County’s Development Department were laid off Monday due to the continuing slump in new construction.

via More county workers laid off in Hernando .

 

* BATON ROUGE, La. (AP) — Gov. Bobby Jindal’s plan to close a $341 million budget deficit will cost at least 335 state employees their jobs — mainly in the state Department of Corrections.

Seventy people hired for a new skilled nursing unit for prisoners will be let go because the facility at the Elayn Hunt Correctional Center in St. Gabriel won’t be expanded as planned.

via More than 300 jobs to be cut in Louisiana Department of Corrections | thetowntalk.com | The Town Talk.

 

- US and some Canada News -

* FREMONT, Calif. - Logitech International SA, a maker of mice, webcams and other computer peripherals, said Monday it is cutting its salaried work force by 15 percent in response to weak consumer demand amid what it expects to be an extended global downturn.

Switzerland-based Logitech, which also has offices in Fremont, has about 3,500 salaried employees in a total work force of about 9,000.

via Logitech to cut salaried staff by 15 percent (AP) by AP: Yahoo! Tech .

 

* Jan. 6 (Bloomberg) — Logitech International SA, the biggest maker of computer mice, will cut 15 percent of its non- manufacturing jobs and withdrew its fiscal 2009 profit targets because of the deepening global recession.

 

* LOS ANGELES (Reuters) - Health insurer Cigna Corp (CI.N) said on Monday it will cut 1,100 jobs, or about 4 percent of its workforce, and consolidate certain operations as it copes with the economic downturn.

As a result, the company said it expects to record after-tax restructuring charges of $30 million to $40 million in the fourth quarter of 2008.

 

* In a second round of cuts, Perceptive Software Inc. laid off 53 employees on Monday, or 10 percent of its work force.

via Perceptive Software lays off 53 - Kansas City Business Journal: .

 

* Xerox was one of the first companies to recognize the slumping economy and take steps to deal with it.

The company has offered separation packages seeking to trim roughly 5.2 percent of its employees worldwide. If not enough people step forward to reach that goal, some will face layoffs.

via Xerox Copes With Recession; Layoffs Possible - 13WHAM.com .

 

Wind tower manufacturer DMI Industries says it is cutting about 20 percent of its work force due to declining demand from developers struggling to get financing for wind projects.

via Wind tower maker cutting about 20 percent of jobs - BusinessWeek.

 

* SPRINGFIELD - The daily and Sunday Republican announced Monday it will reduce its workforce and restructure some of its operations as a result of a deteriorating economy.

Publisher Larry A. McDermott told employees in a letter that 22 full-time represented positions and 14 part-time positions would be eliminated.

via Republican plans layoffs - MassLive.com .

 

* Harrah’s Entertainment announced late Monday that it had eliminated or “reclassified” 70 positions at the Rio Hotel & Casino.  Reclassified is defined by reducing full-time staff to part-time.

via Layoffs at the Rio Hotel-Casino.

 

* Atlanta-based Definition 6 laid off approximately eight staffers in recent weeks. Cuts at the full-service digital agency affected employees at all levels, from director positions to rank-and-file account executives.

via Atlanta’s Definition 6 Joins Digital Agency Layoff Club - ClickZ.

 

Automotive castings company JL French has enacted layoffs at the Glasgow plant.

 

* NEW YORK -(Dow Jones)- LPL Financial, an independent broker/dealer, said it will cut 10% of its work force, or approximately 275 employees, according to a recent filing with the Securities and Exchange Commission.

In the Dec. 31 filing, LPL said it announced the staff reduction to reduce costs as part of a “comprehensive strategic business review.”

 

R.L. Stowe Mills will close its doors after almost 108 years in the sales yarn business, company officials announced today.

Harding Stowe, the company’s president and chief executive, said the yarn operation will close facilities in Tennessee and North Carolina which will put about 550 people out of work. About 350 of those employees work in the Chattanooga area, he said.

 

* The tough economy is hitting specialty veterinarian manufacturing company Heska.

The company today started laying off “less than 10 percent” of its 312 workers in Loveland and Des Moines, Iowa, chief financial officer Jason Napolitano said.

via Economic slowdown hits Heska | LovelandConnection.com | Loveland Connection.

 

* U.S. Steel Corp. said today it is eliminating its drawn-over-mandrel tubing products business and closing those lines at its Lone Star, Texas, plant, resulting in a fourth-quarter pre-tax charge of about $25 million and the loss of about 50 jobs.

via U.S. Steel to close tubing unit in Texas - Pittsburgh Tribune-Review.

 

Robert Bosch Corp. will trim about 10% of its 2,100-member work force in North Charleston, the company said Monday.

Out of the roughly 200 people who will be affected, about 75 accepted a severance package offered by Bosch in early December, said spokeswoman Becky MacDonald.

via Charleston Regional Business Journal | Charleston, SC.

 

* GRAND RAPIDS — Slowdowns in housing and consumer spending are driving cutbacks at Kindel Furniture Co., the city’s only residential furniture maker.

On Monday, company officials told their 130 employees they would lay off 19 full-time and five part-time workers, and go to a four-day work week for everyone else starting this week.

 

* In Kleberg county, about a hundred people have lost their jobs after a uranium mining operation shut down.

 

Les Schwab Tire Centers is laying off 27 people at its Prineville distribution center, according to Bend TV station KTVZ.

“We’re selling fewer tires, and that affects everyone,” Schab executive Jodi Hueske told the station. “We’re loading (fewer) tires on our trucks and hauling fewer tires to our stores.”

via Schwab Tire lays off 27 in Prineville - Business - Oregonlive.com.

 

Mike: And this is before Logitech’s 500 layoof:

* This year’s job market is starting out on a dismal note. Fremont is being jolted with about 500 job cuts this month, primarily from a high-tech sector that has begun to erode.

Over a span of several weeks from New Year’s Eve through mid-February, companies are cutting 534 jobs from their Fremont operations.

via High-tech job cuts landing in Fremont - ContraCostaTimes.com.

 

* The Internal Revenue Service will eliminate more than 700 area jobs this year due to consolidation sparked by a rise in the electronic filing of tax returns.

The IRS service center headquartered on Route 133 in Andover will no longer process tax returns after September 2009, according to IRS spokeswoman Peggy Riley.

As a result, 711 full- and part-time positions in Andover, Methuen, Lowell and Fitchburg will be terminated, the majority of the job losses occurring in Andover.

via With e-filing on the rise, IRS to cut 700 jobs - GloucesterTimes.com, Gloucester, MA.

 

* MAIDEN - Getrag Corp. laid off 141 of its approximately 500 employees Monday.

The manufacturer of General Motors and Chrysler auto parts cited the continuing worldwide economic crisis as the reason for cutting its work force by nearly 28 percent.

via Catawba County axle maker cuts 141 jobs.

 

* Laird Technologies, which makes electronic components used by a wide range of industries, has seven manufacturing plants in the United States and operations spread around the world. The company said late last year that it is closing or downsizing three of its U.S. manufacturing plants.

via 01/06/2009 - Laird Technologies to close Earth City manufacturing plant - STLtoday.com .

 

* CLEMSON — A possible cut of 70 jobs at Clemson University’s Public Service & Agriculture division is — for now — a budget exercise, a spokeswoman said on Monday.

The Associated Press reported that Clemson’s PSA division, which includes its extension service, could lose 70 jobs from the research and extension service, if it chose to meet an 8 percent cut in the coming year by reducing staffing.

 

- International News -

 

Jan. 6 (Bloomberg) — Indian exporters expect to cut as much as 10 million jobs by March as the global recession prompts overseas buyers to cancel orders

 

* TOKYO (AFP) — Japan’s Sanyo Electric Co. plans to cut up to 1,000 jobs to revamp its struggling businesses before being bought by Panasonic Corp., a press report said Tuesday.

Sanyo Electric is considering shedding about 500 of its 20,000 regular employees in Japan, mainly in the semiconductor division, by the end of March, the Nikkei business daily reported.

via AFP: Japan’s Sanyo to cut up to 1,000 jobs: report.

 

* LONDON, Jan 6 (Reuters) - The euro zone private sector services economy shrank sharply in December and firms cut more jobs than first estimated, a survey showed, pointing to a deep recession lasting for at least a good part of the year.

With inflationary pressures evaporating and no sign that businesses — now cutting payrolls at a rapid pace — are sensing a pick-up any time soon, the data reinforces expectations the European Central Bank is likely to cut interest rates to new lows.

via Euro zone services PMI at record low, firms slash jobs - Forbes.com.

 

* London, UK (AHN) - The services purchasing managers index of the U.K. surprisingly improved in December to 40.2 compared to a market expectation for a decline to 39.2, according to a data.

But the country’s service sector activity contracted at a near-record pace last month, a report showed.

 

A COLLAPSE of Jaguar Land Rover would put around 75,000 jobs at risk and cost the British taxpayer up to £2 billion, a top Midland business expert warned.

Professor David Bailey, director of Birmingham Business School, said the consequences of Government inaction over JLR would be “huge” as pressure grows for a New Year £1 billion state-sanctioned loan.

via 75,000 jobs risk if Jaguar collapses - Coventry Telegraph.

 

* The Philippine Overseas Employment Administration (POEA) yesterday reported that at least 1,000 more overseas Filipino workers (OFWs) have lost their jobs in Taiwan and other countries due to the global financial crisis.

via 1,000 more OFWs laid off in Taiwan | Home >> Pinoy Abroad >> Asia .

 

* LONDON, Jan 5 (Reuters) - British retailer Marks & Spencer (MKS.L) is set to cut more than 1,000 jobs in stores, its head office and support functions following disastrous Christmas trading, The Times web-site reported on Monday.

via Marks & Spencer to cut over 1,000 job losses-paper | Industries | Consumer Goods & Retail | Reuters .

 

* LONDON (Reuters) - Consumer morale sank lower in December as worries about job losses resulting from the economic downturn soured the Christmas spirit.

The Nationwide Building Society said its consumer confidence index fell four points to 47 last month — the lowest since the survey began in 2004.

via Consumer morale worsens in December - Investing | More commentary - MSN Money UK.

 

* TOKYO, Jan. 6 (PNA/Kyodo) — Domestic sales of new vehicles, excluding minivehicles, fell to a 34-year low of 3,212,342 units in 2008 — nearly half of the peak level in 1990 — as worsening economic conditions depressed consumer demand, an industry body said Monday.

The sales figure — the lowest recorded since 1974 in the aftermath of the first oil shock — represents a 6.5 percent year-on-year decline and the fifth consecutive yearly fall, the Japan Automobile Dealers Association said.

 

- Hiring News -

 

* WASHINGTON (CNN) — Despite a bleak economic environment featuring wide-ranging layoffs and rising unemployment, the nation’s premier law enforcement agency is touting “one of the largest hiring blitzes in our 100-year history.”

The FBI is about to embark on its biggest hiring spree since immediately after the September 11, 2001.

The FBI posted openings for 850 special agents and more than 2,100 professional support personnel. Officials say it’s the largest FBI job posting since immediately after the September 11, 2001, terrorist attacks.

 

More than 12,000 jobs will soon open up at the MGM Mirage’s new CityCenter on the Las Vegas Strip.

via KTVN Channel 2 - Reno Tahoe News Weather, Video - 12,000+ Jobs to Open Up at CityCenter in Las Vegas.

 

* Having trouble finding a job in, say, New York City or South Florida? You might give Madison, Wis., a try. It’s got an unusually healthy outlook for job growth and a strikingly low unemployment rate–3.5% in October, when the national rate was 6.5%.

via Ten Cities For Job Growth In 2009 - Forbes.com.

 

 

Pressure Grows on Central Banks for Further Cuts …..

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Pressure Grows on Central Banks for Further Cuts …..

…. following the continued proliferation of very weak economic data. Cuts are already expected to emerge from the UK, Canada and Australia over the coming month and a growing conviction that the ECB will be compelled to reduce Euro rates significantly (they are already behind the curve and further inaction could prove extremely costly) following their meeting next week. The short term outlook for differentials therefore remain firmly in favour of the US Dollar its interest rates having already been cut by the Fed with a target level of zero. In the short term, this will leave the US Dollar itself very much back in favour, especially against the Euro if perception grows that the ECB are reluctant to advocate easier credit conditions.

As mentioned, recent data from the UK and Eurozone have again been weaker than market consensus. The CIPS index of purchasing manager’s sentiment in the construction sector released yesterday was the lowest reading ever since the report’s inception in 1997 and this morning’s Nationwide house price survey for December fell a staggering 2.5% m/m (down 15.9% y/y) against expectations of -1.5% and -14.6%. French consumer confidence released earlier this morning came in at -44 against -43 in November. although this number is not an all time low (-47 in July) the trend is still not looking good.

Today is again light on meaningful economic data with a further CIPS report from the UK, this time the index for the purchasing manager’s sentiment in the Services sector plus the 1st estimate from EuroStat for the year-on-year change in MUICP (Monetary Union Index of Consumer Prices). After that we wait until 3.00pm for data from the US.

Early trade today saw the Euro under quite severe pressure following yesterday’s publication of Goldman’s outlook for the currency for the next 3-months plus perceived selling of the currency by a large French Bank on behalf of EDF following their bid for British Energy going unconditional. It looks as if a re-visit to 1.0200 might take a few days longer than I had thought.

<The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Edward Kirwan, BSc Hons, is an independent professional Investment Portfolio Consultant working with Currencies Direct and is based in Spain. Working with overseas property investments, currency trade, corporate foreign exchange, international payments and transfer payments overseas are all an important elements of this business.

Contact Edward Kirwan by e-mail: enquiries@invest-in-overseas-property.info

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Mirror Mirror On The Wall…. | Market Strategy

Cheeky title, but apt we think. Most market participants are probably at a loss as to how to call the market right at this point in time. As 2009 gets underway, one which we believe will be wrought with challenges early on, we all lie waiting in hope that the concerted efforts by governments and central banks globally will bear fruit eventually. For if not, and that economies sink deeper into recessions and into a hole too deep to dig itself out of, we are certainly in for much tougher times. The US government and many other nations around the world will be laden with budget deficits so big in these trying times that it will hamper growth for years to come. China’s once mighty growth will fall with a thud which will resonate loud and hard throughout the world.

Are the economies of the world coming to a stall?

The underlying growth of the world economy is generally driven by the United States, China and the Euro Zone. The three countries, which account for a combined total of 48.0% of the world GDP, contributed about 45% to the global growth in 2007. Given their significance to the world economy, it is only natural to expect that the economic growth of Malaysia in 2009 will be in the hands of these three major countries.

The US economy has contracted, China has slowed while the Euro Zone has slipped into a technical recession. Therefore, it is reasonable to expect the economic growth of Malaysia to downshift as well.

The US economy has contracted and is on the brink of a technical recession. The y-o-y real GDP growth of the country dipped from 2.1% in 2Q08 to 0.7% in 3Q08. On a q-o-q annualised basis, its economic growth has fallen from 2.8% in 2Q08 to -0.5% in 3Q08. As for the Euro Zone, its economy has slipped into a technical recession, registering a q-o-q annualised growth rate of -0.2% in both 2Q08 and 3Q08. In terms of y-o-y growth, the fall is from 1.5% in 2Q08 to 0.6% in 3Q08. The Chinese economy, meanwhile, has started to soften since early this year. Its y-o-y real GDP growth has gradually come off from 10.6% in 1Q08 to 10.1% in 2Q08, and 9.0% in 3Q08.

Statistically, the economic growth of Malaysia has the strongest correlation with that of China. During the period 1Q00-3Q08, both countries registered a reasonably high correlation of 0.63. It is higher compared to that between Malaysia and the United States. The economic growth of the two countries registered a correlation of 0.54 from 1Q00 to 3Q08. Given that the Chinese economy is currently undergoing a soft-landing (though a somewhat severe one), there is every reason to expect that the Malaysian economy would not slow too significantly over the near term. Interestingly, we find that the yo-y real GDP growth of Malaysia has not correlated positively with that of the Euro Zone over the years. This indicates that the economic impact of a technical recession in the Euro Zone on Malaysia may not be great, immediate and direct.

If the China economy continues to slow orderly and gradually, the International Monetary Fund forecasts that its y-o-y real GDP growth would soften from 9.7% in 2008 to 8.5% in 2009. Our estimation shows that every 1.0 percentage point decline in the y-o-y real GDP growth of China has a tendency to lower that of Malaysia by 0.6 percentage point. Strictly going by the regression test and based on our y-o-y real GDP growth forecast for Malaysia in 2008, the country’s economy for 2009 is likely to expand by about 4.1-4.3% in theory. Depending on how effective the projects outlined in the Economic Stabilisation Plan would be implemented, attaining a y-o-y real GDP growth rate of about 4% next year is still a real possibility for Malaysia, albeit challenging.

The world economy, including Malaysia, is now at a crossroads. In the best-case scenario, we may see the economies of the United States, the Euro Zone, China and Malaysia to stage a strong and steady recovery in 2009. The economic growth of China would climb back to 10%, while that of Malaysia may significantly surpass the 5% mark in 2H09. Realistically, one can expect the United States economy to reach the trough only in 1Q09, and make a gradual and bumpy recovery in 2H09. In the base-case scenario, the economic growth of China is expected to stabilise at around 9% in 2H09, while that of Malaysia would climb above 5% in 2H09. In the worst-case scenario, the world economy would slip into a technical recession and grow significantly below 3%. If that happens, the economies of the United States, the Euro Zone and Malaysia are very likely to slip into a technical recession. As for China, its economic growth would significantly slump below 8% in 2H09.

Actually, the impact of global credit crunch on the Asian economies is relatively insignificant and indirect. Bank write-downs on global holdings of United States originated and securitised mortgage, consumer and corporate debt in the Asian region as at September 08 were unimportantly small. This is actually in line with our estimation that high inflationary pressure plays quite a significant part in choking the growth of many Asian economies as well. Be that as it may, the United States sub-prime crisis has admittedly spread to real sectors and this indirectly affects the economic growth of many export-led countries in the region. Given ample liquidity in Asia as a whole, credit crunch in the region is more of a confidence issue than a real shortage of capital, if ever there was one.

After careful assessment of all the underlying impediments and potential catalysts, we estimate that the Malaysian economy would expand by 4.1-4.3% in 2009. The growth is expected to be largely underpinned by the domestic-based services sector and private consumption expenditure. The export-oriented manufacturing sector is expected to gradually emerge from the doldrums in 2H09.

While there are impediments that could crimp the growth of the Malaysian economy in 2009, there are also catalysts that would potentially boost the domestic economy next year. A deeper than expected recession in the United States economy and a sharper than expected slowdown in the China economy may send the Malaysian economy into a tailspin. On the contrary, a gradual recovery in the United States economy in 2H09 and a continued softlanding in the China economy would provide support for the Malaysian economy.

Actually, there is every reason to believe that a substantial easing of global inflationary pressure, a significant cut in policy interest rates worldwide, a massive injection of capital into the global banking system, a series of tax and non-tax stimulus packages can help lift the US economy out of the doldrums. Further, it is reasonable to expect that the domesticbased services sector in China would continue to support the growth of the economy, while the export-oriented manufacturing sector slows.

After careful assessment of all statistics available, we estimate that the real economy of Malaysia would grow by 4.1-4.3% y-o-y in 2009 (see Figures 14 and 15). It is one percentage point lower than our earlier forecast, which was 5.2% y-o-y, for two reasons. First, the growth of the local manufacturing sector is expected to dip more than expected, as almost half of the global economy is now in a recession. Second, due to a sticky price movement in the domestic economy, the easing of inflationary pressure is expected to take longer than expected. While an economic expansion rate of 4.1-4.3% is obviously below the trend-growth of Malaysia, it is by no means a concern. After all, it is in line with the International Monetary Fund’s projection that the growth of the world economy would slow from 3.7% in 2008 to 2.2% in 2009.

For 2009, the economic growth of Malaysia is expected to be largely supported by the domestic-based services sector, which accounts for about 54% of the country’s economy. As consumers in Malaysia now have a lower inflation expectation, they will turn less cautious about spending. In particular, this will give a shot in the arm to the wholesale and retail trade, accommodation and restaurant industries, which account for a combined total of about 27% of the services sector in Malaysia. Coupled with the fact that interest rates in the country are conducive to mortgage purchases and the local employment market continues to be healthy, both the banking and real estate industries are expected to grow encouragingly. The two industries account for over 20% of the local services sector. All things considered, we expect that the services sector would grow by a y-o-y rate of 5.5% in 2009. As the services sector is expected to grow at a softer rate next year, we expect that the growth of the domestic private consumption expenditure would slow from 9.1% in 2008 to 4.5% in 2009.

As for the export-oriented manufacturing sector, its growth is expected to continue to be discouraging, especially during 1H09. This is based on our expectation that the United States economy would remain sluggish and the China economy would continue to soften over the near term, thereby dampening the production growth of electronics and electrical products. Nevertheless, we expect the global electronics industry to slowly perk up in 2H09, as the United States economy makes a bumpy recovery then. All in all, it is estimated that the manufacturing sector would grow by 2.3% in 2009. In line with the moderate performance of the industrial sector, we expect the Malaysian exports to grow by only 3.3% next year.

Given global economic uncertainties over the near term, many Malaysian companies are expected to be cautious about capital spending, at least during the first half next year. Most of the local businesses, especially those in the export-oriented manufacturing sector, are expected to invest minimally. Even if there would be some improvement in the world economic conditions in 2H09, we expect that most of the manufacturing firms in the country would positively respond to it only in early 2010. Therefore, we estimate that the local private investment expenditure would merely increase by 4.2% in 2009.

As for the construction sector, its growth in 2009 would be mainly hobbled by the delay in the implementation of the government infrastructure projects. Reportedly, many of them will either be downsized or cancelled due to the government fiscal constraints. Nevertheless, we expect that private housing projects would still grow moderately and civil engineering activities in the oil and gas industry would keep the construction sector expanding. Thus, the growth of the construction sector is expected to remain at about 3% in 2009.

Both the mining and agricultural sectors are expected to expand by 2.9% and 2.6% in 2009, respectively. The growth of the former would be mainly underpinned by the production of crude oil and natural gas, while that of the latter would be largely supported by the production of industrial crops and food crops. While the prices of mining and agriculture commodities have dipped substantially of late, it is still profitable to gradually increase the production capacity. After all, we expect that the prices of the two commodities would slowly climb, as the global economic conditions stabilise in the second half next year.

Are markets heading for a great big fall?

There is no clear indication as to how prolonged this problem will drag on but we can see that in the last few decades since WW2, no recession in the US has lasted more than 24 months (16 months to be more specific). Each era would have had their specific sets of issues, though it is widely accepted that the current set is the worst that has been during the period in mention. By 2H09, the recession in the US would have run a course of at least 18 months, making it the longest ever (the Great Depression years aside).

This is where there is a divergence of thoughts and expectations. While much is said about severe difficulties in the interim, markets globally seem to be pricing themselves otherwise. P/B valuations of markets are hovering around “neutral” levels, pricing in extreme hope and expectations that a recovery is at hand in the coming year. What if it doesn’t happen?

Is it too early to make a call?

Net flow of funds post the Asian Financial Crisis in 1997 paints an even more grim picture. Assuming we take the 1998 period to be when most foreign funds that had wanted to get out of the market had gotten out just before the capital control measures instituted in 3Q98, there has been a net outflow of RM14.5bn from the transaction of shares and corporate securities (assuming 4Q98 as the starting point).

What will make us all stand tall?

Tracking the net flow of foreign funds into or out of the market against the performance of the KL Composite Index and the corresponding quarterly share price performances of the companies highlighted, we have noticed a greater level of out-performance vis-à-vis the Index over the years. It is by no means a measure of how the stocks will perform in the coming quarters, but we believe it does indicate some form of resilience of the stocks to weather adverse economic and market conditions.

The various other stocks that we have under coverage, while providing some opportunities for cherry-picking at relatively distressed valuations vis-à-vis their fair values, need to be done with extreme caution and with a certainly much longer investment horizon in view. A similar exercise as that carried out with the larger-capitalized companies, but this time on the lesser capitalized ones with BUY calls, reveals general under-performance by almost all of the stocks in question from the periods 2000-current.

WHERE ARE THE MARKETS HEADED TO IN 2009?

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6 January 2009 Newz Bits

TALKING POINT

Time to take some profit on plantation counters

HIGHLIGHTS

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The Irish Economy’s Rise Was Steep, and the Fall Was Fast

Dublin

IT’S 3 a.m. at Doheny & Nesbitt, a favorite watering hole of Dublin’s political and business elite, and the property tycoon Sean Dunne stoops to retrieve a penny from the pub’s grimy floor.

One would think that Mr. Dunne, Ireland’s best-known building developer, would be in bed at this hour. It’s a weeknight, after all, and he has meetings that begin before first light.

What’s more, the Irish economy, pummeled by the most severe housing bust in Europe, has collapsed. And the gossip around town is that Mr. Dunne, whose brazen deal-making and Donald Trump-like lifestyle epitomized the country’s euphoric boom, might be going bankrupt.

But, no matter, a penny is a penny.

“I am never, never too proud to pick a penny up from the floor,” Mr. Dunne said. He is on perhaps his fifth pint of Guinness, capping a rollicking night of Champagne cocktails, followed by a wine-soaked dinner — yet his thick brogue is clear of even the faintest slurring.

“I grew up with nothing and I know the value of money,” he adds. “The Celtic Tiger may be dead and if the banking crisis continues I could be considered insolvent. But the one thing that I have is my wife and children — that they can’t take away from me.”

It is not known whether Mr. Dunne will fall victim to today’s world financial catastrophe, but there is no doubt that his country has.

Everything, it seems, has grown worse here. The recession started earlier and its bite has been deeper. Housing prices have fallen by as much as 50 percent. Bank shares have plummeted by more than 90 percent. Unemployment is approaching 10 percent.

The roots of Ireland’s fall date to more than 20 years ago, when a clutch of economists, politicians and civil servants put their heads together in this very pub and planted the philosophical seeds for the Irish economic miracle.

Known widely as the “Doheny & Nesbitt School of Economics,” these beery musings soon became government policy that chopped taxes in half, sharply reduced import duties and embraced foreign investment — a radical transformation that gave birth to the Celtic Tiger and perhaps the most open and vibrant economy in Europe.

But beyond the glow of this sudden efflorescence that made Ireland the fourth most-affluent country in the Organization for Economic Cooperation and Development, a housing bubble had begun to form. Low interest rates, a wave of inward immigration and a bank lending spree drove housing’s share of the economy to 14 percent, the highest in Europe, from 5 percent, according to research done by Finfacts, a financial Web site that analyzes the Irish economy.

Developers like Mr. Dunne became multimillionaires and — much like the hedge fund and private-equity elite in America — became visible public and cultural figures. They were living large in a country just coming to grips with its ability to show a little swagger.

Ireland’s policy makers, like their counterparts in the United States and Britain, were seduced by record tax inflows and a full-employment economy. They paid little heed to the lonely voices that warned of the crash that finally came over the summer, when interest rates in Europe began to rise. Banks that had steered more than 60 percent of their loans toward property stopped lending, and asset values plummeted.

“We have repeatedly warned that the government’s housing policy was extremely dangerous,” said John Fitz Gerald, an economist at the Economic and Social Research Institute, a leading policy center in Dublin, who has long urged that the government stanch housing demand by raising taxes. “You will now see unemployment going to 10 percent and we will experience a sharp drop in output.”

He shakes his head and sighs: “This was predictable, but the government just did not deal with it.”

BY wide consensus here, two events have come to define — both culturally and financially — the sweep and excess of the Irish property boom. Both revolve around Sean Dunne.

In July 2005, Mr. Dunne paid 379 million euros for a seven-acre plot in the exclusive Ballsbridge neighborhood of Dublin and promptly announced that he would tear down the two luxury hotels on the site to build a high-end commercial and residential development.

That deal amounted to 54 million euros an acre, one of the highest amounts ever paid for land in Europe. His subsequent architectural plan featured a soaring Dubai-like office tower cut in the shape of a diamond that anchored a futuristic community of expensive houses and glamorous shops, and the price tag of one billion euros shocked Dubliners with its gall and ambition.

Hobbled by delays and vocal neighborhood opposition, the project sits before a local planning board that on Jan. 30 will either approve or scrap the plan.

The second moment occurred in 2004 when Mr. Dunne, who is now 54, celebrated his second marriage, to Gayle Killilea, a former gossip columnist 20 years his junior, by inviting 44 of his friends on a two-week Mediterranean wedding cruise on the yacht Christina O, on which Aristotle Onassis and Jacqueline Kennedy married.

Much as the $3 million birthday party for Stephen A. Schwarzman, the Blackstone Group founder, came to be seen as a crass display of private equity’s manifold riches, the Dunne wedding was viewed similarly in Ireland: as a conspicuous and garish expression of the man and his business.

That a billion euro property plan and a gaudy wedding celebration should be held up as cautionary exemplars of Ireland’s pursuit of money angers Mr. Dunne. In his view, it speaks to what some call the Irish disease.

“Jealousy and begrudgery are still alive and well in Ireland, and whoever eradicates them should be prime minister for life,” he says as he tucks into a heaping plate of gravy-drenched turkey and mashed potatoes in the restaurant of one of the two hotels he owns — and is hoping to raze. “It’s part of the Irish psyche and it is the result of 800 years of being controlled by other people, of watching everything the master or landlord is doing.”

Mr. Dunne’s compact paunch, reddish cheeks and mischievous grin — which he occasionally deploys with a wink of his eye — can give him the air of a department store Santa. But his business methods are far from jolly: he is notorious for taking legal action against all who cross him, from local newspapers to rival property developers.

He defends his purchase of the Ballsbridge site as responsible, not reckless, as his critics have deemed it. He points out, too, that his winning bid was just slightly more than the second-highest offer and that subsequent property sales had far exceeded his submission of 54 million euros an acre.

Still, he recognizes that times have changed. Just recently, he pruned staff at his development company, and some of his senior executives agreed to take 50 percent pay cuts.

Asked where he will find the 600 million euros that he needs to tear down the two hotels, dig a massive hole in the ground and erect his vision of a new Dublin, he ruefully remarks: “It is fair to say that there is not a queue of bankers lining up to lend to me right now.”

But he says the project will be completed, assuming that it wins approval of the planning board. “If anyone wants to bet I can’t do this, I will take that bet,” he says, citing, without specifics, talks with Asian banks and a sovereign wealth fund. “You have to have steel in a certain part of your body to do this job, and as one of my bankers recently said to me, ‘Sean, the only thing that will take you out is a stray bullet.’ ”

IN many ways, the ups and downs of Mr. Dunne’s life and career mirror the Irish economy’s own rise and fall. Born into a house without electricity or running water in the small provincial town of Tullow, outside Dublin, Mr. Dunne studied construction economics at a technical college in the 1970s.

Along with many of his countrymen, he forsook the stagnant Irish economy — in his case, choosing bartending in New York City and working on an oil rig in Canada.

With the Irish economy still afflicted by an unemployment rate of about 20 percent in the 1980s, and a punitive overall tax rate, he began his real estate career in London. He moved back to Ireland in 1990 and began a string of property deals.

He initially focused on government-sponsored housing projects. But as the Irish economy began its true take-off, demand came from the growing corps of newly wealthy Irish, many of whom were returning to Ireland from abroad. They were joined by a wave of foreign workers.

After years of emigration and economic stagnation, Ireland’s housing stock was depleted, precipitating a housing euphoria. Capital gains taxes were low, as were interest rates. Banks stood ready to lend, offering mortgages with no money down to a house-hungry population.

The projects of Mr. Dunne and a small circle of developers grew in size and scope until the skyline of Dublin, never known for its tall buildings, began to fill with cranes and great shiny towers.

Signs of a bubble were everywhere: a family home in Dublin cost as much as a similar abode in Beverly Hills; house prices more than doubled over a 10-year period; and household debt as a percentage of G.D.P. jumped to 160 percent from 60 percent during the same period.

Irish banks, unlike those in the United States, didn’t dole out that many subprime loans. Rather, they lent furiously to big property developers who themselves were liberated to build pell-mell by government-imposed tax breaks.

Mr. Dunne, who says he put 35 percent cash down — or about 125 million euros — for the Ballsbridge project, says that even with the drop in asset values, he still has hope that the project can be completed.

“This is the way God made me, with heavy shoulders and an ability to carry a great load,” he says, forcefully rejecting the rumors of his financial demise buzzing around Dublin. (One of the more fantastic claims was that his financial troubles had forced him to take a month’s recuperation in a mental institution.)

“Failure is not an option for me,” he says. But others aren’t so sure.

The Irish government recently announced a $7.5 billion bank bailout and took majority stakes in the country’s largest banks, a move that followed the government’s earlier promise to guarantee all bank deposits.

Analysts are uncertain that the government will allow the banks to continue to support the type of high-risk, high-reward projects that have become the bane of their financial existence.

“The banks in Ireland did not lend recklessly to individuals; they lent recklessly to developers,” says Ronan Lyons, an economist at Daft, Ireland’s largest property Web site. As for the Ballsbridge project, he may well take Mr. Dunne’s bet.

“I would be surprised if it gets built,” Mr. Lyons says. “The migrants are going home, there is a surplus of properties for sale, and even though this is a landmark project there is just not an appetite for large projects now.”

WHILE the pain is acute in Dublin, at least the city has the small comfort of having enjoyed the full benefit of the boom.

Such is not the case in the city of Limerick. Traditionally one of Ireland’s more depressed cities, Limerick was a latecomer to the property party. While there were some good times, the downturn has had a more wrenching effect there, with unemployment over 14 percent — among the highest rates in Ireland.

The layoffs have picked up speed around Limerick in the last month, as construction companies have stopped work, seemingly on a dime, sending such a procession of jobless to seek assistance that the local unemployment office became the second busiest in the country.

The waiting room in the office is dank and gloomy, and Dale McNamara, 20, wonders how a professional life once so charmed came to be so hopeless. Since graduating from high school as an electrician, flourishing building work in the area kept him more than busy and flush enough to buy a new car, start a family and consider buying a house.

Then, without warning on Dec. 5, he was told that it would be his last day of work, just six months before he would have received his certificate as an independent electrician.

Since then, he has been frantically knocking on doors, but to no avail. Now, as rent, heating bills and car payments pile up, he is beginning to feel desperate, unable to afford a night out or a Christmas present for his 20-month-old baby.

“If I don’t get a job in the next two weeks, I am worried about losing my house,” he says. “We have no money.”

He looks at his number in the unemployment lines and grimaces — he has been waiting four hours now and his name has still not been called.

“My grandfather says this reminds him of the 1930s when everyone left for America and Australia,” he adds. “There is just no work here.”

More dire, however, is the condition of the permanently unemployed in Limerick’s festering ghettoes, where experts say the unemployment rate touches 70 percent. During the early years of the economic revival, the government did its best to spread money to such areas, which are a feature of urban life all over Ireland.

IN fact, it was through social housing projects like these that Mr. Dunne got his start as a developer. But as the investment returns in the private sector became quite obviously more lucrative, the attention paid to so-called social estates like Moyross, on the northern outskirts of Limerick, wavered.

Crime, gangland disputes and a sense of anomie flourished as Moyross and other similar projects evolved as cocoons of poverty and hopelessness amid the riches and celebration of the Irish miracle.

“This place missed out entirely on the moment,” says Stephen Kinsella, an economist at the University of Limerick. “There has been no accumulation of wealth here.”

Walking through the garbage-strewn, empty roads on a cold, misty afternoon, Mr. Kinsella points to the shuttered houses and the mothers still dressed in pajamas taking their children home from school. Social workers in Moyross refer to the “pajama index”: the more men and women one sees who do not take the time and care to dress for the day, the worse the economic situation tends to be.

The Irish government has recently begun a regeneration project in Moyross that would result in large new investments in housing and infrastructure, but the going so far has been slow.

For Brother Shawn O’Connor, a Franciscan monk who has been living and working with the poor in Moyross for more than a year now, the vicissitudes of the Irish property market are a notion as distant as is his hometown, Red Hook, a village in the Hudson Valley of New York.

Brother O’Connor is the local superior of the community of Franciscan Friars, who do their work in some of the world’s most destitute communities. He and his fellow monks extend day-care assistance and spiritual counseling to the needy. They survive themselves on four hours of daily prayer and food handouts from neighbors — as Franciscans, they take a vow of chastity, poverty and obedience and thus do not spend money on any personal items, including food.

He recognizes that the deprivation of his community is severe, but suggests that it may be an easier hardship than the experiences of many Irish who have seen their riches disappear.

“There was this one story of a guy who shot his wife, son and daughter,” he says. “He had overextended himself. There is this desperation for wealth and people go after it — only to find out that it is not enough.”

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Understanding Adjustable and Fixed Rate Mortgages

The loan structure is one of the first decisions you’ll have to make when taking out a mortgage. The two main types of mortgages are fixed-rate and adjustable rate, the main difference being the way your interest is calculated. Each structure has its own pros and cons, and it’s important to know which one best suits your situation. This article lists some of the basic differences between the two.

Fixed-rate Mortgages A fixed-rate mortgage, as the name suggests, uses a single interest rate for the life of the loan. The main advantage of this loan is stability: because the rate never changes, your monthly payments remain the same regardless of the market situation. Fixed-rate mortgages are typically offered in 10-year, 20-year, and 30-year plans. Some loans also have a bi-weekly option, which allows you to make extra payments and pay off your loan sooner.

On many fixed rate mortgages, you start off paying more interest than principal in your early payments. But since your principal gets smaller each year, the situation eventually reverses and more of your payments are counted against the actual cost of the loan.

The fixed rate doesn’t apply to property taxes and insurance premiums—these are controlled by the government and your insurance provider respectively. But since your monthly payments are mostly made up of principal and interest, you can expect fairly stable payments with only minimal changes.

Adjustable Rate Mortgages An ARM bases its interest on a third-party index that determines the market interest rate. This means that your interest rates can change from time to time, depending on current market indicators. Some of the commonly used references are the Certificate of Deposit Rate (CD), the Treasury Security Rate, and the Cost of Funds Index (COFI) of the Federal Home Loan Bank.

To protect borrowers from drastic increase, most ARMs impose a cap on either the payment itself or the change in interest rate. For example, a mortgage may allow a maximum increase of 2% each year, no matter what the current rate is. Others may cap the actual amount your payments can go up. Ideally, this will be a “lifetime cap”; that is, the cap applies throughout the life of the loan.

ARMs typically have an introductory period where you pay a fixed or low interest rate for the first few years. This scheme is designed to attract more borrowers, especially in the sub-prime market. Many people take advantage of this structure by enjoying the introductory rate, and then selling or refinancing the home when the rates shift back to normal.

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Gold-History Repeating Itself?

Today’s action: Gold opened down by a few dollars and now has reversed itself and is cusrrently up $7-10 oz. Based off of chart formations it would appear that  Gold is breaking out to the upside and getting ready to challenge the $900 level, If it can break that then we are set up for a test of the $950-$975 level. If it fails here, a pullback to the $800 level (support base) will probably occur. Today’s articles include one about a new 2yr gold price cycle that appears to be forming. Next some questions answered about the markets for 2009. Finally a special report from Gold World about Gold Backed Banking. Enjoy and good investing! - jschulmansr

Gold’s 2-year cycle - MineWeb

A Mineweb reader has noticed a recent two-year cycle for gold price behaviour which, if it continues will likely give some guidance to price movements this year and next.

By: Joseph Cafariello

There seems to be a two-year cycle in the gold price which has been repeating itself since about 2004.  The even years follow one pattern, while the odd years follow another pattern.  The even years tend to reach exaggerated extremes to the upside and to the downside on a percentage basis, while the odd years tend to be a little calmer with less volatility.

For example, 2008 went very much like 2006, with exaggerated highs reached in the spring of each year, and a late start to the traditional autumn-winter-spring upswing, which began around October/November of 06 and 08.  On the odd-number side, 2007 went much like 2005, with moderate highs reached in May of each year, and an early start to the traditional autumn-winter-spring upswing, which began around August/September of 05 and 07.

If this is indeed a reliable cycle, we can expect 2009 to be much like 2005 and 2007 all throughout the year.  The first half of 2009 should see gold follow the same pattern as the first halves of 2005 and 2007.  In the springs of 05 and 07, gold kept hitting its head against the previous year’s high all throughout the spring.  More than once during the spring of 2007, gold topped out at about $690, coming to within about 5% of the 2006 high of $735.  Similarly, the spring of 09 should see gold hitting its head against 2008’s high of $1,035, coming to within 5% of it, or up to about $985.  That will be the high for the first half of 2009 at around the beginning of May, though this will not be the high for 2009 as a whole.

Given the odd-number year pattern, we might also expect the back half of 2009 to be much like the back halves of 2005 and 2007.  In both 2005 and 2007, the summertime pull-backs were modest, and the autumn-winter-spring upswings started early, at around August/September of 05 and 07.  The latter half of 2009, then, should see a modest summer-time pull-back of about 5% to 7% of its spring 09 high, taking gold down from $985 in May 09 to about $925 by August 09.  However, the low for 2009 will still be the upcoming January low of $800, which is now only about a week or two away.  The lows of January 2005 and January 2007 were also “the” or “close to the” annual lows for those years.  So the low of 2009 will be at around $800 in January.

The high for 2009 will come in December.  The traditional autumn-winter-spring upswing in 2009-10 will be much as it was in 2005-06 and 2007-08, with an early start.  The year-end run for 09 will begin around August or the beginning of September, jumping from about $925 in Aug/Sep 09 and rising steadily until the end of December 09.  The annual highs for 2005 and 2007 were hit in or near December of each year, and each high was about 20% higher than the average of their first halves.  Thus, the annual high of 2009 will be hit in or near December, and will be 20% higher than the average of its first half, putting the 2009 high at about $1,150 in December.

The traditional autumn-winter-spring upswing, however, will certainly not end in 2009, but will spill over into the spring of 2010 much as it did in the springs of 2006 and 2008.  The high in the spring of 2008 was about 40% higher than high in the spring of 2006.  Hence, the high in the spring of 2010 will be about 40% higher than 2008’s high of $1,035, putting gold at about $1,450 in the spring of 2010.  Then, the summertime pull back of 2010 will be just as stark as were the summertime pullbacks of 2006 and 2008.

And so the two-year cycle will continue, where even-number years follow a pattern of extremes, while the odd-number years are calmer, but with a nice upward kick at the end.  This two-year cycle with even-number years on the extreme side and odd-number years on the moderate side will continue until the commodity boom is over (say around the year 2030, when the populations of China and India finally achieve a 75% middle-class), and until the US dollar recovers at around the same year (2030), when the rest of the world will be looking to the US as a nice place to shop given its then-to-be dirt-cheap dollar.

The above comment was contributed by Mineweb reader Joseph Cafariello who describes himself as “A raving gold bug and proud of it”

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2009 Market Q&A: Four Questions Answered - Seeking Alpha

Source: Eric Roseman of The Sovereign Society

By Eric Roseman

Over the last several weeks I’ve received numerous questions from Sovereign Society subscribers, including individuals who frequent our daily blog.

As we start 2009, I thought this would be an ideal forum to collect some of these important questions and attempt to give you my best conclusions. I can’t reprint all of these inquiries; but I’ve compiled several excellent questions from our members.

Overall, I don’t like forecasting. I generally believe it’s a total waste of time and most consensus estimates ahead of 2008 ended in the basement with the majority of analysts dead wrong about the economy, the market and just about everything else.

I have to admit that I never expected the markets to crash, the banking system to go bust or the dollar to skyrocket in the midst of the worst financial crisis in 75 years. To be fair, I think most pros failed to make accurate predictions.

Question: I’m a retired investor living on income. Prior to the big rally in Treasury bonds, I held most of my savings in short-term Treasury’s and bank term deposits. But with short-term rates under 1% and government bonds yielding a pittance, I’m nervous. What should I do to supplement my income?

Comment: This is perhaps the most challenging environment for retirees in more than a generation. With money-market funds yielding almost nothing, Treasury bonds yielding around 2% and bank CDs paying under 1%, retirees must supplement their income.

My advice is to take a small portion of your savings, say 20%, and scatter that sum across a dozen or more investment grade corporate bonds. I emphasize “investment grade” and not junk debt. Investment grade debt includes anything rated BBB or better in my book and, to make it easier, I would stick to issues rated A- or higher.

A good strategy to keep things simple is to buy a laddered portfolio of corporate bonds ranging from two years all the way to seven years. This should at least give your nest egg a boost and if you feel comfortable with this formula, then increase your position to say 35% of your portfolio. But remember, don’t go whole-hog; at some point over the next 12 months, perhaps later, Treasury bond prices will get smashed and long-term rates will head higher as the government expands credit to the moon. Keep your powder dry.

Question: Do you think we’ll avoid another Great Depression? Despite all the money thrown at the markets since late 2007 we’re still in the midst of a severe credit contraction and the global economy has literally fallen off a cliff since October.

Comment: I think we’ll avoid another Great Depression but only because government will nationalize or partially nationalize key industries. Without government intervention, the free market would have resulted in massive failures and a total collapse of the banking system and the broader global economy. There’s no doubt in my mind that the government made a big mistake not rescuing Lehman Brothers last September. Once you’re bailing out major banks, then do it right. But in all honesty, we don’t know what transpires behind the Fed’s walls or the Treasury’s. There’s some crazy buddy system in progress with special interests influencing government policy. The government doesn’t give a damn about you or me. What they care about is protecting their interests. That’s why we must protect our assets and, in the end, I believe gold will triumph above all paper money, especially against the dollar.

I don’t advocate government intervention; but these are not normal times and the consequences might have resulted in the death of capitalism and perhaps the emergence of a new social order, similar to what occurred in post-Weimar Germany in the 1920s. Harsh economic times usually result in a new socio-economic regime. If the Fed and Treasury fail to rescue the credit system, then we might face similar consequences. The world as we know it will come to an end.

It’s hard to know exactly what goes on behind the Federal Reserve’s closed doors and at the Treasury’s. Thus far, government efforts have been bold since the October crash, including major central banks worldwide. Major credit indicators have indeed improved since November but the housing market - the crux of the crisis - is still in a freefall. Housing must stabilize before this severe recession ends.

In my eyes, it seems that bailouts and backstops are not addressing the real problem; most TARP money is ending up in bank coffers again and, in most cases, these institutions aren’t lending. The core of this credit crisis lies with the consumer and with housing. If you’re going to fork out several trillion dollars to fix or remedy this crisis then give the money to the consumer - not the banks. The consumer is in a severe bear market with personal assets plummeting over the last 18 months, including real estate, stocks, most bonds and now, possibly his or her job might be next on the chopping block.

Give consumer households $50,000 or more and allow them to clean-up their busted balance sheets, keep their homes (service mortgages) and pay off installment debt. You might not agree with me and, in all fairness, it’s against the tenets of the Sovereign Individual; but what good will all this money do if it’s basically squandered by government and ending up in the pockets of reckless bankers again? I have serious doubts about how the government is dealing with this crisis and I don’t think Obama’s spending package will help much at all despite perhaps growing the economy for a few quarters.

Question: What about the banks? With governments now standing behind their biggest financial institutions, is the worst over?

Comment: The global banking system, for all intents and purposes, is effectively bust or bankrupt. This is especially the case in the United States, Europe and, to a lesser extent, in Japan. More than a dozen emerging market banks are totally bust, including Iceland, the Baltics, Hungary, Romania, Bolivia, Ukraine, Ecuador, Argentina, etc. Not a pretty picture.

I think we’re more than 75% through the worst at this juncture. Governments now stand behind the largest banks in each country and, in some cases, even guarantee entire deposits until 2010 (e.g. European Union). I wouldn’t worry about the largest banks failing at this point. The worst is now behind us.

Question: I know you’re a big gold bug, but isn’t the euro a strong currency and do you think it’s a better hedge against the dollar than gold? Is it too late to purchase gold coins and, if not, where would you suggest I buy coins?

Comment: I have absolutely zero faith in the U.S. dollar and other currencies, including the euro or yen. In the end, all currencies will decline vis-à-vis gold and, in fact, since 2005 the world’s currencies have been losing their relative value to gold bullion. Despite big moves by the yen and euro over the last several years, they pale against gold.

Increasingly, the average man in the street will realize that paper money is not protecting his purchasing power and will revolt against fiat money. At The Sovereign Society, we’ve driven home this message since our first year of publication in 1997. Gold is the only asset in this world that isn’t someone else’s liability; with U.S. interest rates effectively at 0%, paper money now competes with gold, which also pays 0% interest. In a zero percent world, which asset would you rather own? I think the answer is obvious.

I think every investor should hold at least 10% of his assets in physical gold. This means coins, wafers or bars. Getting gold coins today is difficult because the U.S. Mint has stopped selling Eagles since last summer while other dealers are complaining about tight supplies amid booming investor demand. I suggest KITCO or First Federal Coin Corporation.

Also, I would not hold or store all of my physical gold at my home domicile. I strongly suggest parking some of your gold in Switzerland, too. Remember, you must report assets outside of the United States and Canada.

I’m convinced we’ll see some sort of government confiscation of gold again just like we did in the 1930s. Back then, FDR did allow Americans to hold a maximum of 100 ounces. I’m not so sure the next confiscation will be so generous.

I hope you found this helpful.

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2009 Gold Outlook - Gold World

By Luke Burgess

The investment markets are yielding to the fact that the global economy will remain weak for the better part of 2009.

As a result, investors will continue to seek safe havens.

Under normal conditions, these safe haven investments would include land and real estate. These assets have intrinsic value; or in other words, their value will never fall to zero. But with falling prices, investing in real estate is out of the question for most people right now. And there’s little doubt that investors will look elsewhere for safety against financial crisis.

The best safe haven asset in the world right now is still gold because it is never considered to be a liability.

And we believe that safe haven investment demand will drive gold prices during 2009. With this in mind, we would like to present a broad overview of Gold World’s 2009 gold outlook. But before we get into that, let’s review what happened to gold prices in 2008.

Gold Was One of the Best Investments of 2008

In March 2008, gold prices hit a record high of $1,033 an ounce as the gold bull market entered its seventh year of life. This was followed by a normal 18% correction, which drove gold prices back down to $850 an ounce.

Gold prices subsequently rebounded and were once again closing in on the $1,000 level in mid-July. At the same time, however, the fundamental and psychological effects of the slowing housing and credit markets were just beginning to devalue significantly the investment markets across the board.

As a result, many long gold positions had to be sold in order to cover losses from investments in other markets. Over the next several months, this forced selling pressure pushed gold prices down.

Gold prices were also held down during the second half of 2008 as the U.S. dollar enjoyed a +20% rally. Foreign governments, institutions, and banks began buying the U.S. dollar, which despite a legion of problems continues to be the world’s most important reserve currency, as a hedge against domestic economic turmoil.

These factors contributed to a significant drop in the price of gold, which officially bottomed out for the year at an intraday low of $683 an ounce in October 2008.

Gold prices have subsequently bounced off of the $700 level as major selling has dried up, and fresh buying has come into the market.

Despite three 20% corrections and serious deflation in the market, gold exited 2008 with a positive 5.4% gain for the year. Although subtle, this gain outperformed every major equity index and commodity in the world. Here are just a few examples…

This made gold one of the best investments of 2008.

And the 2009 gold outlook looks just as strong.

Gold’s 2009 Outlook

Despite a bit of downside in the immediate future, we expect gold to have a stellar year.

Global economic turmoil and deflation will undoubtedly continue to influence gold prices in the near-term. A short-term pullback in gold prices from current levels to $800—maybe even a bit lower—is not out of the question. However, we expect gold prices to break new records during 2009.

For our current perspective, we expect gold prices to reach as high as $1,300 during 2009, which would be a profit of over 50% from current levels.

Gold prices in 2009 will be supported more heavily by supply/demand fundamentals than in the previous years of this gold bull market.

As we’ve previously discussed, during the third quarter of 2008, world gold demand outstripped supply by 10.5 million ounces. This deficit was worth $8.5 billion and was the largest supply/demand deficit since the gold bull market of the 1970s.

Official 4Q 2008 world gold supply/demand figures will be calculated and reported later this month. Gold World will report them to you when the data is released.

In the meantime, though, all estimates suggest that there will be another very large deficit in world gold supplies from the fourth-quarter, with investment demand continuing to drive the market.

We expect that a continuing surge in investment demand could push gold prices as high as $1,300 at one point during 2009.

There will likely be a bit more volatility in the gold market in 2009 as more and more speculators come into the market. It is likely that the gold market will experience three or four price peaks (selling points) during 2009.

How to Invest in Gold for 2009

As we expect a near-term drop in gold prices as a result of continuing deflation, we are advising our readers to hold off on any physical gold buying for the immediate future. As previously mentioned, gold prices could dip back down to $800 before recovering again.

Nevertheless, we expect 2009 to be another great year for gold investors.

Good Investing,

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Gold World Special Report - Gold Backed Banking

Special Report - Here’s How To Get Your Own Copy - Simply Subscribe

January, 2009

It’s a wonder Americans aren’t rioting in the streets.

Not including the $700 billion blank check issued to the banks and signed by the US taxpayer, the sum of liabilities assumed by the US government from the finance industry in the past 6 months alone exceeds 50% of the GDP.

Despite this unprecedented government intervention, the solvency of other every commercial and investment bank is still at stake!

Recognize this all-but-forgotten quote?

How bout a drink from the cup of truth…

The Bush administration’s $700 billion bailout plan may keep some banks afloat for the time being. But fundamental problems are still deeply rooted within the financial markets that threaten to bring down the whole system.

Physical cash and gold are the safest places to hold your wealth right now. Anyone who tells you otherwise has either a motive or no clue.

Those with the means to do so should be holding at least some physical cash and gold.

Of course, people will debate why you should hold these assets…

Gold is the ultimate in hedging against financial turmoil. But as it stands today, it’s quite rare to find someone willing to trade a product or service for gold. In other words, it’s difficult to spend gold like money, which has been a criticism of owning physical gold for decades.

Today’s digital age allows consumers to move electronic fiat money around at speeds exponentially faster than ever before. This morning I paid my cable bill with my check card. The entire transaction was completed within 5 minutes. Had I paid by mailing a check, it could have taken up 1-2 days to reach the cable company and 3-5 days to clear my account.

So what if there was a way gold could be used as easily as electronic money?

The World’s Only “100% Backed-by-Gold Bank”

You might have a hard time believing this, but you can actually put yourself on a personal gold standard with a new kind of currency, and it’s rapidly growing among gold bugs.

Understand first, this new currency is not legal tender issued by any government. That means there’s no debt, inflation, geopolitical turmoil, or any other considerations normally associated with government-issued currency.

The currency comes in electronic form, but can be used like any other currency in the world today to pay for goods and services, and even settle debt. But there’s one major difference that sets this currency apart from every other in the world:

In fact, in most cases you can instantly exchange this currency for physical gold at any time… a feature taken away from the US dollar decades ago.

This currency has a new system fully established, making it as easy to use as the current banking industry’s electronic money. Right now, in fact, there are already over 3,000 outfits—and climbing—in which you can pay online using this currency.

How the “Gold Bank” Works

Customers transfer funds from traditional bank accounts into these unique gold-backed bank accounts, and earn interest on their funds prior to placing an order.

Meanwhile, for customers already holding gold and silver in secured (and insured) vaults, their metals are insured and held in specialized bullion vaults. Their metals assets go through an annual audit, and are fully reported to customers.

Once customers’ funds are in the database, customers’ orders are made through its secure online system. Database servers record all transactions and store currency and metal balances.

The Advantages of Using this Currency?

Being backed by gold, the purchasing power of this currency fluctuates in relation to the price of gold.

This means that as the price of gold increases, the purchasing power of the account increases. On the flip side, however, if the price of gold falls, so does the value of the account. Nonetheless, the risk of significant price fluctuation in gold is small compared to the risk of value fluctuations among fiat currencies, especially the US dollar.

And despite a short-term correction, the price of gold has increased significantly over the past five years. So this factor has worked out to the advantage of anyone holding this currency over that period. And with +$2,000 gold on the horizon, holders of this currency should do quite well in the future.

Now you should know that I’m in no way affiliated with this service, nor do I receive any compensation from it. That said…

I Recently Put the Final Touches on my New Research Report…

This report shares all the details about the new gold-backed electronic currency, and it’s yours free after you take a risk-free trial of the Mining Speculator service.

It’s your chance to get in on the biggest and best buying opportunity in junior gold and silver stocks… ever.

That’s right. The junior gold market is about to blast off, after a brutal beat-down sparked by the financial crisis. Truth is, it’s pushed many gold and silver stocks to new lows…

… Which is why you don’t want to wait a minute longer to position yourself in the Mining Speculator’s mining and precious metals portfolio. Our team of analysts scour the earth for opportunities in gold, as protection against the financial uncertainties engulfing the U.S. and world markets.

You see, as our government continues to lose control of its ability to manage and prop up markets, gold and silver will undoubtedly make meteoric moves that will stun the populace.

And just in case you still harbor doubts about gold, consider this… reported last week in the Financial Times

“… Investors in gold are demanding ‘unprecedented’ amounts of bullion bars and coins and moving them into their own vaults as fears about the health of the global financial system deepen.”

And since gold bullion is getting harder and harder to come by, more investors are looking for the next best alternative, and that’s…

Precious Metals Mining Stocks

Bottom line: Junior mining stocks will begin to make major moves to the upside, rewarding those who got in early and held on… and those who get in now at what are, frankly, bargain share prices.

You see, nothing can keep gold from doubling up and hitting $2,000 an ounce… causing shares in our mining exploration companies to skyrocket.

I’m talking about junior mining stocks with the potential to double, triple—even quadruple!

Of course, many people have trouble accepting gold as an investment—even now that they’ve witnessed a financial upheaval that’s shaken our country by the shoulders.

But I also know that those who have heard me out-and followed through with my research and recommendations-have made extraordinary, life-altering returns.

Which is why I maintain…

There’s never been a better time-a more crucial time-to protect your portfolio with gold and precious metals.

And for a brief time, we’re making it easy to do just that… for as little as $25.

To get immediate inside access to the junior mining companies poised for major run-ups - the ones I’ve visited firsthand and carefully selected after exhaustive research and quality controls - simply take a trial of my Mining Speculator advisory.

When you sign up for Mining Speculator, I will immediately send you the free report on the new gold-backed currency mentioned in this editorial.

So, for only $25 you’ll begin to receive my Mining Speculator junior stock advisory… one that held an average 212% gain over five years… plus you’ll get our new special report on “The World’s Only 100% Backed-by-Gold Bank.”

All you have to do is click here to get started.

Good investing,

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My Note: I do not receive any renumeration or commissions for recommending either the Gold backed banking or the Mining Speculator. As Always be sure to do your own due diligence and read the prospectus before making any investments or deposits into financial institutions.-jschulmansr

FOMC: 01-06-08 Minutes of Dec 15-16, 2008

A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Monday, December 15, 2008 at 2:00 p.m. and continued on Tuesday, December 16, 2008 at 9:00 a.m.

KEY ITEM

“The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.” Detailed vote is below.

———————

PRESENT:

The Manager of the System Open Market Account reported on recent developments in foreign exchange markets. There were no open market operations in foreign currencies for the System’s account in the period since the previous meeting. The Manager also reported on developments in domestic financial markets and on System open market operations in government securities and federal agency obligations during the period since the previous meeting. By unanimous vote, the Committee ratified these transactions.

Engines of Recovery Flame Out as Economy Seeks Obama-Fed Rescue

 

By Rich Miller

Jan. 5 (Bloomberg) — The engines that have lifted the U.S. economy out of every recession since World War II will be of little help this time around.

Inventory rebuilding, household spending, home construction and payroll growth — the forces that powered, to a greater or lesser extent, each recovery since 1945 — may remain missing for much of 2009. A glut of unsold properties may keep housing depressed, while shriveled savings will discourage consumers. Companies may be reluctant to restock and rehire while their profits are squeezed.

“There are no obvious drivers of growth from the private sector,” says Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York.

The result: A recovery, whenever it comes, may be anemic and heavily dependent on low-cost lending by Federal Reserve Chairman Ben S. Bernanke and stepped-up spending by new President Barack Obama. Short-term interest rates might have to remain around zero throughout the year, while the federal budget deficit stays at or near record highs into 2010.

“If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment,” Obama said in his weekly radio address on Jan. 3. The jobless rate stood at 6.7 percent in November.

UBS Securities LLC forecasts that gross domestic product will contract at a 3 percent annual pace this quarter after shrinking 4.5 percent in the final three months of 2008.

‘Policy Blitz’

James O’Sullivan, senior economist at UBS in Stamford, Connecticut, says the economy is likely to stop eroding in the second quarter, thanks to an unprecedented “policy blitz” by the Fed and the Obama administration. The second-half recovery, though, will be weak, he says: growth of 1.5 percent in the third quarter and 2 percent in the fourth, as tight credit continues to pressure consumers and companies.

That’s in contrast to past rebounds, where growth was boosted by a robust revival of private-sector demand.

Inventory swings played a key role in the 16-month recession of 1973-75 and the recovery that followed. Companies slashed stocks in 1974 and 1975 as demand dropped, and then rebuilt them rapidly the following year. That raised 1976 GDP by 1.4 percentage points, the biggest such contribution in 21 years.

Consumer spending and housing powered the economy out of recession in 1983, as pent-up demand sent purchases of cars and homes soaring. Payroll growth was also strong, with 1.1 million jobs created in September alone.

Help From Housing

In 1992, housing again was a big help. Along with capital spending, residential construction spurred the biggest contribution to growth from investment since 1984.

Homebuilding and consumer spending played a more modest role in the economy’s revival in 2002, but that’s because they never declined in the previous year’s recession, which was the mildest since World War II.

All those factors may be missing in action this time around.

With just-in-time inventory management, the downs — and ups — of the stockpiling cycle are more muted than before. Companies are quicker to pare stockpiles when demand wanes, limiting the buildup in unwanted products both at their own sites and those of their customers.

Clearing Out Inventories

For example, Corning, New York-based Corning Inc., the largest maker of glass for flat-panel televisions, said last month it will cut prices to clear out excess inventories.

The downside of this rapid response is that the economy won’t get as much of a pop from businesses restocking as demand recovers. “There is a lack of a big inventory cycle,” O’Sullivan says.

Companies may also be reluctant to ramp up production in the face of what many economists expect to be a slow increase in consumer demand.

Allen Sinai, chief global economist at Decision Economics in New York, says households are in hunker-down mode after suffering $10 trillion in losses in wealth from sagging home prices and shrinking investments. “They know they have to save more; they have no choice,” he says.

The Conference Board’s index of consumer confidence fell in December to the lowest level on record as anxiety about job losses overcame the beneficial effects of a 60 percent decline in gasoline prices since July.

Unemployment

U.S. companies cut 533,000 jobs in November, the most in 34 years. Economists surveyed by Bloomberg News forecast that figures out on Jan. 9 will show a further 500,000 reduction in payrolls in December and an unemployment rate of 7 percent.

Joblessness is likely to continue to rise throughout 2009 and perhaps into 2010. “We’ll probably have a good chance of seeing unemployment hit 9 or 10 percent,” says Kenneth Rogoff, a former chief economist for the International Monetary Fund who’s now a professor at Harvard University.

Consumers have also been shaken by the plunge in the value of homes, for many their biggest asset. Home prices in 20 major U.S. cities declined 18 percent in October from a year earlier, the biggest drop on record for the S&P/Case-Shiller index that goes back to 2001.

The collapse in property values is damping expectations for an early rebound in the housing market. “We’re in the midst of a downward spiral and the momentum is building,” Stuart Miller, chief executive officer of Miami-based Lennar Corp., which builds homes in 14 U.S. states, said on a Dec. 18 conference call.

A Glut of Properties

A glut of unsold properties is prolonging the industry’s pain. The number of previously owned homes on the market at the end of November would take 11.2 months to sell at the current pace. That’s the highest inventory level in at least 10 years.

“Housing starts and building permits are in free-fall,” Nouriel Roubini, chairman of Roubini Global Economics and a professor at New York University, said in a Bloomberg Television interview on Dec. 23. “There’s no bottom.”

Hopes that exports would buoy the economy have been dashed by the spread of the U.S. recession overseas. Japan’s economy, the world’s second-largest after the U.S., probably shrank at an annual 12.1 percent pace last quarter, the sharpest drop since 1974, according to Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo.

That’s left it up to U.S. policy makers to try to pick up the slack.

The Fed cut the main U.S. interest rate to a target range between zero and 0.25 percent on Dec. 16 and pledged to do whatever is necessary to end the longest recession in a quarter century. The incoming Obama administration, meanwhile, is working on a two-year stimulus package worth as much as $850 billion in increased government spending and lower taxes.

“The U.S. is in the midst of a long, deep and severe downturn,” Sinai says. “When we do recover, the engine will be government spending, not home building or the consumer.”

To contact the reporter on this story: Rich Miller in Washington rmiller28@bloomberg.net

However costly, however uneconomic, however outright irrational you might have imagined windpower to be — the reality is even worse

Två utmärkta artiklar om det mycket dyra, subventionerade och kompletta vansinnet med att “förlita” sig på vindkraften som en “säker” energikälla.

Eller vad sägs om följande exempel från de svenska vindkraftverken den senaste månaden:

Är det inte fantastiskt att det är detta MYCKET DYRA, OSÄKRA och MYCKET SUBVENTIONERADE energislag som skall “rädda” vår energiförsörjning.

Se även mina inlägg: Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt - 7Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt - 6Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt - 5Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt - 4Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt - 3Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt - 2Vindkraften som en mycket, mycket dyr bergochdalbana med liten effektThe Real Cost of Wind and Solar Power!Why on earth do we put up with this green extortion?All You Need To Know about Denmark and Wind PowerWho knew a “free” source of energy - Wind Power could be so expensive?Overblown: The Real Cost of Wind Power!Carbon Credits Fund Broken Turbine

Artikel här

http://www.wind-watch.org/news/2009/01/05/more-on-the-high-cost-and-limited-return-of-wind-power/

January 5, 2009 • Ontario, Opinions

More on the high cost and limited return of wind power

My column in the National Post about Ontario’s irrational windpower policy has elicited an electric surge of very interesting responses.

The general conclusion: However costly, however uneconomic, however outright irrational you might have imagined windpower to be - the reality is even worse. Some samples:

From Doug Gallagher in Toronto:

I worked for 10 years in the nuclear power industry in Ontario. I also understand how wind mills work, and how inefficient they really are.

Power levels for wind mills reported in the media are invariably peak power levels, and not average power levels. Typically, the average power out of a windmill is about 20% of peak power. The wind mill on the CNE grounds is rated at 750 kwh, so average power would be around 150 kwh, or about 108,000,000 kw per month assuming enough wind to power it 24 hours a day. The average house in Toronto uses about 1,000 kwh per month, or 12,000 kwh per year. That works out to enough power for about 108,000 households from the windmill at the CNE - theoretically. Many times while walking at the water’s edge in south Etobicoke I have seen the CNE windmill stalk-still. 0 watts output.

The larger issue with power generation in Ontario is that it is government owned with the ensuing inefficiencies. I saw this first-hand will working with the former Ontario Hydro. Undoubtedly power generation costs are subsidized and the price of hydro is held artificially low. This as you point out is for political reasons. Technical decisions made by non-technical people for political reasons guarantees a bad outcome.

In California, when they were facing rotating blackouts, and brownouts, Gov. Arnie solved the problem overnight by increasing the cost of hydro to 17 cents per kwh, as opposed to the 5.6 cents per kwh Ontario now charges. Demand plummeted, and supply became ample enough to allow time to build more capacity.

Supply and demand works every time.

Windmills are a legacy of the Middle Ages. Going that route means we will have power when the wind blows, and not when we need it. Clean coal and natural gas fired generators will provide power when we need it, cost effectively.

Raising the cost of hydro to the true cost of generation would also ensure we waste much less of it.

From a member of the Ontario provincial parliament:

At the present time OPG [Ontario Power Generation, the provincially owned power monopoly] is compelled to pay $0.42 per kilowatt hour for wind & solar energy which they then resell at $0.05 for a loss of $0.37. In addition there are significant capital grants available for wind farms through various government renewable energy programs.

From another reader:

During the 1950’s I worked for Ontario Hydro in Mechanical Maintenance of generating stations. Even then we found that we could not afford to keep small stations manned, because of the labour costs.  All wind turbines are tiny power contributors, even when running, and no one seems to have taken into account that they will need to be maintained. When you look at the huge costs involved in putting them up, and then think about replacing a bearing, the original capital cost is insignificant. I predict that in a few years many of these will be abandoned, as the maintenance costs are unaffordable.

David Frum’s Diary appears in National Review Online

 Och här:

http://network.nationalpost.com/np/blogs/fullcomment/archive/2009/01/02/david-frum-shut-up-and-pay-for-your-windmill.aspx

David Frum: Shut up and pay for your windmill

Posted: January 02, 2009, 3:00 PM by NP Editor

Must we destroy the environment in order to save it? In the province of Ontario, the answer seems to be “yes.”

This month, the Liberal provincial government of Dalton McGuinty will finish drafting its proposed Green Energy Act. The Act’s early drafts call for a big increase in renewable energy production in Ontario. Sounds nice! How do we get there?

The plan contains two big elements: (1) a huge cash giveaway  and (2) a brusque slap-down of local democracy.

Let’s talk about local democracy first. Communities often resist wind and solar power for the simple reason that they ruin the beauty of local landscapes. When you think of wind power, for example, don’t think of the solitary turbine that overtops the CNE grounds in Toronto. To meet the goals set out in the Green Energy Act, Ontario will have to build tens of thousands of these massive turbines, linked by a vast network of electrical transmission wires. Many hundreds of these turbines are proposed for my own beloved Prince Edward County. 

When people in places such as Prince Edward County hear about “the environment,” they think of their environment. They think responsible stewardship means protecting what is lovely and natural. To them, it seems perverse to ruin the landscape in the name of preserving the environment. So they resist.

To deal with this resistance, the Green Energy Act proposes to strip local governments of their zoning powers. (In the draft’s own words, the province will propose: “Streamlined regulatory and approvals processes that enable the rapid but prudent development of green energy projects across the province, reducing uncertainty and transaction costs to all involved.”)

It is important to realize that local scrutiny is often the only scrutiny a wind project gets. Unless a project uses federal money or land, there is no federal environmental assessment. Smaller projects are exempt from provincial assessment as well, and bigger projects can count on a very friendly hearing.

Not all localities will be ignored. There will be special consultation with First Nations/Métis communities (and a special piece of the action for them as well). But for everybody else, Ontario’s message is: Shut up and eat your peas.

It’s not only local landowners and vacationers who are expected to shut up. It’s taxpayers as well.

Here we come to item (1), the huge cash giveaway.

The big inconvenient truth about “green power” is that it is hugely costly - triple the cost of coal power, almost double the cost of nuclear. Advocates of green power insist that the price will soon decline. This promise never comes to pass, for reasons that should be obvious after a moment’s thought.

The big costs involved in a wind and solar projects are not the turbines and solar panels, although they are very expensive in their own right. The big costs are (i) acquisition of the vast amounts of land required to site the turbines and panels and (ii) the stringing of wires from thousands of small-scale power generators to the power distribution grid. These costs are more likely to rise than to fall.

Wind and solar suffer from inherent diseconomies of scale that can never be corrected. Unable to correct these costs, the province has decided instead to conceal them.

In the United States, wind power has been incentivized with lucrative tax credits: 2 US cents per kilowatt hour. (To put that subsidy in perspective, electricity from coal costs about 3 US cents per kilowatt hour.) America’s lavish wind subsidy has been in place since 1992, yet even so, wind cannot compete: In 2007, wind provided less than 5% of America’s electricity supply.

Ontario, however, has no need of tax credits. In Ontario, power generation is monopolized by a government owned corporation. Ontario can simply order its power generation company to buy wind power at a price profitable to the producer - and then average that cost invisibly into Hydro bills.

The new act will offer producers even more. Not only will the province buy their power at a guaranteed profit - not only will it index that profit for inflation - but it will guarantee producers the financing necessary to build the wind turbines in the first place!

Good deal? It gets better. The dreary part about borrowing money, even from the government, is that you do sooner or later have to repay it. Or do you? The explanatory language treats repayment as more a suggestion or guideline than an obligation: “The intent is that over time the market and community will meet all financial requirements for these projects.”

In the name of the environment, the McGuinty government proposes to despoil the province’s beauty and pillage the province’s power consumers.

That’s not green. That’s dumb.

© David Frum 2008

The Year Of The Yield

2008 has gone down in history as the world collapse of markets. Regardless of where you had your investments it was a loosing year for all. With the exception of Madoff. At least according to his books. I have always been a conservative investor. Ok so I am not that conservative however I have always made certain I had holdings that returned dividends in my portfolios. 2009 is the year of “The Yield.”

The January Effect

January is often used as a bellwether for things to come in the markets, and the market action on the first trading day was encouraging - yet one day does not make a market. Nonetheless, January will certainly continue to generate interest as the confluence of a new year, a new president, a new congress, a new stimulus bill, and an unfolding credit crisis continue to intertwine in what will continue to generate some interesting times, not to mention opportunities in the market. Remember buy low and sell high.

The Year of Yield. http://blogs.wsj.com/marketbeat/2009/01/02/the-year-of-yield/

So you think Real Estate values declined in your neighborhood. Check this article out.

In mid-December the Dubai office of Engel and Volkers tried to kick start sales in the stalled secondary Dubai property market with $48 million knocked off the selling price of 150 homes in New Dubai for one day.

Not a single unit sold, despite marketing to dozens of clients supposedly interested in real bargains and a mortgage company on hand to arrange finance. What has happened and what must change to bring the buyers back?

Answer: Slash their prices another 20 million?

An Economy In Trouble?

Headlines worth reading from the start of the week:

I have been through many recessions over the years. Economic Headlines are laggards meaning they are old news.The market will turn around before your eyes and you won’t even notice it until after it is in full swing. By that I mean now is the time to look for bargains.

The Cheap Mystique: Charter Communications (CHTR)

Cramer warned viewers against being seduced by the mystique of a single-digit stock thinking that the price is so low there is practically nothing to lose. Cramer lost $130,000 on $4 stock Charter Communications when he was forced to sell it at $2 to stave off even further losses. But are all single-digit stocks losers? Cramer introduced his “multiply-by-ten” test; if you like a stock at $4, and would still like it at $40, 10 times its current price, then it may be worth buying. “If I had done that with Charter, which was drowning under the weight of its debt, I would’ve never bought the thing in the first place,” he said, and reminded viewers most stocks with absurdly low prices are cheap for a reason.

Note: Years ago I owned CHTR. Back then it had options so I could sell Covered Calls on them. Thank the lord I got called out and never went back. Could it be  Cramer bought my calls?

This doesn’t imply that we should become rigid and inflexible in the application of our methods. To the contrary, it is essential to be life-long learners and to apply new knowledge to continually refine our approach. This is the mind set I try to maintain as it applies to my preferred investing strategy, namely covered calls investing.

In my very first blog post on this Covered Calls Advisor blog site in 2007, I stated that the essential reason why I believe in covered calls investing is that “covered calls offer an excellent avenue for obtaining market-beating results while at the same time offering the added benefit of doing so with less overall portfolio risk.” My intention is to demonstrate the truthfulness of this objective over the next several years.

First, let me affirm that I do believe in the generally accepted personal financial planning principle that we should maintain a money-market account with 3-6 months of living expenses as an emergency buffer. But once the emergency fund is fully funded, additional money available for wealth creation can be committed to our preferred investing method, covered calls investing.

1. Buy-and-Hold Stock Investing: There is some research which has simulated (back-tested) over a multi-year period the results that would have been obtained by investing in covered calls via a diversified index (such as the S&P 500) and by subsequently mechanically reinvesting each month in slightly out-of-the-money, near-month covered calls. The conclusions generally support the notion that the annualized return-on-investment results (when comparing buy-and-hold with the covered calls results) are virtually indistinguishable between the two investment approaches. However, the studies also show that covered calls have only about 70% of the risk of buy-and-hold investing. It is this advisor contention that covered call returns can out pace those of buy-and-hold investing through astute stock and strike-price selections as well as from the timely rolling of existing covered call positions when appropriate.

2. Covered Calls With Collars: This strategy is simply a covered call in combination with the purchase of a put option. This strategy is popular with very conservative investors who purchase the put option as insurance against a significant decline in the price of the underlying stock. I have looked at this strategy several times (especially during the 2008 bear market we’ve just experienced), but each time I come to the same conclusion — the cost of buying the put option is just not worth the price we have to pay for the additional insurance.

Note: I say ‘additional insurance’ since the call we sold to establish the covered calls position already provides some protection against a decline in the underlying stock price. The cost of buying a put option to achieve a second level of insurance is just too high a price to pay, especially if we are at all successful in our objective of selecting stocks that are neutral or bullish — then we achieve significantly better overall returns over time with covered calls.

Remember also that our objective as investors is to ‘buy’ assets that tend to appreciate in value over time (such as stocks) and to ’sell’ assets that depreciate over time (which is the case with both put and call options because of their decay in time value). So we want to ‘buy’ stocks (appreciating asset) and ’sell’ call options (depreciating asset) — which is our covered calls strategy; but also not ‘buy’ a put option (depreciating asset).

3. Selling Calls Against LEAPs: A few years ago, this was a strategy I used for several months before returning to covered calls. This is an alluring strategy, but it is both a more risky and, over time, less profitable than covered calls. The reason(s) for this are not readily apparent, but the primary reason this is true is the same line of reasoning above for collars, namely we want to buy appreciating assets and sell depreciating assets. The decline of time value embedded in all options (including LEAPs — even though they do decay more slowly) ultimately makes LEAPs a less desirable asset to buy than stocks (which of course have no time decay inherent in their purchase price).

4. Selling Cash-Secured Puts: This strategy is a synthetically equivalent strategy to covered calls so in theory one should be indifferent to using either approach. In that regard, there is some appeal to the notion that one should begin a position by selling a cash-secured put and then if the put is exercised you would then be obligated to purchase the stock at the agreed upon strike price. Then, since you now own the stock you would then simply keep the stock and sell a call option against it, thereby establishing a covered calls position.

Good Trading

Obama

talking about the news and all its twists and turns…

 

 

Construction Monthly Review: December 2008

Share price performance

Project implementation is the key going forward

New jobs in the pipeline

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Recent article as to lender liability litigation

Current Trends in Residential Mortgage Litigation

BYLINE: Daniel A. Edelman*; *DANIEL A. EDELMAN is the founding partner of Edelman & Combs, of Chicago, Illinois, a firm that represents injured consumers in actions against banks, mortgage companies, finance companies, insurance companies, and automobile dealers. Mr. Edelman or his firm represented the consumer in a number of the cases discussed in this article.

HIGHLIGHT:

Borrowers Have Successfully Sued Based on Allegations of Over-escrowing, Unauthorized Charges and Brokers’ Fees, Improper Private Mortgage Insurance Procedures, and Incorrectly Adjusted ARMS. The Author Analyzes Such Lending Practices, and the Litigation They Have Spawned.

BODY:

This article surveys current trends in litigation brought on behalf of residential mortgage borrowers against mortgage originators and servicers. The following types of litigation are discussed:(i) over-escrowing; (ii) junk charges; (iii) payment of compensation to mortgage brokers and originators by lenders; (iv) private mortgage insurance; (v) unauthorized servicing charges; and (vi) improper adjustments of interest on adjustable rate mortgages. We have omitted discussion of abuses relating to high-interest and home improvement loans, a subject that would justify an article in itself.1

OVER-ESCROWING In recent years, more than 100 class actions have been brought against mortgage companies complaining about excessive escrow deposit requirements.

Requirements that borrowers make periodic deposits to cover taxes and insurance first became widespread after the Depression. There were few complaints about them until the late 1960s, probably because until that time many lenders used the ”capitalization” method to handle the borrowers’ funds. Under this method, escrow disbursements were added to the principal balance of the loan and escrow deposits were credited in the same manner as principal payments. The effect of this ”capitalization” method is to pay interest on escrow deposits at the note rate, a result that is fair to the borrower. When borrowers could readily find lenders that used this method, there was little ground for complaint.

The ”capitalization” method was almost entirely replaced by the current system of escrow or impound accounts in the 1960s and 1970s. Under this system, lenders require borrowers to make monthly deposits on which no interest is paid. Lenders use the deposits as the equivalent of capital by placing them in non-interest-bearing accounts at related banks or at banks that give ”fund credits” to the lender in return for custody of the funds.2 Often, surpluses greatly in excess of the amounts actually required to make tax and insurance payments as they came due are required. In effect, borrowers are required to make compulsory, interest-free loans to their mortgage companies.

One technique used to increase escrow surpluses is ”individual item analysis.” This term describes a wide variety of practices, all of which create a separate hypothetical escrow account for each item payable with escrow funds. If there are multiple items payable from the escrow account, the amount held for item A is ignored when determining whether there are sufficient funds to pay item B, and surpluses are required for each item. Thus, large surpluses can be built up. Individual item analysis is not per se illegal, but can readily lead to excessive balances.3

During the 1970s, a number of lawsuits were filed alleging that banks had a duty to pay interest on escrow deposits or conspired to eliminate the ”capitalization” method.4 Most courts held that, in the absence of a statute to the contrary, there was no obligation to pay interest on escrow deposits.5 The only exception was Washington. Following these decisions, some 14 states enacted statutes requiring the payment of interest, usually at a very low rate.6

Recent attention has focused on excessive escrow deposits. In 1986, the U.S. District Court for the Northern District of Illinois first suggested, in Leff v. Olympic Fed. S & L Assn.,7 that the aggregate balance in the escrow account had to be examined in order to determine if the amount required to be deposited was excessive. The opinion was noted by a number of state attorneys general, who in April 1990 issued a report finding that many large mortgage servicers were requiring escrow deposits that were excessive by this standard.8 The present wave of over-escrowing cases followed.

Theories that have been upheld in actions challenging excessive escrow deposit requirements include breach of contract,9 state consumer fraud statutes,10 RICO,11 restitution,12 and violation of the Truth in Lending Act (”TILA”).13 Claims have also been alleged under section 10 of the Real Estate Settlement Procedures Act (”RESPA”),14 which provides that the maximum permissible surplus is ”one-sixth of the estimated total amount of such taxes, insurance premiums and other charges to be paid on dates . . . during the ensuing twelve-month period.” However, most courts have held that there is no private right of action under section 10 of RESPA.15 Most of the overescrowing lawsuits have been settled. Refunds in these cases have totalled hundreds of millions of dollars.

On May 9, 1995, in response to the litigation and complaints concerning over-escrowing, HUD issued a regulation implementing section 10 of RESPA.16 The HUD regulation: 1. Provides for a maximum two-month cushion, computed on an aggregate basis (i.e., the mortgage servicer can require the borrower to put enough money in the escrow account so that at its lowest point it contains an amount equal to two months’ worth of escrow deposits); 2. Does not displace contracts if they provide for smaller amounts; and 3. Provides for a phase-in period, so that mortgage servicers do not have to fully comply until October 27, 1997.

Meanwhile, beginning in 1990, the industry adopted new forms of notes and mortgages that allow mortgage servicers to require escrow surpluses equal to the maximum two-month surplus permitted by the new regulation. However, loans written on older forms of note and mortgage, providing for either no surplus 17 or a one-month surplus, will remain in effect for many years to come. ”JUNK CHARGES” AND RODASH In recent years, many mortgage originators attempted to increase their profit margins by breaking out overhead expenses and passing them on to the borrower at the closing. Some of these ”junk charges” were genuine but represented part of the expense of conducting a lending business, while others were completely fictional. By breaking out the charges separately and excluding them from the finance charge and annual percentage rate, lenders were able to quote competitive annual percentage rates while increasing their profits.

Most of these charges fit the standard definition of ”finance charge” under TILA.18 A number of pre-1994 judicial and administrative decisions held that various types of these charges, such as tax service fees,19 fees for reviewing loan documents,20 fees relating to the assignment of notes and mortgages,21 fees for the transportation of documents and funds in connection with loan closings,22 fees for closing loans,23 fees relating to the filing and recordation of documents that were not actually paid over to public officials,24 and the intangible tax imposed on the business of lending money by the states of Florida and Georgia,25 had to be disclosed as part of the ”finance charge” under TILA.

The mortgage industry nevertheless professed great surprise at the March 1994 decision of the U.S. Court of Appeals for the Eleventh Circuit in Rodash v. AIB Mtge. Co.,26 holding that a lender’s pass-on of a $ 204 Florida intangible tax and a $ 22 Federal Express fee had to be included in the finance charge, and that Martha Rodash was entitled to rescind her mortgage as a result of the lender’s failure to do so. The court found that ”the plain language of TILA evinces no explicit exclusion of an intangible tax from the finance charge,” and that the intangible tax did not fall under any of the exclusions in regulation Z dealing with security interest charges.27 Claiming that numerous loans were subject to rescission under Rodash, the industry prevailed upon Congress and the Federal Reserve Board to change the law retroactively through a revision to the FRB Staff Commentary on regulation Z28 and the Truth in Lending Act Amendments of 1995, signed into law on September 30, 1995.29 The amendments:

1. Exclude from the finance charge fees imposed by settlement agents, attorneys, escrow companies, title companies, and other third party closing agents, if the creditor neither expressly requires the imposition of the charges nor retains the charges;30 2. Exclude from the finance charge taxes on security instruments and loan documents if the payment of the tax is a condition to recording the instrument and the item is separately itemized and disclosed (i.e., intangible taxes);31 3. Exclude from the finance charge fees for preparation of loan-related documents;32 4. Exclude from the finance charge fees relating to pest and flood inspections conducted prior to closing;33 5. Eliminate liability for overstatement of the annual percentage rate. 6. Increase the tolerance or margin of error;34 7. Provide that mortgage servicers are not to be treated as assignees.35 The constitutionality of the retroactive provisions of the Amendments is presently under consideration.

The FRB Staff Commentary amendments dealt primarily with the question of third-party charges, and provided that they were not finance charges unless the creditor required or retained the charges.36

The 1995 Amendments substantially eliminated the utility of TILA in challenging ”junk charges” imposed by lenders. However, ”junk charges” are also subject to challenge under RESPA, where they are used as devices to funnel kickbacks or referral fees or excessive compensation to mortgage brokers or originators. This issue is discussed below.

”UPSELLING,” ”OVERAGES,” AND REFERRAL FEES TO MORTGAGE ORIGINATORS A growing number of lawsuits have been brought challenging the payment of ”upsells,” ”overages,” ”yield spread premiums,” and other fees by lenders to mortgage brokers and originators.

During the last decade it became fairly common for mortgage lenders to pay money to mortgage brokers retained by prospective borrowers. In some cases, the payments were expressly conditioned on altering the terms of the loan to the borrower’s detriment by increasing the interest rate or ”points.” For example, a lender might offer brokers a payment of 50 basis points (0.5 percent of the principal amount of the loan) for every 25 basis points above the minimum amount (”par”) at which the lender was willing to make the loan. Industry publications expressly acknowledged that these payments were intended to ”compensate[] mortgage brokers for charging fees higher than what the borrower would normally pay.”37 In other instances, brokers were compensated for convincing the prospective borrower to take an adjustable-rate mortgage instead of a fixed-rate mortgage, or for inducing the purchase of credit insurance by the borrower. 38

In the case of some loans, the payments by the lender to the broker were totally undisclosed. In other cases, particularly in connection with loans made after the amendments to regulation X discussed below, there is an obscure reference to the payment on the loan documents, usually in terms incomprehensible to a lay borrower. For example, the HUD-1 form may contain a cryptic reference to a ”yield spread premium” or ”par plus pricing,” often abbreviated like ”YSP broker (POC) $ 1,500.”39

The burden of the increased interest rates and points resulting from these practices is believed to fall disproportionately on minorities and women.40 These practices are subject to legal challenge on a number of grounds.

Breach of Fiduciary Duty Most courts have held that a mortgage broker is a fiduciary. One who undertakes to find and arrange financing or similar products for another becomes the latter’s agent for that purpose, and owes statutory, contractual, and fiduciary duties to act in the interest of the principal and make full disclosure of all material facts. ”A person who undertakes to manage some affair for another, on the authority and for the account of the latter, is an agent.”41

Courts have described a mortgage loan broker as an agent hired by the borrower to obtain a loan.42 As such, a mortgage broker owes a fiduciary duty of the ”highest good faith toward his principal,” the prospective borrower.43 Most fundamentally, a mortgage broker, like any other agent who undertakes to procure a service, has a duty to contact a variety of providers and attempt to obtain the best possible terms.44

Additionally, a mortgage broker ”is ‘charged with the duty of fullest disclosure of all material facts concerning the transaction that might affect the principal’s decision’.”45 The duty to disclose extends to the agent’s compensation. 46 Thus, a broker may not accept secret compensation from adverse parties.47

Furthermore, the duty to disclose is not satisfied by the insertion of cryptic ”disclosures” on documents. The obligation is to ”make a full, fair and understandable explanation” of why the fiduciary is not acting in the interests of the beneficiary and of the reasons that the beneficiary might not want to agree to the fiduciary’s actions.48

The industry has itself recognized these principles. The National Association of Mortgage Brokers has adopted a Code of Ethics which requires, among other things, that the broker’s duty to the client be paramount. Paragraph 3 of the Code of Ethics states:

In accepting employment as an agent, the mortgage broker pledges himself to protect and promote the interest of the client. The obligation of absolute fidelity to the client’s interest is primary.

Thus, a lender who pays a mortgage broker secret compensation may face

liability for inducing the broker to breach his fiduciary or contractual duties, fraud, or commercial bribery.

Mail/Fraud/ Wire Fraud/ RICO The payment of compensation by a lender to a mortgage broker without full disclosure is also likely to result in liability under the federal mail and wire fraud statutes and RICO. It is well established that a scheme to corrupt a fiduciary or agent violates the mail or wire fraud statute if the mails or interstate wires are used in furtherance of the scheme.49

Real Estate Settlement Procedures Act Irrespective of whether the broker or other originator of a mortgage is a fiduciary, lender payments to such a person may result in liability under section 8 of RESPA,50 which prohibits payments or fee splitting for business referrals, if the payments are either not fully disclosed or exceed reasonable compensation for the services actually performed by the originator.

Prior to 1992, the significance of section 8 of RESPA was minimized by restrictive interpretations. The Sixth Circuit Court of Appeals held that the origination of a mortgage was not a ‘’settlement service” subject to section 8.51 In addition, cases construing the pre-1992 version of implementing HUD regulation X required a splitting of fees paid to a single person.52 Finally, the payment of compensation in secondary market transactions was excluded from RESPA, and there was no distinction made between genuine secondary market transactions and ”table funded” transactions, where a mortgage company originates a loan in its own name, but using funds supplied by a lender, and promptly thereafter assigns the loan to the lender.53

In 1992, RESPA and regulation X were amended to close each of these loopholes. The amendments did not have practical effect until August 9, 1994, the effective date of the new regulation X.54

First, RESPA was amended to provide expressly that the origination of a loan was a ‘’settlement service.” P.L. 102-550 altered the definition of ‘’settlement service” in Section 2602(3) to include ”the origination of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans).” This change and a corresponding change in regulation X were expressly intended to disapprove the Sixth Circuit’s decision in United States v. Graham

Mtge. Corp.55

Second, regulation X was amended to exclude table funded transactions from the definition of ‘’secondary market transactions.” Regulation X addresses ”table funding” in sections 3500.2 and 3500.7. Section 3500.2 provides that ”table funding means a settlement at which a loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds. A table-funded transaction is not a secondary market transaction (see Section 3500.5(b)(7)).” Section 3500.5(b)(7) exempts from regulation by RESPA fees and charges paid in connection with legitimate ‘’secondary market transactions,” but excludes table funded transactions from the scope of legitimate secondary market transactions. Under the current regulation X, RESPA clearly applies to table funded transactions.56 Amounts paid by the first assignee of a loan to a ”table funding” broker for ”rights” to the loan — i.e., for the transfer of the loan by the broker to the lender — are now subject to examination under RESPA.57

Third, any sort of payment to a broker or originator that does not represent reasonable compensation for services actually provided is prohibited. 58

Whatever the payment to the originator or broker is called, it must be reasonable. Another mortgage industry publication states: [A]ny amounts paid under these headings [servicing release premiums or yield spread premiums] must be lumped together with any other origination fees paid to the broker and be subjected to the referral fee/ market value test in Section 8 of RESPA and Section 3500.14 of Regulation X. If the total of this compensation exceeds the market value of the services performed by the broker (excluding the value of the referral), then the compensation does not pass the test, and both the broker and the lender could be subject to the civil and criminal penalties contained in RESPA.59

Normal compensation for a mortgage broker is about one percent of the principal amount of the loan. Where the broker ”table funds” the loan and originates it in its name, an extra .5 percent or one percent may be appropriate.60 This level of reasonableness is recognized by agency regulations. For example, on February 28, 1996, in response to allegations of gouging by brokers on refinancing VA loans, the VA promulgated new regulations prohibiting mortgage lenders from charging more than two points in refinanced transactions.61

The amended regulation makes clear that a payment to a broker for influencing the borrower in any manner is illegal. ”Referral” is defined in Section 3500.14(f)(1) to include ”any oral or written action directed to a person which has the effect of affirmatively influencing the selection by any person of a provider of a settlement service or business incident to or part of a settlement service when such person will pay for such settlement service or business incident thereto or pay a charge attributable in whole or in part to such settlement service or business. . . .” The amended regulation also cannot be evaded by having the borrower pay the originator. An August 14, 1992 letter from Frank Keating, HUD’s General Counsel, states unequivocally: ”We read ‘imposed upon borrowers’ to include all charges which the borrower is directly or indirectly funding as a condition of obtaining the mortgage loan. We find no distinction between whether the payment is paid directly or indirectly by the borrower, at closing or outside the closing. . . . I hereby restate my opinion that RESPA requires the disclosures of mortgage broker fees, however denominated, whether paid for directly or indirectly by the borrower or by the lender.”

Thus, ”yield spread premiums,” ‘’service release fees,” and similar payments for the referral of business are no longer permitted. The new regulation was specifically intended to outlaw the payment of compensation for the referral of business by mortgage brokers, either directly or through the imposition of ”junk charges.” Thus, it provides that payments may not be made ”for the referral of settlement service business” (Section 3500.14(b)).

The mortgage industry has recognized that types of fees that were once viewed as permissible in the past are now ”prohibited and illegal.” The legal counsel for the National Second Mortgage Association acknowledged: ”Even where the amount of the fee is reasonable, the more persuasive conclusion is that RESPA does not permit service release fees.” ”Also, if . . . the lender is ‘table funding’ the loan, he is violating RESPA’s Section 8 anti-kickback provisions.”62

In the first case decided under the new regulation, Briggs v. Countrywide Funding Corp.,63 the U. S. District Court for the Middle District of Alabama denied a motion to dismiss a complaint alleging the payment of a ”yield spread premium” by a lender to a broker in connection with a table funded transaction. Plaintiffs alleged that the payment violated RESPA as well as several state law doctrines. The court acknowledged that RESPA applied to the table funded transactions and noted that whether or not disclosed, the fees could be considered illegal.

Truth in Lending Act Implications Many of the pending cases challenging the payment of ”yield spread premiums” and ”upselling” allege that the payment of compensation to an agent of the lender is a TILA ”finance charge.” The basis of the TILA claims is that the commission a borrower pays to his ”broker” is a finance charge because the ”broker” is really functioning as the agent of the lender. The claim is not that the ”upsell” payment made by the lender to the borrower’s broker is a finance charge.

Decisions under usury statutes uniformly hold that a fee charged to the borrower by the lender’s agent is interest or points.64 The concept of the ”finance charge” under TILA is broader than, but inclusive of, the concept of ”interest” and ”points” at common law and under usury statutes. Regulation Z specifically provides that the ”finance charge” includes any ”interest” and ”points” charged in connection with a transaction.65 Therefore, if the intermediary is in fact acting on behalf of the lender, as is the case where the intermediary accepts secret compensation from the lender or acts in the lender’s interest to increase the amount paid by the borrower, all compensation received by the intermediary, including broker’s fees charged to the borrower, are finance charges.

Unfair and Deceptive Acts and Practices The pending ”upselling” cases also generally allege that the payment of compensation to the mortgage broker violates the general prohibitions of most state ”unfair and deceptive acts and practices” (”UDAP”) statutes. The violations of public policy codified by the federal consumer protection laws create corresponding state consumer protection law claims.66

Civil Rights and Fair Housing Laws The Department of Justice brought two cases in late 1995 alleging that the disproportionate impact of ”overages” and ”upselling” on minorities violated the Fair Housing Act67 and Equal Credit Opportunity Act.68 Both cases alleged disparate pricing of loans according to the borrower’s race and were promptly settled.69 Other investigations are reported to be pending.70 The principal focus of enforcement agencies appears to be on the civil rights implications of overages.71

It is likely that such a practice would also violate 42 U.S.C. Section 1981.While Section 1981 requires intentional discrimination, a lender that decides to take advantage of the fact that other lenders discriminate by making loans to minorities at higher rates is also engaging in intentional discrimination. In Clark v. Universal Builders,72 the Seventh Circuit held that one who exploits and preys on the discriminatory hardship of minorities does not occupy a more protected status than the one who created the hardship in the first instance; that is, a defendant cannot escape liability under the Civil Rights Act by asserting it merely ”exploited a situation crated by socioeconomic forces tainted by racial discrimination.”73

PRIVATE MORTGAGE INSURANCE LITIGATION Another group of pending lawsuits is based on claims of misrepresentation of or failure to disclose the circumstances under which private mortgage insurance (”PMI”) may be terminated. PMI insures the lender against the borrower’s default — the borrower derives no benefit from PMI. It is generally required under a conventional mortgage if the loan to value ratio exceeds about 80 percent.74 Approximately 17.4 percent of all mortgages have PMI.75

Standard form conventional mortgages provide that if PMI is required it maybe terminated as provided by agreement. Most servicers and investors have policies for terminating PMI. However, the borrower is often not told what the policy is, either at the inception of the mortgage or at any later time. As a result, people pay PMI premiums unnecessarily. Since there is about $ 460 billion in PMI in force,76 this is a substantial problem. The failure accurately and clearly to disclose the circumstances under which PMI may be terminated has been challenged under RICO and state consumer fraud statutes.

UNAUTHORIZED SERVICING CHARGES Another fertile ground of litigation concerns the imposition of charges that are not authorized by law or the instruments being serviced. The collection of modest charges is a key component of servicing income.77 For example, many mortgage servicers impose charges in connection with the payoff or satisfaction of mortgages when the instruments either do not authorize the charge or affirmatively prohibit it.

The imposition of payoff and recording charges has been challenged as a breach of contract, as a deceptive trade practice, as a violation of RICO, and as a violation of the Fair Debt Collection Practices Act (”FDCPA”).78 In Sandlin v. State Street Bank,79 the U. S. District Court for the Middle District of Florida held that the imposition of a payoff statement fee is a violation of the standard form ”uniform instrument” issued by the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, and when imposed by someone who qualifies as a ”debt collector” under the FDCPA,80 violates that statute as well.81 However, attempts to challenge such charges under RESPA have been unsuccessful, with courts holding that a charge imposed subsequent to the closing is not covered by RESPA.82

ADJUSTABLE RATE MORTGAGES Adjustable rate mortgages (”ARMs”) were first proposed by the Federal Home Loan Bank Board in the 1970s. They first became widespread in the early 1980s. At the present time, about 25 to 30 percent of all residential mortgages are adjustable rate mortgages (”ARMs”).83

The ARM adjustment practices of the mortgage banking industry have been severely criticized because of widespread errors.84 Published reports beginning in 1990 indicate that 25 to 50 percent of all ARMs may have been adjusted incorrectly at least once.85 The pattern of misadjustments is not random: approximately two-thirds of the inaccuracies favor the mortgage company.86

Grounds for legal challenges to improper ARM adjustments include breach of contract, TILA,87 the Uniform Consumer Credit Code,88 RICO,89 state unfair and deceptive practices statutes,90 failure to properly respond to a ”qualified written request” under section 6(e) of RESPA,and usury.91

Substantial settlements of ARM claims have been made by Citicorp Mortgage,92 First Nationwide Bank,93 and Banc One.94 On the other hand, several cases have rejected borrower claims that particular ARM adjustment actions violated the terms of the instruments. For example, a Connecticut case held that a mortgage that provided for an interest rate tied to the bank’s current ”market rate” was not violated when the bank failed to take into account the rate that could be obtained through the payment of a ”buydown.”95 A Pennsylvania case held that the substitution of one index for another that had been discontinued was consistent with the terms of the note and mortgage.96

A major issue in ARM litigation is whether what the industry erroneously terms ”undercharges” — the failure of the servicer to charge the maximum amount permitted under the terms of the instrument — can be ”netted” or offset against overcharges — the collection of interest in excess of that permitted under the terms of the instrument. Fannie Mae has taken the position that ”netting” is appropriate.97

The validity of this conclusion is questionable. First, nothing requires a financial institution to adjust interest rates upward to the maximum permitted, and there are in fact often sound business reasons for not doing so. On the other hand, the borrower has an absolute right not to pay more than the instrument authorizes. Thus, what the industry terms an ”undercharge” is simply not the same thing as an ”overcharge.”

Second, the upward adjustment of interest rates must be done in compliance with TILA. An Ohio court held that failure to comply made the adjustment unenforceable.98 ”Where a bank violates the Truth-in-Lending Act by insufficient disclosure of a variable interest rate, the court may grant actual damages. . . . If the actual damage is the excess interest charge over the original contract term, the court may order the mortgage to be recalculated at its original terms, and refuse to enforce the variable interest rate provisions.”99

Third, if the borrower is behind in his payments, ”netting” may violate state law requiring the lender to proceed against the collateral before undertaking other collection efforts. A decision of the California intermediate appellate court concluded that the state’s ”one-action rule” had been violated when a lender obtained an offset of interest overcharges against amounts owed by the borrower under an ARM.100

1. E.g., G. Marsh, Lender Liability for Consumer Fraud Practices of Retail

Dealers and Home Improvement Contractors, 45 Ala. L. Rev. 1 (1993); D. Edelman, Second Mortgage Frauds, Nat’l Consumer Rights Litigation Conference 67 (Oct. 19-20, 1992).

2. The lender would deposit the escrow funds in a non-interest-bearing account at a bank which made loans to the lender. The lender would receive a ”funds credit” against the interest payable on its borrowings based on the value of the escrow funds deposited at the bank.

3. Aitken v. Fleet Mtge. Corp., 1991 U.S.Dist. LEXIS 10420 (ND Ill., July 30,1991), and 1992 U.S.Dist. LEXIS 1687 (ND Ill., Feb. 12, 1992); Attorney General v. Michigan Nat’l Bank, 414 Mich. 948, 325 N.W.2d 777 (1982); Burkhardt v. City Nat’l Bank, 57 Mich.App. 649, 226 N.W.2d 678 (1975).

4. See generally, Class Actions Under Anti-Trust Laws on Account of Escrow and Similar Practices, 11 Real Prop., Probate & Trust Journal 352 (Summer 1976).

5. Buchanan v. Century Fed. S. & L. Ass’n, 306 Pa. Super. 253, 452 A.2d 540(1982), later opinion, 374 Pa. Super. 1, 542 A.2d 117 (1986); Carpenter v. Suffolk Franklin Savs. Bank, 370 Mass. 314, 346 N.E.2d 892 (1976); Brooks v. Valley Nat’l Bank, 113 Ariz. 169, 548 P.2d 1166 (1976); Petherbridge v. Prudential S. & L. Ass’n, 79 Cal.App.3d 509, 145 Cal.Rptr. 87 (1978); Marsh v. Home Fed. S. & L. Ass’n, 66 Cal.App.3d 674, 136 Cal.Rptr. 180 (1977); LaThrop v. Bell Fed. S. & L. Ass’n, 68 Ill.2d 375, 370 N.E.2d 188 (1977); Sears v. First Fed. S. & L. Ass’n, 1 Ill.App.3d 621, 275 N.E.2d 300 (1st Dist. 1973); Durkee v. Franklin Savings Ass’n, 17 Ill.App.3d 978, 309 N.E.2d 118 (2d Dist. 1974); Zelickman v. Bell Fed. S. & L. Ass’n, 13 Ill.App.3d 578, 301 N.E.2d 47 (1st Dist. 1973); Yudkin v. Avery Fed. S. & L. Ass’n, 507 S.W.2d 689 (Ky. 1974); First Fed. S. & L. Ass’n of Lincoln v. Board of Equalization of Lancaster County, 182 Neb. 25, 152 N.W.2d 8 (1967); Kronisch v. Howard Savings Institution, 161 N.J.Super. 592, 392 A.2d 178 (1978); Surrey Strathmore Corp. v. Dollar Savings Bank of New York, 36 N.Y.2d 173, 366 N.Y.S.2d 107, 325 N.E.2d 527 (1975); Tierney v. Whitestone S. & L. Ass’n, 83 Misc.2d 855, 373 N.Y.S.2d 724 (1975); Cale v. American Nat’l Bank, 37 Ohio Misc. 56, 66 Ohio Ops.2d 122 (1973); Richman v. Security S. & L. Ass’n, 57 Wis.2d 358, 204 N.W.2d 511 (1973); In re Mortgage Escrow Deposit Litigation, 1995 U.S.Dist. LEXIS 1555 (ND Ill. Feb. 8, 1995).

6. National Mortgage News, Nov. 11, 1991, p. 2.

7. Leff v. Olympic Fed. S & L Ass’n, 1986 WL 10636 (ND Ill 1986).

8. Overcharging on Mortgages: Violations of Escrow Account Limits by the Mortgage Lending Industry: Report by the Attorneys General of California, Florida, Iowa, Massachusetts, Minnesota, New York & Texas (24 Apr 1990).

9. Leff v. Olympic Fed. S. & L. Ass’n, n. 7 supra; Aitken v. Fleet Mtge.Corp., 1992 U.S.Dist. LEXIS 1687 (ND Ill., Feb. 12, 1992); Weinberger v. Bell Federal, 262 Ill.App.3d 1047, 635 N.E.2d 647 (1st Dist. 1994); Poindexter v. National Mtge. Corp., 1995 U.S.Dist. LEXIS 5396 (ND Ill., April, 24, 1995); Markowitz v. Ryland Mtge. Co., 1995 U.S.Dist. LEXIS 11323 (ND Ill. Aug. 8, 1995); Sanders v. Lincoln Service Corp., 1993 U.S.Dist. LEXIS 4454 (ND Ill. Apr. 9, 1993); Cairns v. Ohio Sav. Bank, 1996 Ohio App. LEXIS 637 (Feb. 22, 1996). See generally, GMAC Mtge. Corp. v. Stapleton, 236 Ill.App.3d 486, 603 N.E.2d 767 (1st Dist. 1992), leave to appeal denied, 248 Ill.2d 641, 610 N.E.2d 1262 (1993).

10. Leff v. Olympic Fed. S. & L. Ass’n, n. 7 supra; Aitken v. Fleet Mtge. Corp., n.9 supra; Poindexter v. National Mtge. Corp., n.9 supra; Sanders v. Lincoln Service Corp., n. 9 supra.

11. Leff v. Olympic Fed. S. & L. Ass’n, Aitken v. Fleet Mtge. Corp., n.9 supra; Robinson v. Empire of America Realty Credit Corp., 1991 U.S.Dist. LEXIS 2084 (ND Ill., Feb. 20, 1991); Poindexter v. National Mtge. Corp., n. 9 supra. 12. Poindexter v. National Mtge. Corp., n. 9 supra.

13. Martinez v. Weyerhaeuser Mtge. Co., 1995 U.S.Dist. LEXIS 11367 (ND Ill. Aug. 8, 1995). The theory is that the excessive portion of the escrow deposit is a finance charge.

14. 12 U.S.C. Section 2609.

15. State of Louisiana v. Litton Mtge. Co., 50 F.3d 1298 (5th Cir. 1995); Allison v. Liberty Savings, 695 F.2d 1086, 1091 (7th Cir. 1982); Herrman v. Meridian Mtge. Corp., 901 F.Supp. 915 (ED Pa. 1995); Campbell v. Machias Savings Bank, 865 F.Supp. 26, 31 (D.Me. 1994); Michels v. Resolution Trust Corp., 1994 U.S.Dist. LEXIS 6563 (D.Minn. Apr. 13, 1994); Bergkamp v. New York Guardian Mortgagee Corp., 667 F.Supp. 719, 723 (D.Mont. 1987). Contra, Vega v. First Fed. S. & L. Ass’n, 622 F.2d 918, 925 (6th Cir. 1980).

16. 24 C.F.R. 3400.17, issued at 60 FR 24734.17. The pre-1990 ”uniform instrument” issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation did not provide for any surplus. The pre-1990 FHA form and the VA form provided for a one-month surplus.

18. The finance charge includes ”any charge, payable directly or indirectly by the consumer, imposed directly or indirectly by the creditor, as an incident to or a condition of the extension of credit.” regulation Z, 12 C.F.R. 226.4(a). The definition is all-inclusive: any charge that meets this definition is a finance charge unless it is specifically excluded by TILA or regulation Z. R. Rohner, The Law of Truth in Lending, section 3.02 (1984). There are exclusions from the finance charge which apply only in mortgage transactions. 12 C.F.R. 226.4(c)(7). However, the exclusions require that the charges be bona fide and reasonable in amount, id., and the exclusions are narrowly construed to protect consumers from underdisclosure of the cost of credit. Equity Plus Consumer Fin. & Mtge. Co. v. Howes, 861 P.2d 214, 217 (NM 1993). See also In re Celona, 90 B.R. 104 (Bankr.ED Pa. 1988), aff’d 98 B.R. 705 (Bankr. ED Pa. 1989). ”[O]nly those charges specifically exempted from inclusion in the ‘finance charge’ by statute or regulation may be excluded from it.” Buford v. American Fin. Co., 333 F.Supp. 1243, 1247 (ND Ga. 1971). 19. In re Souders, 1992 U.S.Comp.Gen. LEXIS 1075 (Sept. 29, 1992); In re Barry, 1981 U.S.Comp.Gen. LEXIS 1262 (April 16, 1981); In re Bayer, 1977 U.S.Comp.Gen. LEXIS 2116 (Sept. 19, 1977); In re Wahl, 1974 U.S.Comp.Gen. LEXIS 1610 (Oct. 1, 1974); In re Ray, 1973 U.S.Comp.Gen. LEXIS 1960 (March 13, 1973). A tax service fee represents the purported cost of having someone check the real estate records annually to make sure that the taxes on the property securing the loan are shown as having been paid.

20. In re Celona, 90 B.R. 104, 110-12 (Bankr. E.D.Pa. 1988), aff’d, 98 B.R. 705 (ED Pa. 1989) (lender violated TILA by passing on $ 200 fee charged by attorney to review certain documents without including fee in ”finance charge”); Abel v. Knickerbocker Realty Co., 846 F.Supp. 445 (D.Md. 1994) (lender violated TILA because ”origination fee” of $ 290 excluded from ”finance charge”); Brodo v. Bankers Trust Co., 847 F.Supp. 353 (ED Pa. 1994) (lender violated TILA by imposing charge for preparing TILA disclosure documents without including them in the ”finance charge”).

21. Cheshire Mtge. Service, Inc. v. Montes, 223 Conn. 80, 612 A.2d 1130 (1992) (lender violated TILA by imposing fee for assigning the mortgage when it was sold on the secondary market without including it in the ”finance charge”); In re Brown, 106 B.R. 852 (Bankr. E.D.Pa. 1989) (same); Mayo v. Key Fin. Serv., Inc., 92-6441-D (Mass.Super.Ct., June 22, 1994) (same).

22. In re Anibal L. Toboas, 1985 U.S.Comp.Gen. LEXIS 854 (July 19, 1985) (”The relevant part of Regulation Z expressly categorizes service charges and loan fees as part of the finance charge when they are imposed directly or indirectly on the consumer incident to or as a condition of the extension of credit. The finance charge, therefore, is not limited to interest expenses but includes charges which are imposed to defray a lender’s administrative costs. [citation] A messenger service charge paid to the mortgage lender may not be reimbursed because it is part of the lender’s overhead, a charge for which is considered part of the finance charge under Regulation Z.”); In re Schwartz, 1989 U.S. Comp. Gen. LEXIS 55 (Jan. 19, 1989) (”a messenger service charge or fee is part of the lender’s overhead, a charge which is deemed to be a finance charge and not reimbursable”).

23. Decision of the Comptroller General No. B-181037, 1974 U.S.Comp.Gen. LEXIS 1847 (July 16, 1974) (loan closing fee was part of the finance charge under TILA); Decision of the Comptroller General, No. B-189295 1977, U.S. Comp.Gen. LEXIS 2230 (Aug. 16, 1977) (same); In the Matter of Real Estate Expenses — Finance Charges, No. B-179659, 54 Comp. Gen. 827, 1975 U.S.Comp.Gen. LEXIS 180 (April 4, 1975) (same).

24. Abbey v. Columbus Dodge, 607 F.2d 85 (5th Cir. 1979) (purported $ 37.50 ”filing fee” that creditor pocketed was a finance charge); Therrien v. Resource Finan. Group. Inc., 704 F.Supp. 322, 327 (DNH 1989) (double-charging for recording and discharge fee and title insurance premium constituted undisclosed finance charges).

25. Decision of the Comptroller General, B-174030, 1971 U.S. Comp. Gen. LEXIS 1963 (Nov. 11, 1971).

26. 16 F.3d 1142 (11th Cir. 1994).

27. Id. at 1149.

28. 60 FR 16771, April 3, 1995.

29. See Jean M. Shioji, Truth in Lending Act Reform Amendments of 1995, Rev. of Bank. and Finan. Serv., Dec. 13, 1995, Vol. 11, No. 21; at 235. 30. P.L. 104-29, sections 2(a), (c), (d), and (e), to be codified at 15 U.S.C. 1605(a), (c), (d) and (e).

31. P.L. 104-29, section 2(b), to be codified at 15 U.S.C. 1605(a)(6). 32. The amendment broadened the language in 15 U.S.C. 1605(e)(2), which previously excluded ”fees for preparation of a deed, settlement statement, or other documents.”

33. P.L. 104-29, sections 2(a), (c), (d), and (e), to be codified at 15 U.S.C. 1605(a), (c), (d) and (e).

34. P.L. 104-29, section 3(a), to be codified at 15 U.S.C. 1605(f)(2); P.L. 104-29, section 4(a), to be codified at 15 U.S.C. 1649(a)(3); P.L. 104-29, section 8, to be codified at 15 U.S.C. 1635(i)(2); 15 U.S.C. 1606(c). 35. P.L. 104-29, section 7(b), to be codified at 15 U.S.C. 1641(f). The apparent purpose of this provision was to alter the result in Myers v. Citicorp Mortgage, 1995 U.S.Dist. LEXIS 3356 (MD Ala., March 14, 1995). 36. The amendments were applied to existing transactions in Hickey v. Great W. Mtge. Corp., 158 F.R.D. 603 (ND Ill. 1994), later opinion, 1995 U.S. Dist. LEXIS 405 (ND Ill., Jan. 3, 1995), later opinion, 1995 U.S. Dist. LEXIS 3357 (ND Ill., Mar. 15, 1995), later opinion, 1995 U.S. Dist. LEXIS 4495 (ND Ill., Apr. 4, 1995), later opinion, 1995 U.S. Dist. LEXIS 6989 (ND Ill., May 1, 1995); and Cowen v. Bank United, 1995 U.S.Dist. LEXIS 4495, 1995 WL 38978 (ND Ill., Jan. 25, 1995), aff’d, 70 F.3d 937 (7th Cir. 1995).

37. Jonathan S. Hornblass, Fleet Unit Discontinues Overages on Loans to the Credit-Impaired, American Banker, June 9, 1995, p. 8. See also, Kenneth R. Harney, Loan Firm to Refund $ 2 Million in ‘Overage’ Fees, Los Angeles Times, Nov. 6, 1994, part K, p. 4, col. 1 (”Yield spread premiums” or ”overages” are paid ”to brokers when borrowers lock in or sign contracts at rates or terms that exceed what the lender would otherwise be willing to deliver”); Ruth Hepner, Risk-based loan rates may rate a look, Washington Times, Nov. 4, 1994, p. F1 (such fees are paid to mortgage brokers ”to bring in borrowers at higher-than-market rates and fees”); Jonathan S. Hornblass, Focus on Overages Putting Home Lenders in Legal Hot Seat, American Banker, May 24, 1995, p. 10 (giving examples of how the fees affect the borrower).

38. The extra fees — known in the trade as overages or yield-spread premiums — typically are paid to local mortgage brokers by large lenders who purchase their home loans. The concept is straightforward: If a mortgage company can deliver a loan at higher than the going rate, or with higher fees, the loan is worth more to the large lender who buys it. For every rate notch above ”par” — the lender’s standard rate — the lender will pay a local originator a bonus. Kenneth R. Harney, Suit Targets Extra Fees Paid When Mortgage Rate Inflated, Sacramento Bee, Aug. 13, 1995, p. J1.

39. Prior to 1993, according to industry experts, back-end compensation of this type rarely was disclosed to consumers. More recently, however, some brokers and lenders have sharply limited the size of the fees and disclosed them. They often appear as one or more line items on the standard HUD-1 settlement sheets used for closings nationwide. Id.

40. Jonathan S. Hornblass, Focus on Overages Putting Home Lenders In Legal Hot Seat, American Banker, May 24, 1995, p. 10; K. Harney, U. S. Probes Higher Fees for Women, Minorities, Los Angeles Times, Sept. 24, 1995, p. K4. 41. In re Estate of Morys, 17 Ill.App.3d 6, 9, 307 N.E.2d 669 (1st Dist. 1973).

42. Wyatt v Union Mtge. Co., 24 Cal.3d 773, 782, 157 Cal.Rptr. 392, 397, 598 P.2d 45 (1979); accord: Pierce v. Hom, 178 Cal. Rptr. 553, 558 (Ct. App. 1981) (mortgage broker has duty to use his expertise in real estate financing for the benefit of the borrower); Allabastro v. Cummins, 90 Ill.App.3d 394, 413 N.E.2d 86, 82 (1st Dist. 1980); Armstrong v. Republic Rlty. Mgt. Corp., 631 F.2d 1344 (8th Cir. 1980); In re Dukes, 24 B.R. 404, 411-12 (Bankr. ED Mich. 1982) (”the fiduciary, Salem Mortgage Company, failed to provide the borrower-p

Ouch! 2008 Markets Lookback

With 2008 in the history books, we’ll use this week’s commentary to review some of the key stories over the past year. As you well know, it was not one of the market’s finest performances.

Courtesy The Wealth Advisory Group

Zheung Bao Shun, A.K.A.

 

 

Why Congress Must Stop the Fed

On Tuesday, December 16, 2008 the Federal Open Market Committee (FOMC) lowered the federal-funds-rate target from 1% to between 0.25% and 0%. According to the FOMC statement,

The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

Another main reason behind the massive reduction in the federal-funds-rate target is the suppression of emerging price deflation. The consumer price index (CPI) fell by 1.7% in November from the month before. This was the biggest monthly fall since 1947. (In July 1949 the CPI fell by 0.9%.)

According to the latest FOMC statement, the US central bank is likely to raise its balance sheet further in the months ahead.

The focus of the Committee’s policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve’s balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.

Is so-called deflation such a dreadful thing as most commentators imply? In the present case, the emerging decline in prices is the outcome of a severe weakening of various nonproductive bubble activities that have emerged on the back of past loose monetary policy of the Fed.

Thus between January 2001 and June 2004 the federal-funds-rate target was lowered from 6% to 1%. It is this aggressive loose stance that gave birth to various false activities. Continue reading . . .

The Thriving CULT of Greed and Power

By all appearances, Noah Lottick of Kingston, Pa., had been a normal, happy 24-year-old who was looking for his place in the sun. On the day last June when his parents drove to New York City to obtain his body, they were nearly catatonic with grief.

This young Russian-studies scholar had jumped from a 10th-floor window of the Milford Plaza Hotel and bounced off the hood of a stretch limousine. When the police arrived, his fingers were still clutching $171 in cash, virtually the only money he hadn’t turned over to the Church of Scientology, the self-help “philosophy” group he had discovered just seven months earlier.

His death inspired his father Edward, a physician, to start his own investigation of the church. “We thought Scientology was something like Dale Carnegie,” Lottick says. “I now believe it’s a school for psychopaths.” Their so-called therapies are manipulations. They take the best and the brightest people and destroy them.” The Lotticks want to sue the church for contributing to their son’s death, but the prospect has them frightened. For nearly 40 years, the big business of Scientology has shielded itself exquisitely behind the First Amendment as well as a battery of high-priced criminal lawyers and shady private detectives.

 The Church of Scientology, started by science-fiction writer L. Ron Hubbard to “clear” people of unhappiness, portrays itself as a religion. In reality the church is a hugely profitable global racket that survives by intimidating members and critics in a Mafia-like manner. At times during the past decade, prosecutions against Scientology seemed to be curbing its menace. Eleven top Scientologists, including Hubbard’s wife, were sent to prison in the early 1980s for infiltrating, burglarizing and wiretapping more than 100 private and government agencies in attempts to block their investigations. In recent years hundreds of longtime Scientology adherents — many charging that they were mentally of physically abused — have quit the church and criticized it at their own risk. Some have sued the church and won; others have settled for amounts in excess of $500,000. In various cases judges have labeled the church “schizophrenic and paranoid” and “corrupt, sinister and dangerous.”

Yet the outrage and litigation have failed to squelch Scientology. The group, which boasts 700 centers in 65 countries, threatens to become more insidious and pervasive than ever. Scientology is trying to go mainstream, a strategy that has sparked a renewed law- enforcement campaign against the church. Many of the group’s followers have been accused of committing financial scams, while the church is busy attracting the unwary through a wide array of front groups in such businesses as publishing, consulting, health care and even remedial education.

In Hollywood, Scientology has assembled a star-studded roster of followers by aggressively recruiting and regally pampering them at the church’s “Celebrity Centers,” a chain of clubhouses that offer expensive counseling and career guidance. Adherents include screen idols Tom Cruise and John Travolta, actresses Kirstie Alley, Mimi Rogers, and Anne Archer, Palm Springs mayor and performer Sonny Bono, jazzman Chick Corea and even Nancy Cartwright, the voice of cartoon star Bart Simpson. Rank-and-file members, however, are dealt a less glamorous Scientology.

According to the Cult Awareness Network, whose 23 chapters monitor more than 200 “mind control” cults, no group prompts more telephone pleas for help than does Scientology. Says Cynthia Kisser, the network’s Chicago-based executive director: “Scientology is quite likely the most ruthless, the most classically terroristic, the most litigious and the most lucrative cult the country has ever seen. No cult extracts more money from its members.” Agrees Vicki Aznaran, who was one of Scientology’s six key leaders until she bolted from the church in 1987: “This is a criminal organization, day in and day out. It makes Jim and Tammy [Bakker] look like kindergarten.” To explore Scientology’s reach, TIME conducted more than 150 interviews and reviewed hundreds of court records and internal Scientology documents. Church officials refused to be interviewed. The investigation paints a picture of a depraved yet thriving enterprise. Most cults fail to outlast their founder, but Scientology has prospered since Hubbard’s death in 1986. In a court filing, one of the cult’s many entities — the Church of Spiritual Technology — listed $503 million in income just for 1987. High-level defectors say the parent organization has squirreled away an estimated $400 million in bank accounts in Liechtenstein, Switzerland and Cyprus. Scientology probably has about 50,000 active members, far fewer than the 8 million the group claims. But in one sense, that inflated figure rings true: millions of people have been affected in one way or another by Hubbard’s bizarre creation.

Scientology is now run by David Miscavige, 31, a high school dropout and second-generation church member. Defectors describe him as cunning, ruthless and so paranoid about perceived enemies that he kept plastic wrap over his glass of water. His obsession is to obtain credibility for Scientology in the 1990s. Among other tactics, the group:

The founder of this enterprise was part storyteller, part flimflam man. Born In Nebraska in 1911, Hubbard served in the Navy during World War II and soon afterward complained to the Veterans Administration about his “suicidal inclinations” and his “seriously affected” mind. Nevertheless, Hubbard was a moderately successful writer of pulp science fiction. Years later, church brochures described him falsely as an “extensively decorated” World War II hero who was crippled and blinded in action, twice pronounced dead and miraculously cured through Scientology. Hubbard’s “doctorate” from “Sequoia University” was a fake mall-order degree. In a I984 case in which the church sued a Hubbard biographical researcher, a California judge concluded that its founder was “a pathological liar.”

Hubbard wrote one of Scientology’s sacred texts, Dianetics: The Modern Science of Mental Health, in 1950. In it he introduced a crude psychotherapeutic technique he called “auditing.” He also created a simplified lie detector (called an “E-meter”) that was designed to measure electrical changes In the skin while subjects discussed intimate details of their past. Hubbard argued that unhappiness sprang from mental aberrations (or “engrams”) caused by early traumas. Counseling sessions with the E-meter, he claimed, could knock out the engrams, cure blindness and even improve a person’s intelligence and appearance.

Hubbard kept adding steps, each more costly, for his followers to climb. In the 1960s the guru decreed that humans are made of clusters of spirits (or “thetans”) who were banished to earth some 75 million years ago by a cruel galactic ruler named Xenu. Naturally, those thetans had to be audited.

An Internal Revenue Service ruling in 1967 stripped Scientology’s mother church of its tax-exempt status. A federal court ruled in 1971 that Hubbard’s medical claims were bogus and that E-meter auditing could no longer be called a scientific treatment. Hubbard responded by going fully religious, seeking First Amendment protection for Scien- tology’s strange rites. His counselors started sporting clerical collars. Chapels were built, franchises became “missions,” fees became “fixed donations,” and Hubbard’s comic-book cosmology became “sacred scriptures.’

During the early 1970s, the IRS conducted its own auditing sessions and proved that Hubbard was skimming millions of dollars from the church, laundering the money through dummy corporations in Panama and stashing it in Swiss bank accounts. Moreover, church members stole IRS documents, filed false tax returns and harassed the agency’s employees. By late 1985, with high-level defectors accusing Hubbard of having stolen as much as S200 million from the church, the IRS was seeking an indictment of Hubbard for tax fraud. Scientology members “worked day and night” shredding documents the IRS sought, according to defector Aznaran, who took part in the scheme. Hubbard, who had been in hiding for five years, died before the criminal case could be prosecuted.

Today the church invents costly new services with all the zeal of its founder. Scientology doctrine warns that even adherents who are “cleared” of engrams face grave spiritual dangers unless they are pushed to higher and more expensive levels. According to the church’s latest price list, recruits — “raw meat,” as Hubbard called them — take auditing sessions that cost as much as $1,000 an hour, or $12,500 for a 12 1/2-hour “intensive.”

Psychiatrists say these sessions can produce a drugged-like, mind-controlled euphoria that keeps customers coming back for more. To pay their fees, newcomers can earn commissions by recruiting new mem- bers, become auditors themselves (Miscavige did so at age 12), or join the church staff and receive free counseling in exchange for what their written contracts describe as a “billion years” of labor. “Make sure that lots of bodies move through the shop,” implored Hubbard in one of his bulletins to officials. “Make money. Make more money. Make others produce so as to make money . . . However you get them in or why, just do it.”

Harriet Baker learned the hard way about Scientology’s business of selling religion. When Baker, 73, lost her husband to cancer, a Scientologist turned up at her Los Angeles home peddling a $1,300 auditing package to cure her grief. Some $15,000 later, the Scientologists discovered that her house was debt free. They arranged a $45,000 mortgage, which they pressured her to tap for more auditing until Baker’s children helped their mother snap out of her daze. Last June, Baker demanded a $27,000 refund for unused services, prompting two cult members to show up at her door unannounced with an E-meter to interrogate her. Baker never got the money and, financially strapped, was forced to sell her house in September.

Before Noah Lottick killed himself, he had paid more than $5,000 for church counseling. His behavior had also become strange. He once remarked to his parents that his Scientology mentors could actually read minds. When his father suffered a major heart attack, Noah insisted that it was purely psychosomatic. Five days before he jumped, Noah burst into his parents’ home and demanded to know why they were spreading “false rumors” about him — a delusion that finally prompted his father to call a psychiatrist.

It was too late. “From Noah’s friends at Dianetics” read the card that accompanied a bouquet of flowers at Lottick’s funeral. Yet no Scientology staff members bothered to show up. A week earlier, local church officials had given Lottick’s parents a red-carpet tour of their center. A cult leader told Noah’s parents that their son had been at the church just hours before he disappeared — but the church denied this story as soon as the body was identified. True to form, the cult even haggled with the Lotticks over $3,000 their son had paid for services he never used, insisting that Noah had intended it as a “donation.”

The church has invented hundreds of goods and services for which members are urged to give “donations.” Are you having trouble “moving swiftly up the Bridge” — that is, advancing up the stepladder of en- lightenment? Then you can have your case reviewed for a mere $1,250 “donation.” Want to know “why a thetan hangs on to the physical universe?” Try 52 of Hubbard’s tape-recorded speeches from 1952, titled “Ron’s Philadelphia Doctorate Course Lectures,” for $2,525. Next: nine other series of the same sort. For the collector, gold-and-leather-bound editions of 22 of Hubbard’s books (and bookends) on subjects ranging from Scientology ethics to radiation can be had for just $1,900.

To gain influence and lure richer, more sophisticated followers, Scientology has lately resorted to a wide array of front groups and financial scams. Among them:

 

Last October, Sterling broke some bad news to another dentist, Glover Rowe of Gadsden, Ala., and his wife Dee. Tests showed that unless they signed up for auditing Glover’s practice would fail, and Dee would someday abuse their child. The next month the Rowes flew to Glendale, Calif., where they shuttled daily from a local hotel to a Dianetics center. “We thought they were brilliant people because they seemed to know so much about us,” recalls Dee. “Then we realized our hotel room must have been bugged.” After bolting from the center, $23,000 poorer, the Rowes say, they were chased repeatedly by Scientologists on foot and in cars. Dentists aren’t the only once at risk. Scientology also makes pitches to chiropractors, podiatrists and veterinarians.

Scientology devotes vast resources to squelching its critics. Since 1986 Hubbard and his church have been the subject of four unfriendly books, all released by small yet courageous publishers. In each case, the writers have been badgered and heavily sued. One of Hubbard’s policies was that all perceived enemies are “fair game” and subject to being “tricked, sued or lied to or destroyed.” Those who criticize the church journalists, doctors, lawyers and even judges often find themselves engulfed in litigation, stalked by private eyes, framed for fictional crimes, beaten up or threatened with death. Psychologist Margaret Singer, 69, an outspoken Scientology critic and professor at the University of California, Berkeley, now travels regularly under an assumed name to avoid harassment.

After the Los Angeles Times published a negative series on the church last summer, Scientologists spent an estimated $1 million to plaster the reporters’ names on hundreds of billboards and bus placards across the city. Above their names were quotations taken out of context to portray the church in a positive light.

The church’s most fearsome advocates are its lawyers. Hubbard warned his followers in writing to “beware of attorneys who tell you not to sue . . . the purpose of the suit is to harass and discourage rather than to win.” Result: Scientology has brought hundreds of suits against its perceived enemies and today pays an estimated $20 million annually to more than 100 lawyers.

One legal goal of Scientology is to bankrupt the opposition or bury it under paper. The church has 71 active lawsuits against the IRS alone. One of them, Miscavige vs. IRS, has required the U.S. to pro- duce an index of 52,000 pages of documents. Boston attorney Michael Flynn, who helped Scientology victims from 1979 to 1987, personally endured 14 frivolous lawsuits, all of them dismissed. Another lawyer, Joseph Yanny, believes the church “has so subverted justice and the judicial system that it should be barred from seeking equity in any court.” He should know: Yanny represented the cult until 1987, when, he says, he was asked to help church officials steal medical records to blackmail an opposing attorney (who was allegedly beaten up instead). Since Yanny quit representing the church, he has been the target of death threats, burglaries, lawsuits and other harassment.

Scientology’s critics contend that the U.S. needs to crack down on the church in a major, organized way. “I want to know, Where is our government?” demands Toby Plevin, a Los Angeles attorney who handles victims. “It shouldn’t be left to private litigators, because God knows most of us are afraid to get involved.” But law-enforcement agents are also wary. “Every investigator is very cautious, walking on eggshells when it comes to the church,” says a Florida police detective who has tracked the cult since 1988. “It will take a federal effort with lots of money and manpower.”

So far the agency giving Scientology the most grief is the IRS, whose officials have implied that Hubbard’s successors may be looting the church’s coffers. Since 1988, when the U.S. Supreme Court upheld the revocation of the cult’s tax-exempt status, a massive IRS probe of church centers across the country has been under way. An IRS agent, Marcus Owens, has estimated that thousands of IRS employees have been involved. Another agent, in an internal IRS memorandum, spoke hopefully of the “ultimate disintegration” of the church. A small but helpful beacon shone last June when a federal appeals court ruled that two cassette tapes featuring conversations between church officials and their lawyers are evidence of a plan to commit “future frauds” against the IRS.

The IRS and FBI have been debriefing Scientology defectors for the past three years, in part to gain evidence for a major racketeering case that appears to have stalled last summer. Federal agents complain that the Justice Department is unwilling to spend the money needed to endure a drawn-out war with Scientology or to fend off the cult’s notorious jihads against individual agents. “In my opinion the church has one of the most effective intelligence operations in the U.S., rivaling even that of the FBI,” says Ted Gunderson, a former head of the FBI’s Los Angeles office.

Foreign governments have been moving even more vigorously against the organization. In Canada the church and nine of its members will be tried in June on charges of stealing government documents (many of them retrieved in an enormous police raid of the church’s Toronto headquarters). Scientology proposed to give $1 million to the needy if the case was dropped, but Canada spurned the offer. Since 1986 authorities in France, Spain and Italy have raided more than 50 Scien- tology centers. Pending charges against more than 100 of its overseas church members include fraud, extortion, capital flight, coercion, illegally practicing medicine and taking advantage of mentally incapacitated people. In Germany last month, leading politicians accused the cult of trying to infiltrate a major party as well as launching an immense recruitment drive in the east.

Sometimes even the church’s biggest zealots can use a little protection. Screen star Travolta, 37, has long served as an unofficial Scientology spokesman, even though he told a magazine in 1983 that he was opposed to the church’s management. High-level defectors claim that Travolta has long feared that if he defected, details of his sexual life would be made public. “He felt pretty intimidated about this getting out and told me so,” recalls William Franks, the church’s former chairman of the board. “There were no outright threats made, but it was implicit. If you leave, they immediately start digging up everything.” Franks was driven out in 1981 after attempting to reform the church.

The church’s former head of security, Richard Aznaran, recalls Scientology ringleader Miscavige repeatedly joking to staffers about Travolta’s allegedly promiscuous homosexual behavior. At this point any threat to expose Travolta seems superfluous: last May a male porn star collected $100,000 from a tabloid for an account of his alleged two-year liaison with the celebrity. Travolta refuses to comment, and in December his lawyer dismissed questions about the subject as “bizarre.” Two weeks later, Travolta announced that he was getting married to actress Kelly Preston, a fellow Scientologist.

Shortly after Hubbard’s death the church retained Trout & Ries, a respected, Connecticut-based firm of marketing consultants, to help boost its public image. “We were brutally honest,” says Jack Trout. “We advised them to clean up their act, stop with the controversy and even to stop being a church. They didn’t want to hear that.” Instead, Scientology hired one of the country’s largest p.r. outfits, Hill and Knowlton, whose executives refuse to discuss the lucrative relationship. “Hill and Knowlton must feel that these guys are not totally off the wall,” says Trout. “Unless it’s just for the money.” One of Scientology’s main strategies is to keep advancing the tired argument that the church is being “persecuted” by antireligionists. It is supported in that position by the American Civil Liberties Union and the National Council of Churches. But in the end, money is what Scientology is all about. As long as the organization’s opponents and victims are successfully squelched, Scientology’s managers and lawyers will keep pocketing millions of dollars by helping it achieve its ends.

 

[Sidebar; page 54]

One source of funds for the Los Angeles-based church is the notorious, self-regulated stock exchange in Vancouver, British Columbia, often called the scam capital of the world. The exchange’s 2,300 penny-stock listings account for $4 billion in annual trading. Local journalists and insiders claim the vast majority range from total washouts to outright frauds.

Two Scientologists who operate there are Kenneth Gerbino and Michael Baybak, 20-year church veterans from Beverly Hills who are major donors to the cult. Gerbino, 45, is a money manager, marketmaker and publisher of a national financial newsletter. He has boasted in Scientology journals that he owes all his stock-picking success to L. Ron Hubbard. That’s not saying much: Gerbino’s newsletter picks since 1985 have cumulatively returned 24%, while the Dow Jones industrial average has more than doubled. Nevertheless Gerbino’s short-term gains can be stupendous. A survey last October found Gerbino to be the only manager who made money in the third quarter of 1990, thanks to gold and other resource stocks. For the first quarter of 1991, Gerbino was dead last. Baybak, 49, who runs a public relations company staffed with Scientologists, apparently has no ethics problem with engineering a hostile takeover of a firm he is hired to promote.

Neither man agreed to be interviewed for this story, yet both threatened legal action through attorneys. “What these guys do is take over companies, hype the stock, sell their shares, and then there’s nothing left,” says John Campbell, a former securities lawyer who was a director of mining company Athena Gold until Baybak and Gerbino took it over.

The pattern has become familiar. The pair promoted a mining venture called Skylark Resources, whose stock traded at nearly $4 a share in 1987. The outfit soon crashed, and the stock is around 2 cents. NETI Technologies, a software company, was trumpeted in the press as “the next Xerox” and in 1984 rose to a market value of $120 million with Baybak’s help. The company, which later collapsed, was delisted two months ago by the Vancouver exchange.

Baybak appeared in 1989 at the helm of Wall Street Ventures, a start-up that announced it owned 35 tons of rare Middle Eastern postage stamps — worth $100 million — and was buying the world’s largest collection of southern Arabian stamps (worth $350 million). Steven C. Rockefeller Jr. of the oil family and former hockey star Denis Potvin joined the company in top posts, but both say they quit when they realized the stamps were virtually worthless. “The stamps were created by sand-dune nations to exploit collectors,” says Michael Laurence, editor of Linn’s Stamp News, America’s largest stamp journal. After the stock topped $6, it began a steady descent, with Baybak unloading his shares along the way. Today it trades at 18 cents.

Athena Gold, the current object of Baybak’s and Gerbino’s attentions, was founded by entrepreneur William Jordan. He turned to an established Vancouver broker in 1987 to help finance the company, a 4,500-acre mining property near Reno. The broker promised to raise more than $3 million and soon brought Baybak and Gerbino into the deal. Jordan never got most of the money, but the cult members ended up with a good deal of cheap stock and options. Next they elected directors who were friendly to them and set in motion a series of complex maneuvers to block Jordan from voting stock he controlled and to run him out of the company. “I’ve been an honest policeman all my life and I’ve seen the worst kinds of crimes, and this ranks high,” says former Athena shareholder Thomas Clark, a 20-year veteran of Reno’s police force who has teamed up with Jordan to try to get the gold mine back. “They stole this man’s property.”

With Baybak as chairman, the two Scientologists and their staffs are promoting Athena, not always accurately. A letter to shareholders with the 1990 annual report claims Placer Dome, one of America’s largest gold-mining firms, has committed at least $25.5 million to develop the mine. That’s news to Placer Dome. “There is no pre-commitment,” says Placer executive Cole McFarland. “We’re not going to spend that money unless survey results justify the expenditure.”

Baybak’s firm represented Western Resource Technologies, a Houston oil-and-gas company, but got the boot in October. Laughs Steven McGuire, president of Western Resource: “His is a p.r. firm in need of a p.r. firm.” But McGuire cannot laugh too freely. Baybak and other Scientologists, including the estate of L. Ron Hubbard, still control huge blocks of his company’s stock.

[ Caption: ATHENA GOLD'S WILLIAM JORDAN. Cult members got cheap stock, then ran him out of the company ]

 

In the 1960s and ’70s, L. Ron Hubbard used to periodically fill a converted ferry ship with adoring acolytes and sail off to spread the word. One by one, countries — Britain, Greece, Spain, Portugal, and Venezuela — closed their ports, usually because of a public outcry. At one point, a court in Australia revoked the church’s status as a religion; at another, a French court convicted Hubbard of fraud in absentia.

Today Hubbard’s minions continue to wreak global havoc, costing governments considerable effort and money to try to stop them. In Italy a two-year trial of 76 Scientologists, among them the former leader of the church’s Italian operations, is nearing completion in Milan. Two weeks ago, prosecutor Pietro Forno requested jail terms for all the defendants who are accused of extortion, cheating “mentally incapacitated” people and evading as much as $50 million in taxes. “All of the trial’s victims went to Scientology in search of a cure or a better life,” said Forno, “But the Scientologists were amateur psychiatrists who practiced psychological terrorism”. For some victims, he added, “the intervention of the Scientologists was devastating.”

The Milan case was triggered by parents complaining to officials that Scientology had a financial stranglehold on their children, who had joined the church or entered Narconon, its drug rehabilitation unit. In 1986 Treasury and paramilitary police conducted raids in 20 cities across Italy shutting down 27 Scientology centers and seizing 100,000 documents. To defend itself in the trial, the cult has retained some of Italy’s most famous lawyers.

In Canada, Scientology is using a legal team that includes Clayton Ruby, one of the country’s foremost civil rights lawyers, to defend itself and nine of its members who are to stand trial in June in Toronto. The charges: stealing documents concerning Scientology from the Ministry of the Attorney General, the Canadian Mental Health Association, two police forces and other institutions. The case stems from a 1983 surprise raid of the church’s Toronto headquarters by more than 100 policemen, who had arrived in three chartered buses; some 2 million pages of documents were seized over a two-day period. Ruby, whose legal maneuvers delayed the case for years, is trying to get it dismissed because of “unreasonable delay.”

Spain’s Justice Ministry has twice denied Scientology status as a religion, but that has not slowed the church’ s expansion. In 1989 the Ministry of Health issued a report calling the sect “totalitarian” and “pure and simple charlatanism.” The year before, the authorities had raided 26 church centers, with the result that 11 Scientologists stand accused of falsification of records, coercion and capital flight. “The real god of this organization is money,” said Madrid examining magistrate Jose Maria Vasquez Honrnbia, before referring the case to a higher court because it was too complex for his jurisdiction. Eugene Ingram, a private investigator working for Scientology claims he helped get Honrubia removed from the case for leaking nonpublic documents to the press.

In France it took a death to spur the government into action: 16 Scientologists were indicted last year for fraud and “complicity in the practice of illegal medicine” following the suicide of an industrial designer in Lyon. In the victim’s house investigators found medication allegeally provided to him by the church without doctor’s prescription. Among those charged in the case is the president of Scientology’s French operations and the head of the Paris-based Celebrity Centre, which caters to famous members.

Outside the U.S., Scientology appears to be most active in Germany where the attorney general of the state of Bavaria has branded the cult “distinctly totalitarian” and aimed at “the economic exploitation of customers who are in bondage to it.” In 1984 nearly 100 police raided the church in Munich. At the time, city officials were reportedly collaborating with U.S. tax inspectors and trying to prove that the cult was actually a profitmaking business. More recently, Hamburg state authorities moved to rescind Scientology’s tax reduced status, while members of parliament are seeking criminal proceedings. In another domain, church linked management consulting firms have infiltrated small and middle sized companies throughout Germany, according to an expose published this month in the newsmagazine DER SPIEGEL; the consultants, who typically hide their ties to Scientology, indoctrinate employees by using Hubbard’s methods. A German anticult organization estimates that Scientology has at least 60 fronts or splinter groups operating in the country. German politics appears as well to attract Hubbard’s zealots. In March the Free Democrats, partners in Chancellor Helmut Kohl’ s ruling coalition in Bonn, accused Scientology of trying to infiltrate their Hamburg branch. Meanwhile the main opposition party, the Social Democrats, has been warning its members in the formerly com- munist eastern part of the country against exploitation by the church. Even federal officials are being used by the church: one Scientology front group sent copies of a Hubbard written pamphlet on moral values to members of the Bundestag. The Office of Foreign Minister Hans-Dietrich Genscher unwittingly endorsed the Scientologists’ message: “Indeed, the world would be a more beautiful place if the principles formulated in the pamphlet, a life characterized by reason and responsibility, would find wider attention.”

[end of Internationl Edition-only section]

 

Strange things seem to happen to people who write about Scientology. Journalist Paulette Cooper wrote a critical book on the cult in 1971. This led to a Scientology plot (called Operation Freak-Out) whose goal, according to church documents, was “to get P.C. incarcerated in a mental institution or jail.” It almost worked: by impersonating Cooper, Scientologists got her indicted in 1973 for threatening to bomb the church. Cooper, who also endured 19 lawsuits by the church, was finally exonerated in 1977 after FBI raids on the church offices in Los Angeles and Washington uncovered documents from the bomb scheme. No Scientologists were ever tried in the matter.

For the TIME story, at least 10 attorneys and six private detectives were unleashed by Scientology and its followers in an effort to threaten, harass and discredit me. Last Oct. 12, not long after I began this assignment, I planned to lunch with Eugene Ingram, the church’s leading private eye and a former cop. Ingram, who was tossed off the Los Angeles police force In 1981 for alleged ties to prostitutes and drug dealers, had told me that he might be able to arrange a meeting with church boss David Miscavige. Just hours before the lunch, the church’s “national trial counsel,” Earle Cooley, called to inform me that I would be eating alone.

Alone, perhaps, but not forgotten. By day’s end, I later learned, a copy of my personal credit report — with detailed information about my bank accounts, home mortgage, credit-card payments, home address and Social Security number — had been illegally retrieved from a national credit bureau called Trans Union. The sham company that received it, “Educational Funding Services” of Los Angeles, gave as its address a mail drop a few blocks from Scientology’s headquarters. The owner of the mail drop is a private eye named Fred Wolfson, who admits that an Ingram associate retained him to retrieve credit reports on several individuals. Wolfson says he was told that Scientology’s attorneys “had judgments against these people and were trying to collect on them.” He says now, “These are vicious people. These are vipers.” Ingram, through a lawyer, denies any involvement in the scam.

During the past five months, private investigators have been contacting acquaintances of mine, ranging from neighbors to a former colleague, to inquire about subjects such as my health (like my credit rating, it’s excellent) and whether I’ve ever had trouble with the IRS (unlike Scientology, I haven’t). One neighbor was greeted at dawn outside my Manhattan apartment building by two men who wanted to know whether I lived there. I finally called Cooley to demand that Scientology stop the nonsense. He promised to look into it.

After that, however, an attorney subpoenaed me, while another falsely suggested that I might own shares in a company I was reporting about that had been taken over by Scientologists (he also threatened to contact the Securities and Exchange Commission). A close friend in Los Angeles received a disturbing telephone call from a Scientology staff member seeking data about me — an indication that the cult may have illegally obtained my personal phone records. Two detectives contacted me, posing as a friend and a relative of a so-called cult victim, to elicit negative statements from me about Scientology. Some of my conversations with them were taped, transcribed and presented by the church in affidavits to TIME’s lawyers as “proof” of my bias against Scientology.

Among the comments I made to one of the detectives, who represented himself as “Harry Baxter,” a friend of the victim’s family, was that “the church trains people to lie.” Baxter and his colleagues are hardly in a position to dispute that observation. His real name is Barry Silvers, and he is a former investigator for the Justice Department’s Organized Crime Strike Force. (RB)

 

 

Is a zero interest rate possible here?

As the US and other industrialised nations’ interest rates have followed the Japanese example and approached zero, local analysts have questioned whether there is a possibility the Thai rate will also fall to this level.

The stock market’s 6.4-per-cent rally on Monday reflected speculation that the Thai authorities might have little choice but to reflate the economy through further monetary easing, apart from the fiscal-expansion programme. Thai shares, however, closed 1.16 per cent lower yesterday at 473.15 points on heavy selling of big-cap stocks for short-term profit.

“The market is expecting a weak and volatile 2009 for the world, Thailand included, so can the interest rate in Thailand go down to zero? Bank of Thailand Governor Tarisa Watanagase has already said it is a possibility,” ABN Amro Bank said in a report issued yesterday.

“The Bank of Thailand will be meeting next week to decide on the one-day repurchase rate, and we can expect anything up to a further 50-basis-points cut from the current 2.75 per cent.”

Tarisa has been cautious in her comments on the interest-rate trend, as she does not want to be seen as being too rushed in bringing rates down - at least until the central bank has little ammunition left if the situation turns out to be really bad.

She recently said it all depended on economic conditions.

“If interest rates were to come down to zero, the central bank would have fewer tools left. Monetary policy could become ineffective, as happened to Japan,” Tarisa said.

Seamico Securities said in a report yesterday that after Monday’s Stock Exchange of Thailand rally, there was momentum for the SET to surge further, due mainly to the expectation of a continued lowering of the policy rate. However, the market would be more volatile, as investors would take a profit following the rally, it said.

The SET Index is moving towards the average 25-week resistance level of 480-490 points. Seamico believes the index will not surpass this resistance in its first test. Investors are expected to sell for profit and buy back again when the SET hovers between 450 and 460 points.

“Headline inflation in December was the lowest in six years, paving the way for a lower interest rate,” Seamico said in its paper.

The SET Index had one of its worst years on record in 2008, plummeting nearly 48 per cent after being hit by the US sub-prime crisis and the global economic downturn. Domestic political infighting ravaged investor sentiment throughout the year.

The SCBS Data Book issued yesterday said the index closed the year at 449 points, with retail investors net buyers to the tune of Bt116 billion, foreign investors with a net selling position of Bt162 billion and local institutions as net buyers of Bt46 billion over the year.

“Late December, the market was optimistic, as new Prime Minister Abhisit Vejjajiva successfully delivered his policy address to Parliament despite protests, and fund managers bought stocks for year-end tax rebates,” it said.

The SET closed 2008 with a price-to-earnings ratio of 7, down sharply from 17 at the end of 2007. The market is trading at below book value, at 0.98, versus 2.02 at the end of 2007.

Olentangy river wetland research park

 

FAQ about wine investment

Less than 1% of all the wines worldwide are investment grade and Bordeaux makes up 80% of these wines. Trusted through the years for its premium quality, Bordeaux Wine has an established resale history and is still the primary investment medium. The “Listed Chateaux” Information is a helpful guide for making your selections.

In all fine wines, the price is considered an important indicator of quality. However, prices are affected by more than just the quality of a wine. Scarcity, as it does with any product, can drive prices up as well. As wines age, they may increase in quality or in scarcity, thus increasing in value either way. A method of getting a good price for your wines is usually obtained when bought En Primeur, i.e. while still in barrel, as this is buying wine at the earliest stage possible and, correspondingly, at the lowest possible price. Our panel of wine experts and research team will highlight to you what wines to look out for with fully detailed reports and performances.

Wine-investment can be a highly-lucrative channel for asset growth. However, there are some basic guidelines which should be noted in order to better secure clients’ benefits and gains:

Fine wine is exclusively French red wine produced by the Chateaux from the Bordeaux region of France. It is an asset that improves over time and it has consistently outperformed all other forms of recognised investments as shown below.

The Liv-ex (London International Vintners Exchange) 100 Index is the fine wine benchmark index. It is supply & scarcity weighted and priced off live exchange prices, calculated from the mid-price between the bid and offer.

Records that go back over hundreds of years show that Fine Wine has remained the steadiest form of investment in the world, generally unaffected by individual country recession, interest rate changes, general elections and stock market fluctuations.

With a combination of expertise in Fine Wine vintages, availability of stock, market requirements and conditions, investment expertise and tax knowledge, fine wine brokerages are able to structure ‘tailor made’ portfolios to provide for:

Satyam Computers - A true picture of financial irregularity

Satyam Computers – A story of financial irregularities and its impact on the economy

 

B. Ramalinga Raju, Chairman, Satyam Computer Services Limited wrote a letter dated 07.01.2009 to the Board of Directors of the Company stating the facts as hereunder:

 

The Balance Sheet as at 30.09.2008 carries:

(a) Inflated (non-existent) cash and bank balances of Rs. 5,040 crores;

(b) An accrued interest of Rs. 376 crores, which are also non-existent;

(c) An understated liability of Rs. 1,230/– crores on account of funds arranged by him;

(d) An over-stated Debtors position of Rs. 490 crores

 

He further stated that for the second quarter ending 30.09.2008, the company reported a revenue of Rs. 2,700 crores and an operating margin of Rs. 649 crores (24% revenue margin) as against the actual revenues of Rs. 2,112 crores and an operating margin of Rs. 61 crores (3% revenue margin). This resulted in artificial cash and bank balances going up by Rs. 588.00 crores in the said quarter itself.

 

The following needs to be considered to ensure that the history does not repeat in the future:

 

1. Since the developments are baffling, how come one of the top four consulting & auditing firm, M/s. Price Waterhouse Coopers (PwC) certified the companys’ accounts for the last six years without getting a wind of any wrong doing.

2. The Investor confidence is really shaking and it is hard to digest that after two big stock market scams, there was a possibility that a so-called giant could have such inflated figures.

3. The apex body of Chartered Accountants, ICAI is believed to be said that any member of the body found guilty in the Satyam financial wrong-doings would be severely punished and that the auditors could even be barred from practising, for the lifetime.

4. Satyam closed at 77% lower and it has taken the entire IT index down by 9%. The Mumbai Sensex seems to be reeling under the shock of the said financial fraud that was exposed today by the Chairman himself.

5. The Auditors, especially from the top-four cant wash their hands from their responsibility. This seems to be a clear-cut case of negligence. It seems PwC did not even bothered to check if indeed Bank deposits existed as at that date.

6. It is imperative to note that Satyam was banned from offshoring work with World Bank. Further, the recent controversy shall give out an array of controversy in the days to come, especially in view of the fact that couple of partners of PwC are council members of the apex body of accountants in India, ICAI (The Institute of Chartered Accountants of India).

 

Now coming to the Accounting part of it, it is to be understood that accounting plays a major role in ensuring that the right presentation is done in consonance with the set guidelines. Globally, in todays day, we are talking of Accounting Standards, Guidance Notes, US GAAP, IFRS and so many types of audit like Expenditure Audit, Internal Audit, Systems Audit and finally statutory audit. Despite having the corporate governance in place, how can a fraud of such huge quantum happened and no body could doubt on the integrity of the accounts? We all get to know about the rosy presentation of the accounts and the Board constituted for audit and corporate governance. If such frauds cannot be detected even by these methods, then we need to look into the faults of any of the following:

 

1. Either all the people were aware but still did not attempt to bring the facts to light;

2. Most of the Board including the Corporate Governance committee and Statutory Auditors were at fault;

3. Will the name of the top Statutory Auditors sufficient to infuse confidence in the Shareholders and Stakeholders?

4. With Lehmann Brothers and now with Satyam, we have seen the confidence level going down, especially at the time of recession faced by the world globally.

5. Satyam had approx. 50,000 employees. Isnt this a fact that any decision to reduce the workforce may have an adverse impact on the economy as a whole?

 

The entire accounting profession is shaken by such amount of fraud. Its time we work together as an Auditors, as an Accountant, as an Advisor and ensure that such incidents do not repeat itself anytime in the future to come!

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Sensex nosedives by over 692 pts as Satyam chief resigns

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Slowdown hits charities

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Source: Financial Times

UK charities’ investments lost 19 per cent of their value last year, according to a leading index compiled by State Street, the financial services company. The sharp falls come at a time when charities face lower income from other funding sources, such as legacies, which have been hit by the housing market freeze.

Jeanette Patrizio of State Street Investment Analytics, said: “Although the returns are not surprising, given the global slowdown, we need to remember these are long-term funds and the annual results need to be viewed in context.”

The Case for Privatization of Social Security

Oh wait, it’s the case against. It’s a disaster and a failure.

Italy did for retirement financing what President George W. Bush couldn’t do in the U.S.: It privatized part of its social security system. The timing couldn’t have been worse.

The global market meltdown has created losses for those who agreed to shift their contributions from a government severance payment plan to private funds meant to yield higher returns. Anger is rising both at the state, which promoted the change, and money managers such as UniCredit SpA and Arca Previdenza, which stood to profit.

Prime Minister Silvio Berlusconi’s administration is now considering ways to compensate as many as 1.2 million people who made the switch, giving up a fixed return for private plans linked to financial markets. It’s also letting people delay redemptions on retirement funds to avoid losses after Italy’s benchmark stock index fell 50 percent in 2008, destroying 300 billion euros ($423 billion) in wealth.

“The reform didn’t help anyone,” said Gabriele Fava, who heads the Fava & Associati law firm in Milan and writes about labor law. “Not the government, which was hoping everyone would make the switch to take the strain off its coffers, nor the workers who have not resolved the problem of needing a supplement to their social security pensions.”

[more]

OREO For 01 07 09

OREO For 01 07 09

An Unresolved Issue

Reuters carried several stories (here, for example) which remarked on yesterday’s rally in copper prices, a move upward of over 8% in a single day, and a 24% gain since Christmas.  The move flies in the face of weak economic numbers (copper, as an industrial metal, is fairly sensitive to the economic cycle), a strengthening dollar over the period, and a rise in inventories.  So why did copper go up?  According to Reuters and others, the move up is linked to the reweighting of commodity indices which will occur mid-month. 

This is an interesting explanation.  For most of the first half of this year, the investment banks, which sponsored and promoted commodity index investing, vehemently denied that there was any link between investor buying of futures and the dramatic rise of commodity prices.  In a deeply flawed report, the CFTC (the regulatory body which governs commodity futures) also argued that the $300 billion or so in commodity index investments had no price impact, defying common sense.   An economist who testified before the House Agriculture Committee argued that, “in theory, there are an infinite number of contracts that can be written” without impacting price.  For those of us who don’t live in “theory” but live in the real world, assuming an infinite amount of capital to an infinite amount of participants doesn’t make a lot of sense.

The copper story reflects a growing recognition that index investing in commodities does indeed impact price.  If it is true for copper now, it must also have been true for oil when crude leapt over 50% in a matter of months.  It must have been true in March when, in an incident that the CFTC has yet to explain, the cotton market’s integrity was compromised, causing tremendous harm to the cotton industry.  There have also been widespread assertions that the exodus of hedge fund and investor pools from commodity indices have been partly responsible for the depth and speed of the decline in commodities; investment flows into commodity futures and swaps cause unnecessary volatility and harm in distorting prices both to the upside and downside.

Understandably, despite this growing recognition and body of evidence, among our policymakers this issue has been superceded by the general financial crisis.  It needs to be revisited, and the sooner the better.  The use of commodities as a core investment asset class is a flawed concept.  If this were only a matter among investors, like the dot-com frenzy of the late ’90s, it might not be a legitimate area of government involvement.  However, the price distortions caused by commodity index investing involves basic goods — food, energy, raw materials — that affect everyone, consumers and producers.  Moreover, these price moves disproportionately impact the world’s poor.  Distorted commodity prices can send policy makers false indications of inflation or deflation, leading to bad economic policy choices. 

It’s time to readdress this issue, both in the press and in the halls of Congress.  Did the use of commodities as an investment asset distort prices?  If so, what should be done to improve the integrity of these markets?

Property Monthly Review: December 2008

Share price performance

KLSE Property Index ended higher in Dec, inline with the market. Sunway City, SP Setia and Sunrise were the main gainers with gains of 25.7%, 15.9% and 8.3% respectively. On notable shareholding filings, major shareholders of companies under coverage continued to increase their holdings. The exception was Datuk Richard Fong who reduced his holdings by 0.7% in Glomac.

Hillside projects facing objections

More project delays

Several projects were reportedly deferred in Penang. Hunza Properties Bhd (HPB MK, not rated) deferred its RM400m Gurney Paragon Mall which was earlier scheduled to start last September while Eastern & Oriental (EAST MK, not rated) will delay the launch of the first phase of the Seri Tanjung Pinang condominiums with gross development value of RM1bn. These condominiums were scheduled to be launched in the current financial year ending 31 March 2009 but have now been pushed to the third quarter of next year. With lower launches, developers are currently concentrating on selling existing unsold stocks as well as executing on-going projects to realise the huge unbilled sales locked-in prior to the economic downturn.

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Test Uproading (India)

We’ve forfeited the rights to our own tragedies. As the carnage in Mumbai raged on, day after horrible day, our 24-hour news channels informed us that we were watching “India’s 9/11″. And like actors in a Bollywood rip-off of an old Hollywood film, we’re expected to play our parts and say our lines, even though we know it’s all been said and done before.

As tension in the region builds, US Senator John McCain has warned Pakistan that if it didn’t act fast to arrest the “bad guys”, he had personal information that India would launch air strikes on “terrorist camps” in Pakistan and that Washington could do nothing because Mumbai was India’s 9/11.

It’s odd how, in the last week of November, thousands of people in Kashmir supervised by thousands of Indian troops lined up to cast their vote, while the richest quarters of India’s richest city ended up looking like war-torn Kupwara - one of Kashmir’s most ravaged districts.

The Mumbai attacks are only the most recent of a spate of terrorist attacks on Indian towns and cities this year. Ahmedabad, Bangalore, Delhi, Guwahati, Jaipur and Malegaon have all seen serial bomb blasts in which hundreds of ordinary people have been killed and wounded. If the police are right about the people they have arrested as suspects in these previous attacks, both Hindu and Muslim, all Indian nationals, it obviously indicates that something’s going very badly wrong in this country.

If you were watching television you might not have heard that ordinary people, too, died in Mumbai. They were mowed down in a busy railway station and a public hospital. The terrorists did not distinguish between poor and rich. They killed both with equal cold-bloodedness.

The Indian media, however, were transfixed by the rising tide of horror that breached the glittering barricades of “India shining” and spread its stench in the marbled lobbies and crystal ballrooms of two incredibly luxurious hotels and a small Jewish center.

We’re told that one of these hotels is an icon of the city of Mumbai. That’s absolutely true. It’s an icon of the easy, obscene injustice that ordinary Indians endure every day. On a day when the newspapers were full of moving obituaries by beautiful people about the hotel rooms they had stayed in, the gourmet restaurants they loved (ironically one was called Kandahar), and the staff who served them, a small box on the top left-hand corner in the inner pages of a national newspaper (sponsored by a pizza company, I think) said, “Hungry, kya?” (”Hungry eh?”). It, then, with the best of intentions I’m sure, informed its readers that, on the international hunger index, India ranked below Sudan and Somalia.

But of course this isn’t that war. That one’s still being fought in the Dalit bastis (settlements) of our villages; on the banks of the Narmada and the Koel Karo rivers; in the rubber estate in Chengara; in the villages of Nandigram, Singur, Chattisgarh, Jharkhand, Orissa, Lalgarh in West Bengal; and the slums and shantytowns of our gigantic cities.

That war isn’t on TV. Yet.

So maybe, like everyone else, we should deal with the one that is.

 

Side B believes that, though nothing can ever excuse or justify it, terrorism exists in a particular time, place and political context, and to refuse to see that will only aggravate the problem and put more and more people in harm’s way. Which is a crime in itself.

The sayings of Hafiz Saeed who founded the Lashkar-e-Taiba (Army of the Pure) in 1990 and who belongs to the hardline Salafi tradition of Islam, certainly bolsters the case of Side A. Hafiz Saeed approves of suicide bombing, hates Jews, Shi’ites and democracy, and believes that jihad should be waged until Islam, his Islam, rules the world.

Among the things he said are:

“There cannot be any peace while India remains intact. Cut them, cut them so much that they kneel before you and ask for mercy.”

And: “India has shown us this path. We would like to give India a tit-for-tat response and reciprocate in the same way by killing the Hindus, just like it is killing the Muslims in Kashmir.”

But where would Side A accommodate the sayings of Babu Bajrangi of Ahmedabad, India, who sees himself as a democrat, not a terrorist? He was one of the major lynchpins of the 2002 Gujarat genocide and has said (on camera):

We didn’t spare a single Muslim shop, we set everything on fire…we hacked, burned, set on fire … we believe in setting them on fire because these bastards don’t want to be cremated, they’re afraid of it … I have just one last wish … let me be sentenced to death … I don’t care if I’m hanged … just give me two days before my hanging and I will go and have a field day in Juhapura where seven or eight lakhs [seven or eight hundred thousand] of these people stay … I will finish them off … let a few more of them die … at least 25,000 to 50,000 should die.

And where in Side A’s scheme of things would we place the Rashtriya Swayamsevak Sangh (RSS) bible, We, or, Our Nationhood Defined by M S Golwalkar, who became head of the RSS in 1944. (The RSS is the ideological heart, the holding company of the Hindu fundamentalist Bharatiya Janata Party, BJP, and its militias. The RSS was founded in 1925. By the 1930s, its founder, Dr K B Hedgewar, a fan of Benito Mussolini, had begun to model it overtly along the lines of Italian fascism.)

It says:

Ever since that evil day, when Muslims first landed in Hindustan, right up to the present moment, the Hindu nation has been gallantly fighting on to take on these despoilers. The race spirit has been awakening.

Or:

To keep up the purity of its race and culture, Germany shocked the world by her purging the country of the Semitic races - the Jews. Race pride at its highest has been manifested here … a good lesson for us in Hindustan to learn and profit by.

Of course Muslims are not the only people in the gun sights of the Hindu right. Dalits have been consistently targeted. Recently, in Kandhamal in Orissa, Christians were the target of two-and-a-half months of violence that left more than 40 dead. Forty thousand people have been driven from their homes, half of whom now live in refugee camps.

All these years, Hafiz Saeed has lived the life of a respectable man in Lahore as the head of the Jamaatut Dawa, which many believe is a front organization for the Lashkar-e-Taiba. He continues to recruit young boys for his own bigoted jihad with his twisted, fiery sermons. On December 11, the United Nations imposed sanctions on the Jamaatut Dawa. The Pakistani government succumbed to international pressure and put Hafiz Saeed under house arrest.

Babu Bajrangi, however, is out on bail and lives the life of a respectable man in Gujarat. A couple of years after the genocide, he left the Vishwa Hindu Parishad (VHP, a militia of the RSS) to join the Shiv Sena (another rightwing nationalist party). Narendra Modi, Bajrangi’s former mentor, is still the chief minister of Gujarat.

So the man who presided over the Gujarat genocide was re-elected twice, and is deeply respected by India’s biggest corporate houses, Reliance and Tata. Suhel Seth, a TV impresario and corporate spokesperson, recently said, “Modi is God.” The policemen who supervised and sometimes even assisted the rampaging Hindu mobs in Gujarat have been rewarded and promoted.

The RSS has 45,000 branches and 7 million volunteers preaching its doctrine of hate across India. They include Narendra Modi, but also former prime minister Atal Bihari Vajpayee, current leader of the opposition L K Advani, and a host of other senior politicians, bureaucrats, police and intelligence officers.

And if that’s not enough to complicate our picture of secular democracy, we should place on record that there are plenty of Muslim organizations within India preaching their own narrow bigotry.

So, on balance, if I had to choose between Side A and Side B, I’d pick Side B. We need context. Always.

Partition triggered the massacre of more than a million people and the largest migration of a human population in contemporary history. Eight million people, Hindus fleeing the new Pakistan, Muslims fleeing the new kind of India, left their homes with nothing but the clothes on their backs.

Each of those people carries, and passes down, a story of unimaginable pain, hate and horror, but yearning too. That wound, those torn but still unsevered muscles, that blood and those splintered bones still lock us together in a close embrace of hatred, terrifying familiarity, but also love. It has left Kashmir trapped in a nightmare from which it can’t seem to emerge, a nightmare that has claimed more than 60,000 lives.

Pakistan, the Land of the Pure, became an Islamic Republic, and then very quickly a corrupt, violent military state, openly intolerant of other faiths.

India on the other hand declared herself an inclusive, secular democracy. It was a magnificent undertaking, but Babu Bajrangi’s predecessors had been hard at work since the 1920s, dripping poison into India’s bloodstream, undermining that idea of India even before it was born.

By 1990, they were ready to make a bid for power. In 1992 Hindu mobs exhorted by L K Advani stormed the Babri Masjid and demolished it.

By 1998, the BJP was in power at the center in Delhi. The US “war on terror” put the wind in their sails. It allowed them to do exactly as they pleased, even to commit genocide and then present their fascism as a legitimate form of chaotic democracy.

This happened at a time when India had opened its huge market to international finance and it was in the interests of international corporations and the media houses they owned to project it as a country that could do no wrong. That gave Hindu nationalists all the impetus and the impunity they needed.

This, then, is the larger historical context of terrorism on the sub-continent - and of the Mumbai attacks. It shouldn’t surprise us that Hafiz Saeed of the Lashkar-e-Taiba is from Shimla (India) and L K Advani of the RSS is from Sindh (Pakistan). 

In much the same way as it did after the 2001 parliament attack, the 2002 burning of the Sabarmati Express, and the 2007 bombing of the Samjhauta Express, the government of India announced that it had “incontrovertible” evidence that the Lashkar-e-Taiba, backed by Pakistan’s Inter-Services Intelligence (ISI), was behind the Mumbai strikes.

The Lashkar has denied involvement, but remains the prime accused. According to the police and intelligence agencies, the Lashkar operates in India through an organization called the “Indian Mujahideen”. Two Indian nationals, Sheikh Mukhtar Ahmed, a special police officer working for the Jammu and Kashmir Police, and Tausif Rehman, a resident of Kolkata in

West Bengal, have been arrested in connection with the Mumbai attacks.

So already the neat accusation against Pakistan is getting a little messy.

Almost always, when these stories unspool, they reveal a complicated global network of foot soldiers, trainers, recruiters, middlemen and undercover intelligence and counter-intelligence operatives working not just on both sides of the India-Pakistan border, but in several countries simultaneously.

In today’s world, trying to pin down the provenance of a terrorist strike and isolate it within the borders of a single nation state is very much like trying to pin down the provenance of corporate money. It’s almost impossible.

In circumstances like these, air strikes to “take out” terrorist camps may take out the camps, but certainly will not “take out” the terrorists. And neither will war.

Also, in our bid for the moral high ground, let’s try not to forget that the Liberation Tigers of Tamil Eelam, the LTTE of neighboring Sri Lanka, one of the world’s most deadly terrorist groups, were trained by the Indian army.

As recruiting agents for America’s jihad against the Soviet Union, it was the job of the Pakistani army and the ISI to nurture and channel funds to Islamic fundamentalist organizations. Having wired up these Frankensteins and released them into the world, the US expected it could rein them in like pet mastiffs whenever it wanted to. Certainly it did not expect them to come calling in the heart of the homeland on September 11. So once again, Afghanistan had to be violently remade.

Now the debris of a re-ravaged Afghanistan has washed up on Pakistan’s borders.

Nobody, least of all the Pakistani government, denies that it is presiding over a country that is threatening to implode. The terrorist training camps, the fire-breathing mullahs, and the maniacs who believe that Islam will, or should, rule the world are mostly the detritus of two Afghan wars. Their ire rains down on the Pakistani government and Pakistani civilians as much, if not more, than it does on India.

If, at this point, India decides to go to war, perhaps the descent of the whole region into chaos will be complete. The debris of a bankrupt, destroyed Pakistan will wash up on India’s shores, endangering us as never before.

If Pakistan collapses, we can look forward to having millions of “non-state actors” with an arsenal of nuclear weapons at their disposal as neighbors.

It’s hard to understand why those who steer India’s ship are so keen to replicate Pakistan’s mistakes and call damnation upon this country by inviting the United States to further meddle clumsily and dangerously in our extremely complicated affairs. A superpower never has allies. It only has agents.

On the plus side, the advantage of going to war is that it’s the best way for India to avoid facing up to the serious trouble building on our home front.

The Mumbai attacks were broadcast live (and exclusive!) on all or most of our 67 24-hour news channels and god knows how many international ones. TV anchors in their studios and journalists at “ground zero” kept up an endless stream of excited commentary.

Over three days and three nights we watched in disbelief as a small group of very young men, armed with guns and gadgets, exposed the powerlessness of the police, the elite National Security Guard, and the marine commandos of this supposedly mighty, nuclear-powered nation.

While they did this, they indiscriminately massacred unarmed people, in railway stations, hospitals, and luxury hotels, unmindful of their class, caste, religion or nationality.

(Part of the helplessness of the security forces had to do with having to worry about hostages. In other situations, in Kashmir for example, their tactics are not so sensitive. Whole buildings are blown up. Human shields are used. The US and Israeli armies don’t hesitate to send cruise missiles into buildings and drop daisy cutters on wedding parties in Palestine, Iraq and Afghanistan.)

But this was different. And it was on TV.

The boy-terrorists’ nonchalant willingness to kill - and be killed - mesmerized their international audience. They delivered something different from the usual diet of suicide bombings and missile attacks that people have grown inured to on the news.

Here was something new. Die Hard 25. The gruesome performance went on and on. TV ratings soared. Ask any television magnate or corporate advertiser who measures broadcast time in seconds, not minutes, what that’s worth.

Eventually the killers died and died hard, all but one. (Perhaps, in the chaos, some escaped. We may never know.)

So what are we to make of those who care nothing for life, not even their own? The truth is that we have no idea what to make of them, because we can sense that even before they’ve died, they’ve journeyed to another world where we cannot reach them.

One TV channel (India TV) broadcast a phone conversation with one of the attackers, who called himself “Imran Babar”. I cannot vouch for the veracity of the conversation, but the things he talked about were the things contained in the “terror e-mails” that were sent out before several other bomb attacks in India. Things we don’t want to talk about any more: the demolition of the Babri Masjid in 1992, the genocidal slaughter of Muslims in Gujarat in 2002, the brutal repression in Kashmir.

“You’re surrounded,” the anchor told him. “You are definitely going to die. Why don’t you surrender?”

“We die every day,” he replied in a strange, mechanical way. “It’s better to live one day as a lion and then die this way.” He didn’t seem to want to change the world. He just seemed to want to take it down with him.

If the men were indeed members of the Lashkar-e-Taiba, why didn’t it matter to them that a large number of their victims were Muslim, or that their action was likely to result in a severe backlash against the Muslim community in India whose rights they claim to be fighting for?

Terrorism is a heartless ideology, and like most ideologies that have their eye on the big picture, individuals don’t figure in their calculations except as collateral damage.

It has always been a part of, and often even the aim of, terrorist strategy to exacerbate a bad situation in order to expose hidden fault lines. The blood of “martyrs” irrigates terrorism. Hindu terrorists need dead Hindus, communist terrorists need dead proletarians, Islamist terrorists need dead Muslims. The dead become the demonstration, the proof of victimhood, which is central to the project.

A single act of terrorism is not in itself meant to achieve military victory; at best it is meant to be a catalyst that triggers something else, something much larger than itself, a tectonic shift, a realignment. The act itself is theater, spectacle and symbolism, and today the stage on which it pirouettes and performs its acts of bestiality is Live TV. Even as the Mumbai attacks were being condemned by TV anchors, the effectiveness of the terror strikes was being magnified a thousand-fold by the TV broadcasts.

Through the endless hours of analysis and the endless op-ed essays, in India at least, there has been very little mention of the elephants in the room: Kashmir, Gujarat and the demolition of the Babri Masjid.

Instead, we had retired diplomats and strategic experts debate the pros and cons of a war against Pakistan. We had the rich threatening not to pay their taxes unless their security was guaranteed. (Is it alright for the poor to remain unprotected?) We had people suggest that the government step down and each state in India be handed over to a separate corporation.

We had the death of former prime minister V P Singh, the hero of Dalits and lower castes, and the villain of upper caste Hindus, pass without a mention.

We had Suketu Mehta, author of Maximum City and co-writer of the Bollywood film Mission Kashmir give us his version of George W Bush’s famous “Why They Hate Us” speech. His analysis of why religious bigots, both Hindu and Muslim, hate Mumbai, “Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.”

His prescription: “The best answer to the terrorists is to dream bigger, make even more money, and visit Mumbai more than ever.”

Didn’t Bush ask Americans to go out and shop after 9/11? Ah yes. 9/11, the day we can’t seem to get away from.

It isn’t surprising that those who have grown plump on the pickings of democracy (such as it is) should now be calling for a police state. The era of “pickings” is long gone. We’re now in the era of grabbing by force, and democracy has a terrible habit of getting in the way.

Dangerous, stupid oversimplifications like the police are good/politicians are bad, chief executives are good/chief ministers are bad, army is good/government is bad, India is good/Pakistan is bad are being bandied about by TV channels that have already whipped their viewers into a state of almost uncontrollable hysteria.

Tragically this regression into intellectual infancy comes at a time when people in India were beginning to see that, in the business of terrorism, victims and perpetrators sometimes exchange roles.

It’s an understanding that the people of Kashmir, given their dreadful experiences of the past 20 years, have honed to an exquisite art. On the mainland we’re still learning. (If Kashmir won’t willingly integrate into India, it’s beginning to look as though India will integrate/disintegrate into Kashmir.)

It was after the 2001 parliament attack that the first serious questions began to be raised. A campaign by a group of lawyers and activists exposed how innocent people had been framed by the police and the press, how evidence was fabricated, how witnesses lied, how due process had been criminally violated at every stage of the investigation.

The Supreme Court upheld the death sentence of another of the accused, Mohammad Afzal. In its judgment the court acknowledged that there was no proof that Mohammed Afzal belonged to any terrorist group, but went on to say, quite shockingly, “The collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.”

Even today we don’t really know who the terrorists that attacked the Indian parliament were and who they worked for.

More recently, on September 19th of this year, we had the controversial “encounter” at Batla House in Jamia Nagar, Delhi, where the Special Cell of the Delhi police gunned down two Muslim students in their rented flat under seriously questionable circumstances, claiming that they were responsible for serial bombings in Delhi, Jaipur, and Ahmedabad in 2008. An assistant commissioner of police, Mohan Chand Sharma, who played a key role in the parliament attack investigation, lost his life as well. He was one of India’s many “encounter specialists”, known and rewarded for having summarily executed several “terrorists”.

There was an outcry against the Special Cell from a spectrum of people, ranging from eyewitnesses in the local community to senior Congress party leaders, students, journalists, lawyers, academics and activists, all of whom demanded a judicial inquiry into the incident.

In response, the BJP and L K Advani lauded Mohan Chand Sharma as a “Braveheart” and launched a concerted campaign in which they targeted those who had dared to question the integrity of the police, saying to do so was “suicidal” and calling them “anti-national”. Of course, there has been no enquiry.

Only days after the Batla House event, another story about “terrorists” surfaced in the news. In a report submitted to a sessions court, the Central Bureau of Investigation (CBI) said that a team from Delhi’s Special Cell (the same team that led the Batla House encounter, including Mohan Chand Sharma) had abducted two innocent men, Irshad Ali and Moarif Qamar, in December 2005, planted two kilograms of RDX (explosives) and two pistols on them, and then arrested them as “terrorists” who belonged to Al Badr (which operates out of Kashmir).

Ali and Qamar, who have spent years in jail, are only two examples out of hundreds of Muslims who have been similarly jailed, tortured and even killed on false charges.

This pattern changed in October 2008 when Maharashtra’s Anti-Terrorism Squad (ATS), which was investigating the September 2008 Malegaon blasts, arrested Hindu preacher Sadhvi Pragya, a self-styled God man, Swami Dayanand Pande and Lieutenant Colonel Purohit, a serving officer of the Indian army. All the arrested belong to Hindu nationalist organizations, including a Hindu supremacist group called Abhinav Bharat.

The Shiv Sena, the BJP, and the RSS condemned the Maharashtra ATS and vilified its chief, Hemant Karkare, claiming he was part of a political conspiracy and declaring that “Hindus could not be terrorists.” L K Advani changed his mind about his policy on the police and made rabble rousing speeches to huge gatherings in which he denounced the ATS for daring to cast aspersions on holy men and women.

On November 25, newspapers reported that the ATS was investigating the high profile VHP chief Pravin Togadia’s possible role in the blasts in Malegaon (a predominantly Muslim town). The next day, in an extraordinary twist of fate, Hemant Karkare was killed in the Mumbai attacks. Chances are the new chief, whoever he is, will find it hard to withstand the political pressure that is bound to be brought on him over the Malegaon investigation.

While the Sangh Parivar does not seem to have come to a final decision over whether or not it is anti-national and suicidal to question the police, Arnab Goswami, anchorperson of Times Now television, has stepped up to the plate. He has taken to naming, demonizing and openly heckling people who have dared to question the integrity of the police and armed forces.

My name and the name of the well-known lawyer Prashant Bhushan have come up several times. At one point, while interviewing a former police officer, Arnab Goswami turned to the camera: “Arundhati Roy and Prashant Bhushan,” he said. “I hope you are watching this. We think you are disgusting.”

For a TV anchor to do this in an atmosphere as charged and as frenzied as the one that prevails today amounts to incitement, as well as threat, and would probably in different circumstances have cost a journalist his or her job.

So, according to a man aspiring to be the next prime minister of India, and another who is the public face of a mainstream TV channel, citizens have no right to raise questions about the police.

This in a country with a shadowy history of suspicious terror attacks, murky investigations, and fake “encounters”. This in a country that boasts of the highest number of custodial deaths in the world yet refuses to ratify the international covenant on torture. A country where the ones who make it to torture chambers are the lucky ones because at least they’ve escaped being “encountered” by our Encounter Specialists. A country where the line between the underworld and the Encounter Specialists virtually does not exist.

There are those who point out that US strategy has been successful inasmuch as the United States has not suffered a major attack on its home ground since 9/11. However, some would say that what America is suffering from now is far worse.

If the idea behind the 9/11 terror attacks was to goad America into showing its true colors, what greater success could the terrorists have asked for? The US military is bogged down in two unwinnable wars, which have made the United States the most hated country in the world. Those wars have contributed greatly to the unraveling of the American economy and who knows, perhaps eventually the American empire.

(Could it be that battered, bombed Afghanistan, the graveyard of the Soviet Union, will be the undoing of this one too?)

Hundreds of thousands of people, including thousands of American soldiers, have lost their lives in Iraq and Afghanistan. The frequency of terrorist strikes on US allies/agents (including India) and US interests in the rest of the world has increased dramatically since 9/11.

George W Bush, the man who led the US response to 9/11, is a despised figure not just internationally, but also by many of his own people.

Who can possibly claim that the United States is winning the “war on terror?”

Homeland security has cost the US government billions of dollars. Few countries, certainly not India, can afford that sort of price tag. But even if we could, the fact is that this vast homeland of ours cannot be secured or policed in the way the United States has been. It’s not that kind of homeland.

We have a hostile nuclear-weapons state that is slowly spinning out of control as a neighbor; we have a military occupation in Kashmir and a shamefully persecuted, impoverished minority of more than 150 million Muslims who are being targeted as a community and pushed to the wall, whose young see no justice on the horizon, and who, were they to totally lose hope and radicalize, will end up as a threat not just to India, but to the whole world.

If 10 men can hold off commandos and the police for three days, and if it takes half a million soldiers to hold down the Kashmir Valley, do the math. What kind of homeland security can secure India?

Nor for that matter will any other quick fix.

Anti-terrorism laws are not meant for terrorists; they’re for people that governments don’t like. That’s why they have a conviction rate of less than 2%. They’re just a means of putting inconvenient people away without bail for a long time and eventually letting them go.

Terrorists like those who attacked Mumbai are hardly likely to be deterred by the prospect of being refused bail or being sentenced to death. It’s what they want.

What we’re experiencing now is blowback, the cumulative result of decades of quick fixes and dirty deeds. The carpet’s squelching under our feet.

The only way to contain - it would be naive to say end - terrorism is to look at the monster in the mirror. We’re standing at a fork in the road. One sign says “Justice,” the other “Civil War”. There’s no third sign and there’s no going back. Choose.

Arundhati Roy was born in 1959 in Shillong, India. She studied architecture in New Delhi, where she now lives, and has worked as a film designer, actor and screenplay writer in India. A 10th anniversary edition of her novel, The God of Small Things (Random House), for which she received the 1997 Booker Prize, will be officially published within days. She is also the author of numerous non-fiction titles, including An Ordinary Person’s Guide to Empire. This piece was published by Outlook India, which is sharing it with TomDispatch.com.

(Copyright 2008 Arundhati Roy.)

(Used by permission Tomdispatch)

source : http://www.atimes.com/atimes/South_Asia/JL16Df04.html

ARM

Adjustable Rate Mortgage (ARM) is a variable rate loan.  ARMs usually offer a lower initial rate than fixed-rate loans.  The interest rate can change at specified time periods based on changes in an interest rate index that based on current finance conditions, i.e. LIBOR index or the Treasure index. Common indices include the cost of funds for savings and loan institutions, the national average mortgage rate, and the most popular one-year rate for the government’s sale of treasury bills. The ARM promissory note states maximum and minimum rates.  When the interest rate on an ARM increases, the monthly payments will increase.  When the interest rate on an ARM decreases, the monthly payments will be lower.

Before choosing an ARM over a fixed-rate mortgage, compare the current index value plus margin (i.e. 3.54% one-year Treasury Index + 2.75% margin = 6.21%) to the current fixed-rate (8.25%).  The difference (2.04%) is the interest rate savings that you would get by choosing an ARM if interest rates were to remain the same.

So long 2008! Welcome 2009!

BRITISH FINANCIAL WARFARE: 1929; 1931- 33

The thesis of this paper is that the great economic and financial cataclysm of the first half of the twentieth century, which we have come to know as the Great Depression, was caused by the Bank of England, the British government, and the City of London. The potential for the Great Depression derived from the economic and human destruction wrought by World War I, which was itself a product of British geopolitics and especially of the British policy, exemplified by King Edward VII, of creating an encircling anti-German alliance in order to wage war. The economic destruction of Europe was continued after 1918 by the Peace of Paris (Versailles, St. Germain, Trianon, Neuilly, Sevres) imposed by the Allies on the defeated Central Powers. Especially important here were the 55 billion gold dollars in reparations inflicted on defeated Germany, along with the war debt burden of the supposedly victorious powers themselves. Never during the 1920’s did world trade surpass the levels of 1913. Reparations and war debt were a recipe for economic stagnation.

The ravaged post-war, post-Versailles world of the 1920’s provides the main backdrop for the following considerations:

3. This depression was rendered far more severe and, most importantly, permanent, by the British default on gold payment in September, 1931. This British default, including all details of its timing and modalities, and also the subsequent British gambit of competitive devaluations, were deliberate measures of economic warfare on the part of the Bank of England. British actions amounted to the deliberate destruction of the pound sterling system, which was the only world monetary system in existence at that time. The collapse of world trade became irreversible. With deliberate prompting from the British, currency blocs emerged, with the clear implication that currency blocs like the German Reichsmark and the Japanese yen would soon have to go to war to obtain the oil and other natural resources that orderly world trade could no longer provide. In 1931, Norman engineered a disintegration by detonating the gold backing of the pound sterling.

As we have already hinted, we consider that these matters are not solely of historical interest. The repertoire of central bank intrigue, speculative bubbles, defaults, devaluations, bank rate manipulations, deflations and inflations constitute the essential arsenal being used by British economic warfare planners today.

The Maastricht “convergence criteria” with their insane deflationary thrust are very similar in effect to the rules of the gold exchange standard as administered by London, 1925-1931. For that matter, the policies of the International Monetary Fund are too. The parallel extends even to the detail of Perfidious Albion’s gambit of opting out of the European Currency Union while watching its victims writhe in an deflationary straightjacket tailored between Threadneedle Street and Saville Row.

Since the summer of 1995 hot money generated by the low interest rates of the Bank of Japan has been used by hedge fund operators of the Soros school to puff up the world bubble. If the Bank of England’s late 1996 switch to bank rate increases turns out to be a harbinger of world tight money, then it is possible that the collapse and disintegration of the world financial system will recapitulate other phases of the interwar years.

Lord Montagu Norman was always obsessed with secrecy, but the British financial press has often practiced an arrogant and cynical bluntness in its self-congratulatory accounts of its own exploits. Therefore, wherever possible we have let the British, especially the London Economist magazine and Lord Keynes, speak for themselves and indict themselves. We have also drawn on the memoirs of US President Herbert Hoover, who had moments of suprising lucidity even as he, for the sake of absurd free-market, laissez-faire ideology, allowed his country to drift into the abyss. As we will see, Hoover had everything he needed to base his 1932 campaign for re-election on blaming the Federal Reserve, especially its New York branch, for the 1929 calamity. Hoover could have assailed the British for their September 1931 stab in the back. Hoover would have been doing the country a permanent service, and he might have done somewhat better in the electoral college. But Hoover was not capable of seriously attacking the New York Fed and its master, Lord Montagu Norman.

ECONOMIC DECLINE AFTER WORLD WAR I

The roots of the crash of 1929 are to be sought in the economic consequences of World War I, which was itself a product of the British geopolitical machinations of King Edward VII and his circles. The physical impact of World War I was absolutely devastating in terms of human losses and material damage. This destruction was then greatly magnified by the insistence of London and Paris on reparations to be paid by defeated and prostrate Germany.

After a few years of haggling, these reparations were fixed at the astronomical sum of 32 billion gold-backed US dollars, to be paid over 62 years at an interest rate of 5%. Even Lord Keynes, in his “Economic Consequences of the Peace,” compared this to the imposition of slavery on Germany and her defeated allies, or to squeezing a lemon until the pits squeak.

The reparations issue was complicated by the inter-allied war debts, owed especially by France and Britain to the United States. For a time a system emerged in which Wall Street made loans to Germany so that Germany could pay reparations to France, which could then pay war debts to Britain and the US. But this system was based on usury, not production, and was therefore doomed.

The most dramatic evidence available on economic stagnation during the 1920’s is the fact that during this decade world trade never attained the pre-war level of 1913.

THE CABAL OF CENTRAL BANKERS

A dominant personality of the City of London during these years was Sir Montagu Norman, the Governor of the Bank of England during the period 1920-1944. Norman came from a line of bankers. His grandfather was Sir Mark Wilks Collet, who had himself been Governor of the Bank of England during the 1880’s. Collet had also been a partner in the London firm of Brown, Shipley & Co., and also in the New York bank of Brown Brothers & Co., later Brown Brothers, Harriman, one of the most evil and most powerful banks in modern American history. The managing partner of Brown Brothers, Harriman during the 1930’s was Prescott Bush, father of President George Herbert Walker Bush, and a financial backer of Hitler. The dominant figure at Brown Brothers, Harriman was W. Averell Harriman, Roosevelt’s special envoy to Churchill and Stalin, head of the Marshall Plan, and the adviser to President Truman who was most responsible for starting the Cold War with Russia and for prolonging the Korean War.

Acting by himself and relying only on his own British resources, Montagu Norman could hardly have aspired to play the role of currency dictator of Europe. Norman’s trump card was his ability to manipulate the policies of the United States Federal Reserve System through a series of Morgan-linked puppets.

Morgan’s key puppet was Benjamin Strong of the New York Federal Reserve Bank, which then as now represented the flagship of the entire Fed system. Strong was Governor of the New York Federal Reserve Bank between 1914 and his death in 1929. Strong was an operative of the House of Morgan who had worked at Bankers Trust. In addition to what he could do himself, Strong had great influence over Andrew Mellon, who served as Secretary of the Treasury between 1921 and 1929 under Presidents Harding, Coolidge, and Hoover.

Montagu Norman also owned a large piece of Hjalmar Schacht, Governor of the German Reichsbank and later Finance Minister in governments in which Adolf Hitler was chancellor. Montagu Norman himself, along with King Edward VIII, Lady Astor and Sir Neville Chamberlain, was one of the strongest supporters of Hitler in the British aristocracy. Norman put his personal prestige on the line in September, 1933 to support the Hitler regime in its first attempt to float a loan in London. The Bank of England’s consent was at that time indispensable for floating a foreign bond issue, and Norman made sure that the “Hitler bonds” were warmly recommended in the City.

THE FEDERAL RESERVE: CAUSE OF DEPRESSION

One of the main causes for the Great Depression was the Federal Reserve System of the United States. Many naive persons think of the Federal Reserve System as a part of the United States government, which it emphatically is not. Probably this is because the only money we have nowadays is marked “Federal Reserve Note.” The Federal Reserve is a privately owned and privately managed institution. Those who can remember the 1960’s can recall that there were one dollar silver certificates as well as United States Notes, the descendants of Lincoln’s greenbacks, in several denominations. But after the Kennedy assassination, the private Federal Reserve established a monopoly on printing American money, shutting out the US Federal Government from this important function.

In this way the Federal Reserve System violates the letter and spirit of the United States Constitution. There, in Article I, Section 8, Clause 5 we read that the Congress shall have the power “to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.”

The Federal Reserve was created in December, 1913 when Woodrow Wilson signed the Glass-Owen Federal Reserve Act. That bill had been the product of cloak-and-dagger machinations by Wall Street financiers and their political mouthpieces, many of them in league with the City of London. Wall Streeter Frank A. Vanderlip, in his autobiography “From Farm Boy to Financier” narrates that the secret conference which planned the Federal Reserve was “as secret - indeed, as furtive - as any conspirator.” Vanderlip was one of the insiders invited to the Jekyl Island Club on the coast of Georgia in the autumn of 1910 by the Senator Nelson Aldrich, the father-in-law of John D. Rockefeller Jr. Aldrich also invited Henry Davison of J.P. Morgan & Co., and Benjamin Strong, the future Governor of the New York Federal Reserve Bank. Also on hand was Paul Warburg of the notorious international banking family, descended from the Del Banco family of Venice. As Vanderlip recounted, “We were instructed to come one at a time and as unobtrusively as possible to the railway terminal on the New Jersey littoral of the Hudson, where Senator Aldrich’s private car would be in readiness, attached to the rear end of a train for the South.”

On Jekyl Island this crew began to decide the main features of the central bank of the United States: “We worked morning, noon, and night….As we dealt with questions I recorded our agreements…If it was to be a central bank, how was it to be owned - by the banks, by the Government or jointly ? When we had fixed upon bank ownership and joint control, we took up the political problem of whether it should be a number of institutions or only one.” In the end, says Vanderlip, “there can be no question about it: Aldrich undoubtedly laid the essential, fundamental lines which finally took the form of the Federal reserve law.”

Today each of the twelve Federal Reserve Banks - Boston, New York, Chicago, San Francisco, and so forth - is a private corporation. The shares are held by the member banks of the Federal Reserve System. The Class A and Class B Directors of each Federal reserve Bank are elected by the shareholders from among bankers and the business community, and other Directors are appointed by the Federal Reserve Board in Washington.

Members of the Board of Governors of the Federal Reserve System in Washington are chosen by the President and must be approved by the Senate, for what that is worth. But when we come to the vital Federal Reserve Open Market Committee, which sets short-term interest rates and influences the size of the money supply by buying or selling government securities, the picture is even worse. The FOMC comprises 7 Fed Governors from Washington plus 5 presidents of Federal Reserve Banks appointed by the respective Directors of these banks. In practice, 5 Federal Reserve district presidents who have never been seen by the President or the Congress have a vote on setting the credit policy and money supply of the United States. Public policy is made by a private cabal of self-appointed plutocrats.

How was this sleazy product marketed to the Congress ? Interestingly, the Congressmen were told that the Federal Reserve System would prevent panics and depressions like those of the 1870’s and 1890’s. Here is a sampling compiled by Herbert Hoover of selling points used by lobbyists seeking votes for the Federal Reserve Act:

[The Memoirs of Herbert Hoover, p.7]

The verdict of history must be that the Federal Reserve has utterly failed to deliver on these promises. The most potent political argument against this arrangement is that it has been a resounding failure. Far from making financial crises impossible, the Fed has brought us one Great Depression, and it is about to bring us a super-depression, a worldwide disintegration.

The Federal Open Market Committee was not part of the original legislation that created the Federal Reserve System. But in the early 1920’s, some regional Federal Reserve Bank presidents, inevitably dominated by New York, formed a committee outside of any law to coordinate their activities in determning the money supply and interest rates through buying and selling of government securities - i.e., open market operations. This was a very successful power grab by the regional Reserve Bank leaders, all directly chosen by bankers and the private sector, and not subject to approval by anyone in Washington. In 1935 Franklin D. Roosevelt very unwisely signed a Banking Act which legalized the Federal Open Market Committee in its present form, with a formal majority for Federal Reserve Board Governors in Washington, the ones proposed by the President and approved by the Senate. But at the same time the Secretary of the Treasury, who used to be a member of the central Board, was ousted from that position.

THE BRITISH RECORD OF STARTING WALL STREET PANICS

The British had a long track record of using the London Bank Rate (that is, the rediscount rate of the Bank of England) for financial and economic warfare against the United States. The periodic panics of the nineteenth century were more often than not caused by deliberate British sabotage. A few examples:

* The Panic of 1873 resuted from a British-directed effort to ruin the banking house of Jay Cooke and Company, which had served Lincoln and his successors as a quasi-governmental agency for the marketing of United States Treasury securities and railroad bonds during and after the Civil War. The Cooke insolvency had been preceded by a massive dumping of US staocks and bonds in London and the rest of Europe. This was London’s way of shutting down the Civil War boom that Lincoln’s dirigist and protectionist policies had made possible. Instead, a long US depression followed.

The economics profession is totally bankrupt today, with every Nobel Prize winner in economics with the sole exception of Maurice Allais qualifying for committment to a psychiatric institution. One of the reasons for the depravity of the economists is that their assigned task has always been one of mystification, especially the job of covering up the simple and brutal fact that American depressions have generally been caused by Bank of England and City of London bankers. All the mystical mumbo-jumbo of curves, cycles, and epicycles a la Schumpeter has always had the purpose of camouflaging the fact that the Bank of England bank rate was the nineteenth century’s closest equivalent to the hydrogen bomb.

DEFLATION CRISIS OF 1920-21

The New York panic of 1920-21 represents yet another example of British economic warfare. The illusion that the existence of the Federal Reserve System might serve as a barrier against new financial panics and depressions received a nasty knock with the immediate postwar depression of 1920, which was a co-production of the Bank of England and the New York Federal Reserve. The British deliberately provoked this Wall Street panic and severe depression during a period of grave military tension between London and washington occasioned by the naval rivalry of the US and UK. The British Bank Rate had been at 6% from November 1919 until April 15, 1920, when it was raised to 7%. The bust in Wall Street began in the late summer of 1920. The UK Bank Rate was lowered to 6.5% in April 1922, and it went down all the way to 3% by July, 1922.

The Federal Reserve, as usual, followed London’s lead, gradually escalating the discount rate to 7% in June, 1920 to detonate the bust, and descending to 6.5% about a year later. The argument used by the central bankers’ cabal to justify their extreme tight money policy was the climate of postwar inflation, speculation, expansion and the freeing of consumer demand that had been pent up in wartime. This depression lasted about two years and was quite sharp, with a New York composite index of transaction indices falling 13.7% for the sharpest contraction since 1879. In many other countries this was the fiercest depression on record. As Keynes later complained, the US recovered much more rapidly than the British, who scarcely recovered at all. For the rest of the interwar period, the United Kingdom was beset by permanent depression.

The fact that this depression was brought on deliberately by the Norman-Strong duo is amply documented in their private correspondence. In December 1920, Strong and Norman agreed that “the policy of making money dearer had been successful, though it would have been better six months earlier. They agreed, too, that deflation must be gradual; it was becoming now too rapid and they favored a small reduction in rates both in London and New York.” [Clay, Lord Norman, p. 132]

THE CRASH OF 1929

The panic of 1929 is a prime example of a financial collapse which was not prevented by the Federal Reserve. In fact, the 1920’s speculaltive bubble and subsequent crash of 1929 was directly caused by Federal Reserve policies. Those policies in turn had been dictated by the world of British finance, which had been decisive in shaping the Federal Reserve to begin with.

During World War I, all the industrialized nations except the United States had left the gold standard. Only the United States had been able to stay with gold, albeit with special controls. During the 1920’s about two thirds of the world’s supply of monetary gold, apart from Soviet holdings, was concentrated in two countries - the United States and France. The British, who were fighting to preserve their dominance of the world financial system, had very little gold.

The British were determined to pursue their traditional economic imperialism, but they had emerged from the war economically devastated and, for the first time, a debtor nation owing war debts to the United States. At the same time, the British were fighting to keep their precious world naval supremacy, which was threatened by the growth of the United States Navy. If the US had merely built the ships that were called for in laws passed in 1916, the slogan of “Brittania Rules the Waves” would have gone into the dust- bin of history early in the 1920’s.

The pre-war gold parity had given a dollar to pound relation of $4.86 per pound sterling. As an avid imperialist Montagu Norman was insisting by the mid-1920’s that the pound return to the gold standard at the pre-war rate. A high pound was a disaster for British exports, but gave the British great advantages when it came to buying American and other foreign real estate, stocks, minerals, food, and all other external commodities. A high pound also maximized British earnings on insurance, shipping, and financial services — London’s so-called “invisible exports” and earnings.

LORD NORMAN’S GOLD EXCHANGE STANDARD, 1925-1931

The nineteenth century gold standard had always been an instrument of British world domination. The best economic growth achieved by the United States during the century had been registered between 1861 and the implementation of the Specie Resumption Act in 1879. During that time the United States enjoyed the advantage of its own nationally controlled currency, Lincoln’s greenbacks. Specie resumption meant re-opening the Treasury window where holders of paper dollars could have these dollars exchanged for gold coins. The United States in 1879 thus returned to a gold coin standard, under which paper money circulated side by side with $20 and $50 gold pieces. This practice proved to be deflationary and detrimental to economic development, while it increased American vulnerability to British currency manipulations.

The post-1918 gold standard de-emphasized the circulation of gold coins, although this still went on. It was rather a gold exchange standard, under which smaller countries who chose the gold standard could hold some of their reserves in the leading gold-backed currencies like the pound sterling or the dollar. These currencies were counted as theoretically as good as gold. The advantage to the smaller countries was that they could keep their reserves on deposit in London and earn interest according to the British bank rate. As one London commentator noted at the time, “…many countries returning to gold “have had such confidence in the stability of the system, and in particular in the security of the dollar and of sterling, that they have been content to leave part of the reserves of their currencies in London.” [Economist, September 26, 1931, p. 549]

The post-1918 gold exchange standard included the workings of the so-called gold points. This had to do with the relation of currency quotations to the established gold parity. Norman wanted the pound sterling to be worth $4.86. If the pound strengthened so as to trade for $5, let us say, then the pound was said to have exceeded the gold import point. American and other gold would be shipped to London by those who owned gold. That gold would be deposited in London and would earn interest there. If, as later happened, the pound went down to 4 dollars to the pound, then the pound was said to have passed the gold export point, and British gold would be physically shipped to New York to take advantage of the superior earnings there. This meant that if Norman wanted to keep a strong pound, he needed to weaken the dollar at the same time, since with a strong dollar the British gold would flee from London, forcing Norman to devalue the pound sterling, lowering its the gold parity. Notice that gold movements were to a very large degree based on the decisions of individual banks and investors.

(During the later 1930’s, after the a period in which the dollar floated downward in terms of gold, the United States under Franklin D. Roosevelt established a gold reserve standard, also called by FDR’s critics a “qualified external bullion standard,” in which gold transactions were limited to settlements with foreign central banks, while private citizens were barred from holding gold. This was similar to the gold reserve provisions of the Bretton Woods system of 1944-1971.)

Norman’s problem was that his return to the pre-1914 pound rate was much too high for the ravaged post-1918 British economy to support. Both the US and the British had undergone an economic downturn in the early 1920’s, but while the US soon bounced back, the British were never able to recover. British manufactures were now considered low-quality and obsolete.

THE GOLDEN CHANCELLOR

Nevertheless, Norman insisted on a gold pound at $4.86. He had to convince Winston Churchill, the Chancellor of the Exchequer. Norman whispered into Churchill’s ear: “I will make you the golden chancellor.” Great Britain and the rest of the Empire returned to the gold standard in April, 1925. Norman himself craved the title of “currency dictator of Europe.” And indeed, many of the continental central banks were in his pocket.

It was much easier to return to the gold standard than it was to stay there. British industrial exports, including coal, were priced out of the world market, and unemployment rose to 1.2 million, the highest since Britain had become an industrial country. Emile Moreau, the governor of the Bank of France, commented that Norman’s gold standard had “provoked unemployment without precedent in world history.” British coal miners were especially hard hit, and when the mine owners announced wage reductions, Britain experienced the 1926 general strike, which was defeated with Winston Churchill as chief scab and strike-breaker.

But Norman did not care. He was a supporter of the post- industrial society based on the service sector, especially financial services. The high pound meant that British oligarchs could buy up the world’s assets at bargain basement prices. They could buy US and European real estate, banks, and firms. Norman’s goal was British financial supremacy: “…his sights remained stubbornly fixed on the main target: that of restoring the City to its coveted place at the heart of the financial and banking universe. Here was the best and most direct means, as he saw it, of earning as much for Britain in a year as could be earned in a decade by plaintive indsutrialists who refused to move with the times. The City could do more for the country by concentrating on the harvest of invisible exports to be reaped from banking, shipping, and insurance than could all the backward industrialists combined.” [Boyle, 222]

Montagu Norman’s golden pound would have been unthinkable without the puppet role of Benjamin Strong of the New York Federal Reserve Bank. Since the pound was grotesquely overvalued, the British were running a balance of payments defecit because of their excess of imports over exports. That meant that Norman had to ship gold from the Bank of England in Threadneedle Street across the Atlantic. The British gold started to flow towards New York, where most of the world’s gold already was.

The only way to stop the flow of gold from London to New York, Norman reasoned, was to get the United States to launch a policy of easy money, low interest rates, reflation, and a weak dollar - in short, a policy of inflation. The key to obtaining this was Benjamin Strong, who dominated the New York Fed, and was in a position to dominate the entire Federal Reserve system which was, of course, independent of the “political control” of the US government which these oligarchs so much resented.

In essense, Norman’s demand was that the US should launch a bubble economy. The newly-generated credit could be used for American loans to Germany or Latin America. Or, it could be used to leverage speculative purchases of stocks. Very soon most of the new credit was flowing into broker call loans for margin buying of stocks. This meant that by advancing a small percentage of the stock price, speculators could borrow money to buy stocks, leaving the stocks with the broker as collateral for the loans. There are many parellels between the measures urged for the US by Norman in 1925 and the policies urged on Japan by London and Wall Street in 1986, leading to the Japanese bubble and their current banking crisis.

In 1925, as the pound was returning to gold, Montagu Norman, Hjalmar Schacht and Charles Rist, the deputy governor of the Banque de France visited Benjamin Strong in New York to mobilize his network of influential insiders for easy money and low interest rates in the US. Strong was able to obtain the policies requested by Norman and his European puppets. Norman & Co. made a second pilgrimage to Wall Street between 28 June and 1 July 1927 to promote American speculation and inflation. On this second lobbying trip, Norman exhibited grave concern because the first half of 1927 had witnessed a large movement of gold into New York. Strong and his cabal immediately went into action.

The second coming of Norman and Schacht in 1927 motivated Strong to force through new reflation of the money supply in July and a further cut in the US discount rate in August of that same year. The rediscount rate of the New York Fed was cut from 4% to 3.5%. This was the credit which stoked the culminating phase of the Coolidge Bull Market during 1928 and 1929. Strong also got the FOMC to begin buying US Treasury securities in open market operations, leaving the banks flush with cash. This cash soon wandered into the broker call loan market, where it was borrowed by stock speculators to buy stock on margin, fueling a growing stock speculation. Interest rates in London were supposed, according to Norman, to be kept above those in New York - although Norman later deviated from this when it suited him.

In his essay “The Economic Consequences of Mr. Churchill,” Lord Keynes noted that the British had returned to gold at a rate that was at least 10% too high; Keynes showed that the British government had also chosen a policy of deliberately increasing unemployment, especially in the export industries in order to drive down wages. In order to stem the flow of gold out of London, Keynes observed, the Bank of England’s policy was to “encourage the United States to lend us money by maintaining the unprecedented situation of a bill rate 1 per cent higher in London than in New York.” [Essays in Persuasion, p. 254]

One alarmed observer of these events was, ironically, Secretary of Commerce Herbert Hoover of the Coolidge administration, who condemned the Fed policies as “direct inflation.” “In November, 1925,” recounts Hoover, “it was confirmed to me by Adolph Miller, a member of the Reserve Board, that Strong and his European allies proposed still more ‘easy money policies,’ which included continued manipulation of the discount rates and open market operations - more inflation.” Hoover says he protested to Fed chairman Daniel Crissinger, a political appointee left over from the Harding era who was in over his head. “The other members of the board,” says Hoover, “except Adolph Miller, were mediocrities, and Governor Strong was a mental annex of Europe.”

Hoover had to some extent struggled behind the scenes in 1925 against Norman’s demands, but by 1927 he had begun to defer in matters of high finance to Ogden Mills, who was willing to go along with the Bank of England program. After the crash, Hoover’s friend Adolph Miller of the Fed Board of Governors told a committee of the US Senate:

[Senate Hearings pursuant to S.R. 71, 1931, p. 134 in Lionel Robbins, The Great Depression (London, 1934), p. 53.]

A few years later the British economist Lionel Robbins offered the following commentary on Miller’s testimony: “The policy succeeded….The London position was eased. The reflation succeeded. But from that date, the situation got completely out of control. By 1928 the authorities were throughly frightened. But now the forces they had released were too strong for them. In vain they issued secret warnings. In vain they pushed up their own rates of discount. Velocity of circulation, the frenzied anticipation of speculators and company promoters, had now taken control. With resignation the best men in the system looked forward to the inevitable smash.” [Robbins, pp. 53-54]

Robbins contends that the Wall Street bubble of 1925-1929 was built on top of an economy that was sinking into recession in 1925. The Norman-Strong bubble masked that recession until the panic exploded in 1929. Robbins places the responsibility for the Crash at the door of the Federal Reserve and its European counterparts: “Thus, in the last analysis, it was deliberate co-operation between Central bankers, deliberate ‘reflation’ on the part of the Federal Reserve authorities, which produced the worst phase of this stupendous inflation.” [Robbins, p. 54]

The evolution of the Norman’s tactics shows clearly enough that he did not provoke a crash in New York out of legitimate self defense, to protect the Bank of England’s gold from being exported to Manhattan. Norman was willing to sacrifice massive quantities of gold in order to feed the New York bubble and thus be sure that when panic finally came, it would be as devastating as possible. Between July 1928 and February, 1929, the New York Fed lending rate was 5%, half a point higher than the 4.5% that was the going rate at the Bank of England. As the London Economist commented, “two years ago [in early 1927] no one would have believed New York could remain half a point above London for more than a few weeks without London being forced to follow suit.” [Economist, February 9, 1929, p. 275] All during the autumn of 1928 the Bank of England hemorrhaged gold to Manhattan, as British pounds hurried to cash in on the 12% annual interest rates to be had in the Wall Street brokers’ call loan market. Even in January and February of 1929, months when the Bank of England could normally expect to take in gold, the gold outflow continued.

During the first week of February, 1929, Norman raised the London bank rate to 5.5%. The Economist snidely commented:

[Economist, 9 February 1929, p. 275]

The higher British bank rate scared a number of Wall Street speculators. In two days the Dow Jones average declined by about 15 points to 301. On the day Norman hiked the rates, the volume went over 5 million shares, at that tme an extraordinary level. But within a few days the momentum of speculation reasserted itself.

The signal sent by the higher London Bank Rate was underlined in March 1929 by the Anglophile banker Paul Warburg. This was once again the scion of the notorious Anglo-Venetian Del Banco family who had been the main architect of the Federal Reserve System. Warburg now warned that the upward movement of stock prices was “quite unrelated to respective increases in plant, property, or earning power.” In Warburg’s view, unless the “colossal volume of loans” and the “orgy of unrestrained speculation” could be checked, stocks would ultimately crash, causing “a general depression involving the entire country.” [Noyes, p. 324]

Between February and April 1929, the Bank of England was able slightly to improve its gold stocks. By late April the pound began to weaken, and the Banque de France, true to Moreau’s hard line policy, siphoned off more of Norman’s gold. July 1929 was a bad month for Threadneedle Street’s gold. By August 21, 1929 the Bank of England had paid out 24 million pounds’ worth of gold since the start of the year. In August and September, however, the gold outflow slowed.

On the morning of 4 September 1929, the New York hedge fund operator Jesse Livermore received a message from a source in London according to which a “high official” of the Bank of England - either Montagu Norman or one of his minions - had told a luncheon group of City of London men that “the American bubble has burst.” The same official was also quoted as saying that Norman was looking for an excuse to raise the discount rate before the end of the month. The message concluded by noting that a financier by the name of Clarence Hatry was in big financial trouble. [Thomas and Morgan-Witts, pp. 279-280]

The New York Federal Reserve Bank had raised its discount rate to 6% on August 8. Soon therafter, the market began to run out of steam. The peak of the Coolidge bull market was attained on September 3, 1929, when many leading stocks reached their highest price quotations. So Livermore’s Bank of England source had been right on te money. On Sept. 5, the market broke downward on bearish predictions from economic forecaster Roger Babson, who on this day won his nickname as “the Prophet of Loss.” During the following weeks, the market drifted sideways and downward.

On September 20, 1929 it became known in the City of London that the Clarence Hatry group, which supposedly had been worth about 24 million pounds, was hopelessly insolvent. On that day Hatry and his leading associates confessed to fraud and forgery in the office of Sir Archibald Bodkin, the Director of Public Prosecutions, went to have lunch at the Charing Cross Hotel, and were jailed. Hatry later asserted that in late August, he had made a secret visit to the Bank of England to appeal to Montagu Norman for financing to allow him to complete a merger with United Steel Company, a UK firm. Norman had adamantly refused Hatry’s bid for a bridge loan. By 17 September, when Hatry stock began to fall on the London exchange, Hatry had liabilities of 19 million pounds and assets of 4 million pounds.

When, on 19 September, Hatry approached Lloyd’s Bank in last a desperate bid for financing, the wayward financier had told his story to Sir Gilbert Garnsey, a chartered accountant. Garnsey had made a second approach to Norman for emergency financing, and had also been rebuffed. At this point Norman had informed the chairman of the London Stock Exchange that the Hatry group was bankrupt; in this conversation it was agreed that trading in Hatry shares would be suspended on 20 September.

Norman thus wanted the Hatry bankruptcy; he could have prevented it if he had wanted to. How many times did Norman, who operated totally in the dark as far as the British government and public were concerned, bail out other tycoons who happened to be his friends and allies? The Hatry affair was useful to Norman first of all because it caused a rapid fall in the London stock market. London stockjobbers who were caught short on cash were forced to liquidate their New York holdings, and the Economist spoke of “forced sales” on Wall Street occasioned by the “Hatry disclosures.” [London Economist, 23 November, 1929, p. 955] More important, Norman could now pretend that since confidence in London had been rudely shaken, he needed to raise the bank rate to prevent a further flight of funds.

Less than a week after the Hatry group’s debacle, Norman made his final and decisive bid to explode the New York bubble. He once again raised the Bank of England discount rate. As the New York Times reported from London, “the atmosphere was tense in the financial district and exciting scenes were witnessed outside the Royal Exchange. Ten minutes before noon a uniformed messenger rushed into the corridor of the Bank carrying a framed notice over his head. The notice read: ‘Bank rate 6 1/2 per cent.’ A wild scramble ensued as messengers and brokers dashed back to their offices with the news.” One of the subtitles of the Times’s article was “BUSINESS FEARS RESULTS”. [NYT, 27 September 1929] And well they might have.

6.5% was a very high discount rate for London in those days, and a full point had been a big jump. The London rate had not been so high since 1921, during the so-called deflation panic of 1920-21. The British move towards higher rates was imitated within two days by the central banks of smaller continental states where British influence was high: Austria, Denmark, Norway, Sweden, and the Irish Republic all hiked their discount rate. On October 10 the British monetary authorities in India also raised the discount rate there by a full point. Added to the steps already taken by the Bank of England, these actions generated a giant sucking sound as money was pulled out of New York and across the Atlantic.

The Economist approved Norman’s maneuver, while blaming “the continuance of Stock Exchange speculation in America, with its concomitant high call rates” for the need to go 6.5%. Such a high rate would of course be highly destructive to British factories and farms, but this, as we have already seen, counted for nothing in Norman’s machinations. The Economist commentary ended with a very sinister prophecy:

[28 September 1929, p. 557]

What the Economist meant by success, as we will see, was the detonation of a collossal panic in New York. By abruptly pulling millions of pounds out of New York, Norman turned the sagging Coolidge bull market into the biggest rout in stock market history up to that time. Then, as the Economist suggests, the British bank rate could come down again.

John Kenneth Galbraith, in his much-quoted study The Great Crash, curiously manages to avoid mentioning the raise in the British Bank Rate as the immediate detonator of the Crash of 1929. But then, Galbraith is a Canadian and an Anglophile. But a few old American textbooks had the story somewhat better: “The stovck-market collapse came in October, 1929 when English interest rates were raised to six and one-half per cent in order to bring home needed capital that had been attracted to the United States by the high speculative profits,” wrote hicks and Mowry in their 1956 Short History of American Democracy”.

Various London outlets now began feverishly signalling that it was time to pull the rug out from under the New York market. A prominent signaller was Philip Snowdon, the Chancellor of the Exchequer in the Labour Party government of Ramsay MacDonald which had come into power in the spring of 1929 on a platform which had included the need for better relations with the United States. On October 3, 1929, Snowdon addressed the Labour Party’s annual conference in Brighton. Snowdon’s audience was understandably not happy with a higher bank rate, since they would be the main victims of unemployment.

Snowdon, while stressing that Norman’s actions were independent of the Exchequer, genially told the delegates that “there was no other recourse.” Why not? Snowdon first repeated the argument about defending London’s gold stocks: “Monetary conditions in America, Germany, and France have been such as to create a great demand for the currencies of those countries, dollars, marks, and francs, and a consequent selling of sterling, with the result that the rates of exchange have gone against us recently, reaching points where payments were taken in gold.” The US, in particular, was the culprit: “In New York, with America’s plethora of liquid capital and high rates, there has been a usual year’s orgy of speculation, draining money away from England.” “There has been a raid on the financial resources of this country which the increased bank rate is now intended to check” Snowdon ranted. “The object of the increased rate is to draw money back to England,” Snowdon stressed. The hardship of high rates must be blamed on the US: “…there must be something wrong and requiring our attention when such an orgy 3,000 miles away can so dislocate the financial system of this country and inflict injury on our workers and employers.” It was time to bail out of New York and come home to London, Snowdon urged: “British credit is the best in the world. The British market is the safest in the world for those who are satisfied with reasonable investments and not lured into wild speculations.” [NYT, 4 October 1929]

When J.P. Morgan read this speech, he was reportedly apoplectic that Snowdon had repeated his catchphrase of “orgy of speculation” so many times. But J.P.

REPLICATING ISRAEL? Rs 8,000 cr fraud hits Satyam.Kasab is a Pak national, says Pak media.Sensex sheds 749 pts on Satyam fraud.SC stays non-bailable warrant against Raj Thackeray.10 million to lose job by March in export units

 

PARIS (AP) — Government officials and Jewish leaders are concerned the conflict in Gaza may spill over into violence in Europe, with attacks reported against Jews and synagogues in France, Sweden and Britain.

Assailants rammed a burning car into the gates of a synagogue in Toulouse, in southwest France, Monday night.

A Jewish congregation in Helsingborg, in southern Sweden, was attacked Monday night by someone who “broke a window and threw in something that was burning,” said police spokesman Leif Nilsson. And on Sunday slogans, including “murderers … You broke the cease-fire,” were daubed on Israel’s Embassy in Stockholm.

In Denmark, a 27-year-old Dane born in Lebanon to Palestinian parents is alleged to have injured two young Israelis last week in a shooting police suspect could be linked to the Gaza crisis. Belgium ordered police in Antwerp and Brussels to be on increased state of alert” Tuesday after recent pro-Palestinian protests ended in violence and arrests.

France has Western Europe’s largest Jewish and Muslim communities and a history of anti-Semitic violence flaring when tensions in the Middle East are high. In 2002, some 2,300 Jews left France for Israel because they felt unsafe. Even in normal times, anti-Semitic incidents are not uncommon.

President Nicolas Sarkozy warned in a statement Tuesday that France would not tolerate violence linked to the Gaza crisis. A day earlier, his interior minister said she was concerned about the prospect of contagion and met with the heads of the two main Muslim and Jewish groups and police officials to stress the need to “preserve national unity.”

Jews in the small Strasbourg suburb of Lingolsheim in eastern France woke up Tuesday to find graffiti with words like “assassins” spray-painted on the outside walls of their synagogue. The community filed a complaint for “degradation of a place of worship,” the mayor’s office said.

Damage to the synagogue in Toulouse was limited to a blackened gate. Police said unlighted gasoline bombs were found in a car nearby and in the synagogue’s yard. A local Jewish leader, Armand Partouche, said he believed the assailants fled when the building’s alarm went off.

Local authorities promised Tuesday to boost security for synagogues and other Jewish sites in the city, Partouche said.

“We really fear that anti-Semitism will spring up again and that the current conflict will be transposed to our beautiful French republic,” Partouche said.

French Muslim leader Mohammed Moussaoui condemned the attack, saying no motive could justify an assault on any place of worship.

Interior Ministry spokesman Gerard Gachet said police have not noted an increase in violence against Jews linked to the Gaza crisis. But he said tensions are likely.

In Britain, the Community Security Trust, a Jewish defense group, said it had seen a rise in anti-Semitic incidents since the start of Israel’s offensive against Gaza. The group said it recorded 20-25 incidents across the country in the past week — a sizable increase from 2-3 incidents usually reported to the group over the Christmas-New Year period.

Police are investigating an arson attempt Sunday on a synagogue in north London. Assailants splashed liquid on the door and set it on fire. Police would not speculate on whether the attack was linked to the Gaza crisis.

In another incident last week, a gang of 15-20 youths walked along the main street in Golders Green, a largely Jewish neighborhood in north London, shouting “Jew” and “Free Palestine” at passers-by, said Community Security Trust spokesman Mark Gardner.

Associated Press Writers Jill Lawless in London, Jan M. Olsen in Copenhagen, Malin Rising in Stockholm, Robert Wielaard in Brussels and Audrey Sommazi in Toulouse contributed to this report.

That could give further impetus to crude oil as it heads back to the $50 mark.

As Israel continues to pound Palestine with 400 Palestine residents killed, its offensive against the Hamas has given crude oil speculators a reason enough to push prices up.

Crude oil prices jumped nearly 23 per cent last week, the highest percentage in 22 years and the middle-east conflict ensures that it continues to rise.

The reason being that traders see shortfall in supplies as conflict escalates and the battle is not just confined to the attacks on the ground.

Manouchehr Mottaki, Iranian Foreign Minister said, “The biggest mistake of the Zionist regime would be entering Gaza on the ground. They have to know that nothing will be left of them (if they attack Gaza from ground).”

However, Shimon Peres, President of Israel said that if there were somebody that could stop terror with a different strategy, they would accept it.

“We shall not accept the idea that Hamas will continue to fire and we shall declare a ceasefire. It does not make any sense,” he said.

All options open to dismantle terror groups: India

“The Indian mission has been in touch with us and it gives us a lot of strength. We are very concerned with the developments and hear gunshots and exploding shells all around us with some shrapnel even falling in our backyard, but are so far unharmed,” an Indian woman from New Delhi, now living in the Gaza city with her Palestinian husband and two children, said on conditions of anonymity.

“The mission has extended all help in case we want to leave Gaza but the thought of leaving my husband alone in this situation is scary. My children have Indian passports so they do not have any problems,” she said.

Another Indian woman from Kashmir, also married to a Palestinian, said she is afraid that she “may not be able to come back soon” if she leaves the territory now.

“Two of my three children do not have Indian passports, so I will have to leave them here with my husband which is not an option at the moment though it seems to be getting really hard with each passing day. I am worried about my kids,” she said.

Two nuns serving in Mother Teresa’s Missionaries of Charities have a moral dilemma with the thoughts of evacuating.

“We are very uncomfortable with the thought leaving all these handicapped children and old age people we work with in the middle of a crisis. We are staying,” sister Chalen, hailing from Kunnoor district, said.

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1.  Still photos of Israeli assault on Gaza civilians

Stop the Bombing – End the Siege of Gaza NOW!

January 6, 2008

The Canadian Peace Alliance is calling on all members and supporters to support existing demonstrations, or organize their own, this Saturday, January 10 to demand that the Canadian government call for an immediate end to the massacre in Gaza. We know that almost 600 Palestinians, mostly civilians, have been killed and thousands more maimed and wounded since the Israeli assault began, and many more will be killed as the humanitarian disaster worsens.

The Government of Canada has so far rejected calls for a ceasefire and is supporting the war crimes being committed by Israel in Gaza. As with the wars in Iraq, Lebanon and Afghanistan, Stephen Harper has proven himself to be firmly in the camp of the war mongers of the outgoing Bush administration. This does not reflect the will of the majority of Canadians who want to see our country as an arbiter of peace rather than a country that supports the bombing of civilians.

Canadian Foreign Minister, Lawrence Cannon has blamed Hamas for starting this conflict by sending rockets into Southern Israel, yet the facts contradict this assertion. According to Richard Falk, United Nations Special Rapporteur on Human Rights in the Palestinian Territories, “There was no substantial rocket fire from Gaza during the ceasefire until Israel launched an attack last November 4th directed at what it claimed were Palestinian militants in Gaza, killing several Palestinians. Also, it was Hamas that on numerous public occasions called for extending the truce, with its calls never acknowledged, much less acted upon, by Israeli officialdom.”

The humanitarian crisis in Gaza has been worsening since the Israeli blockade began 2 years ago. International agencies, including the United Nations, have condemned the blockade which has severely limited necessities such as medical supplies and food. The Harper government has been one of the most vociferous supporters of this collective punishment and was the first government to end humanitarian aid to the Palestinians after the election of Hamas.

Since the Israeli bombing began eleven days ago, the crisis has worsened. More than 80 per cent of Palestinians are without needed food aid and hospitals are operating on the thousands of wounded without anesthetics or even basic pain killers. Electricity and communications have also been targeted resulting in isolation and deprivation for the 1.5 million people of Gaza.

The current assault on Gaza is an aggressive war that violates international humanitarian law and the Geneva Convention. Our government is now complicit in these war crimes. Canadians will not stand by while the conservative government supports the unilateral massacre of innocent people.

Demonstrations will be held throughout Canada this week. Click here for events listings.

Our spirit will not die

http://www.nowpublic.com/tech-biz/us-asks-arab-nations-300-billion-fund-auto-bailout

 

Reuters

A six-month truce between Hamas and Israel ended on 19 December 2008.[29][30][31] Hamas blamed Israel for breaching the truce[32][33] and for not lifting the Gaza Strip blockade, and Israel blamed Hamas for increased rocket fire directed at southern Israeli towns and communities.[34] Israel’s stated objectives in this conflict are to end Palestinian rocket fire and prevent the rearming of Hamas. Hamas demands the cessation of Israeli attacks and an end to the Israeli blockade.[35]

At least 225 people were killed on the first day of the Israeli attack.[36] By the first evening, Israeli Air Force fighter-bomber aircraft had bombed roughly 100 Hamas-run buildings and compounds (including police stations, prisons, and command centers) in four minutes during the first wave of the strike.[37][38] Israel also hit what it identified as Hamas-run institutions and bases in all of Gaza’s main towns, including Gaza City and Beit Hanoun in the north and Khan Younis and Rafah in the south.[39][40][41][42][43][44] The attacks have also hit civilian infrastructure, including mosques and housing, with a great number of civilian casualties reported. Israel asserts many of these hid weapons and personnel, and that it is not targetting civilians.[45][46][47][48][49][50][51] The Israeli Navy has shelled targets in Gaza, instituting at the same time a naval blockade of Gaza, which has resulted in one naval incident with a civilian boat.[52][53][54][55]

Hamas has intensified its rocket and mortar attacks against Israel throughout the conflict, increasing the distance of attacks to as far away as 40 kilometres (25 mi) from the Gaza border, hitting civilian communities like Beersheba and Ashdod. These attacks have resulted in civilian casualties and damage to infrastructure. All schools in the area are closed.[56][57][58][59]

The IDF started massing infantry and armor units near the Gaza border and engaged in an active blockade of Gaza.[60] On 3 January 2009, a ground invasion began, with mechanised infantry, armor, and artillery units, supported by armed helicopters, entering Gaza.[61][62]

Both Israel and Hamas are under pressure for a humanitarian truce.[63][64] While Israeli defense minister Ehud Barak intially stated that this will be a “war to the bitter end”[65], Israeli defense officials have suggested as recently as January 6 that the operation could be “over in the next 72 hours”.[66] Hamas officials stated their openness to accepting a truce that ends the Gaza Strip blockade.[63]

 

Reuters

New Delhi: Barely two weeks before George W. Bush leaves the White House, Bollywood is ready with a farewell present — a film that takes pot shots at the outgoing U.S. president.

‘The President is Coming,’ set in Mumbai during Bush’s trip to India in 2006, tells the fictional tale of six Indians vying for a chance to shake hands with the visiting head of state.

Bush is a running theme in the film and so are ‘Bushisms’ — verbal slip-ups in his speeches — that have gained notoriety during his eight-year presidency.

“Bush is more of a sort of metaphor for the things that America represents — good or bad — but he’s also used as a bit of a punching bag because he’s an easy target,” said Kunaal Roy Kapur, the film’s 29-year-old director.

Shot in a mock documentary style, the English-language film depicts a series of farcical tests conducted in a room at the U.S. consulate to single out a young Indian worthy enough to meet Bush.

‘The President is Coming’, adapted from a play of the same name, opens in Indian cinemas on Friday, just days before Barack Obama takes office on Jan. 20 as the first black U.S. president.

“It’s definitely a nice little goodbye present for Bush,” said Kapur.

WHO PLAYS BUSH?

There is no word yet on whether an actor plays the president’s role in the film, although the director has said he used different ways to deal with the problem, including using video footage of Bush.

Television promos for ‘The President is Coming’ showed a person wearing a rubber Bush mask and a business suit walking past various Mumbai landmarks.

Kapur said the film, made at a cost of about 30 million rupees (approximately $618,000), would have lost much of its charm if Bush had not been the incumbent U.S. president.

“The premise wouldn’t have been as much fun if any of the other presidents had been around,” the first-time director said.

 

Nobody can question Israel exercising its right to self-defence, to protect the lives and property of its citizens from rocket attacks in Gaza by the Hamas, which has been going on for weeks and months now. As the deputy permanent representative of the United States to the United Nations — in a press interview after the US had refused to join in the condemnation of Israel’s action by the UN Security Council — said, ‘Israel, like all other members of the UN, has the right of self-defence. This right is not negotiable.’

Like Israel and other members of the UN, India too has the right to self-defence against acts of terrorism emanating from Pakistani territory and sponsored by the State of Pakistan. It has the right to retaliate against Pakistan and the duty to do so to protect the lives and property of its citizens.

The question is not whether we should retaliate. We should if we want Pakistan and the hordes of terrorists nursed by it to take us seriously. The question is, whether a direct military strike will be the wise and appropriate way of retaliating against Pakistan or whether we should do it through political and diplomatic measures, followed by deniable covert actions, if those measures do not make Pakistan change its ways.

For many years, Israel has been the victim of acts of terrorism by organisations such as the Hamas and the Hizbollah, sponsored mainly by Syria and Iran. Its retaliation has been directed against these terrorist organisations and not against their State-sponsors.

After the Arab-Israeli war of 1967 and the Yom Kippur war of 1973, Israel has indulged in military strikes in the territory of a sovereign state and a member of the UN only on two occasions — against the Osirak nuclear reactor under construction in Iraq in the early 1980s, and against the Hizbollah’s infrastructure in Lebanese territory in 2006. In the past, Israeli armed forces have operated in Lebanese territory on other occasions too.

Isreal’s action against Osirak in Iraq was a success, but its action in Lebanon in 2006 against the Hizbollah was not. Despite its concerns over the nuclear sites in Iran producing enriched uranium, Israel has till now avoided any military strikes on these sites, despite public pressure from sections of the Israeli people to do so.

It did launch an attack on a suspected nuclear site in Syria last year, but as a deniable covert action and not as an admitted military strike. It has also indulged in covert actions against suspected Hamas operatives based in Syria.

It is able to indulge in openly admitted military strikes against the Hamas in Gaza because Gaza is not part of any sovereign State. In the past, Israel’s retaliatory military strikes have been against terrorist organisations posing a threat to its citizens and property, and not against the States sponsoring them. Its actions against States sponsoring terrorism have been in the form of covert actions and not direct military strikes.

Practically all States facing the problem of terrorism have a covert action capability, because it gives them a third option if political and diplomatic measures fail. Without this option, a nation has to rely only on military retaliation, which could be messy when used against a next door neighbour. When a nation doesn’t use military strikes and doesn’t have a covert action capability, the State-sponsor and the terrorists sponsored by it develop contempt for such a nation.

The US has bombed Libya, Iraq and Afghanistan in retaliation for their perceived anti-US acts, but it has never taken a similar measure against Cuba, its next door neighbour.

It has declared Cuba a State-sponsor of terrorism and constantly keeps trying to undermine its political stability and economy, but avoids direct military action against it, despite it being a superpower. America knows that military action against a neighbour could get messy.

It is hoped that the government draws the right lessons from its dilemma after the Mumbai terror strike and tries to revive our covert action capability, which was discarded more than a decade ago as an ill-conceived unilateral gesture to Pakistan.

(The writer is Additional Secretary (retired), Cabinet Secretariat, Government of India, New Delhi [Images] and, presently, Director, Institute for Topical Studies, Chennai. E-mail: seventyone2@gmail.com)

http://www.rediff.com/news/2009/jan/06raman-india-should-learn-the-art-of-silent-strikes.htm

Massacre of innocents as UN school is shelled

Obama breaks silence to express deep concern over civilian casualties

 

The Gaza Strip (Arabic: ???? ???? transliteration: Qi?a? Gazza/Qita’ Ghazzah, Hebrew: ????? ???? Retzu’at ‘Azza) is a coastal strip of land along the Mediterranean Sea currently governed by Hamas. It borders Egypt on the south-west and Israel on the north and east. It is about 41 kilometers (25 mi) long, and between 6 and 12 kilometers (4–7.5 mi) wide, with a total area of 360 square kilometers (139 sq mi). The area is not recognized internationally as part of any sovereign country but is claimed by the Palestinian National Authority as part of the Palestinian territories. Since the June 2007 battle of Gaza, actual control of the area is in the hands of the Hamas de facto government.

Israel governed the Gaza Strip from 1967-2005. Pursuant to the Oslo Accords signed between Israel and the Palestinian Authority, Israel maintains control of the strip’s airspace, territorial waters, and offshore maritime access, as well as its side of the Gaza-Israel border. This continued control has allowed the Israeli state, which opposes Hamas, to control the inflow and outflow of Gaza’s essential resources, including food.[citation needed] When food is in short supply, Gazans have taken in food supplied by World Food Programme workers in the area.[citation needed] Israel’s position is that reports of food or fuel crisis are “created and promoted by Hamas.” According to Israel, “there is no humanitarian crisis in Gaza” and Hamas purposely shuts down electricity and confiscates the fuel supplied by Israel to Gaza.[1]

Egypt governed the Gaza Strip from 1948-1967 and today runs the southern border between the Gaza strip and the Sinai desert, a border now famous for the breach in early 2008.

His comments came before a meeting with Congressional leaders in an attempt to get them to back the $300 billion measures aimed at people on lower and middle income, assuring opposition Republicans their views would be considered.

“The economy is very sick,” he said before meeting with Senate Democratic Leader Harry Reid. “The situation is getting worse. … We have to act and act now to break the momentum of this recession.”

He said he expected that the latest US unemployment figures, due out later this week, would be sobering.

The complete recovery package would cost between $750 billion and $1 trillion [£630 billion] and include tax cuts for lower and middle income groups and relief for businesses over two years.

If passed, it would more than double the savings tax payers received in George W Bush’s tax reforms of 2001 and 2003. In real terms the cost would exceed that of the Vietnam War, which drained the treasury of $682 billion in current dollars, according to the Congressional Research Service

Obama’s “American Recovery and Reinvestment Plan” aims to “create or save” three million jobs by 2011 and would include public works projects and support for states that are struggling to balance their budgets.

The meeting will mark the first gathering of all former presidents at the White House since 1981, spokeswoman Dana Perino said. Bush and Obama will hold a private one-on-one meeting before the expanded presidential gathering, she said.

Among the living presidents are Jimmy Carter, George H.W. Bush and Bill Clinton, along with the current and future White House occupants Bush and Obama.

“President-elect Obama, I think, originally had the idea for this, but President Bush readily agreed, thought it was a great idea to get everybody together,” Perino said.

Perino said the five men will likely discuss life as a president and raising children in the White House, but said details of their discussions will not be made public.

“All of us would love to be flies on the wall and listening to that conversation, but these are leaders who only understand what it’s like to be in each other’s shoes,” she said.

While this is the first meeting of all former presidents at the White House in more than two decades, they have previously attended presidential funerals and ceremonies to inaugurate presidential libraries.

Source: DPA

Sensex sheds 749 pts on Satyam fraud!Shocked over how the financial manipulation went on in Satyam Computer Services for so long, industry said it was time corporate India stopped giving itself “self-congratulatory” awards and gave a hard look on deeper issues relating to corporate governance.

Satyam Computer crashed by Rs 139.15 or 77.69 per cent to close at Rs 39.95, after the Chairman announced the company had falsified accounts and assets for several years.

Amazingly, the company ADR on the US stock market — Nasdaq — closed higher by four per cent last night.

The declining Sensex recorded the biggest single-day loss in the past two months, after Satyam Computers Services, the country’s fourth-largest software developer, plunged around 80 per cent, the highest since getting listed in 1992.

The 50-share National Stock Exchange index Nifty tumbled by 192.40 points at 2,920.40, after hitting the day’s low of 2,888.20 points during the day.

Fuel prices may go down again: Deora

India cut gasoline prices by 10 per cent and diesel by 6 per cent in the first week of December, when it also announced other measures to lift wobbly markets in a slowing economy.

The likely cut in fuel prices, ahead of general elections due by May, will further reduce inflation, which has already fallen to a near 10-month low of 6.6 per cent.

It is quite a SHAME that a powerful quarter in India supports the MSSACRE in GAZA. Prominent Bangla Daily Anand Bazaar Patrika published from Kolkata has an ENVIable position as it has been alwyas supporting LPG Mafia pleading Economic reforms for so called development and industrialisation. At the same time, the selfstyled CRUSADER of Bangla nationality across the border, supports most the Bush Regime. It supported US aggression in Iraq and Afganistan. No wonder, it supports the ISraeli Operation in GAZA having a stringest stance  in favour of WAR against Terrorism. The mainstream Media and even political parties have turned ZIONIST as they had always been Brahaminical!India as a Nation lost its reputation as the Leader of the Third world because it stands quite detached in the hour of HUMANITARIAN CATASTROPHY! Rahre the Brahaminical hegemony ruling India and enslaving eighty five percent indigenous aboriginal people, tries its best to REPLICATE ISRAEL! As HAMAS is believed to be crushed in GAZA, the WAR Goddess of Blind Nationalism also wants SACRIFICE of INNOCENT people across the political border to WIPE OUT Muslim Terrorists in Pakistan!

Unlike operation ‘Sarp Nash’ in 2003 during which security forces had come across bunkers built by militants, Brig Singh said in the current operation, there were no such reports of bunkers being set up by the ultras in the forest area.

The militants were using natural caves with rocks around them as hideouts in the region, he said.

Replying to questions on the operation that began on January 1, he said, “it is not possible to specify as of now how long the operation will last.”

The officer said the undulating forest terrain in the region and the weather were acting as major constraints for the army in flushing them out.

What is happening in Gaza are extremely important because although the mass media is covering the story, and somewhat critical of Israel’s actions, in general they are telling only part of the story. The overwhelming majority of the people in the US and elsewhere assume — because the media hasn’t given them any reason to believe otherwise — that while Israel’s slaughter of Palestinians is an “over-reaction”, it was caused initially by Hamas’ unwarranted firing of mortars at Israel. They haven’t a clue as to why Hamas would do such a thing. They don’t know that Palestinians are fighting against an illegal occupation of their land.

India is upgrading its MiG-27 fighters to sharpen their strike capabilities, officials said on Wednesday, even as experts say the recent Mumbai attacks have exposed the country’s need to modernise its defence forces. Although the upgrade was planned well ahead of the attacks, officials said the defence ministry wants to speed up modernisation of its forces to tackle any future security threat. The upgrading comes at a time when tension runs high with Pakistan over Mumbai and India is saying it has all options open to deal with “terror outfits” in Pakistan.

Bihar Chief Minister Nitish Kumar, who belongs to JD-U, said consultations with states should have preceded enactment of the National Investigation Agency Act and other anti-terror laws. He wanted that NIA be barred from taking up any case not relating to terrorism without the consent of the state government.

“It appears the recent spurt in terrorist activities has led the Centre to rush through various legislations without adequate consultation with state governments,” he said.

“The anti-terror measures taken by Union Government after the Mumbai attacks were encroachment on state’s right and were against the federal structure of the country.” He said that there are many lacunae in the NIA Act and “states could have also been involved in the decision process before enactment of the Act.”

Kuldeep Nair writes quite clearly in the Telegraph:

As the Bush administration goes into the sunset, it is logical to seek a scrutiny of the balance sheet of Indo-US relations, especially in the outgoing president’s second term, when the world sat up and took note of a bilateral relationship that became important enough for the United Progressive Alliance government to stake its very existence on last year. Such a scrutiny has, indeed, become imperative because events since the November 26 terrorist attacks in Mumbai have exposed the myth of a strategic or natural alliance between India and the United States of America much like the Enron scam.

For this columnist, who has just returned from India to the ground realities of American strategic thinking, it is sad to see a government on Raisina Hill offering to go to Washington and to other world capitals, hat in hand, with “evidence” of terrorist designs on India from across the border with Pakistan.

If P.V. Narasimha Rao had been alive today, he would have told Manmohan Singh and Pranab Mukherjee that India’s fight against terror cannot be won by appealing to the goodwill of rulers in other countries — as the Union home minister, P. Chidambaram, will do in Washington later this week — but only by putting in place a bold agenda for dealing with the cross-border threat and implementing it with cold and steely calculation.

Rao would have been speaking from experience. In 1993, shortly after the serial bombing of Mumbai, his government managed to obtain irrefutable physical evidence of a Pakistani plot to blow up Mumbai. It can now be told that the Research and Analysis Wing, India’s external spy agency, obtained the evidence after Pakistan’s then president, Ghulam Ishaq Khan, presented that proof in Pakistan’s supreme court during Khan’s epic battle against the prime minister, Nawaz Sharif, whom the president dismissed in April 1993, a month after the Mumbai bombings.

Sharif challenged his dismissal under Pakistan’s controversial eighth constitutional amendment. Khan knew that his future as president was doomed if Sharif won the case in the supreme court. He urged the court to hold part of its proceedings in camera and then presented evidence at the secret session that Sharif, as prime minister, not only knew about the Inter Services Intelligence plot to bomb Mumbai using Dawood Ibrahim’s underworld network, but had also given his go-ahead to it.

Lawyers for the State argued at this in camera sitting of the court that Sharif was unfit to be prime minister because he nearly took Pakistan to war with India by allowing the risky serial bombing of India’s premier metropolis. The supreme court quashed Sharif’s dismissal, reinstated him in office and cancelled Khan’s orders for fresh elections. Eventually, of course, both the squabbling politicians were persuaded by the army to resign and fresh elections brought in Benazir Bhutto as prime minister.

The meeting will mark the first gathering of all former presidents at the White House since 1981, spokeswoman Dana Perino said. Bush and Obama will hold a private one-on-one meeting before the expanded presidential gathering, she said.

Among the living presidents are Jimmy Carter, George H.W. Bush and Bill Clinton, along with the current and future White House occupants Bush and Obama.

“President-elect Obama, I think, originally had the idea for this, but President Bush readily agreed, thought it was a great idea to get everybody together,” Perino said.

Perino said the five men will likely discuss life as a president and raising children in the White House, but said details of their discussions will not be made public.

“All of us would love to be flies on the wall and listening to that conversation, but these are leaders who only understand what it’s like to be in each other’s shoes,” she said.

While this is the first meeting of all former presidents at the White House in more than two decades, they have previously attended presidential funerals and ceremonies to inaugurate presidential libraries.

New Delhi says the evidence, which also included photographs of recovered weapons, data gleaned from satellite phones, and details from the interrogation of the lone surviving gunman, proves that the Mumbai siege was launched from across the border.

Pakistani authorities have dismissed the evidence as “a propaganda offensive” designed “to whip up tensions” in the region.

The transcripts, which were obtained by The Hindu newspaper, show that the 10 gunmen who carried out the attacks were in close contact with their handlers throughout the siege. India says the handlers directing the attacks that left 164 dead were senior leaders of Lashkar-e-Taiba, a Pakistan-based militant group.

‘Look for govt official’

“There are three ministers and one secretary of the cabinet in your hotel. We don’t know in which room,” the handler told a gunman inside the Taj Mahal hotel at 1510 hrs IST on the first night of the attack on November 26.

“Oh! That is good news. It is the icing on the cake!” he said.

The handler told him to find the government officials “and then get whatever you want from India.” The handlers in Pakistan told another team of gunmen who had seized a Jewish center to shoot the hostages if necessary. “If you are still threatened, then don’t saddle yourself with the burden of the hostages. Immediately kill them,” he said.

He then added, “If the hostages are killed, it will spoil relations between India and Israel.”

“So be it, God willing,” the gunman replied.

Six Jewish foreigners, including a rabbi and his wife, were killed inside the Jewish center.

Later in the night, nearly 24 hours after the attacks began, the handlers urged the gunmen to “be strong in the name of Allah”

“Brother, you have to fight. This is a matter of prestige of Islam. You may feel tired or sleepy, but the commandos of Islam have left everything behind, their mothers, their fathers.”

Source: Associated Press

During 2008, his approval rating in the US dipped below 30%, bottoming out at 19%, the lowest on record. Lower than then US president Richard M Nixon in his final days in office, when he resigned in disgrace following the Watergate scandal.

This contempt manifested itself in the November 2008 US presidential and congressional elections, when Democrats took back the White House and established decisive majorities in both Houses of the US Congress. Pundits have called it a clear voter mandate, some claiming that the massively unpopular Bush and those connected to him have damaged the Republican Party’s brand name for decades to come.

In 2008, Bush’s last full year in office, the US economy shed an estimated 2.4 million jobs, its worst single year loss of employment in over six decades.

Why India is upset with George Bush & Co

This figure provides an exclamation point to a year’s worth of bleak economic news and harrowing forecasts. Remember, when then president Bill Clinton [Images] left the Oval Office in January 2001, the unemployment rate was 4.2 per cent. Today, it’s at 7 per cent and, by all accounts, spiralling upward.

Moreover, in 2000, the year before Bush became president, the US government reported a $236 billion annual budget surplus. By 2008, that surplus became a record $400 billion or $500 billion deficit (no one knows for sure). Not to mention the nearly $1 trillion in bail-out money the government has earmarked for various collapsing businesses in the past few months.

In fact, under Bush’s eight-year stewardship, the federal deficit has almost doubled, from $5.6 trillion to $10.6 trillion. The dollar has been devalued. The financial sector is in crisis.

‘The US is perceived as hypocritical’

Some of Bush’s economic failures might be forgivable had he made major strides in the foreign policy arena. But today the US is mired in two expensive, protracted wars — Iraq and Afghanistan — and sustainable peace seems far-off in both countries. Globally, the perception of America has diminished, with Bush an easily identifiable symbol for the massive and growing anti-US sentiment in many parts of the world. Going to war in Iraq, virtually unilaterally and on dodgy intelligence, plus allegations of improper detainments at Guantanamo Bay and prisoner abuse at Abu Ghraib in Iraq, have raised questions about the US’s commitment to human rights.

And, every step of the way, with his folksy rhetoric and lack of gravitas, Bush has provided endless fodder for late-night comedians, political commentators, academics and the international media.

Last month, just when it seemed that Bush’s term might end quietly and without incident, an Iraq journalist hurled shoes and abuses at him in front of a worldwide audience, becoming an instant celebrity in the process. Photographs and videos of the incident will doubtless remain indelible images of the Bush presidency.

So how did we get to this point, where the US president — the ostensible leader of the free world — is disrespected in a most serious manner and the incident is considered funny and deserving?

What happened?

The presidency of George W Bush began on an inglorious note: he actually lost the popular vote in the 2000 presidential election.

Clinton’s vice-president and the 2000 Democratic Party nominee Al Gore [Images], seen here with Bush, garnered 50,999,897 votes to Bush’s 50,456,002, a difference of over 500,000 votes.

But because America determines her President through a group of 538 representative voters called the Electoral College, which essentially makes the contest a composite of 51 separate races (one in each of the 50 states plus one in Washington DC), by sweeping rural and less populous states, Bush was able to cobble together the Electoral College majority he needed for victory: 271 to Gore’s 266. Bush was just the fourth candidate to have lost the popular vote and yet still win the election.

Exclusive: The George Bush interview!

It helped that his brother Jeb Bush was governor of Florida [Images] (the state’s chief executive), the definitive state in the election. Had Gore won Florida — and he lost there by only a few hundred votes, a race so close that the US supreme court was forced to make a ruling — Bush would have never occupied the White House.

From the start, Bush was hounded by questions of legitimacy. Given the controversial circumstances surrounding his victory, many said he did not ’speak’ for the American people. As a supposedly ‘weak’ president (in electoral terms), he would need to be conciliatory in his dealings with Congress and other branches of government.

And, in fact, during his campaign, Bush had run as a so-called ‘Compassionate Conservative’ who wanted to be a ‘uniter’ rather than a ‘divider’.

In addition to traditional Republican promises like strengthening national defence and cutting taxes, he also made education core part of his platform, which helped him to siphon away many Democratic votes — education is generally a ‘Democrat’ issue. But it also suggested that Bush would be willing to comprise. Congressional Democrats hoped his narrow victory and non-partisan campaign rhetoric would translate into pragmatic, non-partisan governance.

They were sorely, sorely mistaken.

Part II: After 9/11, Bush suddenly had political capital

“He (Raju) can be charged under various sections of the Indian Penal Code for falsification of accounts, cheating and breach of trust. These offences attract a maximum penalty of seven years,” said a senior partner of law firm Titus and Company, Diljeet Titus.

Expressing a similar opinion, senior Supreme Court advocate C A Sundaram said, “If the admissions (made by Raju in his resignation letter) are true, it is a very serious matter. It would be violation of (the) SEBI (code), Company Law and the IPC.”

Satyam Computer chairman Raju, in his resignation letter to the board, has admitted falsifying accounts and under-stating liabilities.

Another senior advocate and corporate law practitioner U K Chaudhary said the Satyam chief could be imprisoned for seven years under various provisions of company law. “Under section 628 of the Companies Act, which deals with misrepresentation of accounts, he could be punished for a maximum of 2 years along with penalty. However, the punishment term could be extended to seven years for producing false affidavits and other documents,” he said.

In addition to Raju, Titus said “action should also be taken against chief financial officers, finance managers, and legal and tax advisors for their complicity in this episode”.

Suggesting that the CBI should get into the case, he said if appropriate action is not taken, the Satyam fiasco would ‘make a mockery of the Indian enforcement mechanism’.

Text: PTI

The incoming administration of President-elect Barack Obama [Images] has two options to deal with the fallout of the 26/11 terror attacks on Mumbai [Images]: (1) To support, and to garner international backing for, Pakistan’s democratically elected leadership in order to enable it to act firmly against terrorist groups on its soil or (2) To designate Pakistan as a state sponsor of terrorism under United States law — a designation that will involve considerable sanctions on a country that the outgoing Geo

Why it Won

 The following is taken from our Strategy, Business Development, Marketing & Position Plan, which we plan to release next week. PLEASE NOTE: this section of the document only concerns a  2007  (slightly updated) feasibility analysis and commentary by GigaSpeed on the FTTH & BWA market dynamics and uncertainties on a political level. The rest of the document is not yet released. I uploaded this piece because of the dialogue going on at Om Malik’s GigaOm blog

Notwithstanding the satirical paragraph above, community fiber or muni wi-fi would maybe have been appropriate if it had been organized properly ten or five years ago, when there were almost no projects planned by private/public businesses. However, in 2009 it is too late and unnecessary for the people to organize this themselves. The argument that “the government also built the highway and road infrastructures and therefore should also build the digital infrastructure” does not hold water when it comes to FTTH and muni-Wi-Fi. The cable/DSL duopoly may be a problem, but the competition amongst them forces them to have a reasonably priced service and ever-increasing speed. Even in markets where no duopoly exists, the price or level of broadband service does not justify local government’s involvement in a commercial affair. There is a bigger need to organize infrastructure upgrades and maintenance. There are bridges collapsing in the USA, with fatalities. Senate Majority Leader Harry Reid is quoted in a 2007 CNN article, stating that infrastructure all over the country needs attention.

“[I] think we should look at this tragedy that occurred as a wake-up call for us. We have — all over the country — crumbling infrastructure, highways, bridges, dams, and we really need to take a hard look at this…”

Satyam Chairman Resigns After Falsifying Accounts (Update4)

Satyam Computer Services Ltd. Chairman Ramalinga Raju resigned after saying he falsified earnings and assets, prompting a collapse in the stock of India’s fourth- largest software-services provider.

Raju unsuccessfully tried to sell two companies to Satyam last month in a final attempt to plug 50.4 billion rupees ($1.03 billion) of “fictitious” cash on the company’s balance sheet, he wrote in a letter to Hyderabad-based Satyam’s board today. Profits have been inflated for “several years,” he said.

Satyam, which means “truth” in Sanskrit, plunged in New York trading, after earlier dragging down India’s benchmark index, in a scandal described as “horrifying” by markets regulator C.B. Bhave. Raju’s reign unraveled in the past month as a shareholder revolt blocked the asset purchases, a World Bank ban kept Satyam from bidding for orders and four directors quit.

“This is a black day for India, the software sector and corporate governance claims,” Arun Kejriwal, founder of Kejriwal Research & Investment Services, said in Mumbai. “If at all there’s an event that could be the biggest setback for corporate India, it is this.”

Goldman Sachs Group Inc., Citigroup Inc., HSBC Holdings Plc, and Credit Suisse Group AG suspended coverage of Satyam, which slumped a record 78 percent in Mumbai. The National Stock Exchange removed Satyam from its main Nifty index after the benchmark slumped 6.2 percent.

Satyam’s American depositary receipts fell $8.42, or 90 percent, to 93 cents at 9:14 a.m. in early New York trading.

‘Deep Shock’

“We’re in a deep state of shock by what’s been announced and we’re fairly happy that we sold when we did,” said Greg Kuhnert, a fund manager at Investec Asset Management Ltd. in London, which manages about $10 billion and sold its 0.15 percent stake in Satyam last month. “When we look at further investments in the country, we’ll have to get out a magnifying glass and really examine every bit very closely.”

Satyam maintains computer networks and provides outsourcing services for clients including Citigroup, Nissan Motor Co. and Qantas Airways Ltd. The company employs about 53,000 people in Bangalore, Chennai and Hyderabad and competes with Infosys Technologies Ltd., Tata Consultancy Services Ltd. and Wipro Ltd.

“This quarter will be tumultuous for us,” interim Chief Executive Officer Ram Mynampati said in an e-mailed statement. “Rumors will abound and it would be fair to assume that competition will try to leverage it to their advantage.”

Infosys, India’s second-largest software exporter, called the incident “deplorable.”

‘Non-Existent’

Of Satyam’s reported cash and bank balances of 53.61 billion rupees on Sept. 30, 50.4 billion rupees was non-existent, Raju said in the letter sent to the Bombay Stock Exchange.

Operating margin in the quarter ended Sept. 30 was 3 percent of revenue, instead of the reported 24 percent, Raju said. The company’s revenue was 21 billion rupees, 22 percent less than the inflated figure of 27 billion rupees that had been reported.

Raju arranged 12.3 billion rupees “to keep operations going” at Satyam over the last two years by pledging the founders’ shares and raising funds from other sources, he said.

“What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years,” Raju said. “It was like riding a tiger, not knowing how to get off without being eaten.”

Brother Quits

Rama Raju, the outgoing chairman’s younger brother and Satyam’s managing director, also resigned, the company said.

The founders’ concern was that a poor performance, combined with the fact they held a small stake in the company, would make Satyam an easy target for a takeover, exposing the inflated figures, he said.

Raju’s attempts to “keep the wheel moving” at Satyam was finally derailed as lenders sold most of the pledged shares because of margin calls, he said.

Satyam’s auditor PricewaterhouseCoopers is examining the statement made by Raju and declined to comment further, it said in an e-mail, citing client confidentiality.

Prem Chand Gupta, minister for company affairs, said the government is investigating the incident. “There will be no leniency in dealing with this case,” he said in New Delhi.

The Securities & Exchange Board of India ordered a probe into trading in Satyam shares, the regulator said on its Web site. Bombay Stock Exchange spokesman Kalyan Bose said the bourse will examine whether to remove Satyam from the Sensitive Index.

Maytas, World Bank

Raju scrapped the planned acquisition of Maytas Properties Ltd. and Maytas Infra Ltd. last month, less than 12 hours after announcing it, after the company’s ADRs plunged.

Separately, the World Bank Dec. 23 declared India’s fourth- biggest software-services provider ineligible for contracts for eight years from September, alleging “improper” benefits were given to the bank’s employees.

DSP Merrill Lynch Ltd. said it ended its contract with Satyam yesterday. The software provider had on Dec. 27 named Merrill as an adviser for helping it on strategic “options” including a possible stake sale.

Raju, who won the Ernst & Young Entrepreneur of the Year award in 2007, has an MBA from Ohio University and is an alumnus of Harvard Business School, according to Satyam’s Web site.

Satyam in September was awarded the Golden Peacock Global Award for Excellence in Corporate Governance by the London-based World Council for Corporate Governance. The council today withdrew the award.

“This company had a five-star independent board and it had a leading auditor and still it managed the con,” said Tarun Sisodia, a Mumbai-based analyst with Anand Rathi Securities Ltd. “So the question is why only Satyam, why not every other company.”

Update DOW closes down 245 Market Update: India

Update: 5:11pm EST: Markets closed with biggest drop since 12/1. DOW down 245; NAS down 53 and S&P down 28; even GLD was down 23…nothing good ahead of Friday’s job numbers and did we mention Paulson spoke again today? (as good an indicator for down markets as any, the Harry Reid of downers HA!)…yeah he is all for FAN FRED being used to buy up Mortgage at 4.00% now…basically just talking to talk as they continue to do nada about housing and the bad economic data snowballs…

President-elect Barack Obama is the “decision maker” in spending the rest of a $700 billion financial bailout fund, but should consider continuing bank capital injections, outgoing U.S. Treasury Secretary Henry Paulson said Wednesday.

Meredith Whitney had a killer report out on the ongoing need for capital injections to the financials today as well…

Homebuilders are on the Hill asking for stimulus to include tax breaks for homebuyers and a low interest rate of 2.99% for first 6 mos on 30 yr mortgages…see Diana Olick of CNBC video update here

and CNBC’s Steve Liesman reports on FastMoney that ING projections suggest we could soon reach a point where we have 1 million job losses a month…meanwhile back in progressive land Paul Krugman is worried that PEBO economic stimulus could reduce unemployment by only 1-2% points or less, that simply isn’t good enough..click on our blogroll to read Paul’s column….

Original Post: DOW down 160…okay someone compare the Satyam logo and that outside the Enron building and tell me I am not seeing the pattern here, Oy!

Here at MiM we have personal stakes in outsourcing IT jobs to India, in the sense that many of OUR jobs keep getting outsourced, so we are biased, but here is the report coming over the wires:

Via CNBC:

The chairman of India’s Satyam Computer Services quit Wednesday after admitting the company’s profits had been doctored for several years, shaking faith in the country’s corporate giants as shares of the software services provider plunged nearly 80 percent.

The company’s balance sheet — riddled with “fictitious” assets and “non existent” cash — contained a $1 billion hole that could no longer be concealed after a deal intended to save the struggling company was scuppered, Chairman B. Ramalinga Raju said in a letter to the board.

See CNBC video here, November 3rd, one of MANY interviews given by Satyam Chairman on the joy and beauty of outsourcing, all while knowing his books were completely fraudulent, very bad man IMO. Int his one he claims his earnings are UP 28%, yeah right okayyy.

-snip-

News of the fraud dragged down the benchmark Sensex stock index 7.3 percent to 9,586.88 with Satyam’s shares plummeting nearly 78 percent to 40 rupees. The accounting scandal raises questions about the quality of corporate governance in India and is likely to reverberate around the region.

Chairman Resigns After Falsifying Accounting : Satyam

Raju unsuccessfully tried to sell two companies to Satyam last month in a final attempt to plug 50.4 billion rupees ($1.03 billion) of “fictitious” cash on the company’s balance sheet, he wrote in a letter to Hyderabad-based Satyam’s board today. Profits have been inflated for “several years,” he said.

Satyam, which means “truth” in Sanskrit, slumped a record 78 percent in Mumbai trading, dragging down India’s benchmark index, in a scandal that was described as “horrifying” by markets regulator C.B. Bhave. Raju’s reign unraveled in the past month as shareholders blocked the asset purchases, a World Bank ban kept Satyam from bidding for orders and four directors quit.

“This is a black day for India, the software sector and corporate-governance claims,” Arun Kejriwal, founder of Kejriwal Research & Investment Services, said in Mumbai. “If at all there’s an event that could be the biggest setback for corporate India, it is this.”

Goldman Sachs Group Inc., Citigroup Inc., HSBC Holdings Plc, and Credit Suisse Group AG suspended coverage of Satyam. The National Stock Exchange removed Satyam from its main Nifty index after the benchmark slumped 6.2 percent.

Satyam’s American depositary receipts fell $8.42, or 90 percent, to 93 cents in trading before the opening of the New York Stock Exchange. The shares were then halted by the exchange, which said it is evaluating the news.

Deep Shock

“We’re in a deep state of shock by what’s been announced and we’re fairly happy that we sold when we did,” said Greg Kuhnert, a fund manager at Investec Asset Management Ltd. in London, which manages about $10 billion and sold its 0.15 percent stake in Satyam last month. “When we look at further investments in the country, we’ll have to get out a magnifying glass and really examine every bit very closely.”

Satyam maintains computer networks and provides outsourcing services for clients such as Citigroup, Nissan Motor Co. and Qantas Airways Ltd. The company employs about 53,000 people in Bangalore, Chennai and Hyderabad, and competes with Infosys Technologies Ltd., Tata Consultancy Services Ltd. and Wipro Ltd.

“This quarter will be tumultuous for us,” interim Chief Executive Officer Ram Mynampati said in an e-mailed statement. “Rumors will abound and it would be fair to assume that competition will try to leverage it to their advantage.”

Infosys, India’s second-largest software exporter, called the incident “deplorable.”

Nonexistent Cash

Of Satyam’s reported cash and bank balances of 53.61 billion rupees on Sept. 30, 50.4 billion rupees was nonexistent, Raju said in the letter sent to the Bombay Stock Exchange.

Satyam’s operating margin in the quarter ended Sept. 30 was 3 percent of revenue, instead of the reported 24 percent, Raju said. The company had sales of 21 billion rupees, 22 percent less than the stated figure of 27 billion rupees.

Raju arranged 12.3 billion rupees “to keep operations going” at Satyam during the past two years by pledging the founders’ shares and raising funds from other sources, he said.

“What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years,” Raju said. “It was like riding a tiger, not knowing how to get off without being eaten.”

Brother Quits

Rama Raju, the outgoing chairman’s younger brother and Satyam’s managing director, also resigned, the company said.

The founders’ concern was that poor performance, combined with the fact that they held a small stake in the company, would make Satyam an easy target for a takeover, exposing the inflated figures, he said.

Raju’s attempts to “keep the wheel moving” at Satyam was finally derailed as lenders sold most of the pledged shares because of margin calls, he said.

Satyam’s auditor PricewaterhouseCoopers LLC is examining the statement made by Raju and declined to comment further, the firm said in an e-mail, citing client confidentiality.

Prem Chand Gupta, minister for company affairs, said the government is investigating the incident. “There will be no leniency in dealing with this case,” he said in New Delhi.

The Securities and Exchange Board of India ordered a probe into trading in Satyam shares, the agency said on its Web site. Bombay Stock Exchange spokesman Kalyan Bose said the bourse will examine whether to remove Satyam from the Sensitive Index.

Maytas, World Bank

John Heine, a spokesman for the U.S. Securities and Exchange Commission, said he wasn’t authorized to confirm or deny whether the agency was investigating Satyam.

Raju scrapped the planned acquisition of Maytas Properties Ltd. and Maytas Infra Ltd. last month, less than 12 hours after announcing it, following a drop in the company’s ADRs.

Separately, the World Bank declared on Dec. 23 that the company was ineligible for contracts for eight years starting in September, alleging that improper benefits were given to the bank’s employees.

DSP Merrill Lynch Ltd. said it ended its contract with Satyam yesterday. The software provider had on Dec. 27 named Merrill as an adviser for helping it on strategic “options,” including a possible stake sale.

Vianale & Vianale, a law firm in Boca Raton, Florida, said today that it filed a class action lawsuit against Satyam and its top executives. Satyam spokesman Jim Swords declined to comment.

Raju, who won the Ernst & Young Entrepreneur of the Year award in 2007, has an MBA from Ohio University and is an alumnus of Harvard Business School, according to Satyam’s Web site.

In September, Satyam was awarded the Golden Peacock Global Award for Excellence in Corporate Governance by the London-based World Council for Corporate Governance. The council today withdrew the award.

“This company had a five-star independent board and it had a leading auditor and still it managed the con,” said Tarun Sisodia, a Mumbai-based analyst with Anand Rathi Securities Ltd. “So the question is, why only Satyam, why not every other company?”

Satyam:Crisis of confidence or Crisis of revenues?

On the morning of Jan. 7, Ramalingam Raju, the chairman of troubled IT company Satyam Computer Services, has sent a starilng letter to his board and exchange board of India.There he clearly acknowledged that he had inflated the amount of cash on the balance sheet of India’s fourth-largest IT company by nearly $1 billion, incurred a liability of $253 million on funds arranged by him personally, and overstated Satyam’s September 2008. Raju made us shocked by admitting to one of the biggest corporate frauds in Indian history. Raju confessed that for years Satyam had been inflating its numbers.

Now it is notable that Satyam Computer Services is India’s 4th largest company.But this amount of inflation really arising the question whether that position can be owed by Satyam or not.When global economy is navigating through the sub prime crisis or economy slowdown,this kind of shock makes the whole IT industry bewildered and it is tough to foretell what is going to be with Satyam.Though different companies of IT sectors claim Satyam’s case is different but no doubt it will leave a greater impact at the present scenario.

Investors sent Satyam’s Mumbai-listed shares plunging 78% after his announcement. Regulators and investigators are now working to unearth more details of the very comany, and Raju has to face a possible prison term.But we can have a look at several milestones of Satyam which made it India’s one of the best IT company. 1987 Satyam was incorporated as private limited company in 1991 it made a debut in BSE 1993 was another landmark for Satyam when it signed up with Dun and Bradstreet and awarded by ISO 9001 certification 1999 was a golden year for Satyam because it has been listed as 1st Indian internet company listed on NASDAQ.After several achievements and rewards 2006 it revenue crossed US $1 billion.At last 2008 within only two years Satyam’s balance sheet was shown to have US $2 billion into it’s account-fastest growing company.

When Indian IT market is turbulent then Satyam’s botched attempts really aggravates the situation to a grater extent.Satyam’s shares fell nearly 80 percent in India and dragged down Bombay’s main benchmark index 7.3 percent reported on January 8.All other companies now started offering the customers of Satyam.53000 employs of Satyam as well as fresh graduates of Satyam now find themselves in a fix.

Now we cannot discard the fact, Indian economy setup is emerged as a risky environment which is deprived of regulatory oversight and protections.It also highlights cultural risks inherent in India’s family-owned businesses, which have long battled issues such as nepotism, mismanagement, weak boards and lack of transparency and professionalism.Only half of the companies are firmly controlled which reached the landmark of 30 share index under BSE.This episode could caste a cloud in investment @outsourcing sector. If it happens then yes India is going to plunge into financial crisis in nearby feature.But investing companies thinks it will not have that big impact on investments if you are looking forward for 6-10 years.But this is time when Crash Management system would have to be controlled in strong hand and obviously employment will be a bigger issue.By this time of economy slowdown small portfolios may become larger and they are all tuned with same opinion private equity is still running in a safe condition.

Satyam Accounting Scandal Erodes Confidence in India

By Pooja Thakur

Jan. 8 (Bloomberg) — The accounting scandal that caused Satyam Computer Services Ltd. to collapse yesterday is shaking investor confidence in Indian stocks, putting an end to the market’s best start since 2000.

“How did they manage to conceal a fraud of such magnitude even from the auditors?” said Greg Kuhnert, a London-based fund manager at Investec Asset Management Ltd., which manages about $10 billion and sold its 0.15 percent stake in Satyam last month. “That to me is a huge concern and is making me very nervous about the situation in India now.”

India’s Sensex index tumbled 7.3 percent yesterday, led by a 78 percent plunge in Satyam, after Chairman Ramalinga Raju said profits at the company had been inflated for years and then resigned. Satyam American depositary receipts fell $8.42, or 90 percent, to 93 cents before the opening of the New York Stock Exchange, which then halted trading in the stock.

Just six weeks after Franklin Templeton Investments’ Mark Mobius said the world’s second-fastest growing major economy would overcome the Mumbai terrorist attacks and prosper, his company said the Satyam scandal will weigh on investors.

“This unfortunate development will be a short-term negative for market sentiment,” Sukumar Rajah, chief investment officer of equity in India at Franklin Templeton Investments, which manages $4 billion of assets in the country, said in an e- mail.

Still, by forcing regulators to improve oversight, the incident “should be a long-term positive,” Rajah said.

‘Horrifying’

Satyam had 50.4 billion rupees ($1.03 billion) of “fictitious” cash on its balance sheet on Sept. 30, Raju wrote in a letter to Hyderabad-based Satyam’s board yesterday. India’s markets regulator C.B. Bhave said the Satyam disclosure was of “horrifying magnitude.” The Securities & Exchange Board of India ordered a probe into trading in Satyam shares, according to the regulator’s Web site.

“We are verifying all the facts,” Prem Chand Gupta, India’s minister for company affairs, said in New Delhi yesterday. “Once we complete our investigation, we will take appropriate action,” he said, adding that “there will be no leniency.”

Satyam, which means “truth” in Sanskrit, shook the market after the Sensex had rebounded 7 percent in the first four days of the year and global investors turned net buyers of Indian shares. The index plunged 52 percent in 2008 and investors pulled a record $13.1 billion from the market last year, according to the nation’s stock market regulator.

India’s stock markets are shut today for a public holiday.

Cheap Stocks

Developing-nation stocks are trading near their cheapest levels in a decade after the global economic slowdown and a slump in commodity prices sent the MSCI Emerging Markets Index down 54 percent in 2008. In comparison, the MSCI World Index dropped 42 percent. Shares in the MSCI emerging-markets index trade at 8.8 times reported earnings, while developed shares fetch 11.5 times profit. Sensex companies trade at 9.5 times earnings.

Aberdeen Asset Management Asia Ltd., Satyam’s largest institutional investor as of September, said its investment outlook for India hasn’t changed. Funds run by Aberdeen own at least 5.12 percent of Satyam, according the Hyderabad-based company’s filings for the quarter ended Sept. 31.

“People will grow a bit more dispassionate, but you can say the same for the U.S. and elsewhere,” said Hugh Young, managing director at Aberdeen’s Asian unit, which manages $37.3 billion. “India has great companies that do the right things. Hopefully this is a one off.” He declined to say how many Satyam shares Aberdeen holds, or whether any were sold recently.

Exports, Demand

India’s $1.2 trillion economy may grow 7 percent in the year ending March 31, the slowest pace since 2003, according to government forecasts. The economy may expand at close to that rate in the next fiscal year as the global recession cuts exports and domestic demand wanes, Junior Industry Minister Ashwani Kumar said in New Delhi yesterday.

The Satyam scandal is spurring concern that India’s corporate governance is inadequate days before the earnings reporting season starts. Infosys Technologies Ltd., the country’s second-largest software services provider, will report its financial results for the quarter ended Dec. 31 on Jan. 13.

PricewaterhouseCoopers LLP, Satyam’s auditor, declined to comment on the scandal, according to an e-mail from the New York-based firm’s public relations adviser Edelman.

“It may take a while to restore the lost confidence,” Rahul Chadha, head of Indian equities in Hong Kong for Mirae Asset Global Investment, which oversees $39 billion. India “was attractive primarily on account of quality of managements and robust business models,” Chadha said.

To contact the reporters on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net

Satyam Accounting Scandal Erodes Confidence in India

Get Live News

The accounting scandal that caused Satyam Computer Services Ltd. to collapse yesterday is shaking investor confidence in Indian stocks, putting an end to the market’s best start since 2000.

“How did they manage to conceal a fraud of such magnitude even from the auditors?” said Greg Kuhnert, a London-based fund manager at Investec Asset Management Ltd., which manages about $10 billion and sold its 0.15 percent stake in Satyam last month. “That to me is a huge concern and is making me very nervous about the situation in India now.”

India’s Sensex index tumbled 7.3 percent yesterday, led by a 78 percent plunge in Satyam, after Chairman Ramalinga Raju said profits at the company had been inflated for years and then resigned. Satyam American depositary receipts fell $8.42, or 90 percent, to 93 cents before the opening of the New York Stock Exchange, which then halted trading in the stock.

Just six weeks after Franklin Templeton Investments’ Mark Mobius said the world’s second-fastest growing major economy would overcome the Mumbai terrorist attacks and prosper, his company said the Satyam scandal will weigh on investors.

“This unfortunate development will be a short-term negative for market sentiment,” Sukumar Rajah, chief investment officer of equity in India at Franklin Templeton Investments, which manages $4 billion of assets in the country, said in an e- mail.

Still, by forcing regulators to improve oversight, the incident “should be a long-term positive,” Rajah said.

‘Horrifying’

Satyam had 50.4 billion rupees ($1.03 billion) of “fictitious” cash on its balance sheet on Sept. 30, Raju wrote in a letter to Hyderabad-based Satyam’s board yesterday. India’s markets regulator C.B. Bhave said the Satyam disclosure was of “horrifying magnitude.” The Securities & Exchange Board of India ordered a probe into trading in Satyam shares, according to the regulator’s Web site.

“We are verifying all the facts,” Prem Chand Gupta, India’s minister for company affairs, said in New Delhi yesterday. “Once we complete our investigation, we will take appropriate action,” he said, adding that “there will be no leniency.”

Satyam, which means “truth” in Sanskrit, shook the market after the Sensex had rebounded 7 percent in the first four days of the year and global investors turned net buyers of Indian shares. The index plunged 52 percent in 2008 and investors pulled a record $13.1 billion from the market last year, according to the nation’s stock market regulator.

India’s stock markets are shut today for a public holiday.

Cheap Stocks

Developing-nation stocks are trading near their cheapest levels in a decade after the global economic slowdown and a slump in commodity prices sent the MSCI Emerging Markets Index down 54 percent in 2008. In comparison, the MSCI World Index dropped 42 percent. Shares in the MSCI emerging-markets index trade at 8.8 times reported earnings, while developed shares fetch 11.5 times profit. Sensex companies trade at 9.5 times earnings.

Aberdeen Asset Management Asia Ltd., Satyam’s largest institutional investor as of September, said its investment outlook for India hasn’t changed. Funds run by Aberdeen own at least 5.12 percent of Satyam, according the Hyderabad-based company’s filings for the quarter ended Sept. 31.

“People will grow a bit more dispassionate, but you can say the same for the U.S. and elsewhere,” said Hugh Young, managing director at Aberdeen’s Asian unit, which manages $37.3 billion. “India has great companies that do the right things. Hopefully this is a one off.” He declined to say how many Satyam shares Aberdeen holds, or whether any were sold recently.

Exports, Demand

India’s $1.2 trillion economy may grow 7 percent in the year ending March 31, the slowest pace since 2003, according to government forecasts. The economy may expand at close to that rate in the next fiscal year as the global recession cuts exports and domestic demand wanes, Junior Industry Minister Ashwani Kumar said in New Delhi yesterday.

The Satyam scandal is spurring concern that India’s corporate governance is inadequate days before the earnings reporting season starts. Infosys Technologies Ltd., the country’s second-largest software services provider, will report its financial results for the quarter ended Dec. 31 on Jan. 13.

PricewaterhouseCoopers LLP, Satyam’s auditor, declined to comment on the scandal, according to an e-mail from the New York-based firm’s public relations adviser Edelman.

“It may take a while to restore the lost confidence,” Rahul Chadha, head of Indian equities in Hong Kong for Mirae Asset Global Investment, which oversees $39 billion. India “was attractive primarily on account of quality of managements and robust business models,” Chadha said.

Prediction Batch for January 2009 (1-13)

1- public executions brought back as humorously predicted by the late George Carlin. People betting on what numbered basket a certain head might land. Hosted by Joe Rogan or Howie Mandel. “Ok Loquita will it be a negro or white head landing in basket #9? For 100,000!”

2-Internet becomes regulated by the government, after the stock market is crippled by off shore cyber attacks. The dollar nearly loses all of it’s value and the gov’t has no choice but to enforce new strict regulations. Fringe groups quickly form their own uncensored networks.

3- More humans regularly travel below the earth in tunnels that have existed for hundreds of years. A new caste system is created in America. Above and Underground Dweller societies. A new kind of “civil war” breaks out.

4- Clones began infiltrating society in the mid-90s, however it takes decades to realize it has been happening. Eventually tests are administered and society fragments accordingly. Some humans prefer living in Clone Communities or CC’s.

5- Clones become remote controlled by people living underground. In this way, other planets would first be inhabited by remote-controlled clones. (PKD “clans of the alphane moon”) Wars from 2015-2100 are essentially fought be remote controlled clones. It’s all about how you build your clones; durability and maliciousness in appearance and fighting techniques. Botbizness replaces Boeing. Starts with mechanical spy birds that are already being commissioned by the Air Force. (as seen on wired.com)

6- Sperm and Egg donating becomes a very competitive industry. Children are raised in ultra proper ways to be able to sell their eggs and sperm to the highest bidder. Parents begin having more children for this huge payoff, when said children become 18. Since Social security and federal retirement pensions fade, this thinking becomes more mainstream for aging adults as a source of retirement funds.

7- A website is created that graphically displays all that you’ve ever eaten. Each time you eat something, you just wave your “food chip” finger over the item. This “food chip” would be implanted on your index finger at birth. This will be the new diet craze, as humans become utterly obsessed with each singular ingredient they ingest as it shows up on their charts. Chart parties are organized where couples compare their diets.

8- An A-list celebrity Free Haven Zone will be created which will eliminate the majority of the paporazzi. This piece of land will be secured by the U.S. gov’t. This will be the most coveted military post. Guards will get signatures that they will then sell to the adoring masses upon the end of their enlistment. This free haven zone will be so crucial as our economy increasingly depends on the well-being of our great movie stars!

9- Human population problems will reverse. The world will be in need of more people to colonize other planets, as earth begins to die off. If a child or young adult kills themselves, the parents will be forced to recreate on the spot. Or else they will be imprisoned.

10- Masturbation competitions will replace Nathan’s Hot Dog Competition on Coney Island.

11- Rich men begin cloning their penis’ in their mid-20s when they are most thick, virile, and strong in that area. This way they will always have a drawer full of supple penis’ to turn to in old age. A penis cache. Viagra is replaced and these cloning firms are the new buzz.

12- Fruit and Vegetables will be discovered to be the reason for people living under 85. Secret foods will be re-introduced, allowing man to live 500 plus years as last seen in biblical times.

13- A new government job is created. OS or operation scan. These gov’t employees go to high schools, colleges, and work places - discretely scanning brains. These scanners could be transparent, placed in cell phones. This would allow the gov’t to identify threat candidates or TC’s. A Brain Chemistry Database is created and these “minority report” person’s are actively tracked. (Also the ability to scan through house walls is allowed during the night)

Credit Cardholders

SECTION 1. SHORT TITLE.

This Act may be cited as the Credit Cardholders’ Bill of Rights Act of 2008′.

SEC. 2. CREDIT CARDS ON TERMS CONSUMERS CAN REPAY.

(a) Retroactive Rate Increases and Universal Default Limited- Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after section 127A the following new section:

Sec. 127B. Additional requirements for credit card accounts under an open end consumer credit plan

(a) Retroactive Rate Increases and Universal Default Limited-

(1) IN GENERAL- Except as provided in subsection (b), no creditor may increase any annual percentage rate of interest applicable to the existing balance on a credit card account of the consumer under an open end consumer credit plan.

(2) EXISTING BALANCE DEFINED- For purposes of this subsection and subsections (b) and (c), the term existing balance’ means the amount owed on a consumer credit card account as of the end of the fourteenth day after the creditor provides notice of an increase in the annual percentage rate in accordance with subsection (c).

(3) TREATMENT OF EXISTING BALANCES FOLLOWING RATE INCREASE- If a creditor increases any annual percentage rate of interest applicable to credit card account of a consumer under an open end consumer credit plan and there is an existing balance in the account to which such increase may not apply, the creditor shall allow the consumer to repay the existing balance using a method provided by the creditor which is at least as beneficial to the consumer as 1 of the following methods:

(A) An amortization period for the existing balance of at least 5 years starting from the date on which the increased annual percentage rate went into effect.

(B) The percentage of the existing balance that was included in the required minimum periodic payment before the rate increase cannot be more than doubled.

(4) LIMITATION ON CERTAIN FEES- If–

(A) a creditor increases any annual percentage rate of interest applicable on a credit card account of the consumer under an open end consumer credit plan; and

(B) the creditor is prohibited by this section from applying the increased rate to an existing balance,

the creditor may not assess any fee or charge based solely on the existing balance.’.

(b) Exceptions to the Amendment Made by Subsection (a)- Section 127B of the Truth in Lending Act is amended by inserting after subsection (a) (as added by subsection (a)) the following new subsection:

(b) Exceptions-

(1) IN GENERAL- A creditor may increase any annual percentage rate of interest applicable to the existing balance on a credit card account of the consumer under an open end consumer credit plan only under the following circumstances:

(A) CHANGE IN INDEX- The increase is due solely to the operation of an index that is not under the creditor’s control and is available to the general public.

(B) EXPIRATION OR LOSS OF PROMOTIONAL RATE- The increase is due solely to–

(i) the expiration of a promotional rate; or

(ii) the loss of a promotional rate for a reason specified in the account agreement (e.g., late payment).

(C) PAYMENT NOT RECEIVED DURING 30-DAY GRACE PERIOD AFTER DUE DATE- The increase is due solely to the fact that the consumer’s minimum payment has not been received within 30 days after the due date for such minimum payment.

(2) LIMITATION ON INCREASES DUE TO LOSS OF PROMOTIONAL RATE- Notwithstanding paragraph (1)(B)(ii), the annual percentage rate in effect after the increase permitted under such subsection due to the loss of a promotional rate may not exceed the annual percentage rate that would have applied under the terms of the agreement after the expiration of the promotional rate.’.

(c) Advance Notice of Rate Increases- Section 127B of the Truth in Lending Act is amended by inserting after subsection (b) (as added by subsection (b)) the following new subsection:

(c) Advance Notice of Rate Increases- In the case of any credit card account under an open end consumer credit plan, no increase in any annual percentage rate of interest may take effect unless the creditor provides a written notice to the consumer at least 45 days before the increase takes effect which fully describes the changes in the annual percentage rate, in a complete and conspicuous manner, and the extent to which such increase would apply to an existing balance.’.

(d) Clerical Amendment- The table of sections for chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after the item relating to section 127A the following new item:

127B. Additional requirements for credit card accounts under an open end consumer credit plan.’.

SEC. 3. ADDITIONAL PROVISIONS REGARDING ACCOUNT FEATURES, TERMS, AND PRICING.

(a) Double Cycle Billing Prohibited- Section 127B of the Truth in Lending Act is amended by inserting after subsection (c) (as added by section 2(c)) the following new subsection:

(d) Double Cycle Billing-

(1) IN GENERAL- No finance charge may be imposed by a creditor with respect to any balance on a credit card account under an open end consumer credit plan that is based on balances for days in billing cycles preceding the most recent billing cycle.

(2) EXCEPTIONS- Paragraph (1) shall not apply so as to prohibit a creditor from–

(A) charging a consumer for deferred interest even though that interest may have accrued over multiple billing cycles; or

(B) adjusting finance charges following resolution of a billing error dispute.’.

(b) Limitations Relating to Account Balances Attributable Only to Accrued Interest- Section 127B is amended by inserting after subsection (d) (as added by subsection (a)) the following new subsection:

(e) Limitations Relating to Account Balances Attributable Only to Accrued Interest-

(1) IN GENERAL- If the outstanding balance on a credit card account under an open end consumer credit plan at the end of a billing period represents an amount attributable only to interest accrued during the preceding billing period on an outstanding balance that was fully repaid during the preceding billing period–

(A) no fee may be imposed or collected in connection with such balance attributable only to interest before such end of the billing period; and

(B) any failure to make timely repayments of the balance attributable only to interest before such end of the billing period shall not constitute a default on the account.

Such balance remains a legally binding debt obligation.

(2) RULE OF CONSTRUCTION- Paragraph (1) shall not be construed as affecting–

(A) the consumer’s obligation to pay any accrued interest on a credit card account under an open end consumer credit plan; or

(B) the accrual of interest on the outstanding balance on any such account in accordance with the terms of the account and this title.

(c) Access to Payoff Balance Information- Section 127B of the Truth in Lending Act is amended by inserting after subsection (e) (as added by subsection (b)) the following new subsection:

(f) Payoff Balance Information- Each periodic statement provided by a creditor to a consumer with respect to a credit card account under an open end consumer credit plan shall contain the telephone number, Internet address, and Worldwide Web site at which the consumer may request the payoff balance on the account.

(d) Consumer Right To Reject Card Before Notice Is Provided of Open Account- Section 127B of the Truth in Lending Act is amended by inserting after subsection (g) (as added by subsection (c)) the following new subsection:

(g) Consumer Right To Reject Card Before Notice of New Account Is Provided to Consumer Reporting Agency-

(1) IN GENERAL- A creditor may not furnish any information to a consumer reporting agency (as defined in section 603) concerning the establishment of a newly opened credit card account under an open end consumer credit plan until the credit card has been used or activated by the consumer.

(2) RULE OF CONSTRUCTION- Paragraph (1) shall not be construed as prohibiting a creditor from furnishing information about any application for credit card account under an open end consumer credit plan or any inquiry about any such account to a consumer reporting agency (as so defined).’.

(e) Use of Terms Clarified- Section 127B of the Truth in Lending Act is amended by inserting after subsection (g) (as added by subsection (d)) the following new subsection:

(h) Use of Terms- The following requirements shall apply with respect to the terms of any credit card account under any open end consumer credit plan:

(1) FIXED’ RATE- The term fixed’, when appearing in conjunction with a reference to the annual percentage rate or interest rate applicable with respect to such account, may only be used to refer to an annual percentage rate or interest rate that will not change or vary for any reason over the period clearly and conspicuously specified in the terms of the account.

(2) PRIME RATE- The term prime rate’, when appearing in any agreement or contract for any such account, may only be used to refer to the bank prime rate published in the Federal Reserve Statistical Release on selected interest rates (daily or weekly), and commonly referred to as the H.15 release (or any successor publication).

(3) DUE DATE-

(A) IN GENERAL- Each periodic statement for any such account shall contain a date by which the next periodic payment on the account must be made to avoid a late fee or be considered a late payment, and any payment received by 5 p.m., local time at the location specified by the creditor for the receipt of payment, on such date shall be treated as a timely payment for all purposes.

(B) CERTAIN ELECTRONIC FUND TRANSFERS- Any payment with respect to any such account made by a consumer on-line to the Web site of the credit card issuer or by telephone directly to the credit card issuer before 5 p.m., local time at the location specified by the creditor for the receipt of payment, on any business day shall be credited to the consumer’s account that business day.

(C) PRESUMPTION OF TIMELY PAYMENT- Any evidence provided by a consumer in the form of a receipt from the United States Postal Service or other common carrier indicating that a payment on a credit card account was sent to the issuer not less than 7 days before the due date contained in the periodic statement under subparagraph (A) for such payment shall create a presumption that such payment was made by the due date, which may be rebutted by the creditor for fraud or dishonesty on the part of the consumer with respect to the mailing date.’.

(f) Pro Rata Payment Allocations- Section 127B of the Truth in Lending Act is amended by inserting after subsection (h) (as added by subsection (e)) the following new subsection:

(i) Pro Rata Payment Allocations-

(1) IN GENERAL- Except as permitted under paragraph (2), if the outstanding balance on a credit card account under an open end consumer credit plan accrues interest at 2 or more different annual percentage rates, the total amount of each periodic payment made on such account shall be allocated by the creditor between or among the outstanding balances at each such annual percentage rate in the same proportion as each such balance bears to the total outstanding balance on the account.

(2) ALLOCATION TO HIGHER RATE- Notwithstanding paragraph (1), a creditor may elect, in any case described in such paragraph, to allocate more than a pro rata share of any payment to a portion of the outstanding balance that bears a higher annual percentage rate than another portion of such outstanding balance.

(3) SPECIAL RULES FOR ACCOUNTS WITH PROMOTIONAL RATE BALANCES OR DEFERRED INTEREST BALANCES-

(A) IN GENERAL- Notwithstanding paragraph (1) or (2), in the case of a credit card account under an open end consumer credit plan the current terms of which allow the consumer to receive the benefit of a promotional rate or deferred interest plan, amounts paid in excess of the required minimum payment shall be allocated to the promotional rate balance or the deferred interest balance only if other balances have been fully paid.

(B) EXCEPTION FOR DEFERRED INTEREST BALANCES- Notwithstanding subparagraph (A), a creditor may allocate the entire amount paid by the consumer in excess of the required minimum periodic payment to a balance on which interest is deferred during the 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.

(4) PROHIBITION ON RESTRICTED GRACE PERIODS UNDER CERTAIN CIRCUMSTANCES- If, with respect to any credit card account under an open end consumer credit, a creditor offers a time period in which to repay credit extended without incurring finance charges to cardholders who pay the balance in full, the creditor may not deny a consumer who takes advantage of a promotional rate balance or deferred interest rate balance offer with respect to such an account any such time period for repaying credit without incurring finance charges.’.

(g) Timely Provision of Periodic Statements- Section 127B of the Truth in Lending Act is amended by inserting after subsection (i) (as added by subsection (f)) the following new subsection:

(j) Timely Provision of Periodic Statements- Each periodic statement with respect to a credit card account under an open end consumer credit plan shall be sent by the creditor to the consumer not less than 25 calendar days before the due date identified in such statement for the next payment on the outstanding balance on such account, and section 163(a) shall be applied with respect to any such account by substituting 25′ for fourteen’.’.

SEC. 4. CONSUMER CHOICE WITH RESPECT TO OVER-THE-LIMIT TRANSACTIONS.

Section 127B of the Truth in Lending Act is amended by inserting after subsection (j) (as added by section 3(g)) the following new subsections:

(k) Opt-Out of Creditor Authorization of Over-the-Limit Transactions if Fees Are Imposed-

(1) IN GENERAL- In the case of any credit card account under an open end consumer credit plan under which an over-the-limit-fee may be imposed by the creditor for any extension of credit in excess of the amount of credit authorized to be extended under such account, the consumer may elect to prohibit the creditor, with respect to such account, from completing any transaction involving the extension of credit, with respect to such account, in excess of the amount of credit authorized by notifying the creditor of such election in accordance with paragraph (2).

(2) NOTIFICATION BY CONSUMER- A consumer shall notify a creditor under paragraph (1)–

(A) through the notification system maintained by the creditor under paragraph (4); or

(B) by submitting to the creditor a signed notice of election, by mail or electronic communication, on a form issued by the creditor for purposes of this subparagraph.

(3) EFFECTIVENESS OF ELECTION- An election by a consumer under paragraph (1) shall be effective beginning 3 business days after the creditor receives notice from the consumer in accordance with paragraph (2) and shall remain effective until the consumer revokes the election.

(4) NOTIFICATION SYSTEM- Each creditor that maintains credit card accounts under an open end consumer credit plan shall establish and maintain a notification system, including a toll-free telephone number, Internet address, and Worldwide Web site, which permits any consumer whose credit card account is maintained by the creditor to notify the creditor of an election under this subsection in accordance with paragraph (2).

(5) ANNUAL NOTICE TO CONSUMERS OF AVAILABILITY OF ELECTION- In the case of any credit card account under an open end consumer credit plan, the creditor shall include a notice, in clear and conspicuous language, of the availability of an election by the consumer under this paragraph as a means of avoiding over-the limit fees and a higher amount of indebtedness, and the method for providing such notice–

(A) in the periodic statement required under subsection (b) with respect to such account at least once each calendar year; and

(B) in any such periodic statement which includes a notice of the imposition of an over-the-limit fee during the period covered by the statement.

(6) NO FEES IF CONSUMER HAS MADE AN ELECTION- If a consumer has made an election under paragraph (1), no over-the-limit fee may be imposed on the account for any reason that has caused the outstanding balance in the account to exceed the credit limit.

(7) REGULATIONS-

(A) IN GENERAL- The Board shall issue regulations allowing for the completion of over-the-limit transactions that for operational reasons exceed the credit limit by a de minimis amount, even where the cardholder has made an election under paragraph (1).

(B) SUBJECT TO NO FEE LIMITATION- The regulations prescribed under subparagraph (A) shall not allow for the imposition of any fee or any rate increase based on the permitted over-the-limit transactions.

(l) Over-the-Limit Fee Restrictions- With respect to a credit card account under an open end consumer credit plan, an over-the-limit fee may be imposed only once during a billing cycle if, on the last day of such billing cycle, the credit limit on the account is exceeded, and an over-the-limit fee, with respect to such excess credit, may be imposed only once in each of the 2 subsequent billing cycles, unless the consumer has obtained an additional extension of credit in excess of such credit limit during any such subsequent cycle or the consumer reduces the outstanding balance below the credit limit as of the end of such billing cycle.

(m) Over-the-Limit Fees Prohibited in Conjunction With Certain Credit Holds- Notwithstanding subsection (l), an over-the-limit fee may not be imposed if the credit limit was exceeded due to a hold unless the actual amount of the transaction for which the hold was placed would have resulted in the consumer exceeding the credit limit.’.

SEC. 5. STRENGTHEN CREDIT CARD INFORMATION COLLECTION.

Section 136(b) of the Truth in Lending Act (15 U.S.C.

Qatar Expatriate Prospects

 

http://www.xpatulator.com/ 

 

 

Brazil, Mexico, South Korea, Singapore Debt compelling says PIMCO

Bonds sold by Brazil, South Korea, Mexico and Singapore will beat other emerging markets as they avoid a “domino effect” of defaults, according to Pacific Investment Management Co.

Debt sold by countries with large enough financial reserves to stimulate economic growth and access to support from the Federal Reserve’s $120 billion of currency swap lines will outperform, the world’s largest emerging-market bond investor said in a report.

Investors pulled $18 billion from emerging-market bond funds last year as Ecuador’s default last month accelerated losses, according to data compiled by EPFR Global. Brazil’s bonds due 2040, which fell as much as 25 percent last year, gained 30 percent since mid-October. Brazil, Turkey, Colombia and the Philippines raised $4.5 billion selling dollar- denominated bonds this week alone.

“Default probabilities for countries like Brazil, Korea, Mexico and Singapore remain very low,” Curtis Mewbourne, a managing director and co-head of emerging-market investments, wrote in a note published on Pimco’s Web site. “Current spreads for their debt represent a compelling risk-return opportunity.”

Pimco is most bullish on countries that have the resources or can borrow to stimulate their economies as exports slump, according to Mewbourne. He highlighted China’s $585 billion stimulus package and Russia’s $186 billion program.

Pimco’s $2.4 billion Emerging Markets Bond Fund lost 14 percent last year, Bloomberg data show.

The Fed announced currency swaps in October of $30 billion each for the central banks of Brazil, Mexico, South Korea and Singapore. The arrangements, due to expire in April, reduce the likelihood of capital outflows that marked the Asian financial crises of 1997, Mewbourne wrote.

Pimco, based in Newport Beach, California, said access to finance will be significantly reduced for Ecuador, Argentina and Venezuela because of their unconventional policies.

Ecuador reneged on a $30 million coupon payment on Dec. 15, while keeping $5 billion of foreign-exchange reserves. Ecuador’s credit rating was cut to “selective default” by Standard & Poor’s.

The cost to hedge against a default by Argentina for five years rose to 3,713 basis points yesterday from 1,800 basis points three months ago, according to CMA Datavision prices in New York. The cost of contracts on Venezuela’s debt jumped to 2,918 from 1,292.

Credit-default swaps pay the buyer face value in exchange for the underlying securities if a borrower fails to adhere to its debt agreements. A basis point is equivalent to a cost of $1,000 a year to protect $10 million of debt.

Investors should expect a “wide range of different outcomes” in emerging markets, Mewbourne wrote. As policy makers in developing countries follow the U.S., Japan and Europe in cutting interest rates to boost their economies, the currencies will face “downward pressure,” Mewbourne said.

Pimco has tempered its “secular enthusiasm for a generalized strengthening of emerging currencies,” Mewbourne wrote. He didn’t provide any specific currency forecasts.

The Philippines sold $1.5 billion of 10-year notes yesterday to yield 8.5 percent, or six percentage points more than Treasuries, while Turkey sold $1 billion of eight-year bonds to yield 5.01 percentage points above Treasuries. Brazil and Colombia each sold $1 billion of debt this week. Mexico sold $2 billion in bonds on Dec. 18.

Chile, Malaysia, South Korea and Indonesia may also tap the global sovereign debt market later in 2009, according to Brown Brothers Harriman & Co. in New York.

Source: Bloomberg, 08.01.2009  (David Yong in Singapore at dyong@bloomberg.net)

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INDIA’S BIGGEST CORPORATE SCANDAL

In my last post of corporate governance and the Satyam Saga, my conventional view was that Mr. Ramalingam Raju should resign or Satyam shareholder would sack the management. And today it turned out to be a disaster all the newspapers from general to finance, the 24*7 media coverage rigorously carried the story of India’s biggest corporate fraud “THE SATYAM” which has tarnished India’s image.

Every body is pointing fingers towards Satyam management its stock price but what about the 53000 employees and quite a lot of them are fresher. Already the global turmoil has dented the world economy the job market is on the task the future seems to be uncertain.

Although Mr Raju created the company and brought at such a respected level winning the awards like entrepreneur of the year award and the corporate governance golden peacock award which was just taken back today. But how could he forget the simple words of the world that with great position there lays a great responsibility. The employee of the Satyam always saw Raju as there role model.

The corporate governance is all on the doll drum, as if now there is no clarification on the finance side by the Satyam board which briefed media today. The CFO has resigned from his designation but it’s not accepted yet. I still doubt was it planned or things are now going in a random way. This is one of the biggest corporate failures directing affecting the image of the corporate India. It was a blue chip Index and Nifty script where lot of investors Mutual Funds, Banks, Insurance involved and invested in it.

Already India does not have a good reputation for doing business, it stands way below to countries like Sri lanka and Pakistan and incidence like this will definitely hamper the economy. The Indian government and the regulator should set an example to other corporate by following the trial at fair, accurate and at a fast pace and prove the world that Indian regulators will not tolerate any kind of voilations and code of conduct.

The accounting profession and broker-dealers did zero due diligence!!!

Well, actually they did if it served their own purposes. The news of the Madoff scandal that is rocking the financial world ( actually the whole world it seems ) is showing the total lack of integrity and ethics of our once most trusted entities. While listening to our congress talk about spending our money and addressing each other as ” the distinguished gentleman or woman from … wherever ” the damage being done by the laws that are on the books is increasing daily. The accountants for the company from India called Saytam, didn’t do there duty. The unions who have working men and women busting their butts everyday are finding that the leadership they pay their dues to each year have failed them. There are reports that many union pension funds were invested with Madoff. ( Who are the scumbags that took their monies and gave it to him and not into simple Index no load funds are money markets ? ) The fund of fund guys just like the asset allocation brokers who try and sit on the same side of the table as the client are just lazy , incompetent, corrupt, naive,  is there enough adjectives to describe them, I don’t think so. Those seekers of capital get paid a fee each year just for the priviledge of helping people place the investments they have a stewardship over to some money manager. They don’t even care how the manager captures any returns. If the don’t like them , they just sit next to the client and have them move the money to another manager. Getting paid their fees from whoever gets the investment dollars sent their way.  For the working man and woman in this country, the losses they have suffered this year has not been from a mere fluctuation of equity prices, but of a purely greed and theft driven society of politicians, executives, industry leaders, and other bonus and kickback predators the universities of our country have produced.

SATYAM ASATYAM ! ASATYAMEV JAYATE!

 

 

 

 

Doppler 4: Real Estate Radar

We are coming from you live in the Real Estate Room to offer you today’s forecast on Real Estate in Mid Missouri.

Thursday links: China

We want to encourage all of our readers to check out first poll/book giveaway.  We are soliciting opinions on how to take Abnormal Returns to the next level.

Why aren’t stocks falling? (Market Movers)

Checking in on the Coppock Guide.  (Trader’s Narrative)

Don’t forget that last year’s Morningstar Fund Managers of the Year still lost gobs of money.  (The Wallet)

Four index funds off the beaten path.  (Morningstar.com)

Value-based strategies have performed well in the market bounce.  (Value Expectations)

A study of the stock picking ability of self-professed value investors.  (Empirical Finance Research Blog)

The reversal of the Wal-Mart/Sears Holding pairs trade.  (MarketBeat also TheStreet.com)

Risk models are perfectly fine to use as long as you’re aware of the limitations. Every financial ratio or metric is like that.”  (Crossing Wall Street)

Presenting the Financial Modelers’ Manifesto.  (Wilmott Blog via FT Alphaville)

“In the end, if we want markets to work well, we want them to be bigger, not smaller. Even if that means letting speculators through the door.”  (The Balance Sheet)

Hedge funds are going to have to outsource administration, whether they want to or not.  (breakingviews.com also Dealbreaker)

Can a hedge fund manager, John Paulson, make too much in the wrong way?  (Portfolio.com)

The banks have yet to be really fixed.  (Clusterstock)

Prime money market funds gain at the expense of their Treasury-only brethren.  (FT Alphaville)

China’s appetite for U.S. debt is declining.  (NYTimes.com, naked capitalism also Follow the Money)

Global demand for gold is on the rise.  (EconomPic Data)

“Is there a risk of a “pessimism bubble” in the real economy?”  (FiveThirtyEight.com also Free exchange)

Are discussions around the details of a stimulus package missing the larger point?  (Baseline Scenario)

It’s time for Apple (AAPL) to make their succession plan clear.  (Deal Journal)

Happy second blogiversary!  (VIX and More)

The death of Wallstrip can’t be good for the financial blogosphere (or us for that matter).  (Market Movers)

“Statisticians, quantitative analysts, and all related professionals should have the dignity, the self-respect, and the common sense to have nothing to do with the BCS.”  (Slate.com)

Are you curious what other bloggers are saying about Abnormal Returns? So are we. Feel free to check out a compilation of reviews.

Market Analysis

Market Behaviour.  The plots of the two leading indices, the S&P 500 and the Nasdaq 100, provided for the most recent 30 business days, are supplemented by trend lines and by the 30-day moving average (in red).  The tredn lines ae obtained by regression analysis of the local highs and lows in the region shown.

The plots show clearly the ongoing recovery since the last bottom experienced on November 20, 2008.   The recovery was enhanced in the first week of 2009, but at the time of this post  a pending new decline is quite plausible.

 

 

Our Timing Systems.  We use two independent timing systems, referred to as slow and fast.  The slow system is based on conventional trend analysis, and its main ingredient is a modified MACD (Moving Average Convergence-Divergence) approach, determining and extending the trend of the most recent 30 business days.

The fast timing system is our original contribution.  It uses volume data of the most recent 15 days and provides daily forecasts – one day at a time.  It is fairly reliable for the upcoming 1-2 dys.  For both systems we update our calculations daily.  In the slow system trades are typically carried out 2-3 times a month, while in the fast system trades are performed almost every day.

The trades leading to our investment returns are carried out within the Rydex funds, providing a large variety of pairs of index funds, direct and inverse.  Changes in the direct funds are in phase with market changes, while for inverse funds they are out of phase – in fact opposed to them.  You can find a lot more about the Rydex funds in www.rydexfunds.com.

Investment Returns.  The table below compares the market and out investment returns.  All returns reported are our real time returns obtained in managed accounts.  On occasions people have stated that some of out results are “too good to be true”.  To remove any doubt we provide, upon request, fund financial statements for the timing system and period of interest.  If interested, you can drop us a note, and you will get the appropriae statement by return email.

The table is organized in two groups.  The upper half provides returns for completed periods, and the returns are provided with two decimal figures.  The lower half describes ongoing periods changing every day, and the returns are provided with one decimal figure.

As to the returns, 2007 was a decent year in the market, and both of our timing systems have outperformed the market.  As to 2008, both our timing systems have underperformed the market, with slow timing doing so quite substantially. 

How do we assess the performance of any timing, money management, or investment system?  For this we propose to use the total and average annualized returns over the period considered.  This values are compared in the table for the 8-quarter period 12/31/06-12/31/08.

For the sum total of the last two years our systems have not performed adequately.  It waits to be seen how we will do in 2009.

 Nathan Jacobi, Ph.D.

Registered Investment Advisor

n.jacobi@shrago.net

How to easily quadruple your results!

Too much talk about Numbers, Dates and Compound Growth Rates can make your head spin!

But, Scott makes an interesting observation:

What I learned from this post and using the Annual Effective Rate calculator: http://www.investopedia.com/calculator/AnnualEffectiveRate.aspx

is that if I keep up my focus, work and investing for another 5 years past my 10 year date, I can drop my required compound growth rate by 3%(from 40% down to 37%), however, quadruple my number accomplished from 4 million to 16 million, and i’ll still be in my 40’s.

Incredible what taking a little more time can do for you!

What Scott says say is absolutely true, but also consider:

How much does delaying your Date by 1, 3 or 5 years (say) REDUCE your compound growth rate if you keep your Number?

Also, what does reducing your compound growth rate do for you in terms of changing the way that you need to think about building up your nest egg?

Does it mean that you no longer need to start a business, or invest in real-estate? Will keeping your money in Index Funds via your 401k do the trick?

So, rethink your Number and Date - but NOT at the expense of your Life’s Purpose

… then, when you do get to your Date, DO allow the momentum of the activities that got you there to carry you on just a little bit further … you could double your Number, just like that!

If I Ruled the UK

They say you should read the sort of thing you write.  So I thought I’d have a look round some blogs this lunchtime.  I didn’t get any further than Renter Girl, who occasionally appears in print in the Guardian.  In a post, If I Ruled the World, she considers what could be done to improve the private rental market for tenants.  This happens to be an issue I’ve been thinking about for quite some time.  It absolutely amazes me that people aren’t in the streets about this, and that the Labour Government has done absolutely nothing for tenants.  I’m not quite as ambitious as RG, so if I ruled the UK this is what I’d do, in response to some of her points:

“1 Landlords are obliged to submit to the same credit checks and investigations as their tenants. They should also provide references from former tenants, testifying to their suitability, efficiency and professionalism.”

Absolutely spot on.  This got my attention.  The second part is most important.  At present you have no way of knowing what the problems with a property or a landlord are.

I’d go further.  Credit checks on tenants need to be reasonable (and probably specified by law, given the sort of people the property market seems to attract).  I had one agent (and those involved in the Cambridge rental market will know who they are) who, after I’d spent days looking at dross and eventually found somewhere I was happy to live, demanded (on behalf of the landlord, ha, ha) 6 months rent in advance - free credit in other words.  I’d just sold a flat to do a business degree FFS.  I haggled it down to 3, when they happened to mention the fee to renew the contract after 6 months.  I was out the door, all that flat-hunting time totally wasted.

There is a public interest in seeing people housed (since at the end of the day the state has to deal with the problem), so tenants shouldn’t have to do a lot beyond putting up a deposit and a month’s rent in advance and avoiding getting themselves on a non-payers blacklist (to be established for the purpose).  After all, if they can’t pay the rent they soon won’t have a home and will be being hunted by credit collection agencies.

“2 For tenancy deposit protection to apply to landlords, who will pay an amount equal to that paid by their tenant into an account, withheld if they are naughty.”

Makes sense, but who decides they are naughty?  I’d go further.

First, withholding a deposit should be treated as theft, which it is.  The new arrangements for a third-party holding deposits should make this problem a thing of the past, though.   I have to say it’s rather pathetic that all the Labour government has been able to do for tenants is provide some protection against landlords stealing significant sums of their money.

The fundamental problem, though, is that everyone involved is working for the landlord.  In the event of a dispute the agent nearly always sides with the landlord.

Legislation needs to specify the principle that the managing agent is responsible for the property, in a similar way perhaps as a Board is required to take decisions in the best interests of a company (which is a legal entity in itself), not themselves or the employees.

To make this work, there needs to be an appeal procedure for the tenant to complain about and/or switch managing agent (who, obviously, doesn’t have to be the same as the letting agent).

Accordingly, a portion of the rent - say the 10% notionally for maintenance on which I understand landlords get tax relief - should be paid into a fund (like the “sinking fund” some freeholders maintain for leaseholders) and used to make repairs/improvements to the property.  Either landlord or tenant could propose such improvements, with the managing agent having the casting vote in the event of a dispute over priorities etc.  I’ve lost count of the number of “improvements” I’ve asked for and not got: that old chestnut, secure postal delivery; better thermal insulation (guess who pays the heating bills?); security improvements and any number of odd jobs I’ve done myself - such as replacing the 50p plastic loo seat that’s always put in new conversions when it broke.  To be fair, my landlord has fixed a number of problems, too, but these tend to be the ones that don’t cost a lot.

“4 For landlords to pay the council tax. They paid the old style rates. Why was it changed?”

I expect they’d just put the rent up to compensate.  However, as a temporary resident in Cambridge, I am disenfranchised - the Residents’ Associations aren’t begging me to join, and the Council doesn’t seem to take me that seriously, other than as a source of revenue - so get less value from my Council Tax than permanent residents.  For example, the Council allowed the rental property to be created, but provided no (legal) parking space (so, only using a car occasionally, I ended up with 2 tickets before I realised I had to park in another street where the Residents’ Association had succeeded in providing amply for themselves) - and when I complained that my street is all metered and the local residents’ permits don’t work, the Council listened, to be fair, but didn’t take my problem seriously (the money from meters on my street is needed, apparently, to subsidise park and ride buses, so that people who live outside Cambridge can come into town cheaply - um, why is this my problem? - and why are we allowing some people to drive into town and park in order to discourage others to do so? But I digress - that £60 fine really gave me the hump!).

I’d also argue that private tenants get less value per £ of tax collected from council services than owner-occupiers of property.  I don’t drive often (except using the occasional Streetcar - the point of renting is to be live where I want to be); don’t have kids that need educating; and don’t even trouble the police (though when I’ve run into them in the street I have asked them once or twice to try to stop people cycling flat out on the pavements - without lights).  Maybe there should be a special (lower) Council Tax rate for private tenants.

I think, though, the answer is to reform the Council Tax, which is truly awful.  It should be much more progressive (i.e. the rates for small rented properties should be negligible and the rates for 5 bedroom detacheds much higher, in order to be fairer, and, among other things, encourage people to trade-down when the kids have flown the nest), of course, but the main way to achieve fairness is to make it far less significant.  Councils (like in the US) should have other local sources of revenue: a local incomes tax; local sales tax; congestion charges; hotel room occupancy taxes (a brilliant tax, as most of these people don’t get a vote! - if I have to pay it in New York, why shouldn’t tourists pay it when they come here?, after all they use our roads, leave rubbish, report their stolen cameras to the police…), and so on.

“5 It is presumed that tenants are able to stay for as long as they pay rent, and that two months notice must be given. However, tenants can give one months notice. Oh, stop whining and snivelling, landlords!”

Yes, wipe you’re snotty faces, as Putin would say!

It’s absolutely outrageous that tenants no longer have any security of tenure.  This should be restored immediately.  The Assured Shorthold Tenancy should automatically roll over after 6 months to a contract with one month tenant notice, 2 months (or more) for the landlord, but the landlord should only be able to evict a tenant:

“Renegotiation” of the contract (and the associated fees that are often levied) every 6 months (or year) should be OUT.  People don’t organise their lives in 6 month chunks.  I know someone who bought a property just after renewing an Assured Shorthold (um, so she’d have somewhere to live, of course), and was then told she was liable for the rent if the landlord couldn’t find another tenant (not very likely in Cambridge, fortunately).   This is just ridiculous.  It’s reasonable for the landlord to expect you to stay for the first 6 months, but after that you have to be able to choose when you leave.

2 months is far too little notice to have your life disrupted - I gather it’s 6 in France.  And the tenant should be allowed to move as soon as they find somewhere else within the landlord’s notice period, and compensated for the costs incurred (i.e. a couple of months’ rent waived).

But vacant possession must mean that.  It shouldn’t mean a landlord can simply get rid of a tenant they don’t like or to try to find a higher-paying tenant.  Of course, the landlord might try to abuse this and lie about the reason for eviction.  My suggestion is that if a landlord takes vacant possession, without a valid reason, then as well as paying compensation to the evicted tenant, they should be barred from letting the property again for 6 months. This should put them off.

Like insecurity of tenure, this is another obstacle to renting long-term.  It’s not necessary, as evidenced elsewhere e.g. France, where (I saw on TV), the first thing new tenants do is decorate.

I would have thought it was in the interest of landlords as well as tenants for long-term renting to become a viable option in the UK like it is in practically every other country in the Western world.

It’s also in the national interest to sort out the private rental market as the social housing arrangements can’t cope (and too much social housing is bad for the economy in various ways), as more and more priced-out young people will emigrate to Australia.  Fewer and fewer have been able to buy as house prices have risen over the noughties, and since the start of the credit crisis property is now even less affordable (don’t confuse price with affordability), largely because high LTV mortgages have vanished and first-timers now have to raise hefty deposits, not to mention the unemployment risk factor.  Social housing schemes can’t keep up.

“7 For there to be an effective fair rent forum, with tenants encouraged to use it. Landlords are legally prevented from giving notice if the rent is deemed too high, and legally and physically restrained from bleating about it.”

Another key issue.  Landlords must be prevented from hiking the rent once a tenant has spent a fortune moving into a property, or (see point 5) in order to get someone out.

My suggestion is that rent increases are linked to an index of the rents achieved locally by new rentals of comparable property (well, those council bureaucrats need something to do!).  The new rentals are where you find out what the market thinks property (or anything else) is really worth. This way, landlords won’t be able to complain that they are losing out because of a sitting tenant.

“8 For all landlords to nominate a caretaker and contractors on duty 24/7. Overseas owners must have a local representative. These representatives or caretakers must respond to urgent repairs within one day, or less in cases of water or gas leaks and the potential explosions, obviously.”

Yeap.  In my experience most landlords use professional managing agents and they should be required to have one (who should be registered, i.e. liable to be struck off if they don’t do their job, by the way).  As now, managing agents provide different levels of service.  The minimum should be the arbitration and deposit and sinking fund holding role (see point 2) plus 24 hour cover for the landlord.  The drama round here this week was a neighbour getting locked out.  The landlord had apparently given all the spare keys to the agent who only works 9-5!

“10 In the event of forfeiture in the above instance, or bankruptcy, or sale, for it to be presumed that the tenant is a ‘sitting’ tenant, and for notice only to be given to them, well never.”

Of course, but see point 5.  This all needs to be debated, but I’m taking the line that a private rental market is a good thing.  And there was probably some merit in the argument that landlords need to be able to take possession.  But the over-riding principle has to be to allow them to do so without pushing costs onto tenants and whilst minimising the disruption caused to evictees.

“11 Landlords who do not control their tenant’s anti-social or illegal behaviour will be entertained at length in their own home by a crack team of Ethel Merman impersonators who shall perform an avant-garde opera based on the life and works of Celine Dion. Loudly.”

Yeap.  Someone asked me to look at a tenancy agreement recently.  There were all kinds of clauses about not causing a nuisance e.g. by making a lot of noise.  I said to just sign it, and that the problem would be not that the landlord enforced these terms (some of which were on the Alice in Wonderland side of the realistic), but that they didn’t (for other people).  How right I was.

As I said, it’s amazing that Labour has done nothing about the private rental market.  I find it absolutely incredible that social housing tenants have rights that I can only dream about.  Why should my rights depend on the sort of organisation my landlord happens to be?  You’d think there’d be some kind of European law against such unequal treatment of citizens.

Georgetown

As the fruits of Ginkgogate still lay festering on our sidewalks, it may be a tad difficult to look up at our trees with much warmth these days. However, many don’t realize that at least one Georgetown street is like an arbor Brigadoon. That’s because despite the wide scale ravages of Dutch Elms Disease, Georgetown still has a decent collection of American Elms. In particular, a walk down Q St. is like a walk back through time.

Find out why after the jump:

As many people know, American Elms once lined city streets across the nation. There were valued for the hardiness and shape. By arranging them correctly, a city could create a beautiful cathedral-like tree canopy. Sadly, in 1928 a strain of Dutch Elm’s Disease arrived to this country in a shipment of imported lumber. Over the next 50 years, the disease systematically advanced through the nation, leaving ravaged and barren city streets in its wake.

Fortunately, through a mix of luck and good stewardship, at least some locations saved their elms. Most famously, Literary Walk in New York’s Central Park still remains a beautiful showpiece for this amazing species.

However, Washingtonians need not travel all the way to New York to see American Elms. According to Casey Trees, there are over 8,000 American Elms still alive on the streets of D.C. Moreover, according to Trees For Georgetown, there are about 84 American Elms in Georgetown alone.

Many of those 84 Elms are on Q St., east of Wisconsin. Perhaps what makes this stretch of street most special is that it still features the cathedral-like canopy:

Casey Trees lists most of these trees to be in a healthy condition. Nonetheless, there always remains a risk that Dutch Elms Disease can take hold of this concentration of trees. Needless to say, but Q St. just wouldn’t be the same without these majestic trees.

Also, if you’re not familiar with Casey Trees, it is a fantastic organization founded eight years ago as a result of a grant from local philanthropist Betty Brown Casey. Mrs. Casey was alarmed at the loss of tree canopy the city had suffered and wanted to fund an organization dedicated to repairing that canopy. Casey Trees works to manage and monitor live trees and to plant new trees. In Georgetown, Casey Trees works closely with CAG’s Trees for Georgetown.

One of the more interesting and wonky things that Casey Trees has done is to perform a street-by-street audit of all street trees in the District. You can search their map and find out information about every street tree in the entire city. For instance, GM’s favorite Elm, which is on the corner of Q and 30th, has this information:

 

 

GM thinks it’s worth a lot more than $13,000, by the way.

And finally, for the American Elm enthusiasts out there, it should be mentioned that in 2005 Casey Trees planted 90 new disease-resistant American Elm trees on Pennsylvania Ave. in front of the White House.  Coming on four years later, they’re all about 20 feet tall and look very healthy. Pennsylvania Avenue is probably too wide for the trees to create a true cathedral effect, but with luck in about 30 years the White House’s block will be beautifully shaded through the long summer months.

Do you have any favorite Elms in Georgetown or the rest of the city? Are there any other Elm canopies like Q St.?

WHY ETFS

Carl Delfeld is head of the global advisory firm Chartwell Partners and editor of Chartwell Advisor . He served as a director on the executive board of the Asian Development Bank during the administration of President George H. W. Bush, and he is the author of The New Global Investor . Click here for more analysis from Delfeld, or to subscribe to Chartwell Advisor. click here.

For a complete list of ETFs, ETF sponsor information, articles about ETFs and performance data, please click here.

Six lessons for bruised investors: Bogle

“There’s one thing we learn from history and that’s people don’t learn from history” says Warren Buffett.

Another investment legend well known for his practical wisdom as far as markets go is a man I’ve quoted on a few occasions ,  John Bogle, and although I don’t follow his investment approach personally his honesty and integrity, in my opinion, are well worth noting and it gives some food for thought.   Also, the concept of investing in a low cost index fund when markets are at record lows is something I’ve mentioned as a sensible option for investing in the market long-term for people who have little knowledge in how to invest safely in individual shares..

Six lessons for bruised investors

Here are six of the most important of these lessons:

1. Beware of market forecasts, even by experts. As 2008 began, strategists from Wall Street’s 12 major firms forecast the end-of-the-year closing level and earnings of the Standard and Poor’s 500 Stock Index. On average, the forecast was for a year-end price of 1640 and earnings of $US97. There was remarkably little disparity of opinion among these sages.

Reality: the S&P closed the year at 903, with reported earnings estimated at $US50.

Strategists aren’t always wrong. But they have been consistent, betting year after year that the market will rise, usually by about 10 per cent. Thus, they got it about right in 2004, 2006 and 2007, but also totally missed the market declines in 2000, 2001 and 2002, and vastly underestimated the resurgence in 2003.

Ignore the forecasts of inevitably bullish strategists. Bearish strategists on Wall Street’s payroll don’t survive for long.

2. Never underrate the importance of asset allocation. Investing is not about owning only common stocks. Nor are historical stock returns a sound guide to future returns. Virtually all investors should keep some “dry powder” in their portfolios in the form of high-grade short- and intermediate-term bonds. Investors who failed to learn that lesson fell on especially hard times in 2008.

How much in bonds? A good place to start is a bond percentage that equals your age. Although I don’t slavishly adhere to that rule, my bond position accounted for about 65 per cent of my personal portfolio in early 2000. Because returns on my bond funds since then have totalled 50 per cent and returns on my stock funds were negative 25 per cent, bonds are now about 75 per cent of my portfolio, still close to my advancing age.

With all the focus on historical returns that greatly favour stocks, don’t ignore bonds. Consider not only the probabilities of future returns on stocks, but the consequences if you are wrong.

3. Mutual funds with superior performance records often falter. Last year was an extreme example. With the S&P 500 off 37 per cent for the year, Legg Mason Value Trust fell by 55 per cent. Fidelity Magellan Fund, after a good 2007, was off 49 per cent. Funds managed by proven long-term pros felt the pain - Dodge and Cox Stock down 43 per cent; Third Avenue Value down 46 per cent; CGM Focus down 48 per cent; Clipper down 50 per cent; Longleaf Partners down 51 per cent. (Full disclosure: Four of Vanguard’s actively-managed equity funds also lagged the market by wide margins.)

Only time will tell whether the disappointing shortfalls experienced by these and other funds will be recovered in the future, whether the skills of their managers have atrophied, or whether their luck has run out. Whatever the case, chasing past performance is all too often a loser’s game. Managers of funds seeking market-beating returns should make it clear to investors that they must be prepared to trail the market - perhaps substantially - in at least one year of every three.

4. Owning the market remains the strategy of choice. Such a strategy guarantees a return that lags the market return by a minuscule amount, and exceeds the return captured by active equity-fund managers as a group by a substantial amount. Why? Because the heavy costs incurred by investors in actively managed equity funds can easily amount to 2 per cent to 3 per cent annually. Typical expense ratios run from 1 per cent to 1.5 per cent; the hidden costs of portfolio turnover often come to 0.5 per cent to 1.0 per cent; a 5 per cent front-end sales load, amortised over a holding period of five to 10 years, adds another 0.5 per cent to 1.0 per cent per year in costs.

As a group, investors are by definition indexers. (That is, they own the entire market.) So indexing wins, not because markets are efficient (sometimes they are, sometimes they are not), but because its all-in annual costs amount to as little as 0.1 per cent to 0.2 per cent.

Indexing won in 2008 by an especially wide margin. Low-cost, low-turnover, no-load S&P 500 index funds outpaced nearly 70 per cent of all equity funds, and (admittedly a fairer comparison) more than 60 per cent of all funds focused on large-cap US stocks. This continues the pattern - with some variations - that goes back to the start of the first index fund 33 years ago. The bond index fund did even better. Its return of 5 per cent for 2008 outpaced more than 80 per cent of all taxable bond funds.

In sum, active management strategies as a group lose because they are expensive. Passive indexing strategies win because they are cheap.

5. Look before you leap into alternative asset classes. During 2006-07, equity mutual funds focused on developed international markets and emerging markets provided strong relative returns to US stocks. During that period, US investors made net purchases of $US285 billion ($401 billion) in mutual funds investing in non-US stocks, and liquidated on balance some $US35 billion from funds focused on US stocks.

This extreme example of “performance chasing” at its worst is hardly defensible. But, disingenuously, it was touted by fund marketers as adding “non-correlated assets,” or “reducing volatility risk”. In 2008 - with non-US developed market funds falling by 45 per cent and emerging market funds tumbling by 55 per cent, we learned once again that, just when we need it the most, international diversification lets us down.

Commodities were no different. As the global recession developed, commodity funds sank, the largest such fund tumbled 50 per cent. Always keep in mind: When the investment grass looks greener on the other side of the fence, look twice before you leap.

6. Beware of financial innovation. Why? Because most of it is designed to enrich the innovators, not investors. Just think of the multiple layers of fees to the salespersons, servicers, banks, underwriters and brokers selling mortgage-backed debt obligations. These new products (credit default swaps are another example) enriched their marketers during 2005-07, only to impoverish the clients who held them in 2008.

Our financial system is driven by a giant marketing machine in which the interests of sellers directly conflict with the interests of buyers. The sellers, having (as ever) the information advantage, nearly always win.

We can’t say that we haven’t been warned about the perils of ignoring the past. More than 2000 years ago, the Roman orator Cato noted that, “there must be a vast fund of stupidity in human nature, or else men would not be caught as they are, a thousand times over, by the same snares . . . while they yet remember their past misfortunes, they go on to court and encourage the causes to what they were owing, and which will again produce them”.

While the events of 2008 reinforced that message, perhaps these stern and oft-repeated lessons of experience will help investors avoid similar mistakes in 2009 and beyond.

*John C. Bogle is the founder and former chief executive of the Vanguard Group of Mutual Funds. His newest book, Enough. True Measures of Money, Business, and Life, was published by Wiley in November.

$5 Billion Dollars don

Given that UK atheists have gone out and bought themselves a campaign, it’s high time I put this post together.

Simply put, I can think of no proof of God’s existence more solid than these buildings.

(I believe the photo shows No. 3, which I think is  is the one to the left in the map)

Here is a description of the funeral of the man responsible.

Next day, Monday March 14th 1898 was the day of the funeral. It is said that nothing like it has been seen in Bristol before or since. Firms closed or gave their employees time off to witness the event and pay their respects; thousands of people lined the route of the procession; on Bristol cathedral and other churches flags flew at half mast and muffled peals were rung; in all the main streets they put up black shutters or drew their blinds. The city mourned.

Hundreds couldn’t get in to the service at Bethesda. Among those whose who did squeeze into the main area of the chapel and it’s galleries were many  Anglican clergymen and free church ministers. After addresses… nearly a hundred carriages including the mayor’s state coach joined the procession across the river to the cemetery where a crowd of about seven thousand people had gathered at the main gates….

How did this man become so popular, so well known? How did he build such large buildings? How did he go from being an obscure pastor of a small church to a man welcome in the houses of presidents and princes?

The buildings above are the Muller orphanages in Bristol. They held 2000 orphans at one time. The orphans were fed, clothed and educated (in trades such as printing and milling - no chimney sweeps!) from 1836 onward.

The first of the buildings above was built in 1849, the last opened in 1870.

In all that time not one meal was missed, the orphans were always kept warm and well clothed. Dickens himself inspected the orphanages, assuring himself that any reports of mistreatment and hunger were false.

From 1836 when Muller (then an obscure pastor of a non-conformist church) declared his intentions to his death, over one-and-a-half million pounds were raised.

Once you figure in historical differences, this is actually somewhere between £100M and £2B.

In 2007, £1500000 0s 0d from 1870 was worth:

So, up to $5 Billion NZD, depending on how you count it. At minimum, $250M.

Clearly, no trivial exercise and no chump change here.

How did Muller accomplish this? From an Amazon review of the book on my desk (see below for link).

George Mueller, one time playboy, cheat and troublemaker, finally discovered Jesus as a young adult. He was never one to follow what everyone else did, so when he embarked on a lifelong journey of reading and analysing the Bible to discover its truth for himself, it was only a matter of time before he discovered something that few people realise - the God of the Bible is real, and the promises written in the Bible are absolutely true.

So then, he reasoned, that if the Bible says the God not only listens to our prayers but also answers them (and the book sets out his rationale for thinking this), it makes sense that it could be demonstrated to non-believers as evidence for God… after all, if a non-believer were to be confronted by the most amazing in-your-face answers to prayer that couldn’t possibly be man-made, or by coincidence, then surely they would believe?

The book describes Muellers life, which he dedicated to doing just that: proving beyond any reasonable doubt that God listens, and that God answers prayers. He proved this in many ways, not least by providing a home and for the daily needs for thousands of orphans without ever raising money, never appealing for funds, never borrowing from the bank*, and never telling anyone that they were in need (even when people asked).

Over 50 years, God answered prayer after prayer. He never once let Mueller or the orphans down. Skeptics and non-believers could not then (or now) come up with any convincing explanation for this…

I wonder of those buses will be traveling around Bristol?

I know that a lot of Christians never develop the relationship with God that Muller did.

But I can assure you, that among those who do take that time, you will find stories along this vein - I could tell several, but none quite so spectacular as this.

God meets the needs of his people, and he is faithful.

So excuse me if I chuckle when you come to me and talk about an “absence of evidence”!

——–

Source of photos.

Quotation from George Muller - Delighted in God.

If you read no other book in 2009, read this one twice.

*one technical exception is described in the book from the later days of his ministry.

US Debt is really 53 Trillion!!! GOD HELP US!!!

80% ($42 trillion) of today’s debt was created since 1990.

“Foreign interests have more control over the US economy than Americans, leaving the country in a state that is financially imprudent. More and more of our debt is held by foreign countries – some of which are our allies and some are not. The huge holdings of American government debt by countries such as China and Saudi Arabia could leave a powerful financial weapon in the hands of countries that may be hostile to US corporate and diplomatic interests.” David Walker, the US comptroller general. 23 July 2007

If families have less inflation-adjusted income, despite more mothers working, then family personal savings must suffer as a consequence - unless, of course, families reduce their consumption. But, families increased consumption spending and, to cover this, they reduced savings to historic lows and increased household debt to historic highs. Dangerous Trend !!!

Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

Research related articles:

Red Chinese Celebrate at New York Stock Exchange - Canada Free Press


One person is believed to be trapped after an explosion at a hotel in Aberdeenshire.It is thought there are at least four casualties following the explosion at the Drumtochty Arms hotel in the village of Auchenblae.The condition of the people injured in the incident, which happened just before 1730 GMT, is not known.The Scottish Ambulance Service has sent four crews to the scene and a specialist unit.This article is from the BBC News website. © British Broadcasting Corporation

PM’s tour ‘to hear economy woes’
Gordon Brown is expected to begin a three-day tour of England and Wales later, which will include a cabinet meeting in the North West.He aims to show he is heeding concerns about the likely recession, by touring areas hit by unemployment in the 1980s.The PM has made several regional trips recently, including to cabinet meetings in Leeds and Birmingham.The Conservatives have stepped up attacks on Mr Brown’s handling of what they call “Labour’s debt crisis”.Party leader David Cameron called the government’s 12bn VAT cut “a joke” and said Mr Brown may as well have burned the money.’Waste of money’The Liberal Democrat leader Nick Clegg has also said the temporary 2.5% reduction in VAT was a “waste of money” which could have been better spent.But on Monday, Mr Brown said while the UK faced a “testing” year, Labour’s investment in housing and transport and its planned focus on creating jobs in new sectors of the economy was an “essential” response to the downturn."It is more important than ever for us to talk to people right across the country about what they are going through"Gordon BrownHe will visit redevelopment projects and training schemes in the North West, the East and West Midlands, the South West and in Wales over the next three days. His trip will culminate in a “jobs summit” in Downing Street next week.He told a meeting of business groups and union leaders on Monday it was “more important than ever for us to talk to people right across the country about what they are going through, listening to their views, addressing their concerns and learning from their experiences”.Since September the cabinet has met twice outside London, in Birmingham and Leeds. Mr Brown toured again in October to explain his banking bail-out plan to people.On Tuesday a Freedom of Information request revealed it cost West Midlands Police more than 130,000 to look after the cabinet when it met in Birmingham - leading the Tories to claim it was a costly “gimmick”.Downing Street said it worked hard to keep costs down and the aim was for the whole cabinet to hear people’s views in different areas of the country, which they believed was “a worthwhile investment to support local engagement in our national political debate”This article is from the BBC News website. © British Broadcasting Corporation

Pakistan sacks security advisor
Pakistan has sacked its national security advisor as tensions continue between Islamabad and India over November’s attacks in Mumbai.Mehmood Ali Durrani was officially accused of showing “irresponsible behaviour” and a “lack of coordination” on security matters.A BBC correspondent says the main accusation appears to be that he failed to share information with politicians.Islamabad has confirmed the only gunman to survive Mumbai is a Pakistani.More than 170 people died when 10 gunmen attacked Mumbai on 26 November.The BBC’s Charles Haviland in Islamabad notes that Mr Durrani, a retired general, was sacked just hours after the official confirmation that gunman Ajmal Kasab was a Pakistani citizen.ConfirmationAn official statement from the prime minister’s office spoke in general terms but blamed Mr Durrani’s “irresponsible behaviour for not taking the prime minister and other stakeholders into confidence, and a lack of coordination on matters of national security”.Information Minister Sherry Rehman told the BBC that Ajmal Kasab was a Pakistani citizen.For weeks, Islamabad had refused to confirm his identity, saying his name was not listed in the national database of citizens.It is the first time Pakistan has acknowledged any links to the gunmen.The gunman was detained on the first night of the attacks and faces charges in India of murder, attempted murder, waging war against a country and criminal conspiracy.India says all 10 gunmen were from the Pakistan-based militant group Lashkar-e-Taiba. India has provided Pakistan with a dossier of evidence which, it says, links the Mumbai attackers to elements in Pakistan.On Tuesday, Indian Prime Minister Manmohan Singh said that because of the “sophistication and military precision of the attack it must have had the support of some official agencies in Pakistan”.Pakistan rejected Mr Singh’s allegations and accused India of raising regional tension.


Henry Kissinger made headlines on January 5 by proclaiming Barack Obama to be the architect of a New World Order. He told CNBC that His task will be to develop an overall strategy for America in this period when, really, a new world order
Source: canadafreepress.com

New York Stock Exchange halts trading in Satyam stock - Hindustan Times
The New York Stock Exchange on Wednesday halted trading in the stock of beleaguered Satyam Computer Services prior to the opening of the market at 9.30 am US eastern time, the NYSE said in a statement. NYSE regulation is currently evaluating the
Source: www.hindustantimes.com

Nikkei Stock Average closed 362.82 points lower to 8,876.42 - Canada East
TOKYO - The Nikkei Stock Average of 225 issues closed at 8,876.42 on the Tokyo Stock Exchange Thursday, down 362.82 points or 3.9 per cent. Logged in visitors may comment on articles, enter contests, manage home delivery holds and much more online
Source: www.canadaeast.com

Sun to replace Satyam in Sensex - Business Standard
The change is likely to push fund houses and overseas investors, which mainly own index funds, to invest in the stock pushing prices higher, analysts said. Index funds and other overseas investors tracking India s key stock index often reshuffle
Source: www.business-standard.com

Stock prices lower on Wall Street - KABC
NEW YORK — Stock prices are lower on Wall Street. The Dow Jones industrial average is down 87 points. Decliners on the New York Stock Exchange hold an 8-7 lead over gainers. The Nasdaq Composite Index has lost three points. And the Standard&Poor’s
Source: abclocal.go.com


Definition of economic from the Merriam-Webster Online Dictionary with audio pronunciations, thesaurus, Word of the Day, and word games.
Source: www.merriam-webster.com

Economic Globalization
Globalization can be described as a widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary
Source: ucatlas.ucsc.edu

Economic and Housing Data: National Housing Trends, Construction
NAHB produces in-depth economic analyses of the home building industry based on private and government data. The National Association of Home Builders serves the housing industry
Source: www.nahb.org

Economic Advantages Corporation:
Welcome to FairPay: The National Association of Mortgage Brokers is the voice of the mortgage broker industry, representing the interests of mortgage brokers and homebuyers since
Source: www.fpay.org

End of post.

S

Catch you tomorrow.

2008 - IV

October came, and, being the last month of university, I expected a very busy month of assignments. What I got was beyond my anticipation - a lot of work, a lot of rushing, and a lot of headaches. I had to write well over 20,000 words of assignments, one finishing up being 60 pages due on the same day as one that ended up being 50 pages. And both of these were handed in only 2 days before my first prac. in school started (more on that later). I had a unit’s planning done on ‘Belonging’ and a presentation on ‘the Boys’ Crisis’ all on top of my assignments. To say it was a hectic month for university would the a huge understatement. Mopre evidence of this, I still didn’t have a chance to catch up with any of my friends. Probably a testament to my character and ethics, I didn’t cut back on my work hours. It was a bit of a gamble, but I was pleased with my results, so I guess I held up alright.

Because of all this, I had very little time to prepare for prac., my first teaching experience in a school proper. It began on the 27th, and I had no real idea what I would be doing other than what I had picked up in a pre-prac. visit earlier in the month. I knew I’d be teaching year 8 history, the topic of Native Americans and colonial contact, and year 8 English, with no topic or instructions from the teacher whatsoever. I still wish I had more time to prepare for it, but, as I said to some people after the first week, it would have been all thrown out the window anyway because most of the stuff I did prepare more than 2 days in advance would often change to such a degree that no planning would have been better. I’ll reflect more on prac. in the November section, seeings that’s where bulk of it occurred.

I was glad to still be working as much as I was. It probably put me in good step. There was staff shake-ups and the 2 most senior (in terms of time worked there) employees were given the book, leaving me as a) the longest serving employee; b) the most experienced employee, and; c) the only staff member left in the pro-shop. I had been looking for a way to maximise my hours worked in the restaurant (as I get paid more there), and came to the realisation earlier in the year that I would have to leave the pro-shop to do so. With the shake-up, I thought it would be a good time to suggest it. It turned out that the manager, after watching my performance over the part (near) year, wanted to promote me from my position as a worker in the two places, to a more senior, title position in the whole running of the golf course. Primarily, I would work in the restaurant, with my responsibilities there enhanced and enlarged, but my position would also include liaising between the pro-shop (without working in there), and with it the running of the course proper, and the restaurant. They were happy if I didn’t take it, knowing that I was only a casual worker and that it would put a bit of a strain on my university work. But they also said that if I didn’t take it, they wouldn’t be offering the job to anyone else - that the position was being made for me or no one. I thought about it, weighed up the pros (looks great on my CV, gives me heaps more experience, better money, more money, better position) and the cons (more time needed for it, changes the dynamics, more responsibility, probably more stress), and ended up taking the position. I would begin proper after my prac. in November. It would turn out to be a great move, and a very rewarding one. As people know, I’m a very studious worker, and that it would end up demanding of me (by my choice) 28 full working days (where a full working day for me is a 12 hour shift minimum) from the 29 days we were open in the coming December made me very happy.

Just a few final notes on my personal life in October: I turned 22, and for all intents and purposes it was uneventful (it was a Wednesday, and university was taking up my time); a person I met on Contiki came up to Sydney from Melbourne to visit the last 24th, and I went out with her and other Contiki members in Sydney on the 25th for a great night out; the girl and I managed to have quite a good month of friendship between us, though, looking back now, that was the last time that we actually had a good time together; I wasn’t able to keep in much contact with my friends through the month, much to my displeasure, and; my blogging died down to minimal, also to my displeasure.

US politics now, and the campaigns were in for some trouble. Obama, riding the wave of success he gained from McCain’s failed attempt  to take the economy as his own, now had to roll out some policy to match his rhetoric. It took a little longer than expected (I suspect because he wanted  to get the details 100% correct), and he lost a bit of the momentum there. But for McCain, there was no getting up. He had made one too many gambles after the other. First he gambled on Obama and Clinton hurting each other to the point that he would walk through the election - it didn’t happen. If anything, October showed signs that the opposite had happened - Hillary and Bill were both out and about (particularly in Florida and Pennsylvania), campaigning hard for Obama. It looked like the two had mended fences, finally. The previous 9 months were out the window, and they were in it together now.

McCain’s next gamble, Sarah Palin, was going up in flames. A Katire Couric interview with Palin (and Couric is like being interviewed on Sunrise here) revealed how bad a choice Palin was. She said that her foreign experience credentials were boosted by being governor or a state near to Russia. She said, when asked to name newspapers she read, that she read ‘all of them’. Her attempts to talk policy were pathetic. She couldn’t name another Supreme Court case other than Roe v. Wade. To boost all this, she was being ridiculed by near-on every TV show - SNL at the front - and her performance at the VP debates was confused and boring rhetoric.

McCain’s final chance to fail, and fail he really did, happened when he (well, he didn’t directly do it, but 527’s that he has more control of than he lets on did it) injected Rev. Wright back into the campaign. The nation turned their backs on him - he had been dealt with … twice. They were past politics like this. The country was trying to show (and come November, would show) that they were beyond the Republican’s tactics of the past 8 years - of fear and gutter politics. Obama, in his retort, brought to the front and issue little talked about: McCain as part of the Keating Five. The Keating Five traces its roots back to the 80’s, and economists were saying that the fiasco that was part of the Keating Five caused the subprime mortgage crisis that triggered what you read about in September and will read about below here. It killed McCain’s campaign. Absolutely killed his campaign. The people were unimpressed that even Obama had resorted to attacks, but they indulged him this once.

By the close of the month, and oh-so close to the election, Obama had streaked ahead. Observers like me, who were watching the state-by-state evolution of the race, could not see a way for Obama to lose. Pundits and observers who had been watching the national campaign still maintained it was a close race. I knew it wasn’t going to be close in the end, and I was sure of it by the end of November.

Australian politics was dominated by Australia’s reaction to the financial crisis. It had seemingly caught up to us early in the month, though the ‘catch up’ can really be traced with this simple statement: when I went to the US in July, the Australian dollar to US dollar exchange rate was 98c - near parity. By October, it had falling into the 60 cents area. The US economy was retracting, and with it foreign investment. The Australian economy had to deal with this, and it was up to the Rudd government. With Malcolm Turnbull leading the opposition, a strong economics man, I was slightly worried that they would make serious ground against the government. They didn’t. Kevin Rudd acted quickly and effective. His immediate reactions, while not accurate or broad enough to cover every base immediately, was enough to abate more serious economic problems - like those we are seeing in the US. Eventually, when everyone had a chance to stop and take a breath, the ‘on the run’ policies that were drafted were polished and completed for a more long-term and resounding effect on the economy. I liked this approach, I thought it did its job, and I thought it was what was needed for the time and demands. The opposition tried to make ground out of it, but it failed miserably. As the economy began to recover itself (slowly, and it will take longer), Kevin Rudd’s approval numbers soared and Malcolm Turnbull’s plummeted. It seemed that the negative perception that Turnbull had always had to battle in the public’s eye had caught up to him at the same time people were struggling to understand why he was saying the policies Rudd was bringing out were bad when they were obviously succeeding.

Now, returning to the worldwide financial crisis. The economic meltdown didn’t just occupy Australia’s mind - it held sway all over the world. The recap what happened, and where we were, check back to part III. Not to give the impression that anything stopped, or the crisis paused, I’ll just get straight back into it. On the 1st of October, the Senate passed HR1424, the $700 billion stimulus package. The House, two days later on the 3rd, passed the same bill, after debating the ammendments that the Senate had slapped on (like business tax cuts and alternative energy breaks), and the Emergency Economic Stabilization Act of 2008 was born. On October 2nd, Greece, following Ireland’s lead, guaranteed all banking deposits - and effort to calm down domestic investors as well.

Much like the debate that raged between Rudd and Turnbull, the same went through Britain’s House, and eventually their financial guarentee of deposits in banks to £35,000 was raised to £50,000 - partly due to the number of people covered, also due to the fact that the investors and markets hadn’t calmed as much as was anticipated. This announcement was made on October 3rd, and would come into effect October 7th. Also on the 3rd, the Dutch government nationalised the institute of Fortis. Back in the US, and eventually would spread around the world, people started to ask the questions ‘How?’ and ‘Why?’. Most analyst pointed to one reason: the subprime mortgage crisis, beginning in 2005/06, but dating back to the close of the 20th century. Other analysts, particularly those outside of the US, or labeled ‘left win’ inside the US, said that deregulation, and a serious lack of, was to blame as well. Deregulation, being a trademark of the Republicans, and the mortgage crisis were lumped onto the back of President Bush and his party. There was certainly no saving John McCain from this point, and most people knew it.

On the 5th of October, with a new week starting, a lot of people were shocked to read events that had been unfolding in tiny little Iceland. The value of its dollar, relative to the Euro, had dropped a whopping 30% overnight. While the number itself isn’t staggering (the value of the Australian dollar, relative to the US dollar, dropped 30% over roughly 4 months), it was the immediate drop that caused problems. As a majority of trade occurs in Euros, not Krona, with Europe and Iceland, as well as investment and deposits in its bank, the actual value of investments and deposits in the banks dropped 30% as well. The markets, there, went crazy. The government seized ownership of two of the biggest banks, Landsbanki and Glitnir, the the biggest bank, Kaupthing, was put onto a rescue plan. The very next day, the government put a hold on all trading of stocks of the six banks in the country. When the UK government transferred the running of the Kaupthing e-banking to INGDirect in Britain, Iceland was forced to nationalise the company, and thus the largest 3 banks in the country were owned by the government on October 7th.

If all  these actions looked familiar, it’s because the US had been crafting the same bill all through December but pussy-footed around the issues in the House and Senate. This was the UK’s own bank rescue package. In Germany, the government also announced a new bailout plan for Hypo Real Estate. Also on the 6th, the Dow Jones closed the day finally below 10,000, a 30% drop from its high, above 14,000, a year earlier on October 9th. World-wide reaction to this milestone was significant, with some countries (like Brazil and Russia) having to suspend trading.

The big ripples that had emanated from the US, and caused serious problems there, had moved on to the rest of the world. Now there was a chance for the administration to fix what was left. The government, under the Emergency Economic Stabilization Act, planned to reinject capital and funds back into the banks by buying up shares in them - near enough to the nationalisation of the banks that had recently happened in England. The Treasury Secretary Paulson met, on the 10th, with world financial leaders - Wayne Swan representing Australia. President Bush met with world leaders - Kevin Rudd representing Australia - on Saturday the 11th (and nothing says serious problems than when politicians work on a Saturday) to formulate a global response to the crisis. The next day, the 12th, would see the International Monetary Fund and World Bank meetings to figure out what to do as well.

The rest of the world wasn’t going to be distracted by a talk-fest in Washington - on the same October 10th European and Asian markets crashed again - London, Paris and Frankfurt dropped 10% by the first hour of trading, then again when Wall Streets opened again. Why did they crash a second time in the day? Because when Wall Street opened, and the Dow Jones went into trading, it plunged a full 697 points in the first five minutes! When the dust settled, the Dow was at 7,900 - its lowest level since March 17th, 2003. The Dow didn’t rest for the rest of the day either - massive swings the brought it down 600, then up 322, and finally closing the day just (just in the sense that it wasn’t 697!) 128 point down, or a market loss of 1.49% (compare this to the 9% loss that Japan had in one day!). At the close of this week, the markets had seen a loss of 1,874 points for the week. 18% of the market had been wiped off. Again, compare this to Japan’s single day loss. People cast an eye back to the carnage that had been the first half of October - activity like this was expected. After all the institutional problems through September, there had to be a market reaction and correction. It happened alright. In the 8 days of losses, the market was down 40% in value from the record high that happened a year ago. I guess investors weren’t reassured by President Bush’s promise to solve the financial crisis soon. A result of Paulson’s and Bush’s meetings wasn’t what was expected. Rather than the rest of the world taking terms from the US, it seemed that the rest of the world, put out with what the US had caused, dictated the course. The US government would now look to emphasise rescue through recapitalising banks and finances institutes, even the strong ones, for preferred equity. They wouldn’t be buying up illiquid assets. The flavour of the month for the US, after the rest of the world had been rushing to do it because it was the right thing to do. It’s right because it’s quicker, and could be in effect within the month. It would still buy some mortgages held by Fannie Mae and Freddie Mac, but that was of little concern now.

October 12th was a day marked for recapitalisation. The British government was negotiating with Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays about injecting capital into the companies to the tune of £37 billion in exchange for common stock. The negotiations would be successful, and the money would be given to the banks. By the end of the British government’s actions,  they would up owning a majority share in the Royal Bank of Scotland, 40% share in Lloyds and HBOS, had banks cancel dividend payments until full repayment of loans, board members appointed by the Treasury, and limited executive pay enacted. In comparison to the US’s bailout, this looked great and their looked weak and pathetic. European leaders in Paris announced recapitalization plans for Europe’s banks, including continent-wide guarantees on bank deposits for five years. The key point was that European countries would finance their own rescue plans for their own domestic conditions, but in total it would cost €1 trillion. Noway, outside of the Eurozone, announced its own $57.4 billion recapitalisation process. In Australia, and New Zealand, bank deposit guarantees were formally made. In preparation for this, Japan closed all its markets from trading, while the US closed its bond market for the day - the 13th.

Serious movements were being made to fix the mess. And, by all accounts, it looked like it would work. Big steps had been made in the big and medium economies that should prop up world markets for long enough to calm down and bottom out. On the 14th (yes, we’ve only moved forward one day), the US government released a plan to gain equity interests to the value of $250 billion in US banks. Yes, even more nationalisation! Eventually (after much pressuring) Goldman Sachs, Morgan Stanley, J.P. Morgan, Bank of America, Merrill Lynch, Citigroup, Wells Fargo, Bank of New York Mellon and State Street (the 9 biggest banks in the US now) all signed on. The shares that the US government got out of the deal were for a 5% pay, but would increase to 9% after five years. Most analysts agree that before the five years is up, the companies will buy back the shares (when they have the private capital to do so), and the US government will get a paltry 5% return on their investment - or $12.5 billion. Hmmm, perhaps not so paltry. There was a loophole made in the agreement that the government could, if it so wished later on, to buy up common stocks (those other ones were preferred shares), and in this way create substantial profit for the taxpayers whose money they are spending. All this revolves around the theory that if the banks have liquid capital at the levels in which they had prior to the subprime mortgage crisis, they can resume the normal lending patterns that they had between each other and other borrowers.

Think about these big numbers, it seems like childs play to  think back to Australia on the same day, and how the Rudd government announced a $10.4 billion stimulus package - key to it, that pensions, low and middle income earners, and first time home buyers are able to withstand the crisis and economic slowdown. The government also announced it would guarantee all bank deposits for three years, all term wholesaling funding by Australian banks in international markets, and would double the planned level of purchases of residential mortgage backed securities.

The crisis finally caused the first Middle East country to kick into gear now. The United Arab Emirates injected $32.7 billion into the domestic banks, guaranteed all deposits and interbank lendings. Japan, after suffering from those big market fluctuations, attempted to steady the investors by lifting restrictions on companies buying back their shares, enforced disclosure on short selling, and suspended (temporally) sales of government-owned stocks. Iceland, after a three day market shutdown reopened without trading for the three largest banks (all nationalised now).

You would think that after all the actions taken in such short a space of time, the markets would calm down. On the 15th of October, London’s FTSE100 dropped 7.16%, or 314 points, the US Dow fell its largest percentage drop since the 1987 recession, dropping 733 points, with the NASDAQ dropping near enough to 8.5%, and the S&P plummeted over 9%.

October 16th, and the Swiss announced a rescue plan for the banks UBS and Credit Suisse, funding by the government, private investors, and Qatar (of all places).

Over the weekend of October 18th and 19th between President Bush, President Sarkozy, President of the European Commission Barroso, Bush announced on the 22nd that he would host another meeting with financial leaders, this time expanding the group to include G20 countries, like India, Brazil and China. This would come November 15th. Also on the 19th, the Dutch government bailed out ING to the tune one €10 billion. On the 20th, the Belgium government bailed out Ethias to the tune of €1.5 billion. Germany, and BayernLB applied to the government for access to the €500 billion the government had set aside. The Swedish government put out a 1.5 trillion kronor fund for inter-bank lending, and 15 billion kronor for rescue packages and capital injection. Just and Iceland was finalising its national rescue package with the IMF, the Ukraine started up talks for its own. Iceland also got a boost from Denmark and Norway too, while the British government said it would cover losses suffered by British depositors with Landsbanki. Then, to boost up its previous announcement, France, on the 20th also, released a €10.5 billion rescue plane for its six largest banks.

With all this available credit to the financial institutes in the biggest economies around the world, you would think faith in banks would be restored. They still weren’t pleased. Over the week, all the major currencies declined against one-another. Europe suffered, but Asia bore the majority of the backlash. Other than Japan, most of the markets through Asia had suffered relative losses. Investors, waiting for the massive losses that had first hit the US, then Europe, anticipated the volatility and started the ball rolling. On the other hand, the Dow had huge fluctuations in both directions, gains and losses, over the five days, though (of course) it finished the week out with a loss. The yen rose in respect to the US dollar after the Japanese government’s initiatives, and the perception that the Japanese markets had bottomed out. Through the week, Pakistan and Serbia followed the ways of Iceland and Ukraine in applying to the IMF for emergency loans, and began crafting a national rescue package. Soon, keen eyes were on Turkey, South Africa, Argentina, Estonia, Latvia, Lithuania, Romania, and Bulgaria - all were saying they were having problems paying back loans, and may default. Their problems weren’t caused by the subprime mortgages (they didn’t have securities based on property), rather because all these other countries were bailing out banks, and banks had no money of their own, these countries had no one to borrow from.

Proving that investors are both self-centred and ignorant, there were national fears that a worldwide recession was about to come about (hello? had you been watching the past year?) and might even grip the world for time to come (you don’t say …). All this was triggered by Alan Greenspan, whole called the events ‘a once in-a-century credit tsunami’. Gordon Brown didn’t help matters by saying that Great Britain is in ‘recession mode’. The reaction? Worldwide stock market crashes again. When th Dow opened the next day, it fell hard, then fell hard again just before close - finishing the day of the 24th down 312 points. The 7th Asia-Europe Meeting, in Beijing between E.U. and Asian state members, discussed a common approach to the crisis ahead of the November 15th Washington meeting. Nothing real came about from it.

October 27th would prove to be a bad day for Asian markets. Japan’s Nikkei 225 Index plummeted another 6.4% - proving to investors that it hadn’t bottomed out and hitting its lowest point value since 1982. But if you thought this was bad, or the 9% wipe-off that Japan had earlier in the crisis, just you wait for this. Hong Kong stocks crashed through the day, with a end of day market value loss of a massive 12%. The reaction  to this on the Dow was immediate, with a drop in the first hour, but a rally towards the end of the day to finish at only 203 points down. A lot of this was due to a second round of recapitalisation by the US government for 22 banks, kept confidential, to the total sum of $38 billion. The criteria to get funding was strict, with stronger banks getting first preference.

Actually, I don’t want to finish with Russia. I’ll finish on a bit of a high note. JPMorgan Chase, now the largest bank in the United States, closed October out with the announcement that it would help regular Joe Six-pack Americans who had a mortgage by reducing interest payments or principal. They would do this for all homeowners that they had the mortgages of that showed a willingness to repay their mortgage. Following JPMorgan Chase, Washington Mutual, EMC Mortgage Corporation, Bank of America, and Countrywide Financial have all followed suit. The US government, realising the great social cost (which is easily forgotten when we are talking economic losses), has established counseling centers for the troubled areas.

And that was October. Much of the economic crisis happened in September and October, so hopefully I can get in November and December together. Two big months, but without as much to write about. Looking forward to finishing this series up.

Thomas.

Sensex down 235 points in early trade, Satyam crashes 84 pc - Daily News and Analysis


Thousands of people relying on savings to top up their pension income have been affected by recent reductions in the interest rates paid by banks.Two BBC News website readers discuss their situations ahead of a Bank of England announcement which could see rates fall even further.JOE ROUTLEDGE, LONDONAmong the many pensioners to have suffered as a result of plummeting interest rates is Joe Routledge.”We really need the interest on our savings to pay bills,” said the 77-year-old.”It pays the 300 to 400 for our car insurance, as well as things like electricity.”He and wife Veda, 63, a former children’s home worker, have been forced to shift around the 15,000 they had squirreled away, as they search for better rates.When told in November that the 5,000 they had in two Barclays ISAs was reaping just 1.7%, compared to the 5% or so they were used to, the couple moved the cash to a one-year bond with the Halifax paying 3.75%.”There was no way I was going to leave that much money in an account like that, there was no point,” Mr Routledge said.”The problem now is that the money is tied up for a year, so we can’t get at it when we need to pay our bills.”We will just have to economise and cut down on food expenses by shopping around,” he said."We’ve got storage heaters in the hall but we can’t afford to burn them all the time"Mr Routledge said he was luckier than many.The couple’s west London home is subject to registered rent, preventing the landlord from increasing charges beyond what the local authority deems is “fair”.Since a heart complaint forced him to take early retirement from his job with BOC, Mr Routledge has received a company pension - now 96 a month - on top of the couple’s combined weekly state pensions totalling 150.They receive housing and council tax benefit but lose out on the full amount because of the very savings they put aside to fund their retirement.A couple with less than 16,000 in the bank qualify for the benefits and can hold 6,000 in savings without affecting their payments.But for every 500 they have saved over that amount, the authorities assume they earn 1 per week in “tariff income” and reduce the benefit payments accordingly.Slashed incomeThe Routledges’ tariff income is calculated at 18 per week, or 936 per year.But with their interest payments falling well short of covering this, Mr Routledge said it has effectively left them hundreds of pounds a year worse off.”The biggest problems are gas and electricity prices. We’ve got storage heaters in the hall but we can’t afford to burn them all the time,” he said.”Because of my heart condition I don’t drink much but I do like to have a pint. I’ll be lucky if I can get to the pub twice a week now.”JOHN BOUTCHER, ESSEXJohn Boutcher, 62, from Basildon, is living off a 200-a-month pension and the interest on his savings of about 100,000.”I don’t have a mortgage and so it may sound like I have a lot of money in the bank but I still have bills to pay - electricity, council tax,” he said.”With interest rate cuts, the main source of my income is being taken away.”"I’m not entitled to anything from the state because of the level of my savings"Mr Boutcher said if he earned little interest, his savings could eventually disappear.The retired debt agency worker found himself with money to invest after selling his house and moving into a smaller property when his wife died.”I’m not entitled to pension credit,” he said.”I’m not entitled to anything from the state because of the level of my savings.”Mr Boutcher initially placed all his money in a single savings account but in the wake of the collapse of Northern Rock bank, he read about potential limitations to compensation.”I took advice about spreading the risk and moved the money into 35,000 lump sums and put it in different accounts,” he said.Government helpMr Boutcher’s money is currently invested in fixed term savings bonds and earning 5.5% to 7% a year in interest.But the accounts are all set to mature in 2009 leaving Mr Boutcher with a future problem he worries about.The rate reductions in recent months mean many saving accounts are already paying less than 2%.Mr Boutcher believes the income he currently earns from interest could therefore fall to less than 3,000 a year.”When my money matures, where do I invest” he said.”As each bond matures I’m left not knowing where to put it to give me an income.”Mr Boutcher’s income will be boosted when he is able to claim his state pension, but that is still a little over two years’ away.Ahead of the budget, the government has said it is looking at measures to help savers.Mr Boutcher believes more should be done to help people in his situation.”Lowering mortgage rates without any provision for savers, particularly the over 50s, seems to be the finance of madness,” he said.”Mr Brown says it’s OK to spend your money but will they look after me if it’s gone”
Source: news.bbc.co.uk

E-mail rules attack civil rights
By Angus CrawfordBBC NewsRules forcing internet companies to keep details of every e-mail sent in the UK are a waste of money and an attack on civil liberties, critics say.From March all Internet Service Providers (ISPs) will by law have to keep information about every e-mail sent or received in the UK for a year.The government will pay the ISPs more than 25m to ensure work runs smoothly.The Home Office insists the data, which does not include e-mails’ content, is vital for crime and terror inquiries.Dr Richard Clayton, a security researcher at the University of Cambridge’s computer lab said the money could have been better spent.He said:”There’s going to be a record of every single e-mail which arrived addressed to you and all the e-mails you sent out via your ISP.”That of course includes all the spam.”I’d have liked to see more bobbies on an electronic beat investigating internet crimes."This degree of storage is equivalent to having access to every second, every minute, every hour of your life"Earl of Northesk Conservative peer”There are much better things to do to spend our billions on than snooping on everybody in the country just on the off chance that they’re a criminal.”The new rules are due to come into force on 15 March, as part of a European Commission directive which could affect every ISP in the country.The firms will have to store the information under the government’s Interception Modernisation Programme (IMP) and make it available to any public body which makes a lawful request.That could include police, local councils and health authorities.To help set up the system the government may end up paying ISPs between 25m and 70m.The rules already apply to telephone companies, which routinely hold much of the data for billing.’Fundamental right’The Earl of Northesk, a Conservative peer on the House of Lords science and technology committee, said it meant anyone’s movements could be traced 24 hours a day.”This degree of storage is equivalent to having access to every second, every minute, every hour of your life,” he said."Implementing the EC directive will enable UK law enforcement to benefit fully from historical communications data"Home Office”People have to worry about the scale, the virtuality of your life being exposed to round about 500 public authorities.”Under Article 8 of the European Convention on Human Rights, privacy is a fundamental right… it is important to protect the principle of privacy because once you’ve lost it it’s very difficult to recover.”The Home Office said the data was a vital tool for investigation and intelligence gathering.”It will allow investigators to identify suspects, examine their contacts, establish relationships between conspirators and place them in a specific location at a certain time.”Implementing the EC directive will enable UK law enforcement to benefit fully from historical communications data in increasingly complex investigations and will enhance our national security.”‘Better things’But the industry itself has concerns about how the new rules will work.Malcolm Hutty, from LINX (London Internet Exchange), a membership association for ISPs, said: “The position as to what the ISPs are to do is not clear.”He said that on paper the law applied to all companies, but that the Home Office has been saying informally that small ISPs would be exempt.He said they were now left “in limbo”, fearful of legal action if at some time in the future as the company became bigger, and they were then expected to collect the data.Reports have suggested the government has even bigger plans for data retention.They could involve one central database, gathering details on every text sent, e-mail sent, phone call made and website visited.Consultation on the plans is due to open later this yearThis article is from the BBC News website. © British Broadcasting Corporation
Source: news.bbc.co.uk

Heat will spark world food crisis
By James MorganScience reporter, BBC NewsHalf the world’s population could face climate-induced food crisis by 2100, a new report by US scientists warns.Rapid warming is likely to reduce crop yields in the tropics and subtropics, according to Prof David Battisti of Washington University in Seattle.The most extreme summers of the last century will become the norm, he calculates, using 23 climate models.We must urgently create crops tolerant to heat and drought if we are to adapt in time, he writes in Science journal."We’re taking the worst of what we’ve seen historically and saying that in the future it is going to be a lot worse, unless there is some kind of adaptation"Prof Rosamond Naylor,Stanford University”The stresses on global food production from temperature alone are going to be huge,” said Mr Battisti, a professor of atmospheric sciences.”And that doesn’t take into account water supplies stressed by the higher temperatures.”He collaborated with Professor Rosamond Naylor, director of Stanford University’s Program on Food Security and the Environment, to examine the impact of climate change on the world’s food security.Beyond extremeThe duo combined direct observations with projections from 23 global climate models that contributed to the Intergovernmental Panel on Climate Change’s (IPCC) 2007 global assessment.They calculate there is greater than 90% probability that by 2100, the average growing-season temperatures in the tropics and subtropics will be higher than any temperatures recorded there to date.”We are taking the worst of what we’ve seen historically and saying that in the future it is going to be a lot worse unless there is some kind of adaptation,” said Professor Naylor."We do have long enough to adjust these kind of temperature rises… But it requires a huge effort and it requires us to start now"Dr Geoff Hawtin, International Centre for Tropical Agriculture”This is a compelling reason for us to invest in adaptation, because it is clear that this is the direction we are going in terms of temperature and it will take decades to develop new food crop varieties that can better withstand a warmer climate.”In the tropics, the higher temperatures can be expected to cut yields of the primary food crops, maize and rice, by 20-40%, the researchers said.Rising temperatures also are likely to reduce soil moisture, cutting yields even further.Currently three billion people live in the tropics and subtropics, and their number is expected nearly to double by the end of the century.”You are talking about hundreds of millions of additional people looking for food because they won’t be able to find it where they find it now,” said Professor Battisti.Crop failures will not be limited to the tropics, the scientists conclude.As an example, they cite record temperatures that struck Western Europe in June, July and August of 2003, killing an estimated 52,000 people.In France and Italy, the heatwave cut wheat yields and fodder production by one-third.Scientists say such temperatures could be normal for France by 2100.”I think what startled me the most is that when we looked at our historic examples there were ways to address the problem within a given year. People could always turn somewhere else to find food,” Professor Naylor said.”But in the future there’s not going to be any place to turn unless we rethink our food supplies.”"You can let it happen and painfully adapt, or you can plan for it,” said Professor Battisti.”You could also mitigate it and not let it happen in the first place, but we’re not doing a very good job of that.”Uncertain future”This is a very important report,” said Dr Geoff Hawtin, director general of the International Centre for Tropical Agriculture (CIAT) and a former executive secretary of the Global Crop Diversity Trust.”What worries me is the uncertainty about the speed at which the growing season temperatures will rise.”We do have long enough to adjust to these kinds of temperature increases - they are well within our capabilities. But it requires a huge effort - much bigger than we are making currently - and it requires us to start now,” he told BBC News.”We don’t know where the tipping points are - they could come quite quickly.”Along with some other experts, Dr Hawtin believes that maintaining the maximum level of genetic diversity in crops and seedbanks is a good insurance policy, providing options for developing future strains.”We are not doing enough,” he said.”We’ve done a fairly good job on cereal crops, but we have a long way to go on minor crops that could turn out to be of major importance in the future.”We need to understand more about the physiology of drought and heat resistance in plants - maize, beans, legumes, sorghum, millet - anything which grows in an environment subject to drought.”We need to take genes for heat tolerance, for example, and put them together in crops.”And we have to start now.”Harsh realityAs the summers get hotter, said Dr Hawtin: “We can’t just move all our crops north (or south) because a lot of crops are photosensitive. Flowering is triggered by day length - so you would run into all sorts of problems if you tried that.”And even if Russia and Canada turn out to be the world’s bread baskets, the cost of transporting the food to Africa will be too much. People in these areas can’t afford food now.”Researchers at CIAT are part of the global Consultative Group on International Agricultural Research (CGIAR) network, aiming to create new, improved crop varieties able to survive the extreme growing seasons predicted throughout the coming century.Approaches range from conventional crop breeding to genetic modification.A number of other public research institutions and commercial companies are also working on drought- and heat-tolerant varieties. Agrichemical giant Monsanto said this week it had made a “significant step” in creating a drought-tolerant maize which could be available as early as 2010.The genetically modified (GM) corn, which Monsanto claims will “reset the bar” in farming productivity, has moved to the final stage of development and could reach commercial usage within two years, the company said.However, the claims were dismissed as “hype and misinformation,” by Bill Freese, a science analyst at the Centre for Food Safety in Washington DC.
Source: news.bbc.co.uk


The Bombay Stock Exchange benchmark Sensex on Friday, fell by 235 points in early trade on sustained panic selling by foreign funds and retail investors, largely due to the country’s biggest corporate scandal by Satyam Computer. The 30-share index
Source: www.dnaindia.com

Sensex near day’s lows; Satyam, DLF drag - Times of India
At 1 pm, Bombay Stock Exchange was at 9296.01, down 290.87 points or 3.03%. It touched an intra-day low of 9250.82 and a high of 9630.40. National Stock Exchange’s Nifty was at 2832.15, down 3.02% or 88.25 points. The index hit a high of 2929.85 and
Source: timesofindia.indiatimes.com


Up to the minute economic news, expert commentary, economic indicator data and economic calendar from CNNMoney.com.
Source: money.cnn.com

Will there be an Economic Recession, Depression, or Stock Market Crash
Revelation 13: Will there be an Economic Recession, Depression, or Stock Market Crash in 2009 - 2010? How will the World Economy do? - A New Age / Astrology / Prophecy Discussion
Source: revelation13.net

Economic growth - Encyclopedia of Earth
The simplest definition of economic growth is an increase in real gross domestic product (GDP) (that is, GDP adjusted for inflation). The growth rate of real GDP is the percentage
Source: www.eoearth.org

End of post.

Despite Satyam, foreign investors to stay in India

Foreign investors are unlikely to shun India in the wake of a fraud scandal at Satyam Computer Services, with fund managers saying such events were not unique to the country and long-term prospects were good.

A dramatic slide in Satyam shares — down nearly 80 percent on Wednesday and 46 percent on Friday — have dragged down the broader market, and some fund managers reckon this makes stocks more attractive.

“It’s a company-specific problem. You will find accounting irregularities anywhere in the world. It’s a buying opportunity for India after it has been sold down,” Adrian Mowat, JPMorgan’s emerging market and Asia equity strategist, said in Hong Kong.

“It’s a scandal, (but) it doesn’t change the growth prospects of India. Let’s face it, we’ve seen a lot of accounting scandals in the U.S.”

India’s benchmark index has fallen almost a tenth since Satyam’s founder and chairman Ramalinga Raju resigned on Wednesday in India’s biggest corporate scandal, saying about $1 billion or 94 percent of the company’s cash and bank balance did not exist and profits had been overstated.

NOT TIME TO PANIC

Foreign funds were key to a bull run that saw India’s market rise six-fold in 2003-07. The benchmark index fell 54 percent in 2008, its worst year ever, after foreign funds withdrew more than $13 billion.

In a Jan. 8 note, Macquarie Research raised India to overweight from neutral as the country was trading at a discount to Asia ex-Japan.

“… with earnings expectations slashed, and a tremendous amount of monetary stimulus in the pipeline, the case for India has improved dramatically recently,” wrote analysts Daniel McCormack and Tim Rocks.

To combat slowing economic growth, the Reserve Bank of India has slashed lending rates, and the government has announced additional spending.

Some investors in Europe said they would maintain their Indian investment policy unless it became clear that there was a widespread problem of malfeasance among Indian companies.

“We don’t think it’s the time to panic. Long-term investors should continue to prefer companies with good corporate governance records,” Credit Suisse said in a research note, pointing to firms such as Infosys, Bharti Airtel and Housing Development Finance Corp.

Quick action by the regulator and better corporate governance norms would play a large role in supporting sentiment.

The Securities and Exchange Board of India, the market regulator, has already started an investigation into Satyam and the government has promised action to prevent other frauds.

Samir Arora, who oversees about $1 billion at Helios Capital Management in Singapore, said foreign investors may be scared off for a while, but expected confidence to return.

“The bad news is behind us, India will be an outperformer if action is put in place. Investors can make money there.”

破产人 !

 I just cannot wrap my head around the fact  that people say the United States is the richest  country in the world. If that were so then why are we  accumulating more and more debt and our government  probably will never have a balanced budget?I hear  very little people talk about how we need to increase the Personal Saving Rate  in  America and begin to  live within our means, instead of  being debt junkies.  Below is a Personal Saving  Rate chart courtesy of the Federal Reserve Bank of Saint Louis and it is shows the ugly reality that the American people  are just like their government, insolvent.

 

 

 

” TAF is a credit facility that allows a depository institution to place a bid for an advance from its local Federal Reserve Bank at an interest rate that is determined as the result of an auction. By allowing the Federal Reserve to inject term funds through a broader range of counterparties and against a broader range of collateral than open market operations, this facility could help ensure that liquidity provisions can be disseminated efficiently even when the unsecured interbank markets are under stress.”

Lets talk about more debt.TAF- Term Auction Credit, is another non performing asset garbage can. If I remember correctly The Federal Reserve will even except  shares of stock as collateral and non investment grade bonds-all kinds of junk. The interbank market is in dissary and remains insolvent. The Federal Reserve is  grasping at straws and trying harder then ever to stabilize the financial market  offering up more  fiat IOUs- $USDs, it is not working. More banks are visiting the TAF,which should be called  Auction of last resort. Days of only needing to lower or raise the FED FUNDS target rate - discount window, are dead. Below is the TAF chart courtesy of the Saint Louis Federal Reserve. 

via FRB: Frequently asked questions–Revised July 30, 2008.

 

 

 

 

The Banker’s banker-The Federal Reserve is in trouble as well. Their  balance sheet - chart below courtesy of the Saint Louis Reserve, looks as if it is going to collapse on them like a house of cards. They have $2226.116 trillion on their balance sheet and all of that has been accumulated in  13 months. Imagine how big their balance sheet will be 3 months from now. The Federal Reserve is the Zombie bank of banks and the US government is a Zombie government. One of the Zombies must cannibalize the other to stay alive. Any guesses who will be the last Zombie standing? 

 

It is time to talk about the Philadelphia Banking Index, which is descending down  and has me thinking we could very well see a new all time Banking Index low of at least 31.90, just look at the Fibonacci re-tracement levels for this down leg below. Chart courtesy of StockCharts.  The financials just cannot get solvent to save their lives. 

 

“Jan. 8 (Bloomberg) — The Federal Reserve bought $10.2 billion of Fannie Mae, Freddie Mac and Ginnie Mae mortgage- backed securities under a program aimed at lowering home-loan rates begun this week.

The biggest portions of the purchase were $3.45 billion of 30-year bonds with 4.5 percent coupons and $3 billion of 30-year debt with 5 percent coupons, according to the New York Fed’s Web site. The central bank has said it plans to buy $500 billion of so-called agency mortgage bonds by June 30 under the program.

The government is seeking lower loan rates to help curb the U.S. housing slump that’s sparked a global recession. The average rate on a 30-year fixed-rate mortgage dropped for a 10th week to 5.01 percent in the period ended today, the lowest on record, according to Mclean, Virginia-based Freddie Mac.”

via Bloomberg.com: Worldwide.

Housing, housing, housing what can I say about it, a lot of things. The Federal Reserve has begun to buy  MBSs -mortgage backed securities or what I like to call mortgage-backed ticking time bombs. This is another one of those unconventional attempts to lubricate -USDs, the crankshafts and flood the debt machine’s  shoddy Chrysler, Ford ‘and General Motors engines-US Economy, with gasoline-more $USDs, to get the debt machine going again. As more and more mortgage backed ticking times bombs continue to exploded the Federal Reserve- Lord of the printing press plans to buy only  $500 billion of  them. That has drawn me to concluded, that they just picked  a random sum of money that happened to $500 Billion out of the same place they make their fiat currency, thin air.  The chart below of the Philadelphia Mortgage Finance Index courtesy of StockCharts,  summarizes the mortgage meltdown. As you can see from the Fibonacci re-tracement up trend levels of the Mortgage Finance Index, is walking the tight rope with no safety net over the flames of hell, hoping and praying it can live to trade, and profit another day from mortgage backed ticking time bombs. 

 

 

I hope everyone is taking the proper steps when it comes to protecting/building their wealth with tangible assets,physical gold,silver and commodity stocks , the good stuff, because the paper wealth disintegration has only just begun.

Until next time take care and happy trading. 

OREO For 01 09 09

Oreo For 01 09 09

Pundita: Is the US dollar going the way of the pengo?

From the Wikipedia article on hyperinflation:

For the first time I wish you could see me. I am laughing so hard, tears are streaming down my face. I guess it was the surprise at finding such refreshing bluntness in an article about economic matters that set me off.

… was a currency issued on 15 November 1923 to stop the hyperinflation [... ] the Rentenbank, which issued the Rentenmark, mortgaged land and industrial goods worth 3.2 billion Rentenmark to back the new currency. [...] The Rentenmark was only an intermediate currency and was not legal tender. It was, however, accepted by the population and effectively stopped the inflation. The Reichsmark became the new legal tender on 30 August 1924, equal in value to the Rentenmark.

Can hyperinflation happen today in the United States? Not likely unless the US government collectively goes barking mad, because the US does have gold reserves. James makes that point in his essay, which is to suggest that the crashing waves of economic realities are pushing the US ship of state ever closer to repegging the dollar to gold in some fashion or other.

You may trust that federal governments, the US one incuded, would rather stand in front of a firing squad than give up the currency printing press. But once governments try to print their way out of an economic crisis the specter of runaway inflation always looms.

On the time-tested theory that high inflation and great social unrest go hand in hand, all means must be used to shoo away the specter. No matter poor people are they can put with a lot if they know the money they do have is worth something. Once people get the idea that their money is worthless, that’s an easy way for governments to fall in the most unpleasant ways.

Some of my earliest posts on this blog warned that the Bretton Woods monetary system had collapsed, that a new international monetary system had to come into being, and that this would mean a big and unpleasant adjustment for Americans.

I also mentioned that the 9/11 attack on America was actually a sophisticated attempt to crash the US economy. On its own Saddam Hussein’s launch of a petrocurrency war against the US, which he coordinated with the EU and particularly the French government’s attempts to push up the value of the euro, couldn’t do much to hurt the US in the short term. But in combination with al Qaeda’s attack the effect might have been devastating.

The plot was foiled by the fastest thinking and acting I’ve seen from the US government during my lifetime. Within 72 hours of the attack, President Bush, with the help of the Federal Reserve and the EU and British central banks, and through arm-twisting of several governments including an oil kingdom, worked a miracle to stave off a crash.

But America’s narrow escape in 2001 from financial devastation reminds me of the mystery bullet that came close to Abraham Lincoln in his youth. It was as if divine intervention pushed the shot that was fated to kill him into the future, when he’d finished leading America through the Civil War.

The collapse in the credit markets in 2008 did not create the economic crisis we’re facing today; it was only the tripwire. By August 2008 Jim Sinclair had seen the tripwire, and gave his best advice on how to divert the bullet that had been traveling for years.

Those who would dismiss him as a gold bug are ignorant of the ways of The Casino or studiously ignoring them. Jim is not wedded to gold; he’s wedded to survival. So it’s wise to ponder his view. Before turning the floor over to him I want to highlight a point in his essay:

After the demise of the Bretton Woods Agreement, everything financial moved towards a floating non-system. The move away from fixed points towards a fully floating financial system was the process of removal of all financial ALARMS. No longer was there a currency parity rate that when hitting the lower or upper bands rang an ALARM. The concept of financial crisis no longer existed.

And that is how the ‘Black Swan‘ of the mortgage meltdown appeared out of nowhere. That is how the Asian and Mexican financial crises appeared of nowhere.

There will be many more Black Swan economic events, until monetary policy is moored to objective criteria. If you learn nothing else from reading Jim’s essay, you’re ahead of the game.

January 8, 2009 - Jim Sinclair: The US Dollar will replace the US Dollar come The Revitalized and Modernized Federal Reserve Gold Certificate Ratio, not tied to interest rates, but rather gold value held by the Fed/Treasury versus a measure of international liquidity. [...] The Federal Reserve Gold Certificate Ratio is the mechanism of the Rentendollar.

Why will the effort to call any top in the gold price be a waste of time for the gold-ignorant gurus?

Prior to being reduced to zero percent and then removal from the books, there was a direct link between the value of US Treasury gold held (a fixed price of gold then) as a percentage of the growth of the US money supply. As an example, when the cover was deemed to be 25% that meant that as the money supply expanded the value of gold had to be expanded by 25% as well.

Because the price of gold was fixed, the gold cover clause as this device was known, mandated an automatic change in the Federal Reserve Discount rate in order to depress the demand for funds in the US economic system.

There is an argument that says as the dollar was becoming a primary reserve currency and world trade was growing at record rates, the automatic changes in a monetary system were restraining the true wishes of the Administration and Federal Reserve.

After the demise of the Bretton Woods Agreement, everything financial moved towards a floating non-system. The move away from fixed points towards a fully floating financial system was the process of removal of all financial ALARMS. No longer was there a currency parity rate that when hitting the lower or upper bands rang an ALARM. The concept of financial crisis no longer existed.

The movement of any currency up or down, as the Euro recently did, would have been considered a financial crisis.

We have just witnessed multiple central bank interventions that are accepted by the establishment’s international investment community as a dandy deed in the cover up of other serious systemic weaknesses. As a result, upper and lower bands have been considered and implemented. To benefit the plan, the lower limit of $1.49 will not be defended yet in time the market will. $1.49 is only a point after which no great undertaking of intervention will be applied. Let the apples fall from the tree, if they please, as per today.

There is no return to a FIXED anything, but there is a clear indication of a return to the relationship of floating financial alarms, a marriage between the thesis of Bretton Woods and the floating sins of our Financial Fathers.

The Revitalized and Modernized Federal Reserve Gold Certificate Ratio will be tied to a broad measure of money supply, M3 or another new definition of liquidity.

The gold that the US Treasury has held primarily at the New York Federal Reserve will be valued at market at the time of adoption of this mechanism. Please understand that regardless of the arguments concerning the number of ounces the Federal Reserve/Treasury holds, since it will never be audited, accept what is said as correct.

Now the floating increase or decrease in monetary aggregates will mandate a change in the value of the gold held by the US Treasury.

The US Treasury will never have to buy or sell any gold because vehicles will be created that are immediately traded on exchanges that will speculate on the changes in the broad base monetary aggregate in terms of the gold price. That will serve the needs as the aggregates increase.

This is in fact a public way to view the aggregate change by changing the value of another asset, which is a means of balancing the balance sheet of the USA as it was at the day of adoption.

It is not convertibility. It floats and is not fixed.

When the need is greatest (.52 USDX or $2 Euro) it will be seen as an acceptable return to a form of disciplined central banks actions. It will be a reinstatement of an alarm mechanism but with parts that float.

The market value of gold on that day will be a pendulum-starting point, not a fixed price. The broad measure of money supply on that day will be 100 on the liquidity index.

Assuming the dollar is at .5200, the adoption of this mechanism could mark the low of the US dollar for this chapter of the financial history of the USA.

There are other items that will have to fall into place if that is to be the dollar saver from a complete Weimar Experience. This is the major criterion for success.

I assume it is January the 14th, 2011 and gold is trading at $1,650 or higher. Then I would assume the price of gold to trade $100 above and below the price of gold on that day according to changes in the liquidity index.

If the USA would like to avoid a Weimar experience in the US dollar this is the key ingredient to preventing that.

The US dollar is headed in the direction of the Weimar Experience in order to satisfy significant financial failures. Some smaller entities will be rescued by Federal Money, exploding the US Federal Budget deficit and putting the weight of more newly created dollars on the inherently weak dollar.

There is a 70% possibility that since central banks have moved to floating currency parities that the modernized and revitalized Federal Reserve Gold Certificate Ratio will follow under the pressure of future systemic and grave financial circumstances.

The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. This results in an imbalance between the supply and demand for the money (including currency and bank deposits), accompanied by a complete loss of confidence in the money, similar to a bank run.

Enactment of legal tender laws and price controls to prevent discounting the value of paper money relative to gold, silver, hard currency, or commodities, fails to force acceptance of a paper money which lacks intrinsic value. If the entity responsible for printing a currency promotes excessive money printing, with other factors contributing a reinforcing effect, hyperinflation usually continues. Often the body responsible for printing the currency cannot physically print paper currency faster than the rate at which it is devaluing, thus neutralizing their attempts to stimulate the economy.[...]

Hyperinflation effectively wipes out the purchasing power of private and public savings, distorts the economy in favor of extreme consumption and hoarding of real assets, causes the monetary base, whether specie or hard currency, to flee the country, and makes the afflicted area anathema to investment. Hyperinflation is met with drastic remedies, such as imposing the shock therapy of slashing government expenditures or altering the currency basis. [...]

(more) bad news for congo

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It’s raining so hard outside I can barely hear myself think, but I’m going to attempt to write coherently nonetheless. I walked home for lunch today and noticed no signs of the impending storm. 25 minutes later or so I was sitting at the table reading peacefully, enjoying the moment of repose, when the door off our kitched slammed, and I heard the gust of wind wrap all the way around the side of the apartment building to rattle the windows on our front balcony. I looked out the windows into a dark gray, very menacing sky. Realizing I’d left my umbrella at the office, I grabbed a plastic grocery bag (to at least keep the contents of my purse dry should the rest of me happen to arrive back at the office dripping wet) and without hesitation jetted off for the office. Dirt and sand from the road were whipping around violently, a banner on a nearby building flapping precariously, and I ran squinting past many figures behaving similarly, all trying to get somewhere safe and dry before another Congo rainstorm… because they can be rough. I made it a few minutes before this raging inundation began.

Each heavy rainstorm is bad news for many people here, as flooding is common. But I was referring in the title of this post to the exchange rate. Between the beginning of October and the middle of December when I left for South Africa, the Congolese franc fluctuated between 560 and 600 francs to the dollar. The day I returned to Kinshasa and bought groceries, the rate was at 670 and I knew something was up. Then yesterday when Kathy went to the store the rate was 740!

A Diva

Photobucket

ISBN Number: 978-1-897560-08-2

Genre: Contemporary Romance

Length: Category

Heat Index: Mild

Read an excerpt or buy it here!

Harley Taizer wasn’t used to dealing with her greedy parents. They’d never wanted her and made it perfectly clear by giving her to her grandfather. It’s funny how things change when money is involved. Discovering the trust fund her grandfather set up for her, her parents show up demanding the money be given to them. Afraid of just how far his son and daughter in-law will go to get it, her grandfather brings in a security specialist to help protect her.

Kasper Drake hasn’t met a trust fund baby he liked, though he is one himself. Upon meeting his uncle’s newest client he’s willing to throw out all his preconceived notions out the window. He’s trying to get Harley to admit to their fierce attraction when her father shows up demanding to know who Kasper is. She tells him that he’s her fiancée. Kasper latches onto her lie hoping to make her see how good it could be.

Tulsa Mortgage Lender Announces Record Low Rates

 

 ZFG Financial

Mortgage Fraud at Financial Institutions: Prevention and Response By: Travis P. Nelson1

Analyst PREDICTS 40% Unemployment! No Recovery until 2015!

Victory gardens will make a comeback. In England, permaculture is catching on, with people raising patio and fire escape gardens. If the money and coins disappear, barter will take their place.

Thomas Jefferson’s vision for America was for people to be farmers and to help each other.

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Roger Biduk - Payroll Report Sinks Wall Street

Roger Biduk writes:

Bogle: Don

Investing legend John Bogle, founder of the Vanguard Group of Mutual Funds, writes in a guest column for The Wall Street Journal that investors continually ignore lessons of the past, which cost many dearly last year. Bogle offers six such lessons that we should not forget moving forward:

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Stock market predicted to recover slightly in 2009


Hanoi (VNA) – This year, Vietnam ’s stock market will face numerous difficulties as a result of the global economic crisis, and may only show small signs of recovery as the year progresses, according to the State Securities Commission (SSC).

Speaking at a seminar examining the impact of accession to the WTO on the flow of foreign investment into Vietnam, held in Hanoi on January 9, SSC Vice Chairman Nguyen Doan Hung said that the stock market is governed and greatly affected by the macro economy and businesses’ operations, which are currently absorbing the negative impacts of the global economic crisis.

This means that Vietnam will have to overcome more difficulties that will affect production, import-export, banking and finance activities, indirect investment, and payment balance, he said, adding that these are the factors that will directly influence the recovery of the stock market.

To limit these adverse impacts, maintain stability and improve market conditions, Hung stressed the necessity of implementing a range of simultaneous measures, including promoting over-the-counter (OTC) and bond transaction markets, making improvements to infrastructure and technology, as well as increasing levels of financial transparency.

Besides speeding up the equitisation process to ensure business renovation programmes can be carried out, creating high-quality products for the stock market, and attracting investment flow, the country needs to work to improve the financial capacity of the banking sector through allowing banks to sell their stakes to foreign partners at rates of less than 5 percent without needing permission from the central bank, and raising foreign ownership limits in banks to 35 percent, he added.

Hung also recommended a temporary postponement of imposing personal income tax on securities investment activities, including taxes levied on revenues, dividends and bond interests, and suggested the establishment of a fund to support the market when it plunges beyond a certain level and to stimulate demand when the market shows signs of recovery.

2008 was the most volatile year yet for the Vietnamese stock market, as the VN-Index tumbled from 912.07 points in the first trading session of the year to 288.85 points on December 12, a return to the dark financial times experienced four years ago.

Plummeting stock indexes were followed by a sharp decrease in market liquidity. Last year, stock market capital accounted for just 17.5 percent of the country’s GDP, and the total capital mobilised through the market reached just 25,000 billion VND, compared to the 127,000 billion VND mobilised in 2007.-

A Redirection?

Looking over my notes from my marketing research… it seems the sentiment was for:

with a free tax return tossed in for good measure.

Maybe that is the answer.  Maybe “The Gift of Freedom” is too esoteric.  Maybe the used car service is just not going to fly now.  People aren’t thinking new (even used) car, they’re thinking capital and life preservation.

Kinda makes me sad though.  The Gift of Freedom ads got a lot of airtime on Lew Rockwell’s site, and I did get some clickthrough on them.  But they didn’t pan out.

I need results and maybe I should listen to the customer.

Well Monday I go to the bank, and this weekend I have the CEI paperwork to fill out.

Please go to the Virtual Galt website

The Diversity Recession, or How Affirmative Action Helped Cause the Housing Crisis

 

Uncovering the roots of the disastrous home mortgage bubble that popped last year will keep economic historians busy for decades. Yet, one factor has so far been largely overlooked: the bipartisan social engineering crusade to drive up the rate of homeownership by handing out more mortgages to minorities.

More than a negligible amount of the blame for the mortgage meltdown can be traced back to multiculturalism: government-mandated affirmative-action lending, demographic change, illegal immigration, and the mind-numbing effects of political correctness.

The chickens have finally come home to roost.

The mortgage bubble was essentially a bet on the purportedly increased creditworthiness of the bottom half of the American population. After three decades of the home ownership rate stalling at around 64 percent, a series of federal initiatives to increase minority and low-income ownership helped push the rate up to just below 70 percent.

Economist William T. Gavin, a vice president at the St. Louis Fed wrote in 2006:

One of the stated goals of current and past administrations since the Great Depression has been to increase home ownership. After remaining relatively stable around 64 percent, the rate of home ownership has risen to 69 percent in the past decade. This uptrend has been driven by a sharp rise in the rate of home ownership among young, minority and low-income households.

The housing bubble never made much sense. The lower half of American society, where the new homeowners had to come from, isn’t getting better educated, is not settling down to more stable family structures, and is not developing a more rigorous code of honor about paying debts.

Nor was the government doing much of anything to help the bottom half earn more in order to afford home ownership. Indeed, by not enforcing the laws against illegal immigration, the Clinton and Bush Administrations were flooding the country with unskilled workers who competed down the wages of blue-collar Americans.

The home construction industry lured in Mexicans to build new exurban houses for Americans trying to get their children away from public schools overrun by the children of illegal immigrants—in effect, a Ponzi scheme that had to break down eventually.

Yet, pointing out that expanding credit to minorities was likely to lead to a debacle is not the kind of thing a prudent corporate manger would put in an email—too great a chance it would be discovered in a discrimination lawsuit.

The whites in Marquette Park are particularly embittered over the Federal Housing Administration mortgage insurance program, which they claim is causing neighborhood deterioration by subsidizing home purchases by blacks too poor to maintain them. Long conservatively run and an engine of the post-World War II suburban housing boom, the FHA program was liberalized shortly after the 1968 urban riots to encourage lower-income black home ownership (‘if they own it they won’t burn it’ was the maxim of the time).

…[I]f you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country.

To build an ownership society, we’ll help even more Americans to buy homes. Some families are more than able to pay a mortgage but just don’t have the savings to put money down.

In the mid-Sixties, however, the fraction of households owning their residence plateaued at around 64 percent, where it more or less remained into the mid-1990s, as the collateral damage of the Sixties cultural revolution hit the lower half of the population hard. The upper reaches of American society flourished under the new customs that emerged in the Sixties … but they already owned their own homes. To boost homeownership beyond 64 percent would require millions of people in the bottom half of society to convert from renting to owning.

After 1973, economic inequality grew steadily as well.

Rather than make the fundamental reforms needed to help the bottom half actually become economically productive and domestically stable enough to afford to buy a home, the government tried to juice the home-ownership rate directly. Indeed, without ever-increasing government efforts, such as the 1977 anti-redlining Community Reinvestment Act (CRA), to artificially boost minority housing purchases, the rate would have naturally fallen due to the increasing number of single parent homes.

compels banks to make loans to low-income borrowers and in what the supporters of the Act call ‘communities of color’ that they might not otherwise make based on purely economic criteria. … These organizations claim that over $1 trillion in CRA loans have been made …The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA ‘protest’ is issued by a ‘community group.’ … They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities.

To avoid the Community Reinvestment Act hassles, more than a few respectable institutions avoided doing business in minority communities. A lender could define its “community” as, say, stretching only five miles north and south from Mulholland Drive along the top of the Hollywood Hills.

Then, who’s more likely to offer mortgages to Compton and Pacoima? Why, high-pressure bucket shop operations that have no skin in the game—they’re just sales outfits that immediately repackage often fraudulently documented subprime mortgages and sell them to Wall Street.

Two events in 1992—a much-publicized study and a new piece of legislation—ratcheted up mortgage affirmative action.

 

Yet a ‘landmark’ 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic.

That study was tremendously flawed—a colleague and I later showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates. Our study found no evidence of discrimination.

A recent study by Freddie Mac, the federally chartered Federal Home Loan Mortgage Corp. that buys mortgages from banks to resell to investors, documents the shaky financial standing of minorities. The study found that nearly half of black borrowers and a third of Hispanics have “bad” credit records—that is, they have a record of delinquent loans or bankruptcy—compared with a quarter of whites. Moreover, income does not explain the disparity, according to the study. Among people with incomes of $65,000 to $75,000, 34 percent of blacks have bad credit, compared with 20 percent of whites.

Today, however, non-Asian minorities (NAMs) have much higher default rates, suggesting racial bias has entered the system of judging creditworthiness.

Liebowitz went on:

Yet the political agenda triumphed—with the president of the Boston Fed saying no new studies were needed, and the US comptroller of the currency seconding the motion.

No sooner had the ink dried on its discrimination study than the Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: ‘discrimination may be observed when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.’

Liebowitz asked:

Some of these ‘outdated’ criteria included the size of the mortgage payment relative to income, credit history, savings history and income verification. Instead, the Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant’s ability to manage debt.

This is just standard operating procedure when the government wants private firms to impose racial quotas on themselves. The same procedure is used in hiring. Objective measurements that have ‘disparate impact’ on legally protected groups have been subjected to severe judicial and legislative review for decades, with the burden of proof severely resting on the firm.

Liebowitz goes on:

Sound crazy? You bet. Those ‘outdated’ standards existed to limit defaults. But bank regulators required the loosened underwriting standards, with approval by politicians and the chattering class. A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.

Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.

Also in 1992, Congress passed the Government Sponsored Enterprises bill, which set “targets” (i.e., quotas) for Fannie Mae and Freddie Mac, which are quasi-governmental publicly-traded for-profit thing-a-ma-bobs, to encourage “affordable” and “underserved” (more or less minority) home loans.

Reuters reported October 13, 1999:

The mortgage industry intends to pursue minorities with greater intensity as federal regulators turn up the heat to increase home ownership in underserved groups. ‘We need to push into these underserved markets as much as we can,’ said David Glenn, president and chief operating officer of Freddie Mac. …

In September, Freddie Mac launched a new lending program, based on research done in collaboration with five black colleges, to bring more African-Americans into the market.

The federal government in the meantime has increased pressure on lenders to seek out minorities, as well as low-income groups and borrowers with poor credit histories.

Fannie Mae recently reached an agreement with the U.S. Department of Housing and Urban Development to commit half its business to low-and moderate-income borrowers. That means half the mortgages bought by Fannie Mae would be from those income brackets.

Now, even the head of Freddie Mac has protested that the quotas have become “perverse.” On March 12, 2008, Bloomberg News reported:

We have created a tremendous amount of risk…Banks are under a great deal of pressure to lend in these communities. It is very political

The Fed pumped so much money into the system after 9/11 that, with stocks in disfavor after the Internet bubble burst, the liquidity flooded into the home market, postponing the day of reckoning in housing until now.

Straightforward tax-and-spend programs were out of favor in the 1990s, but lean-on-lenders for the benefit of your political constituents is always in season.

During the 1990s, Fannie Mae pledged $1 trillion in capital over seven years to boost home ownership among underserved populations. Last spring, said Raines, the commitment was completed ahead of schedule, and Fannie Mae pledged a further $2 trillion to assist 18 million families during the next decade.

Today, President Bush announced a new goal to help increase the number of minority homeowners by at least 5.5 million before the end of the decade… The President also issued ‘America’s Homeownership Challenge’ to the real estate and mortgage finance industries to join in his effort to increase the number of minority homeowners by taking concrete steps to tear down the barriers to homeownership that face minority families.

 

Bush called for, “Creating new mortgage products to meet the unique needs of recent immigrants.”

The President bragged:

Many organizations have already responded to the President’s challenge by committing to substantially increase by at least $440 billion, the financial commitment made by the government sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market.

$440 billion here, $440 billion there, pretty soon you are talking about real money.

He also proposes to make zero down-payment loans available to first-time buyers whose mortgages are guaranteed by the Federal Housing Administration.

In 2004, as regulators warned that subprime lenders were saddling borrowers with mortgages they could not afford, the U.S. Department of Housing and Urban Development helped fuel more of that risky lending. Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more ‘affordable’ loans made to these borrowers. … Housing experts and some congressional leaders now view those decisions as mistakes that contributed to an escalation of subprime lending that is roiling the U.S. economy.

None of this was controversial at the time, in part because being oblivious to the obvious about minorities is the hallmark of authority these days.

Thus, the home ownership increased over the 1994-2004 period by 8.6% for non-Hispanic whites, but by 16.1% for blacks and 16.7% for Latinos. I calculate that ethnic share changes alone between 1994-2004 would have driven down home ownership rates by 1 to 2 points. Instead, they went up 4 points.

Similarly, from 1994-2004, the ownership rate for married couples went up 7.8%—but by 15.2% for female-headed families.

One mystery remains: Why was Wall Street was so credulous about all these dubious mortgages?

Obviously, greed and fear are always at war on Wall Street. Perhaps, though, one reason greed outgunned fear while phony subprime mortgages were running amok in recent years was that so many were going to non-Asian minorities and that Wall Streeters assumed that the federal government would bail them out rather than see so many NAMs turned out on the street.

Hispanic families are more apt to have undocumented income, leading them to lenders who make loans without income verification, according to the National Council of La Raza.

And the problem is not just that “undocumented workers” get “undocumented mortgages.” It’s also that so many others get drawn into the “undocumented income” racket. For example, many of the highest rates of foreclosure are in fast-growing boomtowns like Las Vegas and exurbs like Palmdale, CA, where so many people are in the contracting business building and upgrading housing.

When some of these contractors get a mortgage for their own homes and the bank asks them to document their income, they wink and imply: ”My employees don’t want me to keep a lot of documents on them, so I pass my savings on to my customers who don’t want me to keep a lot of documents on them either. Just trust me.”

And many contractors were getting rich in the housing boom, so they were safe bets as long as the boom went on even if they wouldn’t document their income. But a lot of the people applying for mortgages by claiming to be successful cash-only businessmen weren’t successful, and were just staying afloat by refinancing their mortgages as interest rates dropped and home prices went up. Ultimately, even the ones who were raking in the cash during the Bubble got hammered when the housing construction boom ended.

She agreed to a high-interest loan that would cost her more than $3,000 a month, more than 70 percent of the $4,200 that she and her husband brought home monthly. She signed papers in English that she didn’t understand. One said she was married to a man she didn’t know. She placed her financial future in the hands of a woman she barely knew who sold cosmetics and jewelry door to door. She sought no one else’s advice.

In summary, while blame for this economic fiasco is deservedly widespread, multiculturalism bears a much larger share of the shame than it’s gotten so far.

Classical socialism called for direct state ownership of the means of production, distribution, and exchange. Neosocialism just aims at political control. Socialism claimed to be more efficient. Neosocialism claims to be more equitable. Above all, neosocialism professes to combat ‘racism,’ since this magic word cows all opposition.

20090109

Warsaw Stock Exchange

Privateers

Privateers have a long history in the foundations of America. They were legal pirates who operated with a “writ of Marqus” to raid enemy ships on behave of the Colonies. Why do we use this moniker. Because the besoddened Eliot Spitzer, before his was sexually laid low, finally past into NY Law, a similar writ: it is called the “false claims act” and it allows us onbehalf of the PEOPLE of New York State to hunt corruption and gives us like pirateers claims to part of the booty. EEEY MATE… Shivermee timbers.. Eliot

table of contents

Steamship Yellow Stone

The steamship Yellow Stone

Texas issued a total of six letters of marque to privateers, including the San Felipe, the William Robbins, the Terrible, the Thomas Toby, the Flash, and the Ocean. Flying the “1824″ Texas Revolutionary flag, these ships not only patrolled the Gulf, but also pursued Mexican shipping on the high seas. The Thomas Toby was the outstanding privateer of the group, capturing several Mexican vessels and bringing them back to be adjudicated and their contents sold. Overall, though, the privateering effort was disappointing for Texas. Mexican shipping was not considered rich trade, so relatively few privateers were willing to take the risk.

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James Morgan to Sam Houston, April 1836

Privateers were privately owned war ships commissioned by a belligerent nation to carry on naval warfare. The ships were given permission to prey upon the enemy, with any booty captured to be divided among the government, the ship owner, and the crew. The commissions were called letters of marque and reprisal. Because their activities were committed under the rule of law, privateers were sometimes called “gentleman pirates.”

Letters of marque and reprisal have been issued since the thirteenth century. The word “marque” comes from the French word for border, giving the holder permission to cross the border; “reprisal” is used in the original sense of “taking prizes.” The purpose of the letters was to augment a nation’s navy, creating a force which could pillage the enemy at no cost to public funds. The privateers had to bring their prizes to an Admiralty Court so that the booty could be legally divided, and there were heavy penalties for attacking the property of a neutral state. Often, privateers were also authorized to take hostages, who would be ransomed back to the enemy or held for leverage in a prisoner exchange.

When the American Revolution began, the rebelling colonies could lay claim to only 31 ships. The Continental Congress commissioned more than 1600 privateers, which captured more than 2000 enemy vessels and 16,000 enemy combatants. The privateers suffered heavy losses themselves, and at least 11,000 of them perished due to maltreatment as British prisoners of war.

The power to grant letters of marque was given to the federal government in the Constitution of the United States in Article 1, Section 8. Such letters were issued regularly in the early years of the United States, particularly during the War of 1812. Privateering was ended by international law in 1856 with the signing of the Declaration of Paris treaty by the major naval powers. The United States, not yet a power, declined to be party to the treaty but observed the end of privateering in practice. During the Civil War, the Confederacy issued 99 letters of marque (the most famous Southern privateer being the fictional Rhett Butler of Gone with the Wind).

Since Article 1, Section 8 of the Constitution still stands, some have suggested that the concept of the letter of marque and reprisal could be revived as a weapon against terrorists. Since September 11, 2001, several bills have been introduced in Congress that would allow the State Department to issue letters of marque and reprisal to private individuals to hunt down, attack, and seize assets from terrorists, but none have made it out of committee.

Bloomberg.com exaggerated - Lithuanian Gvnt says that it doesn

“We are not planning [to borrow] at the moment. The International Monetary Fund has given good marks to our [anti-crisis] plan. I will not attempt to predict today how the situation may develop in the future,” Kubilius told BNS.

Reinoldijus Sarkinas, the Bank of Lithuania’s governor, told BNS: “I don’t think that the situation in Lithuania is as bad as the International Monetary Fund’s representative says it is. It is quite possible that in the future we will have to cooperate with the IMF and other international organizations and to borrow, but today there is no need for borrowing.”

He was commenting on a Bloomberg report, which quoted Christoph Rosenberg, the head of the IMF’s mission to central Europe, as saying that Lithuania could be “the next east European economy in need of an international bailout after neighbouring Latvia was forced to seek aid because of the effects of the global financial crisis.”

However, the original message appears to be so updated that it does not really corresponds to the original message.  Just to compare this I have attached the original message on the bottom of this post.  It seems that Bloomberg have exaggerated this time.

The central bank governor said he was not certain if Rosenberg had actually said that Lithuania might have to borrow from the IMF.

The IMF last month extended a 7.5 billion-euro loan to Latvia.

As the BNS reminds Catriona Purfield, the head of an IMF mission, said in Vilnius last month that she did not see the need for Lithuania borrow from the fund.

Oil

id="desc">Hesitation and fear keep you at a distance from achievement

U.S. Payrolls Hemorrhage Is Likely to Persist After 2008 Drop

The hemorrhaging of the U.S. job market looks likely to persist into the new year after employers slashed payrolls in 2008 by the most since 1945, increasing pressure on President-elect Barack Obama to stanch the decline.

The nation lost 524,000 jobs in December, bringing the total drop for last year to 2.589 million, just shy of the 2.75 million decline at the end of World War II, the Labor Department reported yesterday in Washington. The unemployment rate climbed to 7.2 percent, the highest level in almost 16 years.

“The labor market has deteriorated sharply, and it’s telling us the economy is exceptionally weak right now,’ said Jim O’Sullivan, senior economist at UBS Securities LLC in Stamford, Connecticut. “The first quarter will be pretty rough again, with big declines in payrolls and higher unemployment.”

Obama, who takes office on Jan. 20, urged lawmakers on Jan. 8 to pass his economic recovery program “in the next few weeks,” warning that “if nothing is done, this recession could linger for years.” His plan, which has met with mixed reception in Congress, may exceed $775 billion and aims to save or create 3 million jobs.

Job losses last month were widespread, with manufacturers, builders, retailers and temporary-help agencies axing positions. Companies also cut back employees’ working hours, which economists said could be a harbinger of more job declines. The average work week shrank to a record-low 33.3 hours.

Wal-Mart, Macy’s

Manufacturers including Alcoa Inc. have said they will cut output and staff, and retailers from Wal-Mart Stores Inc. to Macy’s Inc. slashed profit forecasts after the worst holiday- shopping season in almost four decades.

U.S. stocks fell yesterday, extending the market’s worst weekly loss since November, and Treasury securities gained, on concern the recession was worsening. The Standard & Poor’s 500 Stock Index fell 2.1 percent to close at 890.35. Benchmark 10- year note yields fell to 2.39 percent in New York.

Payrolls were forecast to drop 525,000 last month, after a previously reported 533,000 decline in November, according to the median estimate of 73 economists surveyed by Bloomberg News. Revisions subtracted 154,000 from payroll figures previously reported for November and October.

The jobless rate was projected to jump to 7 percent from a previously reported 6.7 percent in November, according to the survey.

“Consumers are now going to get more and more scared at the prospect of losing their jobs,” said Nariman Behravesh, chief economist at HIS Global Insight in Lexington, Massachusetts.

‘Full Throttle’

The report showed the most rapid deterioration in the labor market over a six-month period since 1975, according to Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut. “Policy makers will go full throttle” until “the labor market starts to turn,” he said.

Obama is pressing for a stimulus plan including tax cuts and spending on everything from roads and schools to the energy network, to help pull the world’s largest economy out of a slump that’s in its second year.

The payrolls report was “a stark reminder about how urgently action is needed,” Obama said at a press briefing yesterday in Washington. “What we can’t do is drag this out when we just saw half a million more jobs lost.” He added that he will “make sure that Congress stays focused in the weeks to come” to pass the stimulus bill.

Fed Initiatives

Fed policy makers are planning to start a new program next month aimed at shoring up the market for financing car purchases, credit-card loans and student debt. Officials announced the effort in November at the same time as initiating a $600 billion program to purchase debt issued or backed by government-chartered housing finance companies.

The central bank has already lowered its benchmark interest rate to a range of zero to 0.25 percent, aiming to bring down borrowing costs. Officials’ main focus now is taking unorthodox steps, termed by analysts as quantitative easing, to boost the supply of credit in the economy.

“For policy makers, there is a message” in the payrolls figures, said Kurt Karl, chief U.S. economist at Swiss Re in New York. “The Fed will continue to do quantitative easing.”

Obama’s economic aides and lawmakers are also discussing ways to deploy the second half of the Treasury’s $700 billion financial-rescue fund. House Financial Services Committee Chairman Barney Frank favors using some funds to stem mortgage foreclosures, aid issuers of municipal bonds and help homebuyers.

Revised Figures

The Labor Department also issued revised figures from its household survey, which includes the unemployment rate, going back five years. Benchmark revisions to the payroll figures will be announced in February.

Last month’s decline was the 12th consecutive drop in payrolls. The economy created 1.1 million jobs in 2007.

During President George W. Bush’s two terms in office, the economy generated a net 3 million jobs, compared with 22.8 million created during the eight years when Bill Clinton was president.

Bush leaves office with unemployment at 7.2 percent, compared with the 4.2 percent rate he inherited from Clinton in January 2001. Unemployment was 7.3 percent when Clinton took office in January 1993, the last month that the jobless rate was higher than now.

Hourly Wages

Workers’ average hourly wages rose 5 cents, or 0.3 percent, to $18.36 from the prior month. Hourly earnings were 3.7 percent higher than December 2007. Economists surveyed by Bloomberg had forecast a 0.2 percent increase from November and a 3.6 percent gain for the 12-month period.

Factory payrolls shrank 149,000, the biggest drop since August 2001, yesterday’s report showed. Economists had forecast a drop of 100,000. The decrease included a loss of 21,400 jobs in auto and parts industries. Manufacturing, which makes up 12 percent of the economy, shrank in December at the fastest pace in 28 years, Institute for Supply Management figures showed.

Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 273,000 workers. Retail employment dropped by 66,600. Government payrolls increased by 7,000 after falling 3,000 the prior month. Builders fired 101,000. Financial firms reduced payrolls by 14,000.

Reinforcing Cycle

Analysts said the economy may be in danger of a reinforcing cycle of rising unemployment and declining household spending, what policy makers call a negative feedback loop, which is difficult to snap once it’s begun.

Fed staff last month cut projections for gross domestic product and the job market, stating the unemployment rate was “likely to rise significantly into 2010,” according to minutes of policy makers’ December meeting.

Wal-Mart, the world’s biggest retail chain, this week said fourth-quarter profit will miss its earlier forecasts after sales rose less than analysts anticipated. Macy’s said December revenue slipped 4 percent and announced it would close 11 stores.

Sales at stores open at least a year dropped 2.2 percent in the last two month months of 2008, the biggest holiday-season decline since the International Council of Shopping Centers started keeping records in 1970, the group said this week.

Alcoa Pain

“These are extraordinary times, requiring speed and decisiveness to address the current economic downturn,” Klaus Kleinfeld, chief executive officer of Alcoa, said in a Jan. 6 statement announcing 13,500 job cuts worldwide. The world’s largest aluminum producer said it will trim an additional 1,700 contractor positions and froze hiring and salaries in some areas.

Some companies have taken other steps to lower costs. Caterpillar Inc., the world’s largest maker of construction equipment, will put 814 workers on an “indefinite” layoff, shipper FedEx Corp. cut the pay of Chief Executive Officer Fred Smith and other employees, and auto-parts supplier Visteon Corp. said it will trim the workweek and some salaries.

Rubin’s Career at Citigroup Ends After $20 Billion of Losses

Robert Rubin, the former Treasury secretary who advised Citigroup Inc. as it lost $20 billion in the subprime mortgage crisis, resigned his position as senior counselor and won’t stand for re-election to the board.

Rubin’s departure comes as Citigroup and Morgan Stanley are in talks to merge their brokerage units, said a person familiar with the matter. Rubin, 70, intends to “deepen his involvement in outside activities and organizations to which he has been strongly committed,” the New York-based bank said in a statement on Jan. 9.

Rubin, who served at the Treasury’s helm from 1995 to 1999 under President Bill Clinton, was criticized by investors for collecting more than $150 million in pay in a decade while failing to steer Citigroup away from subprime securities. The investments led to four straight quarterly losses and prompted the bank to turn to the government for a rescue package.

“His reputation has very much been damaged by what has happened at Citi,” Bert Ely, chief executive officer of Ely & Co., a bank consulting firm in Alexandria, Virginia, said in a Bloomberg TV interview. “Fair or not, Citi’s problems do reflect negatively on him.”

Citigroup, the biggest bank recipient of U.S. bailout funds, completed an agreement for a $20 billion government investment, on top of an earlier $25 billion injection and a U.S. guarantee on $306 billion in troubled assets.

“My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today,” Rubin said in a letter to Chief Executive Officer Vikram Pandit.

Rubin’s Hiring

Rubin was hired at Citigroup in 1999 by then co-CEOs Sanford “Sandy” Weill and John Reed as chairman of the executive committee, three months after leaving the Treasury. Rubin was to be part of a “newly constituted” three-person office of the chairman, Citigroup wrote in an Oct. 26, 1999, press release announcing his appointment.

At the time, then-Credit Suisse First Boston analyst Mike Mayo, who’s now at Deutsche Bank AG, warned in a report to clients that the advantages of Rubin’s hiring included “an attractive Rolodex for gaining business, strategic and economic insights, regulatory connections and more management depth if needed.”

Disadvantages included “too many chefs in the kitchen” and “less accountability at the top,” Mayo wrote. “We prefer to see one person in control.”

Treasury

Rubin left Goldman, Sachs & Co. — now Goldman Sachs Group Inc. — to become a top economic adviser to Clinton in 1993. In 1994, he succeeded Lloyd Bentsen as Treasury secretary, presiding over five years of economic growth.

At Treasury, Rubin was instrumental in the dismantling of the 1933 Glass-Steagall Act, which separated commercial lending from investment banking. The repeal of the law allowed Weill, and later former CEO Charles “Chuck” Prince, to build Citigroup into its current form.

When he retired as secretary, Rubin successfully pushed for Lawrence H. Summers, his deputy, to succeed him. Two years later, in 2001, Rubin championed Summers again — this time to become president of Harvard University.

“There is still a great deal to do, but I have great confidence that Citi will meet the long-term challenges ahead,” Rubin said in the letter.

Citigroup’s 77 percent decline in New York Stock Exchange trading in 2008 made the stock the worst performer in the 24- company KBW Bank Index for the second year in a row. The shares fell 41 cents, or 5.7 percent, to $6.75 on Jan. 9.

Satyam’s Raju Faces Charges as Government Reconstitutes Board

Satyam Computer Services Ltd. founder Ramalinga Raju and his brother Rama faced charges of criminal conspiracy and breach of trust in an alleged $1 billion fraud as the government assembled a new company board.

C.B. Bhave, chairman of the Securities & Exchange Board of India, met Corporate Affairs Minister Prem Chand Gupta in New Delhi following the arrest of the brothers late yesterday. The government sacked the board members of the company, India’s fourth-largest software exporter, for failing to deliver and said a reconstituted one would meet in seven days.

“A company without a board is like a headless chicken,” said Kiran Karnik, former president of the National Association of Software and Service Companies, a lobby group. “Satyam needs people with credibility, integrity to retain customers and employees. You also need legal protection for those who come on board from future lawsuits.”

A new management may help Hyderabad-based Satyam to retain customers, including Telstra Corp., and safeguard the jobs of the 53,000 people it employs. Satyam Computer was sued by investors in at least three class-action lawsuits in federal court in the U.S. following the plunge in its shares after Raju said he falsified accounts “for several years” and quit.

“The fact that the audited accounts don’t represent true and fair picture raises an issue that is bigger than the Satyam scandal,” said M. Damodaran, former chairman of the Securities and Exchange Board of India. “If some guy has taken liberties with the system, the person or persons has to be identified and punished.”

Judicial Custody

Raju, 54, and his younger brother were produced before a Hyderabad city magistrate who remanded them to judicial custody until Jan. 23, his lawyer S. Bharat Kumar said today.

The offences carry a maximum sentence of 10 years and the brothers can’t apply for bail, Inspector General V.S.K. Kaumudi said in the southern city.

The scandal, whose scope is being likened to the 2001 bankruptcy of Enron Corp., has shaken confidence in Indian companies and accounting standards.

Houston-based Enron’s 2001 bankruptcy wiped out more than 5,000 jobs and $1 billion in employee retirement funds. The Enron scandal triggered tougher U.S. accounting rules and the creation of a board to oversee auditing firms that review the financial statements of publicly traded companies.

“The developments so far indicate that the current board of Satyam has failed to do what it was supposed to do,” Gupta told reporters in New Delhi yesterday. “The government is committed to punish everyone found guilty, including the auditors.”

Officials have seized documents and the nation’s accounting body is examining auditor PricewaterhouseCoopers LLC’s local unit.

Audit Evidence

Satyam canceled a board meeting scheduled for today after the board was replaced, it said in an e-mailed statement. Ten directors nominated by the government will meet next week to appoint managers at Satyam, Gupta said.

Interim Chief Executive Officer Ram Mynampati said Jan. 8 he was unaware of the false accounting that may force Satyam to restate earnings as he relied on audited statements. The local unit of PwC said in a statement the same day that Satyam’s accounts were supported by “appropriate audit evidence.”

The scandal eroded $2.2 billion in shareholder wealth, drawing calls from executives and auditors to accelerate the investigation. After chairman Raju claimed Jan. 7 he’d padded Satyam’s books, the company’s auditors and interim management had yet to confirm any irregularities.

Satyam fell 41 percent to 23.75 rupees yesterday. The Bombay Stock Exchange removed Satyam from its benchmark Sensitive Index, a day after the National Stock Exchange dropped the stock from the Nifty.

Investor Confidence

The ADRs, each of which represents two ordinary Satyam shares, fell $8.42, or 90 percent, to 93 cents before the opening of the New York Stock Exchange on Jan. 7, when trading was halted.

The announcement by the government on reconstituting the Satyam board will also reinforce stakeholder confidence, the National Association of Software and Service Companies said in an e-mailed statement.

Lazard Asset Management LLC increased its stake in Satyam on Jan. 7 to 5.3 percent from 4.79 percent, while Aberdeen Asset Managers Ltd. and Fidelity Management & Research Co. sold their holdings. Lazard is holding shares on behalf of clients and the acquisition of the shares was not for obtaining control of the company, it said in a filing to the Bombay Stock Exchange today.

India’s stock market regulator plans to review working papers of auditors at companies forming the nation’s main stock indexes, the regulator said in a statement in Mumbai. The Securities and Exchange Board’s Committee on Disclosures and Accounting Standards will hold a peer review of the auditor’s working papers on quarterly and full-year financial statements.

Turning Point

“We believe the Satyam incident marks a turning point in investors’ attitude toward corporate governance,” Suresh Mahadevan, an analyst at UBS AG, said. “In future, companies perceived poor on corporate governance or following aggressive accounting practices will trade at larger discounts compared to their peer group.”

Satyam’s Chief Financial Officer Srinivas Vadlamani is being questioned by the police, Inspector General V.S.K. Kaumudi said. The police is in touch with the stock market regulator and the Registrar of Companies and is helping with their investigations, he said.

Government officials have seized Satyam’s documents and a team from the ministry of corporate affairs has started inspecting eight group companies, Gupta said.

“It’s the prime concern of the government to ensure the operations of the company continue uninterrupted,” Gupta said.

Satyam has offices from the U.S. to the U.K., Brazil and Australia. The company writes software and manages computer systems for clients including ArcelorMittal, the world’s largest steelmaker, and Nissan Motor Co., Japan’s third-biggest carmaker.

Canvas Sheets

Telstra, Australia’s largest telephone company, said Jan. 8 that Satyam’s disclosure will be a factor when it cuts two out of its four major information technology suppliers this year.

Outside the group’s corporate headquarters, four canvas sheets about 6 feet by 8 feet were draped with employees’ signatures, handprints and messages.

“Satyam will come back,” one message reads. “Save Satyam, save Raju,” says another. A third, “Buy Satyam Stock.” On each of the red, green, yellow and blue-painted canvases is printed “The Spirit of Satyam,” like a watermark.

“This current management needs to go so that the 50,000 jobs are saved and client commitments are kept,” Richard Rekhy, chief operating officer of KPMG in India, said. “It is the image of India and corporate India at stake.”

The fall of Raju, named Ernst & Young Entrepreneur of the Year in 2007, began three weeks ago when Satyam proposed paying $1.6 billion for Maytas Properties Ltd. and Maytas Infra Ltd., both tied to his family. The plan was scrapped 12 hours later, after investors called it a “woeful misuse of cash.” Raju said the sale was designed to plug the hole in Satyam’s balance sheet.

“To my non-auditor mind, it is reasonably clear that something like this could not have been hidden from audit for so long,” former regulator Damodaran said.

Investing 2009 and Beyond: Stay Safe and Seek Sound Advice

One of my greatest concerns about investing for retirement is that the term “investing” has become synonymous with buying stocks with 100 percent of one’s portfolio.  No matter what one’s age, goals, or risk tolerance is, having one’s investment portfolio entirely exposed to the stock market is too high a risk with too low a potential reward.  I hope that if the experience of 2008 has taught us anything, it is that investing requires allocating a portfolio to fixed income, equities, and cash in proportion with the account holder’s age, goals, and risk tolerance.  Investing also requires constant monitoring and re-evaluation.

Seek Out Advice

For those who do not have the time or inclination to handle retirement planning, I strongly suggest seeking out an investment advisor.  An investment advisor is not a stock broker, and any investment advisor that only invests in the stock market is not truly an advisor.  In addition, stock brokers earn a commission on trades made, investment advisors generally charge an annual fee constituting a small percentage of the portfolio total.  Please note, I am not disparaging stock brokers - for those investors who would like to have an account solely devoted to equity investing, there are many good brokers in the industry.  However, a stock broker is not the best manager for one’s overall retirement planning.

My concern is that there are individuals holding themselves out to be investment advisors whose counsel is little different from that of a stock broker.  When looking for help with your retirement planning, make sure that your advisor discusses your goals and risk tolerance and builds a portfolio to reflect those.  Also, trust the advisor who speaks in plain terms, clearly explains what he or she plans to do with your portfolio, responds to your calls in a timely manner, and avoids using Wall Street speak like “they/we/I like XYZ stock” - “over an x-year period, the stock market always outperforms other investments” - “you must be in the market at all times or you will miss the rally.”

Earnings Season Begins This Week: Tread Carefully

The S&P 500 has rallied from its low in November 2008 by approximately 20 percent.  Earnings reports for the fourth quarter of 2008, and given what we know about the economy, those reports are expected to be terrible.  The question for the market in 2009 is will earnings improve, and if so, by how much.  So, there will be two facets of the earnings reports that will move the market:

Trading volume for the first full week of trading has been light, as it has been since the end of November.  This partially explains the drop in volatility, which has been welcome.  However, expect some volatility to return with the earnings reports.  Over the next few months, earnings-season volatility will cause headaches as individual stock prices gyrate while investors digest the earnings reports and outlooks.

Over the longer-term, what happens in Washington will determine the economic outlook for 2010.  The results of any stimulus package will not been seen for about 12 months.  The stock market, however, is generally forward-looking, and so, the economic outlook for 2010 will likely drive the market in the second half of 2009.  Although the U.S. and other world governments seem to be doing whatever it takes to avoid an economic calamity, these stimulus programs are largely experimental.  Actions have consequences, and we cannot imagine what the consequences of the various stimulus packages may be.  The best we can do is watch the economic numbers carefully and draw the best inferences possible from those numbers.

What does this all mean?  Well,  no one can honestly say.  That is the most serious risk in investing the market today—there is still little earnings visibility and the economic picture is unclear.  Without being able to determine future earnings capability within a reasonable range, there is no way to put a reasonable value on the stock market.  And so, we could see a year where the market is down 20 percent at one point, up 20 percent at another, and yet ultimately end up right where it began.

What Can We Do?

The slogan for 2008 was “preserve capital.”  Hopefully you have done that.  The mantra for 2009 is “slow and steady.”

In 2008, the best move was to get out of the stock market and stay out.  No sector was immune from the downturn, and the best stocks simply held their value for the year.  In 2009, we need to put the cash raised in 2008 to work, but safety is still paramount.  A good portion of one’s portfolio should be allocated to fixed income: municipal and corporate bonds.  Treasuries have been overbought in the worldwide rush to safety, and so it hard to recommend an asset that offers almost no, and for shorter term bonds exactly no, return.  However, Treasury Inflation-Protected Securities may offer good returns in the future if inflation returns.

Another portion of one’s portfolio can be allocated to the stock market.  However, this should come in the form of trading in and out of specific stocks with a goal of taking profits and keeping losses small.  Thus, one should always have a cash position in this portion of the portfolio to take advantage of opportunities or to dollar-cost average one’s position in the event a stock’s price drops soon after the initial purchase (but does not fall through the stop price).  In other words, when it comes to stock market investing this year, be nimble and be safe.

There are plenty of posts on this blog that detail the themes raised in this post.  I have compiled a list of those posts and their respective topics below:

Currency: The State of the U.S. Dollar

Corporate Earnings: Corporate Default Rate Pushing Up Cost of Financing for Healthy Companies

Credit Crisis: Credit Crisis- A Brief History and Time Line

Deleveraging: The Wolf is at The Door

Economy: Consumer Spending Will Not Bounce Back

Inflation/Deflation:  Disinflation/Inflation/Deflation and Fiscal Stimulus: A Look at 2009

Inflation/Deflation: Economic Roundup (Week of 11-17-08 to 11-21-08): The New Vocabulary Word is Stag-Deflation

Investing: New Mindset Needed for Stock Market Investing

Investing: Fixed-Income Investing: CDs, Money Markets, Treasuries, Municipal and Corporate Bonds

Market Phenomena: Dynamics of a Market Bubble

Behind the Bank

The Crimes of Patriots A True Tale of Dope, Dirty Money, and the CIA, Jonathan Kwitny, W.W. Norton, 1987. 424 pgs, index.

How do banks begin?  For what purpose do banks exist?  Why use an obscure bank?  These question are seldom asked by most bank customers.  We tend to assume that all banks are much the same.  It is only a matter of convenience as to which bank to use.  There is a  lot more to banking than we know.  There is the operations of banks that we see, but beneath the surface there is in some banks operation that you are not allowed to see.

The Nugun Hand Bank was one such operation.  Founded in Australia by Frank Nugan, an Australian, and Michael Hand, an American, the bank was curious from its inception.  Kwitny, a reporter for the Wall Street Journal, traces, what he can, of the banks origins, operations, demise, and aftermath.

The bank, it seems (no one knows for sure) was designed to enable people to evade taxes, evade currency export restrictions, and to launder money.  Almost all the bank’s operation outside of Australia were illegal.  Record keeping of deposits and loans often consisted only of a slip of paper kept in a file drawer.  The morning after Nugan’s 1980 suicide, the key officers of the bank went through the files and destroyed and carted off large quantities of records.  They didn’t need to hurry:  the police did not bother to show up at the offices until several days later.  This is just the beginning of a series of bungled attempts to investigate the bank.  There would be two more

Kwitny raises many questions regarding the bank:  Why were so many retired high ranking U.S. military officers involved as officers of the bank, yet they all claim no knowledge of the illegalities?  Why was the bank able to operate for so long and in so many countries without government authorities taking notice?  Why did so many depositors fail to file claims to try to recover some of their money?  What was the relationship of the bank with the Australian Intelligence and Security Organization?

These are all intriguing questions, but Kwitny does not answer them, at least not directly.  He hints at money laundering–the bank had a branch in the Golden Triangle are of Thailand–but doesn’t give the proof that shows the bank was actually helping the narcotics trade (although it is difficult to see why this branch existed, illegally under Thai law, if it was not to move around drug money.)  Kwitny also tries to implicate the CIA, saying the bank was a conduit for CIA funds.

The issue of the retired military officers is quite odd.  Were these men that naive?  Didn’t they investigate the bank and its principals before joining?  Why were they so willing to lend their names and prestige to this nascent operation?  Many of these men tried to lie their way out of any responsibility but changed their story when they were confronted with documents and, in one instance, a tape recording of a company meeting.

The bank was a magnet for former (?) intelligence operatives.  One especially colorful character was an expatriate American who operated a sleazy restaurant and bar in Sydney’s red light district.  There is nothing unusual about this until it is pointed out that the place is frequented by most visiting U.S. elected and appointed officials.  As Kwitny notes, no one goes the for the food.

The Nugun Hand Bank is a dead issue.  Nugun is dead–this was reconfirmed by an exhumation!–and Michael Hand has disappeared.  From my one internet search, it seems that Hand is still missing.  This may be the way everyone wants the situation to remain.

The book concludes with an after word by Earl Yates, USN (ret.)  Yates was President of Nugan Hand in the U.S.; the operation was nothing but a mail drop near Washington, DC.

I found the story interesting, but the unanswered questions are a major weakness in the book.  The book’s strength is to alert us to the sub rosa world of international banking.

THE WORLD today!

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1. Barack Obama wins Presidential Election and becomes the 44th President of the United States starting January 20 - Hope for a Change - Yes we can -

130 Million Americans, more than in any other election since 1960, voted for a change and choose Obama, obtaining a historic victory to become the first black President of the United States, congratulating and celebrating world leaders, expressing hope, expectations and confidence in a fresh approach to the world’s challenges. Obama won the popular vote with 52% to 46% of McCain and the decisive electoral vote with 365 to 173 of McCain, requiring the Presidential election 270 electoral votes and the Democratic Party is strengthening its majorities in both Houses of Congress, in the House reaching 257 seats/up 21 seats remaining 178 seats for the Republican Party and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota, falling disapointed Democrats short to obtain a 60-vote majority in the Senate. Obama has to confront as he starts Presidency on January 20, 2009, inherited big problems like how to revive economy and the wars in Iraq and Afghanistan, and one has to accept that there are no quick and easy solutions and it will take time to solve troubles; nevetherless it seems to be important that he keeps promises made during his campaign and helps to overcome divides bringing the country together. The President-elect is already moving ahead to choose his team for the transition process, to take place in complete cooperation with the Bush administration, and to form his cabinet, nominating Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team are cooperating as close as possible with President Bush to inject confidence into the market, coordinating the rescue plan for Citigroup and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats had shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Obama talked also about a redistribution of the tax burden to reduce economic inequality, a real plan focusing on fairness and growth. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1,186 Trillion or more, considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by President-elect Obama, who said his economic team is working on an ambitious and significant economic recovery plan including permanent middle-class tax cuts, tax cuts for individuals and businesses could reach with about $300 Billion a large proportion of the new stimulus package, and the creation and preservation of up to 3 to 4 Million jobs during the next two years through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, which could cost  up to $775 Billion, 5% to 6% of the US gross domestic product, or more, to enter into effect as soon as possible after his inauguration on January 20, 2009.  To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department is asking Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position President Bush said he would be open to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance, pulling Kirk Kerkorian, the billionaire investor out of the company, selling his remaining shares. It seems nearly unbelievable that President Bush apparently conditioned his support to some of the  important initiatives to help the contracting US economy to Democrats dropping their opposition to the free trade pact with Colombia. The President-elect is frustrated that the actual administration refuses to discuss an urgently needed second economic stimulus package  and worried as Bush issues a record of so-called ‘midnight regulations’, last minute regulations designed to reward supporters, enraging opponents and undermining his new administration, like coal waste dumping into valleys and streams  and easing the building of coal-fired power stations nearer to national parks, having  his transition team already a list of controversial measures that will take months to undo. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a measured response from Obama and a forcefully demand from President Bush, requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, made it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. NATO foreign ministers urged President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops were withdrawing from Georgia, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict moved from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. The NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, and the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, declared to be prepared to resume a constructive dialogue with Russia, but would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia. Finally Russian troops retreated from Georgia to the two enclaves of Abkhazia and South Ossetia, having Moscow established diplomatic relations with both. US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama Administration to restore relationship. President Bush concentrating on the weakening US economy, addressed the nation to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act/EESA, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The Bush Administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks.  The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans, announcing  the Federal Reserve  it will take a stake of $5 Billion in GMAC  against preferred shares paying a dividend of 8%, lending another $1 Billion to GM to help GMAC to reorganize itself as bank holding company, enabling GMAC to improve its financing offers to vehicle buyers. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies. The Treasury Department disclosed guidelines for Systemically Significant Failing Institutions/SSFI program, it uses to justify emergency aid under the Emergency Economic Stabilization Act/EESA  out of the $700 Billion bailout fund, preventing disruption of financial markets to limit impact on the economy, protecting American jobs, savings and retirement security.

http://www.BarackObama.com/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Excessively indebted Government & Overindebted Households & Undercapitalized Banks & Oversized Financial Sector& Underregulated Markets & Speculations & Contracting Economy Wordwide in 2008 & Deepening Global Recession in 2009 - Market Adjustment - New Opportunities - Recovery -

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. President Bush has signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25% and lowering the federal discount rate to 0,5%,  coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, expecting the weakest Christmas shopping season in decades, dropping consumer confidence 23,4 points to an all time low of 38 the same month, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 5,7% in July, increasing to 6,1% in August, remaining steady at 6,1% in September, hitting  6,5% in October and 6,8% in November, climbing claims for unemployment benefits to the highest level in 26 years and jumping jobless rate to a record high of 7,2% in December with a total of 2,6 Million jobs lost in 2008. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Manufacturing activity suffers declines worldwide, dropping in the United States in December to its lowest level in 28 years. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US car sales of Ford, General Motors and Toyota fell more than 31% and of Chrysler 53% in December in comparision with one year earlier, increasing concerns about the prospects for survival of US automakers. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,96 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles. US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and is expected to slow down even more in the fourth quarter of this year, expecting the IMF a weak 0,5% US gowth for 2008. US growth projections for 2009 have been adjusted to -2,2%, lasting recession at least until the second half of the year. The IMF  lowered its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand. The US one year inflation increased to 5,60% in July (including food and energy), but declined to 4,94% in September, 3,66% in October and 1,07% in November. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 16-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling from 2,1% in November to 1,6% in December, where it is expected to average 2,2% in 2009. The European Central Bank/ECB had raised its main interest rate from 4% to 4,25%, alarmed about inflation trends combined with lower growth increasing stagflation fears in the Eurozone, holding the rate steady at 4,25% in September as inflation risks have fallen but not disappeared, insisting that it is crucial to bring Eurozone inflation back within the target of an annual rate of 2%, but in a joint emergency decision with the world’s most important central banks lowered its key rate to 3,75%, also reducing direct lending rates. The financial crisis has changed economic outlook slowing growth worldwide, falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, lowering the European Central Bank its key rate by another half percentage point to 3,25% and with inflation falling and Europe already in recession decided a new interest rate cut by 0,75% to 2,5%. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! BRIC countries Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 5,2% and 7% respectively lower growth rates in 2008, while the somewhat frenetic growth in India and China, both commodity consumers, could slow down temporarely but will continue with estimated 7,5%and 9,9% respectively in 2008, projecting China a growth of probably 8% for 2009. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standards Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday. However deepening losses, declining confidence, capital needs, suffering more than other major banks from the financial crisis, force bank to reshape its business, considering to integrate its brokerage operation Smith Barney into a  joint venture with Morgan Stanley, receiving about $2,5 Billion, leaving Morgan Stanley with an initial stake of 51% and the right to purchase all of the new unit over a period of up to 5 years. In a deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. Merrill Lynch reported for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital the company encouraged by the Federal Reserve, which now officially approved the acquisition, advanced its merger talks with Bank of America and agreed to be bought in a rescue take over for about $50 Billion, making BofA the second largest bank in the world. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion, reporting stronger than expected third quarter earnings of $1,64 Billion, while J.P.Morgan Chase posted for the same period a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw at least $43 Billon in September from US hedge funds, which lost already more than $200 Billion in value this year, borrowing also heavily money, and as hedge fund outflows increase they will have to sell assets, estimating analists that the hedge fund industry, which managed at its peak beginning 2007 about $2.200 Billion in assets, is going to shrink according to estimates by more or less 45%/$1.000 Billion due to withdrawals and investment losses. Also smaller regional lenders are becoming increasingly vulnerable, practicing American banks a new found caution reducing even business loans! The credit crisis has conduced also to a tightening in lending terms of credit card issuers with consumers to lower risk profile, owing US households about $971 Billion ($8.299,- per household) in credit card debts, increasing charge-offs to 6,82% in August in comparison with 4,61% a year earlier, writing lenders off an estimated $21 Billion in bad credit card loans in the first half of 2008, showing 4,6% of credit card owners defaults in payment of 30 days and more in August. The Federal Reserve approved the transformation of American Express, the nation’s last big independent credit card company, into a bank company, getting greater access to the bailout package for banks, requesting about $3,5 Billion in assistance out of this fund. US banking regulators and the Federal Reserve, worried about financial markets, are working  on stricter rules for credit card issuers prohibiting unfair practices and calling on the industry to be more user-friendly, considering borrowers troubles to make their payments in the midst of a deep recession. AIG/American International Group

Norway provides aid to Gaza

By Luna Finnsson

January 8 2009

Norway’s government has voted to send NOK 30 million worth of humanitarian relief to Gaza in the wake of Israeli attacks on the region. Norway’s Foreign Minister Jonas Gahr Stoere stated: “We are extremely concerned about the precarious humanitarian situation in Gaza.” He added that it is essential to guarantee the aid actually reaches those in Gaza who need it.

The Norway Post reports that the Ministry of Foreign Affairs is currently allocating funds to a number of humanitarian organisations that work to provide emergency medical help to injured residents of the Gaza Strip. “We presume that Israel will provide the necessary access for humanitarian aid. There is an acute need for medical and surgical equipment at the hospitals in Gaza. We join in a broad international appeal to Israel to help to ensure that humanitarian relief supplies reach those in need,” Stoere said in a public statement.

OK, the 401(k) retirement system didn

… from the frontiers of business, politics and society

For years the conventional wisdom has been to plow money into 401(k) plans for retirement. Anyone who didn’t was considered a financial dunce. Well, so much for conventional wisdom. The 401(k) system has “serious shortcomings,” says The Wall Street Journal (”Big slide in 401(k)s spurs calls for change,” 8 January 2009). Employees have seen their retirement accounts drop, 20%, 30%, 44% in the economic downturn.

“This is the biggest test that the 401(k) plan has seen to date, and it has failed,” says Robyn Credico, head of defined-contribution consulting at Watson Wyatt Worldwide, noting that many baby boomers are ready to retire. “We’ve put people close to retirement in a very challenging position.”

The timing couldn’t have been worse.

[E]ven when workers make good choices, a market meltdown near the end of their working careers can still blow their savings to smithereens.

“That seems like such a fundamental flaw,” says Alicia Munnell, director of Boston College’s Center for Retirement Research. “It’s so crazy to have a system where people can lose half their assets right before they retire.”

The U.S. Congress is beginning to take a look at retirement and 401(k) policy, starting with an October 2008 committee hearing with a variety of witnesses.

Some proposed setting up “universal” retirement accounts, which would cover all workers. One such plan called for establishing accounts that would receive annual contributions from the federal government, and would offer a guaranteed, but relatively low, rate of return. Another proposed automatically investing contributions in an index fund that holds stocks and bonds, with the mix getting more conservative as workers approach retirement.

U.S. Rep. George Miller (D-Calif.), the chairman of the House Education and Labor Committee, recently issued the following principles for future 401(k) reform:

But is this just minor tinkering with a system still dependent upon the wildly fluctuating stock market (not much different from gambling)? Do we need more radical reform that provides a solid financial foundation for retirement?

For Twitter: RT @mitchbetts “OK, the 401(k) retirement system didn’t work. What’s next?” http://tinyurl.com/7mp2j5

AUTOWORKERS TO RALLY TOMORROW AT THE DETROIT AUTO SHOW

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Our Recommended Funds: The Buildings Blocks of a Portfolio

To invest in an asset class you have to be able to find a vehicle for that investment. We have compiled our favorite ETFs that allow you to create a portfolio with a wide variety of investments. When creating your portfolio and evaluating investment vehicles be careful of the underlying costs of your investments: keep expense fees low, invest in ETFs that have a low bid/ask spread and watch out for tax consequences (delay, delay, and then delay paying taxes). With that being said here’s our best of list for investment vehicles.

Ruble Falls Against Dollar as Central Bank Devalues Currency

Russia’s ruble fell against the dollar in the first official trading day this year as the central bank devalued the currency for the 13th time in two months and companies demanded foreign currency to repay debt.

The ruble weakened to 30.5312 per dollar in Moscow trading today, according to data from the Micex Stock Exchange. That’s a 3.7 percent decline from 29.4145 on Dec. 30, Bloomberg figures show. Bank Rossii devalued the currency against its target dollar-euro basket, said a central bank official who declined to be identified and didn’t give any other details, citing the bank’s policy. The ruble fell against the basket to 35.3 today, from 34.8 on Dec. 30.

The ruble may retreat 10 percent against the basket this month as companies and banks buy foreign currency to repay more than $80 billion of debt this year, according to Societe Generale SA. Danske Bank A/S in Copenhagen sees a 15 percent drop in the ruble by year end. The currency has weakened 23 percent against the dollar since the beginning of August.

“There’s colossal demand for foreign currency from the corporates needing to refinance,” said Evgeny Nadorshin, chief economist at Trust Investment Bank in Moscow. “If you have such an option, it is better to buy now before the ruble devalues more.”

Investors have withdrawn more than $200 billion since August because of the war in Georgia, a more than 70 percent decline in oil prices since records in July and the worst market rout since the 1998 default, according to BNP Paribas SA estimates.

Depleting Reserves

Russia’s foreign-currency reserves, the world’s third- largest, have fallen by 27 percent since August to $438.2 billion amid the central bank’s efforts to prop up the ruble. Standard & Poor’s cut Russia’s credit rating this month for the first time in nine years, citing a “rapid depletion of reserves.”

The ruble rose to 41.1317 against the euro today, Micex data show. The currency traded at 41.3233 per euro on Dec. 30, according to Bloomberg figures. Bank Rossii manages the target basket, which is 55 percent dollars and 45 percent euros, to protect exporters.

Energy producers led Russian stocks higher as trading resumed, following gains in crude since the start of the year and an accord to settle a dispute over gas shipments through Ukraine.

OAO Rosneft and OAO Lukoil, the nation’s biggest oil companies, rose more than 3 percent. OAO Gazprom jumped 3.7 percent as the world’s largest natural-gas producer prepared to resume supplies to Europe after the European Union brokered an agreement to monitor transit.

The 30-stock Micex Index added 2.6 percent to 635.4, trimming last year’s 67 percent decline, the worst annual performance since at least 2002 when Bloomberg started tracking the measure.

Recession

Urals crude, Russia’s main export blend, traded at $43.23 a barrel on Jan. 9, up from $36.24 on Dec. 30. That’s still 38 percent less than the $70 average price that Finance Minister Alexei Kudrin says is needed to balance the budget.

The decline in the crude price is pushing Russia, the world’s biggest energy exporter, toward its first recession since 1998, when plunging oil revenue forced the government to default on $40 billion of debt and devalue the ruble.

Industrial output slumped the most since 1998 in November, while unemployment surged to 6.6 percent and wage arrears almost doubled. An index of Russian service industries plummeted to a record low last month as signs the economy is heading for a recession curbed spending, VTB Bank Europe said on Jan. 6.

Russia is deploying about $200 billion in emergency funds to inject liquidity into frozen credit markets and help companies and banks refinance their debts. The government approved a list of 295 companies for priority access to state refinancing loans on Dec. 25.

Link betweeen Maternity Leave, C-sections and Breastfeeding.

Two new studies led by researchers at the University of California, Berkeley, suggest that taking maternity leave before and after the birth of a baby is a good investment in terms of health benefits for both mothers and newborns.

One study found that women who started their leave in the last month of pregnancy were less likely to have cesarean deliveries, while another found that new mothers were more likely to establish breastfeeding the longer they delayed their return to work.

Both papers were part of the Juggling Work and Life During Pregnancy study, funded by the Maternal and Child Health Bureau of the U.S. Health Resources and Services Administration and led by Sylvia Guendelman, professor of maternal and child health at UC Berkeley’s School of Public Health. The research takes a rare look into whether taking maternity leave can affect health outcomes in the United States.

“In the public health field, we’d like to decrease the rate of C-sections (cesarean deliveries) and increase the rate of breastfeeding,” said Guendelman. “C-sections are really a costly procedure, leading to extended hospital stays and increased risks of complications from surgery, as well as longer recovery times for the mother. For babies, it is known that breastfeeding protects them from infection and may decrease the risk of SIDS (Sudden Infant Death Syndrome), allergies and obesity. What we’re trying to say here is that taking maternity leave may make good health sense, as well as good economic sense.”

The study on the use of antenatal leave - time off before delivery with the expectation of returning to the employer after giving birth - and the rate of C-sections is the first examination of birth outcomes in U.S. working women, the researchers said. It will appear in the January/February print edition of the journal Women’s Health Issues.

The researchers analyzed data from 447 women who worked full-time in the Southern California counties of Imperial, Orange and San Diego, comparing those who took leave after the 35th week of pregnancy with those who worked throughout the pregnancy to delivery. Only women who gave birth to single babies with no congenital abnormalities were included in the analysis. They adjusted for sociodemographic factors such as income, age and type of occupation, as well as for various health measures such as high blood pressure, body mass index, amount of self-reported stress and average number of hours of sleep at night.

Using a combination of post-delivery telephone interviews and prenatal and birth records, the researchers found that women who took leave before they gave birth were almost four times less likely to have a primary C-section as women who worked through to delivery.

The study authors pointed out that the United States falls behind most industrialized countries in its support for job-protected paid maternity leave. The federal Family and Medical Leave Act provides for only unpaid leave of up to 12 weeks surrounding the birth or adoption of a child.

The bulk of studies on leave-taking and health outcomes from other countries suggest that taking leave prior to birth can be beneficial. The authors point to a macroanalysis of 17 countries in Europe that linked failure to take such leave with low birthweight and infant mortality. Rates of pre-term delivery were lower among female factory workers in France if the women took antenatal leave, and a study conducted in several industrialized countries found that paid leave, but not unpaid leave, significantly decreased low birthweight rates.

According to the U.S. Census, among working women who had their first birth between 2001 and 2003, only 28 percent took leave from their jobs before giving birth while an additional 22 percent quit their jobs. Twenty-six percent of women took no leave before birth.

“We don’t have a culture in the United States of taking rest before the birth of a child because there is an assumption that the real work comes after the baby is born,” said Guendelman. “People forget that mothers need restoration before delivery. In other cultures, including Latino and Asian societies, women are really expected to rest in preparation for this major life event.”

The authors added that financial need may also deter women from taking leave in the last month of pregnancy. Only five states - California, Hawaii, New Jersey, New York, Rhode Island - and the territory of Puerto Rico offer some form of paid pregnancy leave, and none offer full replacement of the woman’s salary.

The study on maternity leave and breastfeeding is in the January issue of the journal Pediatrics. Using data from 770 full-time working mothers in Southern California, researchers assessed whether maternity leave predicted breastfeeding establishment, defined in this study as breastfeeding for at least 30 days after delivery. Phone interviews were conducted 4.5 months, on average, after delivery.

In this study, women who had returned to work by the time of the interview took on average 10.3 weeks of maternity leave. Overall, 82 percent of mothers established breastfeeding within the first month after their babies were born. Among women who established breastfeeding, 65 percent were still breastfeeding at the time of the interview.

Researchers found that women who took less than six weeks of maternity leave had a four-fold greater risk of failure to establish breastfeeding compared with women who were still on maternity leave at the time of the interview. Women who took six to 12 weeks of maternity leave had a two-fold greater risk of failing to establish breastfeeding.

Having a managerial position or a job with autonomy and a flexible work schedule was linked with longer breastfeeding duration in the study. After 30 days, managers had a 40 percent lower chance of stopping breastfeeding, while those with an inflexible work schedule had a 50 percent higher chance of stopping.

Overall, the study found that returning to work within 12 weeks of delivery had a greater impact on breastfeeding establishment for women in non-managerial positions, with inflexible jobs or who reported high psychosocial distress, including serious arguments with a spouse or partner and unusual money problems.

“The findings suggest that if a woman postpones her return to work, she’ll increase her chances of breastfeeding success, especially if she’s got a job where she’s on the clock and has less discretion with her time,” said Guendelman. “Also, women who are in jobs where they have more authority may feel more empowered with how they use their time.”

The American Academy of Pediatrics (AAP) recommends that babies be breastfed for at least the first year of life, and exclusively so for the first four to six months.

According to the AAP, increased breastfeeding has the potential for decreasing annual health costs in the U.S. by $3.6 billion and decreasing parental employee absenteeism, the environmental burden for disposal of formula cans and bottles, and energy demands for production and transport of formula.

The study authors noted that just having maternity leave benefits offered by an employer was not helpful in breastfeeding establishment unless the leave was actually used, indicating the importance of encouraging the use of maternity leave and making it economically feasible to take it.

“These new studies suggest that making it feasible for more working mothers to take maternity leave both before and after birth is a smart investment,” said Guendelman.

Other co-authors of the paper in Women’s Health Issues are Michelle Pearl and Steve Graham, senior research scientists at the Sequoia Foundation, a California-based non-profit organization focused on public health research; Alan Hubbard, UC Berkeley assistant professor of biostatistics; Dr. Nap Hosang, lecturer at UC Berkeley’s Maternal and Child Health program and a practicing obstetrician; and Martin Kharrazi, research scientist supervisor in the California Department of Public Health Genetic Disease Screening Program.

In addition to Guendelman, Pearl, Graham and Kharrazi, the Pediatrics paper was co-authored by Jessica Lang Kosa, research associate, and Julia Goodman, former graduate student, both at UC Berkeley’s School of Public Health.

The study published in Women’s Health Issues received additional funding from the Center for Health Research at UC Berkeley. The paper in Pediatrics also received support from the UC Labor and Employment Research Fund and the UC Berkeley Institute for Research on Labor and Employment.

Article URL: http://www.medicalnewstoday.com/articles/134498.php

Handy Economic Resources Info from International Community - from original post sept 29 20087

Associated Press

WASHINGTON–The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration.

Two law enforcement officials said the FBI is looking at potential fraud by mortgage finance giants Fannie Mae (FNM: 1.74, +0.43, +32.82%) and Freddie Mac (FRE: 1.89, +0.57, +43.18%), Lehman Brothers Holdings Inc.(LEH: 0.13, -0.17, -56.66%), and insurer American International Group Inc.(AIG: 3.31, -1.69, -33.80%)

A senior law enforcement official says the inquiries, still in preliminary stages, will focus on the financial institutions and the individuals that ran them.

Officials say the new inquiries brings the number of corporate lenders under investigation over the last year to 26.

***

http://www.senate.gov/

***

http://www.unece.org/stats/links_int.htm#international

http://www.unece.org/stats/images/header_bt01.jpg

United Nations and specialized agencies

http://www.unece.org/stats/links_int.htm#top

http://epp.eurostat.ec.europa.eu/pls/portal/ddis.go_home?p_language=en EUROSTAT, Statistical Office of the European Communities

Non-governmental organizations

Other statistical sources

© United Nations Economic Commission for Europe

***

Eurostat - Your key to European statistics

***

*Correspondence to Franco Peracchi, Faculty of Economics, University of Rome Tor Vergata, via Columbia 2, 00133 Rome, Italy

Digital Object Identifier (DOI)

Applied Stochastic Models in Business and Industry

See Also:

* Applied Stochastic Models and Data Analysis

Volume 24 Issue 5, Pages 471 - 493

Special Issue: Special issue on statistical methods in performance analysis

Published Online: 8 Aug 2008

Probability measures, Lévy measures and analyticity in time

Ole E. Barndorff-Nielsen and Friedrich Hubalek

JASPER JOTTINGS Week 02 - 2009 Jan 11

JASPER JOTTINGS Week 02 - 2009 Jan 11

Jasper Jottings - The achievement journal of my fellow Jaspers, the alumni of the Manhattan College

http://www.jasperjottings.com/2009/jasperjottings2009W02.html

INDEX

* POSITRACTION: Scientists Build Neonatal Incubator From Car Parts

* JBlogger: Gibbons, Patti (MC1986) calls our attention to Africa

* JUpdate: Maguire, Dannell (MC1967)

* JEmail: McEneney, Mike (MC1953) ids JNews: James Strecansky [MC1962]

* JEmail: McEneney, Mike (MC1953) ids O’Neill, Joe [MC1967] chairman of the ICE

* JUpdate: McCall, Tom (MC1972)

* MFound: MC mentioned in the Epiphany homily

* JObit: Cohane, Francis G. [MC1949]

* JObit: Coleman, Charles T. [MCatnd]

* JUpdate: Kelly, Bob (MC1965)

* JFound: Beegan, Carolyn A. (MC1987)

* ADMINISTRIVIA: LEGACY, Jasper obits [Updated 10JAN09]

* JFound: Yatto, Robert [MC????] is a gastroenterologist on talk radio today

* JHQ: Manhattan College Partners With WCBS-TV To Sponsor Special Television Advertising Obama Inauguration

* JHQ: Manhattan College’s School Of Business Receives Extension Of Accreditation

* JHQ: New GoJaspers

* JNews: Liccardi, Thomas V. [MC1948] a victim in the Madoff scam

* JBlogger: Brennan, Sean (MC????) blogs at the NY Daily News

* JObit: Betron, Frank [MC????]

* JObit: Sontag, William Bill [MC1949]

* JUpdate: Malley, MaryEllen Mel Doherty (MC1992)

* JHQ: January 2009 NEWSLETTER

* JFound: Dianora, Mario (MC1967) practices “Classic Exchange”

* JEMail: McEneney, Mike (MC1953) highlights “job hunting” resources

* JFound: Ellis, Ronald L. [MC1972] is on the Madoff bench

* ENDNOTE: Suggest Holy Father aim at Secular Progressive Socialist Gooferment

# # # # #

POSITRACTION: Scientists Build Neonatal Incubator From Car Parts

http://science.slashdot.org/article.pl?sid=08/12/22/012250&from=rss

Scientists Build Neonatal Incubator From Car Parts

*** begin quote ***

“The NYTimes ran a story this week about a group of scientists who have built a neonatal incubator out of automobile parts, including a pair of headlights as a heat source, a car door alarm to signal emergencies, and an auto air filter and fan to provide climate control. The creators of the car-parts incubator say that an incubator found in any neonatal intensive care unit in the US could cost around $40,000, but the incubator they have developed can be built for less than $1,000. One expert says as many as 1.8 million infants might be spared every year if they could spend just a week in the units, which help babies who are born early or at low birth weights regulate their body temperature until their organs fully develop. Experts say in developing countries where infant mortality is most common, high-tech machines donated by richer nations often conk out when the electricity fizzles or is restricted to conserve power. ‘The future medical technologists in the developing world,’ says Robert Malkin, director of Engineering World Health, ‘are the current car mechanics, HVAC repairmen, bicycle shop repairmen. There is no other good source of technology-savvy individuals to take up the future of medical device repair and maintenance.’”

*** end quote ***

[JR: Folks say they are pro-life. These guys are pro-life. Just seems that there are so many small opportunities that are overlooked.]

# # # # #

* Posted on: Sun, Jan 4 2009 12:37 PM

JBlogger: Gibbons, Patti (MC1986) calls our attention to Africa

FROM JBlogger Gibbons, Patti (MC1986) @ pattigibbons.com

http://pattigibbons.com/?p=900

January 3rd, 2009

Bishop Love: Fast for our brothers and sisters in Sudan and Nigeria

*** begin quote ***

From today’s Diocesan Update from Bishop Bill Love of Albany:

I have been particularly grieved by the reports coming out of the Diocese of Maridi in Southern Sudan, as well as those from the Diocese of Jos in Nigeria, where our brothers and sisters in Christ have come under attack and persecution, primarily because of their faith in Christ. Following is an excerpt from an email I just received from Bishop Justin Badi, Bishop of our sister diocese of Maridi:

“Last night (January 1st) the LRA (Lord’s Resistance Army) came in Nzumara village which is three miles south of Maridi town. They chopped seven people to death, destroyed properties, tortured people and have taken over twenty to the bush. It is a very miserable situation here in Maridi. We very much value your prayers for us.”

*** end quote ***

Jasper Gibbons adds:

*** begin quote ***

Even if you are not from the Diocese of Albany, please join in upholding these Christian brothers and sisters whose faith may cost them their lives. If you know of others in these for whom we should pray, feel free to

{Extraneous Deleted}

*** end quote ***

[JR: Seems appropriate to add the unfortunates as she requests. Personally, I wonder what blame we have to shoulder for the USA's interventionist foreign policy. George Washington said it best -- MYOB. Paraphrasing of course.]

# # # # #

* Posted on: Sun, Jan 4 2009 2:37 PM

JUpdate: Maguire, Dannell (MC1967)

Maguire, Dannell (MC1967)

Account Executive

Brown Harris Stevens

New York, NY

hometown New York

relationship status Married

interests Bicycling; Argentine Tango; Holland Lodge No. 8, F.&A.M.

music Classical

books Your Money and Your Brain

Professional Experience

Account Executive

Brown Harris Stevens

2008 - Present

Education

Manhattan Prep 2014

Harvard Business School

MBA, Finance, 1972

Manhattan College

BA, Political Science, 1967

# - # - #

REPORTING LIVE FROM THE PLAXO NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

20090104

# # # # #

* Posted on: Sun, Jan 4 2009 3:37 PM

JEmail: McEneney, Mike (MC1953) ids JNews: James Strecansky [MC1962]

From: McEneney, Mike (MC1953)

Date: January 5, 2009 12:51:30 AM EST

To: “Jasperfjohn Reinke”

Subject: JAMES STRECANSKY, ‘62

>JNews: James Strecansky [MC1962] BSU

Dear John,

I believe that James is a member of the Class of 1962.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

* Posted on: Mon, Jan 5 2009 7:54 AM

JEmail: McEneney, Mike (MC1953) ids O’Neill, Joe [MC1967] chairman of the ICE

From: McEneney, Mike (MC1953)

Date: January 5, 2009 12:57:13 AM EST

To: “Jasperfjohn Reinke”

Subject: Joseph O’Neill, ‘67

>JNews: O’Neill, Joe [MC1970?] chairman of the ICE

Dear John,

I believe that Joe is a member of the Class of 1967.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

* Posted on: Mon, Jan 5 2009 8:01 AM

JUpdate: McCall, Tom (MC1972)

McCall, Tom (MC1972)

Networks: Dallas / Fort Worth, TX

Sex: Male

Hometown: Frisco, TX

Relationship Status: Married

Political Views: Conservative

Religious Views: Christian - Catholic

Activities: Auto Racing, Hunting, Fishing, Shotgunning

Interests: Karen, Dave, Christina, Katherine, Joseph, Emma, Kaili, Matthias

Favorite Music: Ecclectic

Favorite Movies: Shoot ‘em up!

Favorite Books: Higgins, Ludlum, Clancey, Grisham, Rowlings

Education and Work

College:

* Manhattan College ‘72

* BSBA - Accounting

High School:

* Gorton High School ‘68

Employer:

MileMeter Insurance Company

Chief Operating Officer

July 2008 - Present

Dallas, TX

# - # - #

REPORTING LIVE FROM THE FACEBOOK NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

20090105

# # # # #

* Posted on: Mon, Jan 5 2009 8:26 AM

MFound: MC mentioned in the Epiphany homily

http://stjamescadyville.blogspot.com/2009/01/homily-for-week-of-january-4-2009.html

Sunday, January 4, 2009

Homily for the Week of January 4, 2009|

The Epiphany of the Lord, 2008

First Reading: Isaiah 60:1-6

Responsorial Psalm: Psalm 72:1-2, 7-8, 10-11, 12-13

Second Reading: Ephesians 3:2-3a, 5-6

Gospel: Matthew 2:1-12

Manhattan College is one of the oldest Catholic Colleges. It is located in New York City. It was started by a group of Christian Brothers in the 19th Century. It athletic teams are called the Jaspers after Brother Jasper. One of the greatest achievements of Brother Jasper was that he brought the then little-known sport of baseball to Manhattan College and became the team’s first coach. During one particularly warm and humid day when Manhattan College was playing a semi-pro baseball team called the Metropolitans, Brother Jasper noticed the Manhattan students were becoming restless and edgy as Manhattan came to bat in the seventh inning of a close game. To relieve the tension, Brother Jasper called time-out and told the students to stand up and stretch for a few minutes until the game resumed.

Since the College annually played the New York Giants in the late 1880’s and into the 1890’s at the Polo Grounds, the Manhattan College practice of the seventh inning stretch spread into the major leagues, where it has now become a time-honored custom practiced by millions of fans annually.

In the Catholic Church this weekend is like the seventh inning stretch. It is towards the end of the spiritual season of Christmas, and today is THE TWELVE DAYS OF CHRISTMAS. As the song goes: on the twelfth day of Christmas my true love gave to me twelve drummers drumming. Today is the twelfth day of Christmas, or what we call Epiphany.

{Extraneous Deleted}

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http://www.stjamescadyville.org/

Welcome to St. James Cadyville! Thank you for visiting the website of St. James Parish located in Cadyville, New York.

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[JR: More Seventh Inning Stretch propaganda?]

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* Posted on: Mon, Jan 5 2009 4:13 PM

JObit: Cohane, Francis G. [MC1949]

http://www.legacy.com/NYTimes/DeathNotices.asp?Page=LifeStory&PersonId=122254965

Francis G. Cohane

COHANE–Francis G., Esq., Hawthorne, NY died peacefully on January 4, 2009. Beloved husband of 51 years of Marion (Duffy) Cohane. Devoted father of Francis, Jr. (Kathleen), Thomas, Kevin (Kate), Brian (Lori), Katherine and Christopher (Jacqueline). Loving brother of John (dec.), Gerard (Sally), Joseph (Mary), Kathleen Sussingham (dec.), Marion Peterson (dec.) and Laura Jones (dec.). Cherished grandfather of 12 and a well-loved uncle of numerous nephews and nieces. A native of the Bronx and a World War II, U.S. Navy veteran, Frank held degrees from Manhattan College, St. John’s Law School and the NYU School of Law. He pursued a successful career as a tax attorney, serving with distinction such corporations as Union Carbide, Union Pacific, CIGNA and GTE. A man of extraordinary warmth and humanity, his gifts for love, laughter and generosity will be missed by a large company of colleagues, friends and family. Mass 10am, Wednesday Holy Rosary Church, Hawthorne, NY. Visiting 2-4 and 7-9pm Tuesday, Edwards-Dowdle Funeral Home, Dobbs Ferry (914693-3330) In lieu of flowers, memorials to St. Cabrini Nursing Home 115 Broadway, Dobbs Ferry.

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Cohane, Francis G. [MC1949]

Guestbook: http://tinyurl.com/7qurvn

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Dear John,

I believe that Francis is a member of the Class of 1949.

May He Rest In Peace,

Mike

[JR: Thanks, Mike. Much appreciated. ]

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* Posted on: Tue, Jan 6 2009 7:38 AM

* Updated: Wed, Jan 7 2009 12:05 AM

JObit: Coleman, Charles T. [MCatnd]

http://www.legacy.com/SouthOfBoston-Ledger/DeathNotices.asp?Page=LifeStory&PersonId=122264232

Charles T. Coleman

HINGHAM Charles T. Coleman of Hingham, died on Monday, Jan. 5th, 2009 at the South Shore Hospital in Weymouth. He was 93. Mr. Coleman was born in Hingham and was a lifelong resident of the town. He graduated from Hingham High School and attended Manhattan College. He was an insurance salesman for 35 years with the John Hancock Insurance Co. and in recent years, was an officer of the East Weymouth Savings Bank. Throughout his life, Mr. Coleman was an active volunteer worker in both Hingham and Florida. He was especially popular in South Shore nursing homes where he would frequently entertain the residents with his piano playing. An accomplished musician, he also sang in the Glastonbury Abbey Choir in Hingham. Mr. Coleman loved to travel and was an avid golfer and sports fan, and especially enjoyed the Red Sox and the New England Patriots. He was the beloved husband of the late Mary (McKee) Coleman and the late Josephine (Calvi) Coleman; and was the devoted father of Nancy A. Hanson and her husband Peter of Hingham, Carolyn Coughlen and her husband William of Granby, CT, Charles T. Coleman, Jr. and his wife Frances of Marshfield, Richard Coleman and his wife Dona of Quincy and Mary Ann Majchrowski and her husband Francis of Dalton, MA. Brother of the late Constance Courtney, Francis H. Coleman, Jr. and Margaret M. Falconer. Also survived by 11 grandchildren and 4 great grandchildren. A Funeral Mass will be celebrated on Friday, January 9th at 11 a.m. at St. Paul’s Church, 147 North St., Hingham Square. Interment in St. Paul’s Cemetery, Hingham. Friends may visit at the Downing Cottage Funeral Chapel, 21 Pond St., Hingham on Thursday from 4-7 p.m. In lieu of flowers, donations may be made in his memory to Glastonbury Abbey, 16 Hull St., Hingham, MA 02043. For directions and online guestbook, please visit www.downingchapel.com

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Coleman, Charles T. [MCatn]

Guestbook: http://tinyurl.com/a2ky5a

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* Posted on: Tue, Jan 6 2009 7:50 AM

JUpdate: Kelly, Bob (MC1965)

Kelly, Bob (MC1965)

Rive Vale, NJ

Ford Motor Company

various sales and marketing positions

6/1972 to 3/2007

Retired from Ford Motor company,

enjoying life and my two grandchildren.

Lillian Cautherine and Ronan Robert

hometown River Vale NJ

relationship Married

Professional Experience

National Account Mgr (retired)

Ford Motor Company

1972 - 2007

Education

Manhattan College BA, Economics and philosophy, 1965

Regis HS 1961

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REPORTING LIVE FROM THE PLAXO NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM …

20091006

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* Posted on: Tue, Jan 6 2009 2:29 PM

JFound: Beegan, Carolyn A. (MC1987)

http://www.hamptons.com/detail.ihtml?id=5940&apid=12210&sid=3&cid=38&hm=1&iv=0&townflag=

Tuesday, January 06, 2009

Hamptons.com - The Arts

Hamptons Artists of the Hamptons

Updated: January 06, 2009 11:27am

Artist Among Us - Carolyn A. Beegan

Eileen Casey

*** begin quote ***

Sag Harbor - Carolyn A. Beegan was born in 1965 in New York City, and attended St. Francis Preparatory School in Queens, College of Mt. Saint Vincent, Queen’s College, and graduated summa cum laude from Manhattan College in 1987 with a degree in computer sciences.

Having been raised in a strict Irish Catholic household Beegan credits her upbringing and the 16 years she spent in parochial schools with the strong religious imagery that is evident in her early work. Her family’s ties to Ireland have influenced her work as well, including studies of religious iconography, and she keeps both a U.S. and Irish passport.

Although she did not “declare” herself a full-time artist until 1994 when she was in her mid-20s, Beegan abandoned a successful career as a systems analyst in the oil industry to study at the Art Students League in Manhattan.

{Extraneous Deleted}

How do you support yourself as an artist?

CB: For the past 15 years, I have supported myself by showing with a number of galleries in Manhattan and on the East End. I have also recently set up a website, or visit www.sagharborartist.com. By contacting me through the site, one can purchase paintings, collages, and drawings.

{Extraneous Deleted}

*** end quote ***

Beegan, Carolyn A. (MC1987)

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* Posted on: Tue, Jan 6 2009 7:18 PM

ADMINISTRIVIA: LEGACY, Jasper obits [Updated 10JAN09]

UPDATE: 1/10/9 working

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UPDATE 1/9/9 : Still broken!

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UPDATE 1/8/9 : Still broken!

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From: Info <Info@legacy.com>

Date: January 7, 2009 6:50:27 PM EST

To: “‘jasper’”

Subject: RE: General Inquiries

Thank you for contacting Legacy.com.

We are currently experiencing a temporary technical issue with the keyword search function on our site. Please know that our full technical resources are currently being devoted to this issue, and we hope that it will be resolved shortly. We apologize for any inconvenience this may cause and invite you to try your search again in the coming days.

Thank you for your patience and understanding. Please let us know if we can be of further assistance.

Christine

Legacy.com

—–Original Message—–

From: jasper

Sent: Wednesday, January 07, 2009 7:24 AM

To: Info

Subject: General Inquiries

Name: reinkefj

Email: jasper

Message: This morning your search is broken. My query that puts “manhattan college” but no name returns 1200+ entries but is not using the qualification. System change last night?

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LEGACY, the site from whence Jasper obits come, is broken. I’ve message them for a fix. But for now, I’m “blind”.

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* Posted on: Wed, Jan 7 2009 8:34 AM

* Updated: Sat, Jan 10 2009 1:04 PM

JFound: Yatto, Robert [MC????] is a gastroenterologist on talk radio today

http://briefcasediva.wordpress.com/2009/01/07/ask-dr-yatto-your-dieting-question/

Dr. Robert Yatto, M.D., Gastroenterologist, will be our Guest Speaker on Diva Talk Radio.

When: Wednesday, January 7, 2009 at 2:00 p.m. EST

Where: Diva Talk Radio (http://blogtalkradio.com/DivaTalkRadio)

Topic: Dieting the healthy way

About Dr. Yatto:

Dr Robert Yatto is a gastroenterologist in practice in Crossville, TN. He is a graduate of Manhattan College and the University of Bologna in Italy. He did post graduate training at The Long Island College Hospital in Brooklyn, where he served as Chief Resident in Medicine, and completed a Gastroenterology Fellowship.

He was Chief of Gastroenterology at the VA Hospitals in the Montrose and Castle Point NY facilities and an Assistant Professor of Clinical Medicine at New York Medical College, and was in private practice in New York before relocating to TN.

Dr Yatto has contributed over 30 articles to medical journals and has presented at national gastroenterology and endoscopy meetings during his career. In 2007 he received an American College of Gastroenterology President’s Award for a presentation on long term follow-up of patients treated with endoscopic therapy for reflux disease at Cumberland Medical Center, where he is Director of Endoscopy.

As a self-proclaimed gastroenterologist “on the back nine,” he continues to remain active in his practice as well as with the American College of Gastroenterology, the American Society for Gastrointestinal Endoscopy, and concepts such as this radio program. He was interviewed for input in a discussion on Irritable Bowel Syndrome for a Dr Oz column in Reader’s Digest in an effort to bring cutting edge medical knowledge to the lay public, an important new concept in an age of sometimes inaccurate information dispensing.

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Yatto, Robert [MC????]

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* Posted on: Wed, Jan 7 2009 9:27 AM

JHQ: Manhattan College Partners With WCBS-TV

To Sponsor Special Television Advertising Obama Inauguration

http://www.manhattan.edu/news/news_releases/010609_1.shtml

January 6, 2009

Manhattan College Partners With WCBS-TV To Sponsor Special Television Advertising And Web Programming Surrounding Obama Inauguration

*** begin quote ***

RIVERDALE, N.Y. – Manhattan College has partnered with WCBS-TV New York on a special sponsorship of television advertising and web programming scheduled to cover the Jan. 20 inauguration of President-elect Barack Obama.

As part of the agreement, the College will be receiving:

* Sponsorship of 35 vignettes that will run between Jan. 5-20. The 30-second spots, produced by WCBS-TV, look back at past presidential inaugurations (see schedule below).

* Ten 30-second commercials to air on Jan. 20, prior the inauguration. Commercials to be included are Manhattan Master Builders, What America Needs, Teaching the Leaders of Tomorrow, and two Best of Both Worlds spots. The commercials will run during various times during the day’s coverage of the inauguration (schedule still to be determined).

* Sponsorship of the “Countdown to Inauguration” clock on the WCBS-TV home page at http://wcbstv.com/.

* Total sponsorship of the WCBS-TV politics Web page for the month of January at http://wcbstv.com/politics.

* Exclusive sponsorship of the WCBS-TV home page on Jan. 20.

{Extraneous Deleted}

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* Posted on: Wed, Jan 7 2009 12:15 PM

JHQ: Manhattan College’s School Of Business Receives Extension Of Accreditation

http://www.manhattan.edu/news/news_releases/010609_2.shtml

News Release

January 6, 2009

Manhattan College’s School Of Business Receives Extension Of Accreditation From Prestigious AACSB International

RIVERDALE, N.Y. – The school of business at Manhattan College has received an extension of accreditation by The Association to Advance Collegiate Schools of Business (AACSB) International, the premier accrediting agency for business programs worldwide. Of the 555 institutions throughout the world to hold AACSB accreditation, only 42 institutions are undergraduate-only programs such as Manhattan.

To maintain accreditation, a business program must undergo a rigorous internal review every five years, at which the program must demonstrate its continued commitment to the 21 quality standards relating to faculty qualification, strategic management of resources, interactions of faculty and students and commitment to continuous improvement and achievement of learning goals in degree programs.

Some of the factors in Manhattan’s extension of accreditation included the College’s institutional commitment to Lasallian values that are understood by the students and supported by the faculty, staff, administration and alumni; the willingness of the faculty to expand its efforts to embrace a culture that includes intellectual contributions; and the support, interest and commitment of the College’s president and provost, the dean of the school of business, James Suarez, and the school’s board of advisors.

“The extension of AACSB International accreditation is external confirmation of the overall high quality of the school’s educational program,” Suarez says. “This achievement reflects the outstanding teaching and scholarship of our faculty, the strong academic talent and skills of our students, and the success, dedication and loyalty of our alumni.”

Manhattan’s school of business, which was established in 1928, is comprised of 30 full-time and 12 part-time faculty members and currently enrolls 830 students.

Founded in 1916, AACSB International is the longest serving and largest global accrediting body for business schools that offer undergraduate, master’s and doctoral degrees in business and accounting. The not-for-profit organization’s mission is excellence in management education in colleges and universities. Headquarted in St. Louis, Mo., AACSB is the premier accrediting agency and service organization for business schools.

To learn more about AACSB International accreditation, visit the accreditation section of the AACSB International Website at www.aacsb.edu/accreditation/.

{Extraneous Deleted}

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* Posted on: Wed, Jan 7 2009 12:17 PM

JHQ: New GoJaspers

New GoJaspers.com Look

from Manhattan College Basketball by yuku.com

*** begin quote ***

Looks like they updated the layout of GoJaspers.com. Looks good!

*** end quote ***

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* Posted on: Wed, Jan 7 2009 5:50 PM

JNews: Liccardi, Thomas V. [MC1948] a victim in the Madoff scam

http://www.nytimes.com/2009/01/08/nyregion/08nursing.html?_r=1

Aged Madoff Investors Wonder About the Rest of Their Days

By JAMES BARRON

Published: January 7, 2009

*** begin quote ***

Thomas V. Liccardi knew all about how people should prepare for retirement. He was an accountant who specialized in tax returns for estates — often dealing with people whose elderly parents had died, usually after long and comfortable lives.

He himself kept on working through his 60s and his 70s and into his 80s, doing a few tax returns every year and helping younger accountants he knew in White Plains.

He had planned for his own retirement, of course. By last year, even after two heart attacks and a serious stroke, Mr. Liccardi, 86, was confident that he had no financial worries: he had become a millionaire, wealthy enough to afford $130,000 a year for assisted-living accommodations in a home for the elderly and the round-the-clock health aides whom he and his wife depend on.

The computer-generated financial statements he received every month showed that he had $2.7 million, an impressive increase from the $400,000 he had originally invested with Bernard L. Madoff Investment Securities, back in the late 1990s.

{Extraneous Deleted}

A veteran of the Army Signal Corps in World War II — bronchitis kept him from shipping out with his company when it received orders for Europe — he set up an accounting practice in the Bronx and in Westchester County after he graduated from Manhattan College. Over the years. he was careful with his money, and he counseled his clients to be careful with theirs.

{Extraneous Deleted}

“I don’t know where we’re going to get the money to continue here,” he said. He said they have less than $100,000 in bank accounts — not enough to make it through 2009.

Their two grown daughters live in other states, and he said it would not be realistic to move in with either one. “I thought I’d be able to help them with the Madoff fund I had,” he said. “I can’t do it now.”

*** end quote ***

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Liccardi, Thomas V. [MC????]

[JR: I hope there is a special hell for fraudsters like Madoff. And, the policitican’s for the Social Security Ponzi scheme. No good time to find yourself broke. But at the end of your life, tragic.]

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From: McEneney, Mike (MC1953)

Date: January 8, 2009 11:21:43 PM EST

To: “Jasperfjohn Reinke”

Subject: Thomas V. Liccardi,’48

Dear John,

Today’s NY Times (1/8/09), at page A24, has an article about Tom Liccardi and his wife Edith and their plight after investing most of their life savings with Madoff. It appears that Tom had made due inquiry into the operation years ago and was convinced that it was on the up and up. A sad story!

Mike

PS. I have a copy if you need it.

[JR: Thanks, Mike. Much appreciated. But I got it. Not the Class Year though. That's invaluable.]

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* Posted on: Thu, Jan 8 2009 12:22 AM

* Updated: Thu, Jan 8 2009 11:39 PM

JBlogger: Brennan, Sean (MC????) blogs at the NY Daily News

http://www.nydailynews.com/blogs/basketcase/2009/01/talking-hoops-with-tommy-demps.html

Sean Brennan has been with the Daily News since 1985. The lifelong Bronx resident spent his formative years hanging out in gyms watching hoops, especially at Manhattan, Fordham and Iona. For the last 12 years he has made a fine living of covering the city’s local college teams - when not spending endless hours at Yankees and Mets games from April to October. The Manhattan College grad currently resides in the North Bronx, just a few miles from Manhattan, Fordham and Iona – sort of the Bermuda Triangle of local college hoops.

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Brennan, Sean (MC????)

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* Posted on: Thu, Jan 8 2009 2:56 PM

JObit: Betron, Frank [MC????]

http://www.legacy.com/DALLASMORNINGNEWS/Obituaries.asp?Page=LifeStory&PersonID=122334377

Frank Betron

Frank Betron 66, passed away Monday January 5th, 2009. Celebration of life Friday, January 9th at 10:30 AM at St. Elizabeth Ann Seton in Plano. Born December 30, 1942 in New York City, Frank earned an Engineering degree from Manhattan College, an MSEE from Ohio State University, and an MBA from Rochester Institute of Technology. Frank enjoyed astronomy, tennis, and was a licensed pilot. Preceded in death by father Frank Barry Betron and mother Anna Welgess Betron. Survivors; Mary - wife of 45 years, children Frank, Susan, Michael, and Christine, son-in-law Richard Hanna, daughter-in-law Wendy Betron, grandchildren Katelynn, Lindsey, Lydia, Haley, and Andrew, and sisters Carol Betron Wagner and Ruth Betron.

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Betron, Frank [MC????]

Guestbook: http://tinyurl.com/93wcg8

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* Posted on: Thu, Jan 8 2009 7:30 PM

JObit: Sontag, William Bill [MC1949]

http://www.legacy.com/Bakersfield/Obituaries.asp?Page=LifeStoryPrint&PersonID=122291157

William (Bill) Sontag

1926 - 2008

William (Bill) Sontag was born to Anna and William Sontag on August 8, 1926, in Englewood, New Jersey. He moved to New York City in 1938 and graduated from George Washington High School in 1944. He served in the Army Air Force and was discharged in 1945. Bill then attended Manhattan College and graduated with a Bachelor of Civil Engineering Degree in 1949. He has been a life member of the American Society of Civil Engineers since January 1, 1991. He is survived by his wife of 56 years, Joanne. He leaves behind to cherish his memory two sons, Mark and John Michael. He also considered their wives, Teresa and June his daughters. He was the proud grandfather of Brandon, Julie and John C. as well as one great-grandson, Xander. After working one year for the City of New York, he relocated to Burlington, Iowa where he was employed by the Iowa Ordnance Plant. There he designed a product for the Atomic Energy Commission. Bill met his wife, Joanne, in Burlington and they were married in 1952. In 1954 he was transferred to the Nevada Test Site located outside of Las Vegas, Nevada. He worked as a structural engineer on various facets of atomic testing until 1956. At that time Bill moved to Los Angeles County where he spent 29 years working for Pascoe Metal Building Systems. During that time he received many awards and was involved in the design of approximately 30,000 buildings. He was a registered engineer in California and 22 other states as well as one province in Canada. In addition to being a life member of the American Society of Civil Engineers he also belonged to the Light Steel Fabricating Association of Southern California and represented Pascoe Steel on the technical committee of the Metal Building Manufacturers’ Association and served 3 years as Chairman of that Committee. In 1986 Bill retired as Engineering Manager of Pascoe Metal Building Systems and moved to Bear Valley Springs in Tehachapi. He then did private consulting for ten years. He moved to Bakersfield in 1998. After moving into the Greens, he served on the finance committee for many years. Bill wished to thank CBCC and especially Dr. Mukhopadhyay and his medical assistant, June, as well as the entire staff and his internist, Dr. Raj Patel, for their caring and compassionate care during his five years battling prostate cancer. A memorial service will be held on Saturday, January 10, 2:00 p.m., at First United Methodist Church, 4600 Stockdale Hwy., Bakersfield. In lieu of flowers, Bill wished everyone to donate to the charity of their choice.

Published in the Bakersfield Californian on 1/7/2009

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Sontag, William Bill [MC1949]

Guestbook: http://tinyurl.com/8s7avs

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* Posted on: Thu, Jan 8 2009 7:42 PM

JUpdate: Malley, MaryEllen Mel Doherty (MC1992)

MaryEllen (Mel) Doherty Malley - class of ‘92. Lady J basketball team ‘88-’92. Looking to network with other Jasper alumni.

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* Posted on: Thu, Jan 8 2009 8:26 PM

JHQ: January 2009 NEWSLETTER

http://www.manhattan.edu/newsletters/ManhattanMonthly/2009_01/index.html

January 2009 NEWSLETTER

NEWS

Manhattan College Partners With WCBS-TV To Sponsor Special Television Advertising and Web Programming Around Inauguration

College Will Honor Syska Hennessy Group Chairman at De La Salle Dinner

School of Business Receives Extension of Accreditation

ON CAMPUS

New Scholarships Strengthen Lasallian Tradition

Men’s Lacrosse Supports Special Olympics New York

Relay For Life Cancer Walk

Let It Snow

FACULTY/STAFF

Marketing Professors Contribute Paper to Peer-Reviewed Journal Insights to a Changing World

Faculty and Staff Accomplishments

Welcome New Employees

Manhattan College Milestones

For all your Jaspers sports, breaking news and ticket information, visit www.gojaspers.com.

ALUMNI

Service Trip Planned to the Ninth Ward in New Orleans

Yearbook Release Party for Class of 2008

Treasure Coast Alumni Luncheons

Men’s Hoops vs. Iona at MSG

Manhattan vs. Siena at Times Union Center

Central Florida Alumni Luncheon

Greetings Jaspers in Dubai!

Jaspers Helping Jaspers

Does Your Class Year End in a 4 or 9?

CALENDAR

January 2009

01 New Year’s Day

14 Treasure Coast Alumni Luncheon, Stuart, Fla.

16 Class of 2008 Yearbook Release Celebration

19 Martin Luther King Jr. Day

20 First day of classes

24 Men’s Basketball vs. Iona at MSG

21 De La Salle Medal Dinner

February 2009

05 Mentor Dinner, Smith Auditorium

05 Central Florida Alumni Luncheon

12 Men’s Basketball at Siena, Albany, NY

16 President’s Day

18 Senate Meeting

18 Treasure Coast Luncheon, Stuart, Fla.

22 Jaspers of Georgia Annual Brunch

25 Ash Wednesday

SPORTS

Jaspers Host Iraq War Veterans Appreciation Day

Men’s Hoops Squad Begins Key Homestand

Women’s Basketball’s Lindsey Loutsenhizer ’12 Earns MAAC Rookie of the Week Honors

Baseball’s Kevin Nieto ’10 Is Named to 2009 Brooks Wallace Player of the Year Watch List

Manhattan Athletics Expands JasperVision Platform

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* Posted on: Fri, Jan 9 2009 6:15 PM

JFound: Dianora, Mario (MC1967) practices “Classic Exchange”

http://www.arrl.org/news/features/2009/01/09/10557/

Classic Exchange — A Vintage Radio Contest By Mario Dianora, N2AK

Warm-up those filaments for the Classic Exchange contest, January 25/26 and February 15/16.

January 09, 2009

*** begin quote ***

Do you have any old equipment from the bygone days of radio? Are you a homebrewer who likes to make nifty low power (QRP) radios or replicas of old rigs? Well the good news is that you can put those pieces on the air in an operating event that will make you feel like you are in another era. That event is called Classic Exchange (CX) and it is held twice a year. The purpose of CX as described in their newsletter is to “Encourage restoration, operation and enjoyment of older commercial and homebrew ham gear.” Some years ago, I heard stations on 40 meter CW calling “CQ CX.” After some research, I discovered that this was a contest for vintage and homebrew gear. It sounded like a great way to get some use from the old rigs I had in my basement. Since then, I have rediscovered the magic of radio and await the next CX event for more of it.

*** and ***

Mario Dianora, N2AK, was first licensed as WV2ODC in Staten Island, New York, at age 15. He obtained an Electrical Engineering degree from Manhattan College in 1967 and began a 36 year career as a civilian Electrical Engineer with the Naval Ship Systems Engineering Station in Philadelphia. Employed by the Navy until January 2004, he entered retirement in 2006. Mario enjoys designing QRP equipment, restoring vintage radios and operating both. He enjoys working 80 meter CW for the South Jersey Radio Association’s Field Day operation and sailing his Catalina 25 along the Jersey shore.

*** end quote ***

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Dianora, Mario (MC1967)

[JR: Didn't know this stuff was still active. Must be a dying art. Brings back memories.]

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* Posted on: Sat, Jan 10 2009 6:01 AM

JEMail: McEneney, Mike (MC1953) highlights “job hunting” resources

From: McEneney, Mike (MC1953)

Date: January 9, 2009 10:09:43 PM EST

To: “Jasperfjohn Reinke”

Subject: Attached

Dear John,

This might be worth while to include in J J as an indication of what the Alumni Society is doing.

Mike

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Jaspers Helping Jaspers

The National Alumni Council and alumni relations office have partnered with our center for career development to provide assistance with career advisory services (outlined Here http://www.manhattan.edu/student_life/career-ccd/alumni.html ). We encourage alumni to list openings and view job postings through career development’s affiliate, NACElink Here https://manhattan-csm.symplicity.com/students/index.php?cck=1&au=&ck= . It is especially important that we seek individuals who work in human resources, career placement offices or as career coaches and would be available to support our alumni. In this down economic time we need to do what we do best – help a Jasper! Those who are able to provide help with the job search process or seek career development assistance should e-mail careerdevelopment@manhattan.edu. Also, we invite you to join the Manhattan College alumni groups on LinkedIn and Facebook to connect with other Jaspers. As always, our events present a great way to network with alumni who can assist in your job search

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[JR: Thanks, Mike. Much appreciated. Done!]

[JR: Unfortunately. IMHO as an acclaimed "turkey master" http://tinyurl.com/lxu93,who has been networking with the out-of-work for decades, ever since I first was nuked, this is a case of "much to little; much too late". Sorry, but one doesn't begin this effort when it is most needed. Mike, as you know, I have been very hard on the "alumni office" and all involved ever since I was exposed to what the Ivys were doing back in the 80's. Duke for example has an AGGRESSIVE networking effort, led by their alumni office, that featured every willing alum having three touch points into the Duke networking community. Jasper Jottings itself arose out of that frustration. I learned about it when a coworker, in the next office with whom I was chatting with, was called by one of his "touch points". He was told about a job, an out of work colleague, and urged to pass it on to his two "cell mates". I was stunned. Bet the Dukies are trying to fire up "networking activities". Sigh! Having now gotten that out of my system. Maybe this will help some one. But networking is like farming. You have a long time between "seeding" and "harvesting". Argh! And, what is being offered to the alums appears to be an after thought.]

[JR: Upon reflection, maybe I wasn't critical enough. Where's that alumni directory everyone was hustled to sign up for. That, and an online system, would be the best networking help the College could do for the alum! Double Argh! Or is that Argh squared?]

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Dear John,

I do not disagree with you, but at least this is a start. My brother Ed, and some of his fellow Alums, ( Kevin Dolan, ‘68 and Phil Colon, ‘62),had started an effort during the last “slow down” to run seminars, on campus, for those Alums in transition to help with resume writing, job interviewing and how to network. It lasted 2 or 3 years but could not be sustained. Maybe this one will stick.

Best,

Mike

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* Posted on: Sat, Jan 10 2009 9:46 AM

* Updated: Sun, Jan 11 2009 6:49 AM

JFound: Ellis, Ronald L. [MC1972] is on the Madoff bench

http://www.georgesmayblog.com/madoffs-underground-connection-with-judge-ellis-exposed/

Madoff’s underground connection with Judge Ellis exposed

George S May Blog

Posted under Ethics by gsmwriter on Friday 9 January 2009 at 2:47 pm

*** begin quote ***

The SEC caught wind that over the holidays Madoff and his wife tried to mail his sons what could be up to $1 million in goods, (mostly jewelry), and they are upset to say the least. Monday, the SEC called a hurried court hearing in which they asked the judge to immediately revoke his bail and send him straight to jail for the remainder of his trial.

*** and ***

But not so fast. According to Honorable Ronald L. Ellis, the decision is not so black and white. In fact, today is Friday Jan. 9th, and we are still waiting for a ruling. But before I comment on as to why I think this ruling is taking so long, I want to take a peak at Judge Ellis’ resume.

He has a B.A. degree in chemical engineering from Manhattan College (1972). He got his J.D. from New York University in 1975. He worked for a short time as a Patent Attorney after being admitted into the Patent Bar. In 1976 he began working for the NAACP Legal Defense and Educational Fund Inc. and stayed there up until 1993 when he was appointed as a magistrate judge.

*** and ***

So, as Madoff sits silently behind the desk looking up at the honorable Judge Ellis, I guarantee you he is not as nervous as everyone thinks he might be. Why? Because he knows that, regardless of the fines he receives, or the money that is taken from him, the Honorable Ronald L. Ellis will see to it that Madoff never steps foot inside a jail cell for as long as he lives.

*** end quote ***

# - # - #

Ellis, Ronald L. [MC1972]

[JR: I didn’t know about the Jasper on the bench. And, this sounds very much like a “hit piece”. I’m sure the Jasper Jottings attorney pro bono might have something to say about such “barbara streisand” (i.e., innuendo, slander, libel, defamation). Betcha the writer doesn’t know that a fellow (eighty year plus) Jasper and his wife may be tossed out of their nursing home due to their losses with Madoff. I bet if Madoff’s lawyer knew that he’d be asking for a substitute. Sad. Sad to is the character assassination that passes for blogging these days.]

* Posted on: Sat, Jan 10 2009 3:28 PM

ENDNOTE: Suggest Holy Father aim at Secular Progressive Socialist Gooferment

http://apnews.myway.com/article/20081225/D959O8800.html

Pope decries selfishness in economic crisis

Dec 25, 7:57 AM (ET)

By FRANCES D’EMILIO

*** begin quote ***

VATICAN CITY (AP) - Pope Benedict XVI in his Christmas message Thursday warned that the world was headed toward ruin if selfishness prevails over solidarity during tough economic times for both rich and poor nations.

Speaking from the central balcony of St. Peter’s Basilica on the day Christians commemorate Jesus’ birth in Bethlehem, Benedict declared that the “heart of the Christian

Islamic Finance News Award: Poll 2008

Quoted from Islamic Finance News. Available at: http://www.islamicfinancenews.com.

The fourth annual Islamic Finance news Poll results are in after a record-breaking 2,491 unique votes were cast by the Islamic fi nance industry’s leading practitioners and participants. In the financial sphere 2008 was deemed by many as an annus horribilis with the global markets plummeting due mainly to the US mortgage industry. The Islamic fi nance industry also succumbed to market forces but by and large fared better than its conventional counterparts.

What is clear, from the results of the 2008 Islamic Finance news Poll, is that the more focused and specialized Islamic financial institutions are favored to those of the larger global historically conventional institutions with Islamic operations. With 2,491 votes cast, this is the industry’s most comprehensive and definitive survey. In the Best Overall Islamic Bank category Kuwait Finance House again ran out easy favorite for the second year running. Malaysia’s CIMB Islamic climbed one place to second this year with Saudi Arabia’s Al Rajhi taking third spot. One notable absentee from this category is two-time winner and runner up in 2007, Dubai Islamic Bank.

As more of the world’s fi nancial centers announce their interest in attracting Islamic fi nance to their shores one would assume the Best Central Bank in Promoting Islamic Finance category would be more competitive. Not so. For the fourth straight year Bank Negara Malaysia was voted number one with more than double the votes of its nearest rival, the State Bank of Pakistan, which itself leapfrogged the Central Bank of Bahrain into second place.

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Contango in the oil markets makes storage a profitable venture.  (WSJ.com)

Long equity is also long volatility.  (Market Movers)

Gold sentiment is getting a bit extreme.  (Barrons.com)

Equity sentiment is perking up as well.  (Bespoke)

Hedge funds lost 18.3% in 2008 according to Hedge Fund Research.  (DealBook also naked capitalism)

Performance like that and the Madoff scandal to-boot have put hedge fund of funds on the defensive.  (WSJ.com)

Sorting out the winners and losers from the Madoff mess is growing increasingly complicated.  (Sly Capital, Clusterstock)

Stable value funds have dodged some bullets.  Is their luck run its course?  (Aleph Blog)

Think the TARP is making money?  Piggyback with the Nasdaq OMX Government Relief Index.  (MarketBeat)

The TARP is going to get a major makeover.  (WashingtonPost.com)

The viability of the Federal Home Loan Banks are now in question.  (FT Alphaville)

The employment situation is bad… (EconomPic Data, Economix, Real Time Economics, Market Movers)

But it’s irrelevant at this point in the cycle.  (Big Picture)

Is it now time for ‘inflation targeting‘?  (Real Time Economics)

Do we overvalue the impact of start-ups?  (American.com via Silicon Alley Insider)

Another Buffett hagiography?  Wait, this book may be worth your time (and money).  (NakedShorts)

Just how big is the “Kindle premium“?  (Breakingviews.com)

Enough: True Measures of Money, Business, and Life

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For a critical element of American society, including many of its wealthiest and most powerful, there seems to be no limit today on what “enough” entails.

The excesses are most starkly visible in the continuing crisis in banking and investment, and even in the two enormous government-sponsored (but publicly owned) mortgage lenders, to say nothing of the billion-dollar-plus annual paychecks that top hedge-fund managers draw down and the excessive compensation paid to CEOs, regardless of performance.

Throughout his legendary career, John Boglefounder of the Vanguard mutual fund group, and creator of the first index mutual fundhas helped investors build wealth the right way and led a tireless campaign to restore common sense to the investment world. Along the way, hes seen how destructive an obsession with financial success can be. Now, with Enough, he puts this dilemma in perspective.

Bogle offers his unparalleled insights on money, on the values we should emulate in our business and professional callings, and on what we should consider as the true treasures in our lives. By explaining what “enough” truly is, he demonstrates how close everyone can be to having it.

Because he certainly knows not only where, but why and how. For decades Jack has been communicating his disquiet in previous books, speeches, and public testimony. Years from now, when historians and investors dissect the economic and market meltdowns of 2008, they’ll consult this slim, well-written volume.

In order to understand the intellectual and moral platform from which he surveys the economic wreckage, you need to know a little of his story. Bogle founded one of the world’s great investment companies, the Vanguard Group. Most men in his situation would have levered such success into a multi-billion-dollar net worth; instead, he “mutualized” Vanguard, converting it, in effect, into a nonprofit organization whose only goal was to benefit its fund holders. From an ethical perspective, Vanguard is the only “investment company” worthy of that name. (As opposed to most financial firms, which are in fact “marketing companies” whose main purpose is to milk unwitting investors of fees and commissions.)

The answer to the conundrum of 2008 lies in the books title, “Enough,” which is the punch line from a delightful Kurt Vonnegut/Joseph Heller story. Simply put, our nation has been suffering from decades of unchecked financial excess, for which we are now paying the piper: excess in investment company fees; excess in financial speculation masquerading as diversification and innovation; excess in the salaries of top executives; excess in salesmanship; and most importantly, excess in the role played by the financial industry in our national economy and national life.

Each of these excesses gets its own chapter, and each one is a tightly written gem. Chapters 2 and 3, which dissect out the frenzy of derivatives, structured vehicles, and layers of intermediation behind the recent collapse, alone justify the book’s purchase price.

As Bogle states in the book’s beginning, in the spring of 2007 the financial services sector–which, after all, produces nothing of substantive value–accounted for one-third of the earnings of the S&P 500. By the time you read this, this outsized influence will have shrunken drastically. Let Enough be your welcome to the brave new world; it will satisfy your curiosity, give you a sense of moral balance in this most materialistic of ages, and even plump up your investment portfolio.

–William J. Bernstein

Product Description

Enough.
is a piece of work that simply has not been seen by the likes of Jack Bogle before. Sure, the world knows of his legendary financial mind. He is the Father of Index Investing. He is the founder of Vanguard. He is St. Jack. And now he wants to share his own journey, filled with famous characters and telling anecdotes, that aims to teach investors the importance of doing the right thing, how to be a strong leader in today’s world, and what it means to have “enough.”

It’s hard to imagine a better time to publish a book that advocates moderation, balance and integrity in the business world. In this wise meditation, Bogle, the folk-hero creator of the first index mutual fund and founder of the Vanguard Mutual Fund Group, deplores our worship of wealth and the growing corruption of our professional ethics but ultimately the subversion of our character and values. Directly in his sights: CEOs and hedge-fund managers who draw obscene compensation. At this time of plunging portfolios, it is a relief to be told that enough is within reach. TIME Magazine

Why dont people publish pamphlets any more. Im not talking about the slim-jims handed out at trade shows, but rabble-rousing, world-changing works like Common Sense and The Communist Manifesto. John Bogle, the founder of Vanguard, follows in the footsteps of the great pamphleteersCentral to the effective functioning of capitalism, he writes, was the fundamental principle of trusting and being trustedand that is disappearing. The problem now: No one is satisfied with having enough money or enough success. If pamphlets were still the rage, 48 pages distilled from the contents of this book could be something as powerful to our age as anything written by Thomas Paine or Marx and Engels. In our more bookish time, though, Bogle has fleshed his ideas out to an interesting, 266-page overview of his life and his views.Barrons

What have I created? [Bogle] asks in mock horror in his new bookhis cry reflects a deeper personal dilemma, one that jags like a scar through this thoughtful meditation on the excess and greed that created the worst financial crisis since the Great Depression. I applaud his enthusiasm and dont doubt his wisdom and sincerity. Enough with the period is a worthy addition to the canon, a variation of his familiar sermon on thrift, simplicity, and the superiority of low-cost index funds.James Pressley, Bloomberg News

Bogle is a rarity - a true captain of industry who speaks about complex economic issues in a language comprehensible to the layperson. Michael Smerconish, The Philadelphia Enquirer

Jack Bogles passionate cry of Enough. contains a thought-provoking litany of life lessons regarding our individual roles in commerce and society. Employing a seamless mix of personal anecdotes, hard evidence, and all-too-often-underrated subjective admonitions, Bogle challenges each of us to aspire to become better members of our families, our professions, and our communities. Rarely do so few pages provoke so much thought. Read this book. David F. Swensen, Chief Investment Officer, Yale University

Enough. gives new meaning to the words ‘commitment,’ ‘accountability,’ and ’stewardship.’ Bogle writes with clarity and passion, and his standards make him a role model for all of us. Enough. is must-reading for millions of U.S. investors disenchanted by today’s culture of greed, accounting distortions, corporate malfeasance, and oversight failure.” Arthur Levitt, Former Chairman, U.S. Securities and Exchange Commission

“What went wrong? What can, and should, go right? The great Jack Bogle has the answers. Enough. will leave you hungry for more.” James Grant, editor of Grant’s Interest Rate Observer

“Jack Bogle’s wonderful, thoughtful, helpful, and fun-filled little book inspired me to create my own title: Never Enough of Jack Bogle!” Peter L. Bernstein, author of Capital Ideas Evolving and Against the Gods

“In Enough., Jack Bogle, ‘the conscience of Wall Street,’ distills his half-century of observations on the capital markets, and on life in general, into a few hundred entertaining pagesrequired reading for those concerned about their own future, their family’s future, and the nation’s future.” William J. Bernstein, author, A Splendid Exchange and The Four Pillars of Investing

This is an impressive message from a distinguished businessman. It will challenge all decision makers to consider the sufficiency and direction of their lives and work. What do we mean by Enough? Enough of what? Enough for what purpose? Feast here and reflect. Robert F. Bruner, Dean and Charles C. Abbott Professor of Business Administration, Darden Graduate School of Business

From one battler to another: Thank you for putting in one little book the premise for an active, long life. A primer for those who will abjure complacency and just wanting more, whod rather focus on the joy of trying to move some ball downfield. Ira Millstein, Senior Partner, Weil Gotshal & Manges LLP

The balances one must create in investing, in running a business, and in life more generally are simply and clearly stated in Jacks most recent book, Enough. Unfortunately there are not enough Jack Bogles around in todays world of instant gratification. Enough. should be must reading for business students and corporate board members. David L. Sokol, Chairman, MidAmerican Energy Holdings Company

Other Products of Interest

Globalisation- Who

The World Government people like to depict their critics as uneducated and irrational. Fortunately, there are a few Alexander Solzhenitsyns around, to refute that claim. Bertrand Russell and H. G. Wells were activists in the World Government movement. The movement was pro-Lenin and Trotsky but anti-Stalin; that is why it later gave the impression of being anti-Communist.

Globalism (One-Worldism) is promoted by (a) Multi-national Corporations (against nation-based smaller business) (b) the Trotskyist & Fabian Left (against the Stalinist Left).

The National System of Political Economy, by Friedrich List, 1841, translated by Sampson S. Lloyd, 1885. About 935 KB (download): List-National-System.doc.

There are good reasons for world unity; but who will rule? Why should we trust the OneWorlders, when they try to suppress from public knowledge much of the historical information provided here, and elsewhere in this site? They - the apologists of the Open Society - are far from Open themselves.

The One World Or None report of 1946. In 1946, only the U.S. had the Atomic Bomb. In this report, scientists and journalists tell us that, to prevent nuclear wars, we need a World Government: one-world-or-none.html. The Baruch Plan for World Government was put to Stalin in that year: baruch-plan.html.

Leo Szilard and H.G. Wells, founders of the Green Left. Leo Szilard helped create the first nuclear chain reaction, and initiated the letter to Roosevelt that got the Manhattan Project under way. Later, he warned of the dangers of nuclear weapons, and joined Wells’ crusade for World Government: szilard.html.

Claims that the One-World conspiracy is “British”: british-conspiracy.html. A graphic overview called One World Conspiracy - “British” or “Jewish”? A Jewish one inside the British one, depicting the three factions of the “One World” conspiracy, is at british-conspiracy.gif. Feel free to make copies and transparencies of it.

(1) Free Trade is a means to World Government

F. William Engdahl on how the British Empire adopted Free Trade in the Nineteenth Century: A Century of War.

Richard Cobden was one of the earliest leaders of the Free Trade movement in Britain during the 1800s. The Repeal of the Corn Laws allowed cheaper American grain to flood Britain, forcing farm workers to flee to the cities. Cobden saw the main benefit of Free Trade as political, not economic: Cobden: Free Trade is about creating a World State.

John Locke, philosopher of the “Glorious” English Revolution of 1688, which first put Britain in the clutches of the bankers (up to then, based in Amsterdam, after their expulsion from Spain), is a major “mentor” of the “Free Trade” movement and “English Parliamentianism”. Here, the real John Locke is disclosed.

Karl Marx advocated Free Trade (Capitalism) not for its own sake, but because it creates opportunities for social revolution: Marx on Free Trade.

Trotskyists advocate Free Trade for the same reason: How the Trotskyists Led the Australian Labour Party Up the Free-Trade Path.

Karl Popper against Capitalism (Laissez-Faire): The Open Society and Its Capitalist Enemies.

George Soros against Capitalism (Laissez-Faire); what next? soros2.html.

Werner Sombart, The Jews and Modern Capitalism (1911): sombart.html.

The Money Masters: How International Bankers Gained Control of America, by Patrick S. J. Carmack and Bill Still: money-masters.html.

Financing Sustainable Development, by John H. Hotson; Banana Republic? No, Banana Colony, by Dr H. C. Coombs.: money.html.

F.D.R.: My Exploited Father-in-Law, by Curtis B. Dall: fdr.zip.

Sir James Goldsmith argues against Free Trade, in his book The Trap. The front cover asks, “How is it that humanity’s greatest leap forward in material prosperity has resulted in extreme social breakdown?” Also presents the case against modern Agriculture, the EU, and the homogenization of the sexes: goldsmith.html.

Strobe Talbott, deputy Secretary of State in Clinton’s 1st and 2nd administrations, puts the case for World Government: cobden.html.

Michael Hudson on tax havens (”Offshore Banking Centers”):

A “foreign investor” is likely to be a local oligarch operating out of an offshore account. The complicity of the US Government in setting up such centres. “Much of America’s net foreign debt, along with that of countries such as Argentina, is owed to these flight-capital centers.” They provide “a cloak of invisibility for the wealth built up by embezzlers, tax evaders, a few drug dealers, arms dealers and government intelligence agencies to use for their covert operations.” How they increase the tax burdon on ordinary people. How they can be shut down. tax-havens.html.

(2) Attempts at World Government: The League of Nations, the Baruch Plan

Articles 10-16 of the the Covenant of the League of Nations provided for a World Army: Documents of the 20th Century.

Extracts from the first Soviet Constitution, the Russian Constitution of 1918.

The complete USSR Constitution of 1924, committed to World Federalism (federating all countries within the USSR): USSR Constitution 1924.

The 1946 Baruch Plan for World Government: baruch-plan.html.

Andrei Sakharov on East-West Convergence towards World Government (World Federalism) - How Anatoliy  Golitsyn garbled the story, and how his misinterpretation is being taken up in the United States by George W. Bush: convergence.html.

Walter Lippman shows how “Colonel” House, liasing with Lord (Sir Edward) Grey of the Anglo (Rhodes) conspiracy, persuaded Woodrow Wilson to join World War I. Lippman wanted the League of Nations to be a World Government with a World Army and a World Court. His book Men of Destiny is a collection of articles on these themes, originally published in various journals including Foreign Affairs: lippmann.html.

Arnold J. Toynbee argues the case for World Government: “Abolishing war would involve setting up at least a rudimentary world-government. The first world-authority that it would be necessary for us to establish - and, of course, also to endow with effective power - would be a central agency for controlling the production and the use of atomic energy. … ” toynbee.html.

(3) Writings of the Anglo-American Establishment

The Will of Cecil Rhodes, endowing a Secret Society to run the British Empire and draw the United States back in. The British Empire is now called the British Commonwealth. Rhodes’ Secret Society is called the Round Table; its American branch is the Council on Foreign Relations (CFR). The CFR set up the Trilateral Commission to co-ordinate North America, Western Europe and Japan: rhodes-will.html

Cecil Rhodes’ Imperialism and the Rhodes Scholarships for World Governance: rhodes-scholars.html

Carroll Quigley exposes the Secret Society which largely ran the British Empire (and now largely runs the British Commonwealth and the United States), and which has also been trying to create a World Government (this is the “top-level” “Anglo” Conspiracy, through which, I argue, another, even more secret one operates): The Anglo-American Establishment.

In Tragedy and Hope, he writes, “I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. … my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known” (p. 950): Tragedy and Hope.

Lionel Curtis on why the British Empire should re-incorporate the United States and become a World State: The Commonwealth of Nations (1911-16)

More from Lionel Curtis Civitas Dei: The Commonwealth of God (1938).

A number of important members of the Anglo-American Establishment participated in the Coefficients Club, organized by Beatrice Webb of the Fabian Society to promote Socialism within the Empire. Their concept of Socialism would be called “fascism” by today’s Fabians: most Fabians then supported the Empire, the Boer War and World War I. But a minority envisaged a world run by a meritocracy drawn from all races, and supported the Bolshevik Revolution; this group included H. G. Wells and Bertrand Russell. Their faction seems dominant in the Fabians today.

H. G. Wells wrote a book called The Open Conspiracy, which was his name for the movement for World Government. See H.G. Wells, The Open Conspiracy (the movement for World Government) and H.G. Wells, 4 other H.G. Wells books promoting World Government.

Karl Popper wrote a book called The Open Society. Is the Open Society - the borderless world - also the Open Conspiracy? Open Society, Open Conspiracy

The head of the Open Society Foundation is speculator George Soros, the public face of the Rothschilds. What’s “Open” about Tax Havens, where the world’s rich hide their money, and from which they control the countries in debt to them? Does the foreign debt of all countries add up to zero? If the foreign debt of all countries at, say, 30 June each year is not published, where’s the “Openness”? If money-creation in Capitalism is based on fraud, on deception of the public, if the foreign debt of most countries has been created by dishonest means, why should the debt not be repudiated?

Bertrand Russell and H. G. Wells were activists in the World Government movement. The movement was pro-Lenin and Trotsky but anti-Stalin; that is why it later gave the impression of being anti-Communist.

The Trotskyist/Fabian version of Communism is alive and well. Open-border immigation, casual relationships treated as equivalent to marriage, parents afraid of being “dobbed in” to the government … the wreckage of family life was brought to the West from the pre-Stalin period of the Soviet Union.

In the early (Trotskyist) period of the Soviet Union, marriage was abolished, polygamy was abolished (this mainly affected the Islamic cultures of Central Asia), and homosexuality was legalised. Stalin restored marriage, gave advantages to married women over unmarried women, and made sodomy a crime.

The Russian Revolution was an invasion led by non-theistic Jews, pretending to represent the Working Class. Stalin got power partly because he was not a Jew. Eventually he turned the tables on those who had introduced such terror; in 1953 he was murdered as that clash flared once more.

Stalin was no hero, but he stole the conspiracy, preventing a link-up between the Soviet and Western forces for World Government, as proposed in the 1946 Baruch Plan.

H. G. Wells saw the end of World War I as an opportunity to create a new world. He supported both Lenin, and the attempt to create a World Government at the Treaty of Versailles. He also advocated the creation of a Jewish state. His ideas for a united world drew on Jewish thought, in discussions with David Lubin and Israel Zangwill.

Until recently I was puzzled why Lenin opposed the Treaty of Versailles powers, when I thought Wells & his friends had supported that Treaty. Wells wanted it to create a World Government, with a World Army and a World Court.

David C. Smith explains in his biography H. G. Wells: Desperately Mortal (pp. 240-2), that Wells & his associates felt that the Treaty of Versailles was a failure, because a World Government had not been created. Their opponents were the “Tory” faction of the British Empire, plus American nativism.

Russell observed the despotism set up by Lenin and Trotsky. In the late 1940s, he reproduced in his autobiography a letter he wrote in 1920 attesting to it. In that letter to Ottoline Morrell, Russell confirms that the early Bolshevik regime was a tyranny set up by Americanised Jews.

See the Unwin paperback, The Autobiography of Bertrand Russell, 1975, p. 354; in the hardback edition, the second of three volumes, The Autobiography of Bertrand Russell 1914-1944, p. 172.

Russell saw the situation first-hand when he visited Russia shortly after the Revolution. Yet in his book about the new regime, The Practice and Theory of Bolshevism, published in 1920 soon after his visit to Russia, he makes no mention of the Jewish connection; in the Preface of that book he even wrote, “The Russian Revolution is one of the great heroic events of the world’s history” (Unwin paperback, London 1962, p. 7).

Why omit the Jewish connection?

Because he was basically sympathetic to Marxism - he wanted it to work. In his book Roads to Freedom, published in 1918 before he had visited Bolshevik Russia, he wrote,

If the Russian Revolution had been accompanied by a revolution in Germany, the dramatic suddenness of the change might have shaken Europe, for the moment, out of its habits of thought: the idea of fraternity might have seemed, in the twinkling of an eye, to have entered the world of practical politics; and no idea is so practical as the idea of the brotherhood of man, if only people can be startled into believing in it. If once the idea of fraternity between nations were inaugurated with the faith and vigour belonging to a new revolution, all the difficulties surrounding it would melt away, for all of them are due to suspicion and the tyranny of ancient prejudice. Those who (as is common in the English-speaking world) reject revolution as a method, and praise the gradual piecemeal development which (we are told) constitutes solid progress, overlook the effect of dramatic events in changing the mood and the beliefs of whole populations. A simultaneous revolution in Germany and Russia would no doubt have had such an effect, and would have made the creation of a new world possible here and now.” (Unwin paperback, London 1977, p. 120).

During the Cold War, Russell remained a major advocate of World Government. He promoted it in speeches, in books such as Authority and the Individual (1949, p, 34), and especially in his book Has Man a Future?, pp. 17-18, 23, 24-5, 72-6, 87, 94-5, 97, 122-4.

Russell and Wells imagined that they were leading the movement for World Government; but behind the scenes were Rothschild and other minders.

Roland Perry discloses in his book The Fifth Man, how Rothschild stayed close to Russell & other members of the Pugwash conferences promoting convergence between the Soviet Union and the West:

“{p. 223} Rothschild assiduously kept contact with the key organizers so that his involvement always seemed natural.

“Correspondence with Russell in early 1955 was typical:

Dear Russell, I would like to present the manuscript of your recent broadcast dealing with the Hydrogen Bomb to Trinity. Can you suggest any way in which I might acquire it? Yours Sincerely, Rothschild

See perry.html (p. 223).

I do not maintain that Jewish political action is evil per se, as Nazis do. It has brought benefits for the non-European peoples of the world, whom the Europeans conquered. But if the truth about Bolshevism cannot be told, especially its high connections within the British Establishment, can we trust those same forces today?

The Cold War was won in the name of “Democracy”, yet we have no choice about Globalism because it is “inevitable”. In George Orwell’s vision of a future totalitarian state, 1984, Goldstein, the underground leader and Big Brother’s arch-enemy, was modelled on Trotsky (Like Snowball in Animal Farm). Now, ironically, Hitler is the new Goldstein: The Role of Hitler in the New World Order.

(4) World Federalism

David Ben Gurion, writing in 1962, predicted World Government by 1987. Ben Gurion saw Eastern Europe being torn from the USSR and joined with Western Europe; and China (even Mao’s China) and Japan joining the US in what seems the first published depiction of APEC: writing in LOOK magazine, Jan. 16, 1962 (scroll down to see text).

The World Government movement is often called “World Federalism” or “Global Governance”; “interdependence” means much the same.

Here are some sites promoting it: (a) World Constitution and Parliament Association: http://www.scruz.net/~tgilman/cnfdeart.dir/contents.html (b) The Commission on Global Governance: http://www.cgg.ch/ (c) World Federalism FAQ Page: http://www.geocities.com/CapitolHill/6094/WFFAQ.html (d) World Government Awareness Campaign: http://government.faithweb.com/list.html (this links to many other NGOs pushing Global Governance, e.g. BAHA’I WORLD http://www.bahai.org/; the Bahai faith has its headquarters in Haifa, Israel) (e) Links to international NGOs (Amnesty International, Human Rights Watch etc): http://www.politicalresources.net/int2.htm.

Here are some sites exposing it: (a) http://www.bilderberg.org/ (b) http://web.inter.nl.net/users/Paul.Treanor/worldgov.html (c) (John Loeffler, Henry Lamb): http://www.khouse.org/articles/currentevents/20000701-264.html.

Strobe Talbot, Deputy Secretary of State under Clinton, promoting World Federalism (Time Magazine July 20, 1992): http://www.comeandtakeit.com/s-talbot.html. Global goals of the Clinton administration (The Phyllis Schlafly Report): http://www.eagleforum.org/psr/1997/oct97/psroct97.html. Time Magazine November 3, 1997 on the Asia Crisis: “How to Kill a Tiger” (how speculators killed the Asian Tigers): http://www.time.com/time/magazine/1997/int/971103/asia.how_to_kill_a.html. Clinton’s Jewish cabinet: http://www.abbc2.com/islam/english/toread/clintjew.htm. Clinton’s Jewish ambassadors: http://www.abbc2.com/islam/english/jewishp/jambas.htm. Jewish oligarchs controlling Yeltsin’s Russia: http://abbc.com/islam/english/jewishp/russia/finan.htm.

(5) A World Court - the Politics of “Human Rights”

The Hague Tribunal judging Milosevic is a World Government initiative. Ramsey Clark, former U.S. Attorney-General, is one brave American who has rejected the blitzkrieg-for-human-rights methods of the New World Order in Iraq & Yugoslavia.

The NWO destroyed Yugoslavia, a multicultural country; it began when the IMF demanded repayment of loans, the amount of which is far less than the cost of the damage caused to the shattered Balkans by the 10 years of war since: http://www.emperors-clothes.com.

In his book The Open Conspiracy (1933), H. G. Wells wrote, “The Open Conspiracy rests upon a disrespect for nationality, and there is no reason why it should tolerate noxious or obstructive governments because they hold their own in this or that patch of human territory” (p. 89).

The Gulf War was fought because Iraq invaded Kuwait’s sovereignty, yet when Saddam invaded Iran, the US did not stop him - it sold him weapons.

Big Brother’s blitzkriegs and economic embargoes are justified in the name of “Human Rights”. But what are “Human Rights”?: Deconstructing Human Rights.

Gore Vidal on the FBI’s holocaust at Waco: http://www.geocities.com/gorevidal3000/tim.htm.

(6) John Hewson, a Globalist, argues against Sovereignty

Hewson, an academic economist, led Australia’s Liberal Party (=Tory, Republican) to the 1993 federal election. After losing, he quit.

The Australian Financial Review of May 31, 2002 published the following article by Hewson.

{title} Dubya’s double standards

{subtitle} John Hewson, who is in China, writes the world must face the reality of globalisation.

{text} Globalisation is inevitable. But the debate will rage for years as to what it really means and what its consequences are.

{I am always intrigued by things that are ÒinevitableÓ. Communism was, Christianity was, Islam was, Capitalism is. Is inevitability compatible with Democracy, i.e. rule by the people?}

My guess is that few, if any, are really focusing on the magnitude of the changes required to complete the process.

It’s a bit like the debate of the early 1970s about the formation of a European common market. At the time, few would have really contemplated the full extent of the potential integration and the loss of national sovereignty with the formation of a single monetary policy and a single currency, the euro.

The US should be leading this process but we are suffering from an appalling lack of leadership. While spruiking the benefits of globalisation and free trade, US President George Dubya imposes tariffs to protect his steel industry and the Congress passes a reprehensible farm bill.

The world is desperate for a new round of trade liberalisation, whether individual countries recognise it or they don’t. Bush promises an American free trade zone and initiates discussions with a range of other countries for bilateral free trade agreements, yet he persists in protecting certain industries for short-term political gain. The world needs his leadership, but unfortunately it is not forthcoming.

We can all try to protect our favoured industries as much as we like, but it is inevitable that the manufacturing base of the world will shift to countries like China. We can protect our manufacturing industries only at the expense of our taxpayers. We are better off recognising where our strengths lie, and supporting those industries, rather than trying to protect the unprotectable.

If I take South Australia as an example, its strengths are not in manufacturing, relative to a country like China, but it has a unique opportunity in education and aged care and similar industries. There is no reason why South Australia can’t be the Boston of the United States, in terms of funds management, or the Phoenix of the United States, in terms of aged care. But government policy has been intent on maintaining a manufacturing base which is, quite frankly, unsustainable.

Globalisation will also require dramatic rationalisation of key industries worldwide. Take a couple of examples, airlines and telcos. The real question in both cases is how many global companies will or should survive. Yet individual governments see a national airline or a telco as an essential status symbol and are going to be most reluctant to let go.

The answer to that question is maybe three or four global telcos and airlines. The path to this rationalisation is going to be difficult and painful in terms of national sovereignty, and again, it requires leadership.

Just consider the rationalisation in process of our airline industry. Ansett has gone and Qantas and Air New Zealand must be one, despite statements to the contrary this week. New Zealand will find this hard to accept. But, as I have said many times, we should really operate as if New Zealand is a state of Australia anyway. Sorry, Helen.

It’s essential to recognise the reality of the airline and telco industries. These are highly competitive, low-margin businesses. Scale is everything. And it must be global scale. As tough as it is for individual countries to accept that they will not necessarily have their own airline and their own telco, global rationalisation down to a few operators is the only answer. Smart governments will be attempting to prepare their electorates for this reality rather than defending the indefensible.

Another area of major concern in terms of globalisation is labour market mobility. Rather than opening up, countries are closing down. There are now something like 23 million identiified genuine refugees sitting in camps around the world that no country will take, and anti-immigration sentiment is growing in Europe and other parts of the world, including Australia.

In a globalised world the flee flow of labour is at least as important as the free flow of goods. While the world has made some progress in terms of trade liberalisation, it is way behind in terms of the free flow of people.

Again, it’s a leadership question. George Dubya should use his coalition, and/or the UN, to solve this refugee crisis. I guess it will take countries to sit around a table and to allocate the existing refugees to do this. At this stage, unfortunately, the process is being resisted. There is no leadership.

There is also the issue of the Kyoto Protocol and the fact that internationally we must have some agreement to reduce greenhouse gas emissions. In a globalised world we would all agree, because it is so significant.

Again the US is stepping outside and Australia is ignorantly following. Yet Kyoto is inevitahle and Australia has negotiated a great deal. It would be absolutely foolish to not accept it.

(7) What the Kyoto Protocol could mean

The Sydney Morning Herald published the following article on June 5, 2002.

{title} The new green house effect {by Anne Davies, Urban Affairs Editor}

{text} The cost of the typical Australian home could rise by as much as $111,000 if the nation was to meet its obligations to reduce greenhouse gas emissions, a conference of architects was told yesterday.

A lawyer and greenhouse expert, Ross Biair, told the Royal Australian Institute of Architects that the cost of making the materials which went into houses, such as bricks and con rete, was very energy-intensive.

If Australia adopted a carbon tax system to meet its Kyoto protocol obligations, the housing sector would be hit hard.

Mr Blair said a $40-a-ton carbon tax would cause the cost of the average house to rise by $37,000 to pay for the cost of the “embodied energy” in the raw materials.

{end of text}

Lets’s explore the consequences.

Fired Bricks and Concrete go up in price, making Mudbrick and Stone houses more affordable - that is, Mudbrick and Stone houses in the rural areas, where the raw materials are found & there’s no transport cost to move these bulky materials.

All sorts of alternative housing could replace the current fad for Fired Brick.

And people would shift out of the big cities, back to the land where the materials are.

Could be a godsend!

Or would we end up using nuclear power instead of coal? Is this why Japan signed up?

With energy more expensive, labour (i.e.) muscle would make a comeback. China & India would gain a relative advantage.

An Address delivered to a Working Class audience on April 14th, 1918

British Socialist Party, London, 1920

{Trotsky predicts that the Bolshevik Revolution will spread to Germany, thence to the whole world}

{p. 19} … The day, howver, will come, comrades, when that boiler will blow up, and then the working class will get hold of an iron broom and will start sweeping the dust out of all corners of the present German Empire, and will do it vith German thoroughness and steadiness, so that our hearts will rejoice watching them doing it.

But in the meantime we say: “We are passing through hard, strenuous times, but we are prepared to suffer hunger, cold, rain and many other calamities and misfortunes, because we are only part of the world working class and are fighting for its complete emancipation. And we shall hold out, comrades, and shall carry our fight to a successful end, we shall repair the railways, the locomotives, we shall put production on a firm hasis, put straight the food supply, do all that is necessary - if only we keep in our bodies a cheerful mind and a strong stout heart. So long as our soul is a living one, our Russian land is safe, and the Soviet republic stands firm.”

Let us then, comrades, remember and remind the less conscious of us, that we stand as a city on the mount, and that the workers of all countries look at us and ask themselves with bated breath, whether we shall tumble, whether we shall fail, or stand our ground? And we, on our part, call out to them: “We vow to you that we shall stand our ground, that we shall not fail, that we shall remain in power to the end.” But you, workers of the other countries, you, brothers, do not exhaust our patience too much, hurry up, stop the slaughter, overthrow the bourgeoisie, take the power into your hands, and then we shall turn the whole globe into one world re-

{p. 20} public of Labour. Al the earthly riches, all the lands and all the seas - all this shall be one common property of the whole of humanity, whatever the name of its parts: English, Russian, French, German, etc. We shall create one brotherly state: the land which nature gave us. This land we shall plough and cultivate on associative principles, turn into one blossoming garden, where our chidren, grand-children, and great-grand-children will live as in a paradise. Time was when people believed in legends which told of a paradise. These were vague and confused dreams, the yearning of the soul of the oppressed Man after a better life. There was the yearning after a purer, more righteous life, and Man said: “There must be such a paradise, at least, in the ‘other’ world, an unknown and mysterious country.” But we say, we shall create such a paradise with our toiling hands here, in this world, upon earth, for all, for our children and grand children and for all eternity! … {end}

However, just as Marx insisted that Christianity be judged by its practice rather than its theory (theology), so Communism must be judged by its practice not its rhetoric.

Write to me (Peter Myers) at  myers@cyberone.com.au.

HOME

CalPERS warns of rate hike

CalPERS thought it had found the sweet spot four years ago — a way to avoid big pension cost increases that could trigger a backlash against generous benefits for state and local government employees.

But how do you plan for an historic stock market crash?

Nearly a third of the value of the California Public Employees Retirement System investment portfolio was wiped out by last fall, possibly leaving the big fund far short of the money needed to pay projected retirement costs in the decades ahead.

So CalPERS warned that the annual pension contribution that must be paid by state and local governments could increase by nearly a third — starting July 1, 2010, for the state and schools and July 1, 2011, for local government agencies

It’s exactly what wasn’t  supposed to happen when CalPERS adopted an unusual “smoothing” policy in 2005 that changed the three-year period for calculating investment gains and losses to 15 years, well beyond the average for most pension funds.

“This plan will help end the whiplash employers experience when contribution rates dramatically increase and decrease year to year,” the CalPERS board president, Rob Feckner, said in a news release.

Now CalPERS is waiting to see what  happens to the value of its investment portfolio by the end of the current fiscal year, June 30, the period that will be used to calculate a new contribution rate.

The average CalPERS contribution rate paid by state and local governments is currently about 13 percent of payroll.

If the investment loss is 20 percent for the full fiscal year, CalPERS estimates that contribution rates could be increased by 2 to 5 percent of payroll. If the loss is more than 20 percent, the increase would be even higher.

On the other hand, if the stock market recovers by July and losses shrink, the rate increase could be much smaller. For example, if the investment loss is 10 percent, the CalPERS contribution rates might only go up 0.2 to 0.5 percent of payroll.

The CalPERS investment portfolio, peaking at $260 billion in 2007, had dropped to $180 billion by early last month, a loss of about 31 percent. But only 20 percent of the loss was in the current fiscal year,  the period to be used for the next rate calculation.

As CalPERS waits for its fiscal year-end damage report, the health of all pension funds after the stock market crash is a hot topic. The cover story of the February issue of Reason magazine, “The Next Catrastrophe,” sketches an alarmist scenario.

The article by Jon Entine argues that “state, local and private pension plans covering millions of government employees and union workers” are “teetering on the brink of implosion” because of the crash and politically driven investments.

A consulting firm, Mercer, reported last week that the pension funds of 1,500 large corporations in a Standard & Poor’s index were underfunded by $409 billion at the end of last year, a dramatic crash-driven change from a $60 billion surplus in 2007.

Mercer said the pension expenses of the corporations are expected to jump from $10 billion last year to $70 billion this year — a seven-fold increase far beyond what CalPERS is warning of now.

But it was amid controversy over soaring contribution rates that the CalPERS board adopted the new smoothing policy in March 2005. The state’s annual pension payment to CalPERS had reached $2.6 billion, up from $160 million five years earlier.

CalPERS said the new smoothing policy was adopted because member agencies wanted more predictable contribution rates, with gradual changes. But the “whiplash” from big rate changes also was causing political problems.

Gov. Arnold Schwarzenegger cited the need to control runaway pension costs as he backed a proposed initiative that would give new state and local government workers a 401(k)-style investment retirement plan, rather than guaranteed monthly payments.

Schwarzenegger, in April 2005, dropped his support for the initiative, which opponents said would eliminate death and disability benefits. Yet the issue of pension reform lives on.

In what has become a common complaint, critics said much of the run up in state pension costs was caused by an overly generous  pension increase signed by former Gov. Gray Davis in 1999 at the urging of politically powerful public employee unions.

The legislation signed by Davis, the first Democratic governor in 16 years, undermined a cost-cutting reform backed by former Republican Gov. Pete Wilson that lowered pension benefits for most new state workers.

Still, the nonpartisan Legislative Analyst estimated that about $600 million of the increased state costs resulted from the benefit increase. Most of the increase was said to be due to sagging investment returns from the giant CalPERS investment portfolio.

Big investment gains during the high-tech boom of the late 1990s allowed employer pension contributions to drop, in some cases all the way to zero. But when the stock market weakened, contribution rates went up to cover the gap.

The CalPERS in-house actuarial staff had told lawmakers that the 1999 benefit increase would not require higher contributions. The miscalculation put the CalPERS power over public purse strings in the spotlight for the second time in a decade.

Legislation pushed by Wilson in 1991 shifted control of the actuaries from CalPERS to the Legislature and governor — part of a move, overturned by the courts, to use a $1.8 billion CalPERS “surplus” to help balance the state budget.

Public employee unions struck back with Proposition 162, approved by 51 percent of the voters in 1992. The measure returned control over the actuaries to CalPERS along with authority over investment decisions and administration of the pension system.

Actuaries, wielding great power, make the financial and demographic estimates about revenue needed to meet future pension obligations. For example, CalPERS assumes investment yields will average 7.75 percent a year over the next several decades.

A drop of a percentage point or two in the assumed annual investment yield could create the need for a major contribution increase. Assuming a higher annual investment yield could do the opposite, lowering the contribution rate.

The smoothing policy adopted by CalPERS in 2005 attempted to allow for big market swings by giving actuaries more wiggle room — an expansion of the “corridor” for evaluating the market value of assets from 10 percent to 20 percent.

A CalPERS spokesman, Edd Fong, said it’s still possible that the smoothing policy, despite the historic stock market plunge, may help avoid a major contribution rate increase, if the market recovers enough of the losses by June 30.

Allan Blinder: 01-12-09 Economist of the Day

ALAN S. BLINDER is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University and Co-Director of Princeton’s Center for Economic Policy Studies, which he founded in 1990. He is also Vice Chairman of the Promontory Interfinancial Network.

Contact Information

E-mail: blinder@princeton.edu

Short Biography

Dr. Blinder served as Vice Chairman of the Board of Governors of the Federal Reserve System from June 1994 until January 1996. In this position, he represented the Fed at various international meetings, and was a member of the Board’s committees on Bank Supervision and Regulation, Consumer and Community Affairs, and Derivative Instruments. He also chaired the Board in the Chairman’s absence. He speaks frequently to financial audiences.

Before becoming a member of the Board, Dr. Blinder served as a Member of President Clinton’s original Council of Economic Advisers from January 1993 until June 1994. There he was in charge of the Administration’s macroeconomic forecasting and also worked intensively on budget, international trade, and health care issues. During the 2000 and 2004 presidential campaigns, he was an economic adviser to Al Gore and John Kerry. He also served briefly as Deputy Assistant Director of the Congressional Budget Office when that agency started in 1975, and testifies frequently before Congress on a wide variety of public policy issues.

Dr. Blinder was born on October 14, 1945, in Brooklyn, New York. He earned his A.B. at Princeton University in 1967, M.Sc. at London School of Economics in 1968, and Ph.D. at Massachusetts Institute of Technology in 1971–all in economics. Dr. Blinder has taught at Princeton since 1971, and chaired the Department of Economics from 1988 to 1990.

Dr. Blinder is the author or co-author of 17 books, including the textbook Economics: Principles and Policy (with William J. Baumol), now in its 10th edition, from which over two million college students have learned introductory economics. He has also written scores of scholarly articles on such topics as fiscal policy, monetary policy, and the distribution of income. From 1985 until joining the Clinton Administration, Dr. Blinder wrote a lively monthly column in Business Week magazine. Currently, he is a columnist for The New York Times Sunday business section, a regular commentator on PBS’s Nightly Business Report, and appears frequently on CNBC, CNN, Bloomberg TV, and elsewhere.

Dr. Blinder was previously President of the Eastern Economic Association and Vice President of the American Economic Association. He is a member of the Bretton Woods Committee, the Bellagio Group, and the Council on Foreign Relations, and a former governor of the American Stock Exchange. Dr. Blinder also serves on academic advisory panels for the Federal Reserve Bank of New York, the Bank for International Settlements, the FDIC Center for Financial Research, and the Hamilton Project.

He has been elected to the American Philosophical Society and the American Academy of Arts and Sciences.

Dr. Blinder and his wife, Madeline, live in Princeton, NJ. They have two sons, Scott and William, and two grandsons, Malcolm and Levi.

Papers

Forthcoming

“The Supply Shock Explanation of the Great Stagflation Revisited,” paper for NBER conference on the Great Inflation, September 2008, forthcoming in a conference volume (with Jeremy Rudd).

“Education for the Third Industrial Revolution,” forthcoming in an Urban Institute volume.

“Popular Opinion about Economic Policy: The Role of the Media,” forthcoming in an American Academy of Arts and Science publication.

“Economic Advice and Political Decisions: A Clash of Civilizations?,” The Patinkin Lecture, Israel Economic Association, May 2005, forthcoming (in Hebrew translation).

2008

“Talking about Monetary Policy: The Virtues (and Vices?) of Central Bank Communication,” prepared for BIS Annual Conference, Lucerne, June 2008.

2007

How Many U.S. Jobs Might Be Offshorable?” CEPS working paper no. 142, March 2007.

Offshoring: Big Deal or Business as Usual?” CEPS working paper no. 149, June 2007.

Leadership in Groups: A Monetary Policy Experiment” CEPS working paper no. 151, July 2007 (with John Morgan); also NBER Working Paper No. 13391, September 2007.

“On the Design of Monetary Policy Committees,” keynote lecture for the Bank of Norway research workshop Monetary Policy Committees, Oslo, September 2007.

2006

2005

“Central Bank Talk: Committee Structure and Communication Policy,” prepared for ASSA meetings, Philadelphia, January 2005 (with Charles Wyplosz).

2004

2003

2002

2001

2000

Are Two Heads Better than One?: An Experimental Analysis of Group vs. Individual Decisionmaking,” NBER Working Paper no. 7909, September 2000 (with John Morgan).

1999

1998

1997

1996

1995 (in government service)

1994 (in government service)

1993 (in government service)

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

1978

1977

1976

1975

1974

1973

1972

Books

Opt-Ed Articles

Personal Data

Educational Background

Government Service

Honors

Professional Activities

Current:

Previous

Special Lectureships

Teaching Experience

Economic Downturn pounds Commercial Real Estate Market

Book: The Indonesian Story (C. Wolf, 1948)

THE 

 

INDONESIAN 

STORY 

 

 

 

The Birth, Growth and 

Structure of the 

Indonesian Republic 

 

CHARLES WOLF, Jr. 

 

 

 

Issued under the auspices of the 

American Institute of Pacific Relations 

 

THE JOHN DAY COMPANY, NEW YORK 1948 

 

 

 

All rights reserved 

 

Copyright* 1948, by the International Secretariat 

Institute of Pacific Relations 

 

1 East 54th Street 

Nezv York 22, 2V. Y. 

 

 

 

PRINTED IN THE UNITED STATES OF AMERICA 

AMERICAN BOOKSTRATFORD PRESS, INC., NEW YORK, N. Y 

 

 

 

To 

 

T. W. 

 

 

 

PREFACE 

 

 

 

It is not surprising that the islands of the 

 

Indies have more than once been referred to as the cultural “melting 

pot of Asia.” The founding of the Hindu kingdom of Taruma in 

Western Java brought the rich heritage of ancient India to Indonesia 

over 1200 years ago. Later, pilgrims from India introduced Gau- 

tama’s teachings to the islands, and in the 8th and 9th centuries 

Buddhism reached its apogee with the hegemony of the Sumatran 

Empire of Shrivijaya. The remarkable Borobodur, with its countless 

carved stone figures of the Buddha, still stands in Middle Java as a 

monument to Buddhist art. 

 

In the 14th century the Madjapahit Empire, extending from 

New Guinea in the East to Sumatra in the West, brought about 

a fusion of the Brahman-Buddhist strains in Indonesian culture. 

Madjapahit later fell before the crusading vigor of Islam. By the end 

of the 15th century Mohammedanism had been accepted in all of 

Java and thence it spread to other parts of the archipelago. The 

acceptance of Islam was in many cases merely nominal. To this day 

Hindu influence remains in Indonesia as a sort of subtle pantheism, 

combined with a naturalist paganism in the more remote parts of the 

islands. In Bali and several of the remoter parts of Indonesia, Islam 

has never been adopted. There the Brahman-Buddhist-naturalist 

traditions have endured to the present day, still basically unchanged. 

 

Western penetration into Indonesia began in the 16th century 

with the arrival of the Portuguese, who were ousted in 1595 by the 

Dutch. Gradually bringing the outer islands under formal control, 

the Dutch erected a colonial structure which was to last until World 

War II. But as the Dutch colonial structure matured, Indonesian 

nationalism evolved. The nationalist movement gathered increasing 

momentum after the turn of the century. When the Japanese occu- 

pied the islands at the start of 1942, it grew at an accelerated pace 

and with Japan’s surrender, the nationalists prepared for what they 

hoped would be a new era in Indonesia’s history. On August 17, 

 

vii 

 

 

 

PREFACE 

 

1945, the Republic of Indonesia proclaimed its independence. This 

is where the present book begins. 

 

For the people of Indonesia, the surrender of the Japanese to the 

Allies meant the beginning rather than the end of war; or more pre- 

cisely, it meant the beginning of their war and the end of a foreign 

war. They had been affected by World War II. It had been waged 

partly on their lands and seas. They had suffered during four years 

under a Japanese misrule harsher than anything they had expe- 

rienced during three hundred and fifty years of Dutch colonialism. 

But in Indonesia, and the other areas of Southeast Asia, the people 

had never really become a party to or partisans of the war. There 

were small pro-Ally resistance groups in Indonesia, and a few ardent 

Japanese supporters as well. But in general, World War II remained 

for the people of Indonesia a struggle among alien forces. 

 

During the Japanese occupation, the seeds of Indonesian national- 

ism burgeoned. To some degree this was the result of Japanese 

propaganda. To a larger degree it was independent of Japanese in- 

fluence and quite often a reaction against it. Starting from the as- 

sumption that the Japanese overlord was only a temporary master, 

the intellectual leaders of the nationalist movement in Indonesia 

began to prepare for their real problem: resistance to a post-war 

restoration of colonialism. Taking advantage of the opportunity, 

they began the task of organizing and mobilizing the ignorant masses 

of the population in preparation for the future. They collaborated 

with the Japanese to secure these ends. They also supported the 

Japanese propaganda of “Greater East Asia” and “Asia for the Asi- 

atics” largely because it was a useful and practical tool. The Japa- 

nese gave the people of Indonesia sufficient grievances against them 

to make antipathy against the Japanese keener there, two and a half 

years after the occupation, than it is today in the United States. Yet 

the nationalist leaders were in many cases willing to collaborate be- 

cause of the ends they had in view. Much had been done toward the 

achievement of these ends when the Japanese capitulated, and the 

struggle for a new Indonesia began. 

 

This was the position in Indonesia when the British prepared to 

re-occupy the islands in September 1945. Much of the background 

is feeling and impression psychological and emotionalwhich per- 

meated almost all of Southeast Asia at the time of re-occupation. 

The forces of the past and of the future met and began to be 

resolved, as opposing political and sociological forces usually are, 

partly by statesmanship and partly by military pressure. This book 

 

 

 

PREFACE IX 

 

deals with the meeting and resolution of these forces. More partic- 

ularly, it deals with the political and economic struggle which has 

been going on in Indonesia since 1945 and with the young Repub- 

lic’s record during this turbulent period. Notwithstanding the ex- 

tremely fluid situation prevailing at the time of writing, an attempt 

has been made to analyze the Republic’s longer-range prospects, and 

to suggest their implications. 

 

Many of the issues discussed are highly controversial. Both the 

Indonesian and Dutch viewpoints are held strongly, if not violently, 

by their adherents. A sincere effort has been made to be objective 

in the analysis; that is, to present each side of the controversy in its 

own terms and from its own point of view. Where comparison and 

evaluation are undertaken, I have tried to be fair. It is, however, not 

always easy or valid to subsume the irrational components of revolu- 

tion under the rational. Nevertheless, on both sides of the dispute, 

material which was felt to contribute heat rather than light has been 

left out. Where value judgments have been made/ 1 think they will 

stand out clearly as such to the reader. Reactions and comments 

elicited by the manuscript prior to printing have indicated that the 

above efforts will not prove fully satisfactory to either Dutch or 

Indonesian partisans. That is probably unavoidable. 

 

It should be noted that the scope of the present work is necessarily 

limited. No attempt has been made to deal with cultural develop- 

ments in modern Indonesia. Only brief reference has been made to 

the complicated problem of Chinese and Eurasian minority groups. 

Nor is the presentation of Republican economics as complete or 

analytical as would be warranted in a work of more exhaustive scope. 

Finally, limitations of time and space have made it impossible to dis- 

cuss fully certain aspects of events in Indonesia which are of partic- 

ular interest to the student of international law, e.g. the issues con- 

nected with de facto and de jure sovereignty, recognition, etc. 

 

Attention is called to the seeming anomaly that in Chapter VIII 

and in earlier chapters, Dr. Hatta is referred to as the Republic’s 

vice-president, whereas in Chapter IX an account is given of the 

cabinet crisis of January 23, 1948, which led to Hatta’s designation 

as Prime Minister and cabinet formateur. The inconsistency was 

due to a substantial rewriting of Chapter IX after the earlier chap- 

ters were already in print. Since completion of the manuscript, the 

Security Council’s Committee of Good Offices has received official 

commendation from the Council for its work in bringing about the 

Renville truce agreement and the political principles of January 17, 

 

 

 

X PREFACE 

 

1 948. With the major part of its work still lying ahead, the Commit- 

tee has returned from Lake Success to Indonesia to launch the second 

phase of its task: implementation of the truce and assistance to the 

parties in framing a final political settlement. After several incidents 

in mid-April, which threatened to nullify the Committee’s earlier 

work, negotiations between the parties, under the Committee’s aus- 

pices, appear ready to begin anew. Decisive results remain to be 

achieved. 

 

Much of the material used was derived from personal observation 

and experience in Indonesia during the period February 1946 to 

June 1947, when the author was a vice-consul in Batavia. For docu- 

mentary material which has been made use of, I am indebted to Dr. 

N. A. C. Slotemaker de Bruine of the Netherlands Embassy in Wash- 

ington, Dr. H. J. Friedericy and Dr. B. Landheer of the Netherlands 

Information Bureau in New York, and the Messrs. Charles Thamboe, 

Soedjatmoko Mangoendiningrat and Soedarpo Sastrosatomo of the 

Republican Ministry of Information. The manuscript was read by 

Miss Virginia Thompson, Professor Raymond Kennedy, Mr. Richard 

AdlofE, and Mr. Bruno Lasker, whose comments have been of con- 

siderable value. I am also grateful for the suggestions and criticisms 

which Mn William L. Holland of the Institute of Pacific Relations 

has offered at various stages in the preparation of the manuscript. 

The Institute, though sponsoring the publication of the book, does 

not assume responsibility for the views I have expressed. For all opin- 

ions and conclusions presented in the book I am alone responsible. 

 

CHARLES WOLF, JR. 

Harvardevens, Mass. 

April 19, 1948 

 

 

 

CONTENTS 

 

 

 

AUTHOR’S PREFACE 

 

PART I 

 

THE BEGINNINGS OF THE REPUBLIC OF INDONESIA 

 

CHAPTER PAGE 

 

I. Birth of the Republic 3 

 

II. The British Occupation 15 

 

III. Proposals, Counterproposals and the Linggadjati Agreement 29 

 

PART II 

 

THE REPUBLIC IN OPERATION 

 

IV. Political Organization of the Republic 49 

V. Economic Problems and Policies 68 

 

VI. Republican Leadership 88 

 

PART III 

 

DEVELOPMENTS AFTER LINGGADJATI AND THE OUT- 

LOOK FOR THE FUTURE 

 

VII. Failure to Implement the Linggadjati Agreement and the 

 

Final Breakdown 105 

 

VIII. Military Action and the Role of the Security Council 128 

 

IX. Recent Developments and the Outlook for the Future 145 

 

APPENDIX 

 

Preamble and Constitution of the Republic 165 

Political Manifesto of the Indonesian Government 172 

Text of the Linggadjati (Cheribon) Agreement 175 

Letter from Sjahrir to the Commission-General, June 23, 1947 179 

Text of the United States Aide Memoire to the Indonesian Repub- 

lic, June 27, 1947 180 

Memorandum of July 20, 1947, from the Lieutenant Governor 

 

General to the Government of the Republic of Indonesia 181 

 

Interests of American Firms in Indonesia 185 

 

Truce Agreement Signed Jan. 17, 1948 184 

 

Radio Address of Queen Wilhelmina, Feb. 3, 1948 189 

 

INDEX 193 

 

 

 

PART I 

 

THE BEGINNINGS 

 

OF THE REPUBLIC OF INDONESIA 

 

 

 

CHAPTER ONE 

 

 

 

BIRTH OF THE REPUBLIC 

 

 

 

On August 17, 1945, the Republic of Indonesia was 

proclaimed by a small group of determined men, 

 

“Since independence is the right of every nation, any form of subjuga- 

tion in this world is contrary to humanity and justice, and must be abol- 

ished. The struggle for Indonesian Independence has reached a stage of 

glory in which the Indonesian people are led to the gateway of an inde- 

pendent, united, sovereign, just and prosperous Indonesian state. 

 

“With the blessing of God Almighty, and moved by the highest ideals 

to lead a free national life, the Indonesian people hereby declare their 

independence.” 

 

At its inception the new government claimed jurisdiction over a 

land area of more than 700,000 square miles and a population of 

more than 70 million. To some its birth came as a complete surprise; 

as far as they knew it had no roots in the past that preceded the 

Japanese occupation. Actually, this is only partially true, During 

the nineteenth century there had been no less than thirty-three 

revolts against Dutch authority in the Indies. For the most part, 

however, these were Batak or Atchenese or other local revolts; that 

is, they came from sectional minorities and did not have a national 

character. 

 

The formal nationalist movement in the Indies began in Java in 

1908 with the organization of the Boedi Oetomo or “High Endeavor” 

society under the leadership of a pacifist social reformer, Soetomo. 

From that time until World War II, Indonesian nationalism was 

characterized by division and disunity, by factionalism of both ex- 

tremist and moderate groups, and by the constant addition of new 

elements to the movement. The nationalist movement came to repre- 

sent different things to different people. It was linked to social re- 

form as advocated by Soetomo. It put its faith in traditionalist or 

Taman-Siswo mass education, according to the ideals of Dewantara. 

It sought autonomy within the Dutch Empire swayed by the pleas of 

 

 

 

 

4 THE INDONESIAN STORY 

 

Soetardjo. It was revolutionary Communism when led by the Mos- 

cow-trained Tanmalaka. It was non-cooperative and radical, a call to 

resistance to Dutch authority, as advanced by the fiery Soekarno 

and the professorial Hatta. It was imbued with the concept of 

social democracy and economic betterment under independent In- 

donesian auspices, led by the young Western-educated socialists 

Sjahrir and Sjarifoeddin. All these elements attached themselves to 

the nationalist cause in the course of its evolution. 1 For thirty years, 

the diversity of these groups and the conflicts among them, no less 

than Dutch suppression of overt acts, stood in the way of Indian 

nationalist unity. 

 

At last, in May 1939 a federation of all Indonesian nationalist 

parties, the Gaboengan Partai Indonesia or G A.P.I., was formed by an 

alliance between the cooperative nationalists in the Parindra party 

and the radical nationalists in the Gerindo party, together with a 

number of smaller groups and religious organizations. This first coali- 

tion was a significant achievement in the development of Indonesian 

nationalism, although for some time world events were to prevent 

the G. A.P.I, from consolidating and exerting a constructive influence. 

Nevertheless, however unstable, the unity which it represented was to 

become a symbol of profound importance. 

 

With the start of the war in Europe in September 1939, shortly 

after the formation of the G.A.P.L, and the fall of Holland in May 

1940, the colonial government of the Netherlands Indies was at that 

time obliged sharply to curtail the activity of the nationalist move-^ 

ment in the interest of the European war effort. Great Britain and the 

United States were making urgent demands for strategic stockpiles of 

the produce of the Indies for rubber, tin, quinine, fibers, and drugs. 

To meet these emergency requirements the Dutch sought to place 

the Indies on a semi-war footing. 

 

In accomplishing this economic and strategic aim the Netherlands 

Indies Government was eminently successful. As an index of the ef- 

fectiveness of this policy, a comparison of exports from the Indies to 

the United States in 1938 and 1940 shows an increase for tin of 412 

per cent, for rubber of 331 per cent, for drugs and spices of 227 per 

cent, for fibers of 218 per cent, and a total increase in Netherlands 

Indies exports from about $330,000,000 in value to approximately 

$450,000,000. 2 

 

l Cf. Paul Kattenburg, “Political Alignments in Indonesia,” Far Eastern Survey, New 

York, September 25, 1946. 

 

* See Rupert Emerson, The Netherlands Indies and the United States, World Peace 

Foundation, Boston, 1942, pp. 45-7. 

 

 

 

BIRTH OF THE REPUBLIC 5 

 

The heated Japanese negotiations for oil concessions in the Indies, 

and the unmistakable signs of trouble appearing on the Pacific hori- 

zon, strengthened the Dutch resolve to eliminate dissension and to 

render the nationalist agitation ineffectual, at least for the time be- 

ing. The Penal Code, forbidding any agitation which might foment 

disorder, was narrowly construed and rigidly enforced. Free assembly 

was curtailed. The nationalist press was made to toe the line of un- 

yielding resistance to the Japanese and of support of the European 

war effort. Nationalist pamphleteering was repressed, and many of 

the pamphleteers and nationalist leaders were jailed or exiled. 

When the Japanese occupied the Indies in March 1942, three of the 

future “Big Four” of the Republic Soekarno, Hatta and Sjahrir 

were in prison or exile, although their prison sentences had begun 

before 1940, and the fourth, Amir Sjarifoeddin, had spent part of 

1940 in prison for dangerous incitement, after which he went to 

work with the government in the Department of Economic Affairs 

because of his antipathy to fascism. 

 

As a result, largely, of Dutch colonial policy from 1939 to 1942, 

the Japanese did not have a consolidated Indonesian nationalist 

front to contend with when they occupied the Indies. In fact, even 

such effective unity as did exist among the nationalists was dis- 

rupted still further over the issue of collaboration. 

 

On the one hand, there was a group headed by Sjahrir and Sjari- 

foeddin: the young, Western-educated intellectuals who, on purely 

ideological grounds, refused to have anything to do with Japanese 

fascism. Some of them were immediately jailed. Others, like Sjahrir, 

pretended to be only passive toward the Japanese. Released from in- 

ternment, Sjahrir went to Tjipanas in the mountains of West Java to 

work quietly and plan for the future. Here he and his colleagues 

gradually built up the Javanese resistance organization that later be- 

came a driving force behind the Republic’s Declaration of Independ- 

ence. Here he wrote his Perdjoeangan Kita (Our Struggle) and what 

was to become the Political Manifesto of the Republic. 

 

Sjarifoeddin also entered the small underground resistance move- 

ment. He was imprisoned by the Kempeitai^ or Japanese Secret 

Police, in 1943, and placed under sentence of death, later commuted 

to life imprisonment. 

 

On the other hand there was the group, headed by Soekarno, 

Hatta, Mansoer and Dewantara, who felt that the defeat of the 

Dutch armed forces and the internment of the remaining white 

Dutch civilian population promised the dawn of a new era for 

 

 

 

6 THE INDONESIAN STORY 

 

Indonesia. This group contended that the new era could best be 

prepared for by dealing with the Japanese in the open, rather than 

by taking the nationalist movement underground. There is little 

evidence to support the charge that this group dealt with the Japa- 

nese from choice. In fact, even those whose dislike for the Dutch 

originally induced some sympathy for the Japanese soon were alien- 

ated completely by the harshness of the Japanese occupation policy, 

and by the decidedly unfavorable turn which the war began to take 

for Japan. 

 

It is not hard to understand the initial reaction of many of the 

nationalist leaders in 1942. In many cases they recognized the Japa- 

nese as the victors over a colonial government which, whatever its 

merits, had coerced them in peace-time. A certain feeling of grati- 

tude and a desire to cooperate with the Japanese were inevitable in 

these instances, and yet after the first year of the occupation it be- 

came clear to even the most sympathetic nationalists that the na- 

tionalist cause would have to be advanced by exerting constant pres- 

sure on the Japanese, and not by simply cooperating with them. 

There were, furthermore, enough short-wave radio sets operating 

clandestinely, despite the untiring efforts of the Kempeitai to ferret 

them out, for the nationalists to hear and to become convinced by 

1943 that the war was definitely turning against the Japanese in the 

Pacific, and that the Japanese hold on the islands was to be short- 

lived. Under such conditions, honest and sincere collaboration with 

the Japanese was very rare. What at first appeared to be collabora- 

tion seems now, upon closer examination, to have been a hard and 

tenacious bargaining to secure concessions for the nationalist move- 

ment. 

 

THE JAPANESE OCCUPATION 

 

The introduction of Japanese rule after the capitulation of the 

Dutch in March 1942 meant the elimination of Dutch officialdom, 

and the imposition of military authority over an indigenous adminis- 

trative substructure. There was no wholesale overhauling of the 

governmental organization despite the elimination of the Dutch, 3 

but not the Eurasian, personnel a distinction which was almost im- 

possible to draw accurately after many generations of miscegenation. 

 

s In Soerabaja, in 1942, several hundred Dutch officials and petty officials were actu- 

ally taken from internment by the Japanese to help solve the city’s food distribution 

problem, which the Japanese could not handle themselves after several weeks of try- 

ing. Within a relatively brief span of time the Dutch had reorganized food distribu- 

tion, and in fact they remained out of internment for over a year until 1943 when the 

Japanese felt they themselves were able to control food distribution again. 

 

 

 

BIRTH OF THE REPUBLIC 7 

 

With their own military authorities firmly placed at the helm, the 

Japanese had as their principal aim that of making the islands self- 

sufficient and of gearing agricultural production to the needs of the 

war machine. 

 

Where necessary new directing organizations were set up by the 

Japanese. For example, an Agricultural Industrial Control Board 

(Saibai Kogyo Kanri Kodan) was set up, early in 1942, connected with 

the former Department of Economic Affairs, with broad powers to 

handle overall financial and procurement requirements for agricul- 

tural industries. The S.K.K.K. was also empowered to deal with 

storage and distribution of the produce of these industries, and to 

gear estate production to the needs of the war effort. In June 1943, 

the powers of the S.K.K.K. were extended still further to include 

not only large estate industries such as rubber and cinchona, but 

also the small estates, particularly those engaged in the production of 

fibers and cacao. 

 

In general, however, the exploitative economic war aims of the 

Japanese were prosecuted within the framework of an unchanged 

administrative set-up. Political measures, including propaganda and 

limited concessions to the nationalists, were regarded by the Japa- 

nese as means to achieve the main economic goals, and to enlist 

popular support for total economic mobilization. Quinine, tin, 

petroleum products, fibers, textiles and food products, especially 

rice and cassava, were needed; and the Japanese ruthlessly con- 

scripted labor into the Hei Ho or Work Corps, to step up produc- 

tion. Actually, in the case of all production except quinine which 

was increased by 16 per cent, and ramie, a flax plant for making tex- 

tiles which was newly cultivated by the Japanese output fell 

considerably under Japanese direction. No figures concerning 

petroleum or tin production from 1942 to 1945 are available, but 

according to both Japanese and Indonesian statistics covering Java, 

rice production dropped by 25 per cent during this period, corn by 

36 per cent, cassava by almost 50 per cent, rubber by more than 80 

per cent in both Java and Sumatra, tea by over 95 per cent, coffee by 

about 70 per cent and palm oil by almost 75 per cent. 

 

The labor reservoir also had to be drained to supply men for the 

auxiliary army, and for police and air-raid protection. For all these 

purposes the method of conscription was employed. 

 

To enlist popular support for such drastic economic measures, the 

Japanese launched successive propaganda campaigns which met with 

varying degrees of success depending upon the nationalist support 

 

 

 

8 THE INDONESIAN STORY 

 

which they received. The first campaign aimed at the glorification 

of Japan and the Greater East Asia Co-Prosperity Sphere, with Indo- 

nesia as a part. This so-called Tiga A (Triple A) movement extolled 

Japan as the “Savior, Leader and Life of Asia” and at the same time 

banned all labor and political organizations, and placed a tighter 

clamp on the press than the Dutch had ever imposed. Tiga A was 

dropped after December 1942, when it had become clear that its 

lack of popular support made it a failure. 

 

The Poesat Tenaga Rajat (Central People’s Power) followed in 

its wake. The Poetera, as it was called, was a centralized organization 

of all political parties (united formally for the first time since the 

defunct G.A.P.I.), including also labor organizations and religious 

and youth societies. Led by Soekarno, Hatta, Mansoer and Dewan- 

tara, the Poetera acquired a strong nationalistic character, and be- 

cause of its broader base, became a potentially stronger nationalist 

force than the G.A.P.I. had been. The Poetera movement spread 

rapidly after its formation in March 1943. While its immediate 

effect was to contribute to a more united war effort, it represented a 

force and a threat to the Japanese which they were never quite able 

to eliminate. In a sense the Poetera was the first formal nationalist!- 

cally-mclined organization to manifest itself during the occupation. 

As its strength grew and it came to include an Auxiliary Army force 

(Tentara Pembela Tanah Aer) and an armed Police Force as well, 

the resistance of the nationalists to Japanese demands stiffened. 

 

The Poetera never broke openly with the Japanese, but neither 

did it express opposition to the revolts which broke out in Blitar, 

Indramajoe and Tasikmalaja as the occupation wore on. The Poe- 

tera carried on a continual tug-of-war with the Japanese military 

authorities for concessions to the nationalist cause, for higher posi- 

tions in the government for Indonesians, and for a withdrawal of 

Japanese officialdom. In exchange for these concessions the national- 

ists promised support of the war effort. 

 

The relation between the Poetera and the Japanese military was 

thus a dynamic one of stress and strain. As the military situation in 

the Pacific grew more and more precarious for the Japanese, the 

pull exerted by the Poetera intensified. As the Japanese war position 

grew still weaker, the Poetera and the nationalists grew stronger, and 

the concessions which they were able to elicit widened in scope. 

 

Finally, after considerable earlier pressure from the Poetera, a 

Commission for the Preparation of Independence was set up in 

April 1944 with Soekarno and Hatta as its guiding lights. By June 

 

 

 

BIRTH OF THE REPUBLIC 9 

 

1944 the nationalists were able to exert sufficient economic pressure 

on the Japanese to bring about the end of the centralized Agricul- 

tural Control Board. In its place, an Agricultural Industrial Trust 

(Saibai Kogyo Renokat) was set up, exercising the same functions 

and with the same powers as the former S.K.K.K., except that it was 

now controlled not by the Japanese military but by private estate 

owners and agricultural companies, Indonesian and Chinese as well 

as Japanese. 

 

In September 1944, under increasing pressure both from the na- 

tionalists and the deteriorating military situation in the Pacific, 

Premier Koiso made the first formal Japanese promise of independ- 

ence to the Indonesians. The red and white independence flag and 

the national anthem, Indonesia Raja (Great Indonesia), which the 

Preparatory Commission had adopted, now were recognized by the 

Japanese authorities. In addition, new regulations were adopted to 

increase the participation of Indonesians in the government as the 

nationalists had demanded. 

 

In July 1945, with American forces in the Pacific closing in for the 

kill, Count Terauchi, the Japanese Commander-in-Chief for South- 

east Asia and the Indies, received instructions from Tokyo to 

make preparations for independence discussions with the Indonesian 

leaders. The original Tokyo plan provided that independence would 

be declared in the name of the Emperor as soon as Russia entered 

the war, and it was further hoped by the Japanese that, with this 

inducement, the Indonesian Auxiliary Army might then be counted 

on to fight side by side with the Japanese against the expected in- 

vasion forces. 

 

In early August, Soekamo and Hatta left Batavia for Japanese 

Asia Headquarters in Saigon by special Japanese plane at Terauchi’s 

invitation. There is every reason to believe that they knew what the 

purpose of their visit was to be and what the underlying motives of 

the Japanese were. 

 

Less than one week after their return to Batavia the Japanese 

capitulation was announced, and somewhat hastily and boldly two 

days later, on August 17, Soekarno and Hatta proclaimed the Re- 

publicnot in the name of the Japanese Emperor, but in the name 

of the Indonesian people. 

 

THE ISSUE OF COLLABORATION 

 

Under the confused conditions which prevailed throughout South- 

east Asia at the time of the unexpected Japanese surrender announce- 

 

 

 

10 THE INDONESIAN STORY 

 

ment, it was inevitable that suspicion of collaboration should be- 

come attached to the new-born independence movements in Burma, 

Indo-China, and Indonesia, and that these suspicions would crystal- 

lize into definite charges against the new regimes by the returning 

colonial powers. 

 

The charges were not long in making an appearance. In Septem- 

ber 1945, Dr. Hubertus J. van Mook, the Lt. Governor General of 

the Netherlands Indies in exile in Australia, advised Admiral 

Mountbatten, the Supreme Allied Commander for Southeast Asia: 

 

“It is obvious that this republican movement is a restricted one and 

that its pattern is a dictatorship after the Japanese model. … It is to be 

seriously doubted that the puppet government has much of a following, 

and it is of particular importance that this extremist organization not be 

recognized in any way directly or indirectly [since it is] … simply a 

Japanese creation/’ 

 

Allied intelligence concerning Indonesia during the occupation 

was more meager than for any other area in Southeast Asia. The 

charges of collaboration thus found the world at large unable to 

judge the situation which had existed during the occupation, or 

to recognize the larger scope which the nationalist movement was 

to attain immediately after the Japanese capitulation. There had 

been no O.S.S. or Allied intelligence teams operating regularly 

throughout the archipelago as there had been in other parts of the 

region. Indeed, Japanese broadcasts and one or two brief landings 

on the Java and Sumatra coasts from submarines by Dutch and 

Allied operatives furnished most of the sparse information which 

came from Indonesia during the war. The landings of British forces, 

in October 1945, in insufficient strength and after a critical six 

weeks’ delay, reflected this dearth of intelligence. 

 

Even after the re-occupation it was difficult to obtain the informa- 

tion necessary for a candid appraisal of the collaborationist charges. 

Released Dutch internees and P.O.W.’s were either too biased or too 

out of touch to offer a fair index of the real state of affairs. Un- 

biased Indonesians were just as difficult to find, and the Chinese 

and Eurasian minorities often were too afraid either of the returning 

Dutch or of the Indonesians to speak freely. 

 

One of the few Europeans fully qualified and sufficiently open- 

minded to judge these charges and to appraise the Republic at its 

inception was a British Army officer, Lt. Colonel Laurence van der 

Post Colonel van der Post had been assigned by British Army 

 

 

 

BIRTH OF THE REPUBLIC 11 

 

Intelligence to remain behind in Java -when Field Marshal Wavell’s 

Southeast Asia Headquarters In Bandoeng decided to evacuate in 

February 1942. He had been assigned the mission of continuing 

guerrilla operations in the hills as long as possible, and specifically 

of keeping au courant of general events during the Japanese occupa- 

tion, looking toward the day when Allied troops would return to 

the Indies. He himself was interned by the Japanese after the guer- 

rilla activities which he had directed in the hills were brought to 

an end. Nevertheless, he maintained sufficient contact with the out- 

side to remain probably the best authority on the Republic’s pre- 

natal history and formation. Unfortunately, however, Colonel van 

der Post’s wide fund of information was never given the attention 

that it merited. 

 

Actually, an accurate appraisal of the collaborationist charges 

which have been directed against the Republic’s leaders depends 

primarily on an initial adjustment in viewpoint. In analyzing 

collaboration with the Japanese in Indonesia a basically different 

approach must be adopted from that applied to the same issue in 

the occupied countries of Europe. 

 

In Europe, the populations of the occupied countries knew what 

the war was about. Despite blundering and corruption in pre-war 

Europe, they knew that fundamentally it represented a struggle for 

existence against the expanding forces of aggressive Fascism. They 

had the clear evidence before them that the Fascist enemy had 

“blitzed” through their defenses, beaten their armies, and forced 

their governments into exile. They maintained contact with these 

exiled governments through the active underground movements 

which flourished under the eyes of the invader. They received news 

and pamphlets from their governments by way of the underground 

and by air; and they could carry on in the assurance that their 

forces and those of their allies were growing stronger day by day and 

would eventually return to liberate their soil. In short, despite harsh 

and discouraging conditions and deprivations, they still had some 

feeling of “belonging,” of being a part of the fight against an enemy 

of long standing; a fight that was being prosecuted by their brothers- 

in-arms outside the motherland. 

 

Under such conditions collaboration with the enemy by an indi- 

vidual citizen was tantamount to treason against his nation’s still- 

continuing fight. In Europe a patriotic and thinking citizen’s duty 

and attitude toward the invader were clear. Collaboration generally 

stood out clearly when judged in this light. 

 

 

 

12 THE INDONESIAN STORY 

 

In Indonesia, on the other hand, a patriotic nationalist’s duty and 

attitude toward the Japanese were by no means as simple or as clear. 

In the first place, the struggle which the war represented between 

fascism and democracy was obscure and distant to all but the most 

sophisticated and Westernized intellectuals, such as Sjahrir and 

Sjarifoeddin. Furthermore, the Japanese were not an established 

enemy of long standing with whom the Indonesians had already had 

contact before and of whom they had already formed a definite im- 

pression. The existence of anti-white racialism, which Japanese 

propaganda exploited, led some Indonesians to identify their op- 

position to foreign white rule with the Japanese war against the 

Western powers. 

 

The Indonesian nationalists did not have the feeling that the 

enemy had fought against their defenses, beaten their forces, or 

driven their government into exile. In fact, the Indonesian people 

had not had any arms with which to fight the invader, since the 

Dutch Government had avoided arming or training any large groups, 

except for the loyal Ambonese, “and had particularly avoided the 

training or arming of educated or nationalistic Indonesians. The 

emergency conditions of the period from 1939 through 1942 had not 

changed this policy. During this period the Dutch had been even 

more circumspect in their building of an Indonesian armed force, 

lest it might come under the influence of the nationalist movement. 

 

Finally, the patriotic Indonesian had little feeling of attachment 

to or contact with the distant Netherlands Indies Government in 

Australia. The underground resistance movement maintained no 

liaison with the exiled Dutch. Such resistance as the Indonesians 

organized was their own and was neither in close touch with nor 

was it supplied by the exile government outside. The Dutch Govern- 

ment had gone, and the Dutch civilians remaining behind were 

interned and for the most part effectively removed from the scene. 

The Indonesians were now alone. They were isolated and left on 

their own to sink or struggle to shore as best they could. The resent- 

ment and sense of isolation felt were summarized by Sjahrir in his 

Political Manifesto: 

 

“When the Netherlands Indies Government . . . surrendered to the 

Japanese in Bandoeng in March 1942, our unarmed population fell prey 

to the harshness and cruelty of Japanese militarism. For three and a half 

years our people were bent under a cruelty which they had never before 

experienced throughout the last several decades of Netherlands Colonial 

rule. Our people were treated as worthless material to be wasted in the 

 

 

 

BIRTH OF THE REPUBLIC 13 

 

piocess of war. From the lowly stations of those who were forced to ac- 

cept compulsory labor and slavery and whose crops were stolen, to the 

intellectuals who were forced to propagate lies, the grip of Japanese 

militarism was universally felt. For this, Dutch colonialism is respon- 

sible in that it left our 70,000,000 people to the mercies of Japanese 

militarism without any means of protecting themselves since they had 

never been entrusted with fire-arms or with the education necessary to 

use them. . . . 

 

“A new realization was born in our people, a national feeling that was 

sharper than ever before. This feeling . . . was also sharpened by the Japa- 

nese propaganda for pan-Asianism. Later attempts by the Japanese to 

suppress the nationalist movement were to no avail. During three and a 

half years of Japanese occupation, the whole state organization . . . which 

had been co

Malaysia Economic Note - Call It a Recession

Construction activity is also slowing sharply. Thus far, much of the slowdown in construction activity has been due to the escalation in material costs, although the construction slowdown may have led to a peak in prices. Costs aside, a slowdown in private sector construction demand, especially in the housing market, could weigh more heavily in the sector’s prospects going forward. Housing approvals for construction by private developers have fallen to a six-year low, in line with clear signs of a slowdown in the private housing market, particularly at the high end. Oversupply of condominiums in the high-end segment (especially in the KLCC area) should put further pressure on market prices and rentals. Developers may be holding back construction on housing activity as a result. Fiscal pump priming, especially for smaller scale rural projects, could provide some cushion for the industry – but speed of implementation remains in question.

Even if we are wrong in our USD view (i.e., the USD weakens earlier than expected), that it may be harder for MYR and SGD to substantially outperform other Asian currencies vs. the USD, given the likelihood the MAS will re-centre the SGD NEER vs. the basket and the likelihood that MYR will largely track the SGD. This may still present opportunities to sell the MYR and SGD against Asian currencies that sold off strongly in 2008, for example the KRW and IDR.

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Do 401(k) Plans Still Make Sense?

The stock market rout has ignited a crisis of confidence for millions of Americans who manage their own retirement savings.

“There’s just no guarantee that when you’re ready to retire you’re going to have the money,” she says. “You either put it in a money market which pays 1%, which isn’t enough to retire, or you expose yourself to huge market risk and you can lose half your retirement in one year.”

Many retirement experts have come to a similar conclusion: The 401(k) system, which has turned countless amateurs like Gardner into their own pension-fund managers, has serious shortcomings.

“This is the biggest test that the 401(k) plan has seen to date, and it has failed,” says Robyn Credico, the head of defined-contribution consulting at Watson Wyatt Worldwide, noting that many baby boomers are ready to retire. “We’ve put people close to retirement in a very challenging position.”

The most obvious pitfall is that 401(k) plans shift all retirement-planning risks — not saving enough, making poor investment choices, outliving savings — to untrained individuals, who often don’t have the time, inclination or know-how to manage them.

“That seems like such a fundamental flaw,” says Alicia Munnell, the director of Boston College’s Center for Retirement Research. “It’s so crazy to have a system where people can lose half their assets right before they retire.”

Congress has begun looking at ways to overhaul the 401(k) system. At hearings in October, the House Education and Labor Committee heard from a variety of witnesses. Some proposed setting up “universal” retirement accounts, which would cover all workers.

One such plan called for establishing accounts that would receive annual contributions from the federal government and would offer a guaranteed, but relatively low, rate of return.

Another proposed automatically investing contributions in an index fund that holds stocks and bonds, with the mix getting more conservative as workers approach retirement.

Other witnesses proposed less drastic changes, such as providing better education.

About 50 million Americans have 401(k) plans, which have $2.5 trillion in total assets, estimates the Employee Benefit Research Institute in Washington. In the 12 months after the stock market’s peak in October 2007, more than $1 trillion worth of stock value held in 401(k)s and other “defined-contribution” plans was wiped out, according to the Boston College research center.

If individual retirement accounts, which consist largely of money rolled over from 401(k)s, are taken into account, about $2 trillion of stock value evaporated.

Participants in 401(k) plans contribute chunks of their pretax pay to an account, which may be invested in stocks, bonds, money-market instruments and other holdings. Each employee typically decides on his or her own mix. At many companies, if an employee contributes to the plan, the company also kicks in some money.

For many workers, 401(k)s have come to replace “defined-benefit” pension plans, which pay a specified amount to employees who retire after a set number of years.

As such, the plans represent a key component of the broad shift in recent years toward an “ownership society,” in which individual Americans are expected to play a bigger role in managing large financial risks such as saving for retirement and paying for health care.

In most plans, “it’s been the Wild West of 401(k) investing,” says Jerry Bramlett, the president and chief executive of 401(k) record-keeping firm BenefitStreet. “You show up at work, they give you a list of funds and send you on your way.”

Defenders of 401(k)s say the plans shouldn’t be judged prematurely. The 401(k) “is doing what it’s supposed to do, which is generate retirement savings,” says David Wray, the president of the Profit Sharing/401(k) Council of America, an association of employers who offer such plans. “When the entire American work force has 30 or 35 years in the 401(k) plan, then you’ll see very substantial balances.”

While 401(k) participants have been through stock slides before, now they are also grappling with declines in home values and tighter consumer credit. What’s more, health care costs are rising fast, and people are living longer.

These converging pressures are prompting many 401(k) savers to postpone retirement and adjust to a lower standard of living.

Some are rolling the dice in an attempt to make up for losses.

Jeff Goodman, a 38-year-old computer programmer in Indian Trail, N.C., watched his 401(k) slide more than 40% last year. He’s not happy with the plan’s investment options, which have almost all been hammered in the downturn.

He’s contributing only enough to get the company’s matching contribution. About two months ago, he opened a brokerage account and started trading stocks and options. He lost roughly $3,000 on a complex options trade. Still, he’s not convinced the 401(k) is the best savings vehicle. “In a recessionary time, you just can’t do the buy-and-hold thing anymore,” he says.

Part of the problem, critics say, is that the 401(k) is trying to fill a role it was never designed to play. The plans were born with little fanfare in 1978 when Congress added section 401(k) to the Internal Revenue Code. Initially, many employers saw them as a supplement to company-funded defined-benefit plans and Social Security — and a way for executives to stash some of their compensation in tax-deferred accounts.

But the legislation marked the beginning of the end of professionally managed pensions that provided guaranteed benefits to retirees.

As big employers recognized that 401(k)s are substantially cheaper than defined-benefit plans, the employee-managed accounts moved from supporting role to center stage. Many workers didn’t even participate in the voluntary plans, which meant that employers didn’t have to make matching contributions. What’s more, employers aren’t required to contribute to the plans at all.

The plans appeared near the beginning of a long bull market. For years, strong stock market returns smoothed the transition from guaranteed pensions to worker-driven plans, masking careless investment choices by individuals and high fees charged by some companies that administer plans.

But according to Boston College’s retirement research center, Americans were becoming less prepared for retirement. Four of 10 working-age households were at risk of being financially unprepared for retirement in 1998, according to the center, up from less than one-third in 1983. By 2006, the figure stood at 44%.

Over the past year, about one in five workers age 45 or older has stopped contributing to a 401(k), IRA or other retirement account, according to a recent survey commissioned by the AARP, an advocacy group for older people.

Peg Kelley, a 58-year-old small-business consultant in Watertown, Mass., didn’t contribute anything to her 401(k) last year. Instead, she’s focused on paying down credit-card debt and building an emergency fund in case the bad economic times turn worse. She’s also still paying off an $8,000 loan she took from her 401(k) plan four years ago to buy a new car.

Afraid of reliving the dot-com market meltdown, which knocked $100,000 off her retirement savings, she moved her entire 401(k) from diversified stock and bond holdings into cashlike investments early last year.

“I’m not going to get rich on my 401(k),” she says, “but also don’t want to get poor because of it.” She had hoped to retire early, but now she figures she won’t quit work before age 65.

Matching contributions from employers are a major incentive for workers to contribute to their plans. The typical matching contribution amounts to 3% of pay. But some employers are cutting back. General Motors and FedEx, for example, are suspending 401(k) matching contributions.

One proposal floated at the congressional hearings was to require companies to make contributions.

Plan participants typically are presented with a complex investment menu that includes some risky and expensive options. In 2006, Congress passed pension legislation that encouraged employers to automatically enroll workers in 401(k)s — except for workers who opt out — and to invest their contributions in broadly diversified products.

Employers rushed to add “target-date” funds to their 401(k) menus. Such funds gradually shift to a more conservative investment mix as a worker’s retirement date approaches. Fund companies raced to roll out target-date products, often stuffing them with their own pricey mutual funds and adding an extra layer of fees on top.

As stocks climbed, some fund companies increased the stock allocations of their target-date funds, setting them up for a steep fall if the market headed south.

Many 401(k) plans don’t give workers straightforward, low-cost investment options, such as funds that track markets indexes, which often beat stock-picking fund managers over the long haul.

Rep. George Miller, a California Democrat who is the chairman of the House committee looking into 401(k)s, wants to encourage all plans to offer at least one index fund. The plan offered to federal employees, he notes, is full of low-cost index funds.

“We see very often that the worst-performing funds are marketed at the highest cost to the least sophisticated investors,” Miller says. “That’s contrary to the national interest to get more people saving earlier and longer.”

Nearly half of plans include an option to invest in company stock, according to a 2007 survey by Hewitt Associates. Many employers offer matching contributions exclusively in company stock, which often leads employees to invest more of their own contributions in those shares, retirement experts say. One of the “universal” plans proposed to Congress included rules against excessive investment in company stock.

The sharp market swings have led some investors to dump stocks at depressed prices, locking in losses that may severely diminish their retirement savings.

Last year, participants shifted around 5.7% of plan assets, compared with 3.3% in 2007. Most of the money went into low-return investments such as cash, bonds and funds designed to hold their value, says Pamela Hess, the director of retirement research at Hewitt Associates.

The chunk of 401(k) assets in stocks, roughly 54%, is now at its lowest level since Hewitt began tracking the data in 1997.

Even if workers follow the golden rules of 401(k) investing — saving early and diligently, holding a broadly diversified investment mix, never tapping their savings until retirement — their success can still depend largely on the luck of the stock-market draw.

Boston College’s retirement research center recently ran scenarios that assumed workers had contributed 6% of pay to a plan for 40 years, had invested in a target-date fund, had never touched their savings until retiring and had annuitized the assets at retirement. The chunk of pre-retirement income these savers could replace in retirement varied dramatically depending on when they retired. Those retiring in 1948 could replace just 19%; those retiring in 1999, 51%; and 2008 retirees, 28%.

Julien Pierre has been a model 401(k) saver. The 32-year-old Santa Clara, Calif., software engineer started contributing to a 401(k) when he was 19, and he has made the maximum contribution for the past eight years or so. He has a well-diversified investment mix, including large-cap, midcap, small-cap and international stock funds.

He started last year with about $220,000 in his 401(k), but about $90,000 of that has been wiped out in the market meltdown. What’s more, his employer recently announced thousands of layoffs. Though Pierre is still maxing out his 401(k) contributions, he sees his plans to retire early crumbling and thinks it may take years to determine whether his faith in the plan has been justified.

“I obviously don’t feel very good about things,” he says. “I’m not looking forward to working that many years.”

This article was reported and written by Eleanor Laise for The Wall Street Journal.

TIPS Irresistible to Gross as Protection Is ‘Cheap’ (Update2)

At a time when central banks are attempting to prevent deflation, the hottest investments in the government bond market are securities that protect debt holders against rising consumer prices.

Inflation-linked debt from the U.S. to Japan returned 5.77 percent since November, including price gains and reinvested interest, compared with 1.55 percent for the government-bond market, according to indexes compiled by New York-based Merrill Lynch & Co.

Pacific Investment Management Co., Vanguard Group and Fifth Third Asset Management, which oversee a combined $1.8 trillion, are scooping up so-called linkers on speculation efforts by policy makers to reignite the global economy will lead to faster inflation than is currently priced into the securities. Yields on U.S. Treasury Inflation-Protected Securities, or TIPS, indicate almost no rise in consumer prices for the next decade.

“They’re breathtakingly cheap,” said Mitchell Stapley, who oversees $22 billion as chief fixed-income officer for Grand Rapids, Michigan-based Fifth Third. “This one’s going to take a while to come to fruition but I’m buying them so dirt cheap I’m willing to have a little patience.”

Last year, inflation-linked securities lagged behind the rest of the government bond market through November, losing 5 percent, as the U.S., Europe and Japan entered simultaneous recessions for the first time since World War II and commodities prices as measured by the Standard & Poor’s/Goldman Sachs Commodities Index tumbled 60 percent from their peak July 11. Treasuries returned 14 percent in 2008, the most since 1995, according to Merrill indexes.

Hedge Fund Sales

At the same time, hedge funds that purchased the debt with borrowed money were forced to sell as lenders reined in credit, according to Kenneth Volpert, who oversees $180 billion in taxable bonds for Vanguard in Valley Forge, Pennsylvania. The world’s biggest financial institutions reported more than $1 trillion in losses and writedowns since the start of 2007.

“There’s been a lot of selling related to de-leveraging hedge fund stuff that just caused TIPS to get unbelievably cheap,” Volpert said.

TIPS due in 10 years yield 0.58 percentage point less than Treasuries, compared with an average of 2.11 percentage points since 2000. In November, TIPS yields rose as much as 0.08 percentage point above Treasuries.

The U.S. securities pay interest on a principal amount that rises with the Labor Department’s consumer price index. The difference in yield, or break-even rate, between yields on TIPS and Treasuries of the same maturity represents traders’ expectations for the rate of inflation over the life of the bonds.

Kokusai Shuns TIPS

The benchmark 2.125 percent 10-year inflation-indexed Treasury note ended last week 102 27/32 to yield 1.81 percent, according to BGCantor Market Data. The breakeven rate rose 46 basis points last week.

The rally in inflation-linked debt left them more in line with inflation forecasts, according to Masataka Horii, one of four managers for the $51 billion Kokusai Global Sovereign Open fund in Tokyo, the biggest bond fund in Asia. U.S. consumer prices may rise 0.65 percent this year, according to a Bloomberg survey of economists.

“U.S. domestic demand is declining,” said Horii, whose fund avoids TIPS. “Inflation will stay low for a while.”

The U.S. Labor Department may say Jan. 16 consumer prices fell 0.9 percent in December, after tumbling by a record 1.7 percent in November, according to the median estimate of economists surveyed by Bloomberg. Prices excluding food and energy in Japan rose at a 1 percent rate in November, down from 2.4 percent in August. The European Union’s rate fell to 1.1 percent in December from 3.5 percent in July, according to a Bloomberg survey.

Wal-Mart Cuts

Bentonville, Arkansas-based Wal-Mart Stores Inc., the largest retailer, and Advanced Micro Devices Inc. in Sunnyvale, California, the second-largest producer of personal-computer processors, said they lowered prices as the economy slowed.

Deflation can hinder investment and spending, delaying an economic recovery. Federal Reserve Bank of Richmond President Jeffrey Lacker said Dec. 3 he was open to purchasing government debt to keep borrowing costs low and ward off deflation. Central banks are slashing interest rates and governments are earmarking trillions of dollars to pump up the economy.

The Fed cut its target interest rate for overnight loans between banks to as low as zero last month from 4.25 percent at the start of 2008, while U.S. policy makers flood the world with an extra $8.5 trillion through 23 plans designed to bail out the financial system. The European Central Bank lowered its benchmark rate to 2.5 percent last month from 4.25 percent in October.

Obama’s Plan

President-elect Barack Obama urged Congress on Jan. 8 to pass a stimulus package that may total $775 billion or risk having the U.S. sink deeper into economic crisis. “If nothing is done, this recession could linger for years,” he said in an address at George Mason University in Fairfax, Virginia.

Credit markets show the freeze is starting to thaw. It costs banks on average 1.20 percentage points more than the U.S. government to borrow for three months, down from 4.64 percentage points in October. The so-called TED spread is the narrowest since before Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15, though it’s still about three times higher than before markets started to collapse in July 2007.

The amount of U.S. commercial paper outstanding, or corporate debt due in nine months or less, rose $83.1 billion during the week ended Jan. 7 to a seasonally adjusted $1.76 trillion, the most since Sept. 10, the Fed said last week.

Gross Says Buy

Pimco co-Chief Investment Officer Bill Gross, who manages the world’s biggest bond fund, recommended inflation-linked debt last week.

TIPS “can benefit if and when the government’s efforts to reflate begin to take hold,” Gross, head of Newport Beach, California-based Pimco’s $128.4 billion Total Return Fund, wrote in a note to clients on Jan. 8. While break-even rates suggest consumer prices will fall an average of 1 percent a year for 10 years, that’s “possible, but not likely,” Gross said.

Pimco turned bullish on TIPS in October, covering a July bet that the debt would fall. The firm started the wager as crude oil rose to a record $147.27 a barrel, said Mihir Worah, who oversees the $11.1 billion Real Return Fund for the firm. Oil ended at $40.83 in New York trading on Jan. 9.

‘Unreasonable’ Outlook

Barclays Wealth, which manages about $215 billion, estimates TIPS are pricing in 11 percent deflation, according to Kevin Lecocq, the firm’s London-based chief investment officer.

“While we may get small deflation in 2009,” he told Bloomberg Television last week. “But to get an 11 percent drop is unreasonable.”

Demand for TIPS soared at the Treasury’s auction last week of $8 billion of the securities. Investors bid for 2.48 times the amount sold, the most since Jan. 12, 2000, when the so- called bid-to-cover ratio was 3.07, according to Treasury data.

The next TIPS sale, a 20-year auction, is scheduled for Jan. 26.

Inflation-linked debt issued by the U.S., U.K., and Germany had its best month in December, and the second-best in Japan, Merrill Lynch indexes show.

The securities returned 10 percent in the U.K., compared with a 5.4 percent gain for all gilts. German inflation- protected debt rose 5.6 percent, compared with 1.7 percent for all the country’s sovereign debt. U.S. TIPS rose 5.8 percent, and Japanese linkers rallied 3.1 percent, the most since returning 3.2 percent in August 2004, according to the indexes.

In the U.K., the 10-year breakeven rate fell to 1.77 percentage points from 4.15 percentage points in July. The comparable rate in Germany declined to 1.6 percentage points from 2.7 percentage points in July.

“TIPS are a great buy,” Vanguard’s Volpert said. “The economy will start coming back, and risk will be taken again, and inflation expectations will work their way up.”

Citi May Book $10 Billion Gain on Morgan Stanley Deal (Update3)

Citigroup Inc. may book a gain of as much as $10 billion by selling control of its brokerage to Morgan Stanley, helping to replenish capital depleted by the biggest losses in the bank’s history, a person familiar with the talks said.

The worst banking crisis since the Great Depression forced Citigroup Chief Executive Officer Vikram Pandit, 51, to abandon his pledge not to sell Smith Barney. For the past decade, the unit has been at the center of the bank’s plan to provide bond- underwriting, savings accounts and investment advice under a single umbrella.

“You’re selling out the future to get through the crisis of the present, and unfortunately they don’t have a lot of other choice,” David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller in New York, said in a Jan. 9 interview.

The pretax gain would come from writing up the value of Citigroup’s Smith Barney unit to a new price set by the deal, said the person, who declined to be identified because the talks are confidential. The gain of $5 billion to $6 billion after taxes would flow into Citigroup’s capital, a loan-loss cushion so eroded that the New York-based bank had to get $45 billion of rescue funds last year from the U.S. government.

Citigroup spokesman Michael Hanretta declined to comment. Jim Wiggins, a spokesman for Morgan Stanley, didn’t return calls seeking comment. Citigroup fell 11 percent to $6.02 as of 12:13 p.m.; Morgan Stanley rose 4.2 percent to $19.86.

‘Morgan Stanley Smith Barney’

Talks on the plan to combine Smith Barney with Morgan Stanley’s brokerage in a $20 billion joint venture progressed over the weekend, another person briefed on the talks said. The deal may be announced as soon as mid-week, this person said.

Former U.S. Treasury Secretary Robert Rubin, 70, who joined the company in 1999 and had opposed calls to break it up, said Jan. 9 that he plans to quit the board.

Under the plan being considered, Morgan Stanley would pay $2 billion to $3 billion to Citigroup to obtain 51 percent of a venture that would combine both firms’ retail brokerage arms, people familiar with the plan said.

The new firm, tentatively named Morgan Stanley Smith Barney, would have about 22,000 brokers, exceeding the network created by Bank of America Corp.’s Jan. 1 takeover of Merrill Lynch & Co., which have about 20,000 brokers between them.

Citigroup posted $10.4 billion of net losses in the first nine months of 2008, putting the bank on track to post its worst year since predecessor City Bank of New York was founded in 1812. Beleaguered by writedowns on mortgage-related bonds, losses on commercial real estate loans and costs related to the bankruptcy of chemicals maker LyondellBasell Industries AF, Citigroup probably lost another $5.82 billion in the fourth quarter, Sandler O’Neill & Partners analyst Jeff Harte estimated in a Jan. 9 report.

German Sale

That figure doesn’t include a $4 billion one-time gain that Citigroup expects from the sale, completed last month, of its retail banking operations in Germany. That unit was also sold by Pandit in an effort to free up capital.

Citigroup, which has 352,000 employees and 200 million customers and does business in more than 100 countries, was pieced together through acquisitions during a 17-year span by former Chairman Sanford “Sandy” Weill, who stepped down from a full-time role in October 2003.

Pandit, hired in December 2007 following the ouster of Weill’s handpicked successor, Charles O. “Chuck” Prince, vowed to conduct a “dispassionate” review of Citigroup’s business mix, and whether the company was too big to manage, as some analysts and investors contended. Pandit, who turns 52 this week, concluded that while cost cuts were needed and some assets should be sold, Smith Barney should remain united with the bank’s other operations of branch banking, securities trading and underwriting and payment processing.

Government Help

Pandit told employees on a Nov. 21 conference call that he didn’t plan to break up the company, singling out Smith Barney as a business he wanted to keep. Later that day, the bank’s share price plunged to a 15-year-low of $3.77, and Pandit spent the ensuing weekend huddled in talks with officials from the U.S. Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. over a plan to receive $20 billion of government bailout funds in addition to the $25 billion it had already received, and $306 billion of guarantees on troubled assets.

The decision to sell majority control of Smith Barney is an acknowledgement by Pandit that relinquishing responsibility for the unit may simplify the task of managing Citigroup’s remaining businesses, one of the people familiar with the plan said.

Citigroup had the worst stock performance for two years in a row among large U.S. banks, as measured by the KBW Bank Index. The stock closed at $6.75 on Jan. 9 in New York Stock Exchange composite trading.

‘Right-Sizing’

“There’s a growing dissatisfaction with the slowness with which Citi seems to be dealing with its issues, particularly in terms of right-sizing the company,” said Bert Ely, chief executive officer of banking industry consultant Ely & Co. in Alexandria, Virginia. That requires “not only substantial downsizing of the balance sheet, but also disposing of and selling off activities that are not crucial to its long-term strategy.”

Richard Parsons, 60, Citigroup’s lead outside director, told the Wall Street Journal that the board has confidence in Pandit’s leadership. Parsons may be named later this month to replace board Chairman Win Bischoff, 67, the Journal reported yesterday, citing unidentified people familiar with the plans.

VC Balderton raises $430million for start-ups

The guys behind Betfair, Setanta, Bebo have raised fresh capital. What a great time to be in the funds - and a mark of quality that these guys can raise money in the teeth of the crunch.

See Techcrunch comments on the European ‘Big Five’ - Balderton, Accel, Atlas, Wellington and Index Ventures- and I picked up on Fred Destin’s blog thoughts too.

Small and Home Business Carnival - January 2009

Well it’s a new year and, hopefully, 2009 will be a profitable one for everyone. With the way the economy is going right now, coupled with job losses from many of the big corporations, small and home businesses seem to be the way forward.

As with our previous editions, there are a number of submissions for this month. Each is very informative and carries great advice. Enjoy looking through them and see you next month ….

Brian Terry presents 3 Ways To Make Money With Product Creation posted at Big Marketing Secrets Blog, saying, “The popularity of online shopping has brought so many opportunities for entrepreneurs. Today, they don’t even need to build a brick and mortar business as they can serve their customers better through online transactions.”

Stephanie Chandler presents Take Your Website to the Next Level with Shopping Carts, Credit Cards and Affliate Programs posted at Business Info Guide.

Emmanuel presents 10 Steps to Achieving Your Business Goals posted at Emmanuel Oluwatosin: Inspiring Excellence, Realising Ambitions.

Stephen Pierce presents FREE New Year’s Report From Stephen: Income Is The Outcome! posted at DTAlpha TalkBack with Stephen Pierce, saying, “This FREE REPORT will be the most important first reading for you for the new year… so I encourage you to read it immediately. In this report we will discuss the most overlooked secret to building massive financial success.”

John Crickett presents Can I Start A Business? posted at Business Opportunities And Ideas, saying, “John answers the question “can I start a business” by examining the data on small/home businesses in the UK.”

Louis Burns presents Crafting Mental Movies For Others posted at NLP Marketing Blog, saying, “This article is about not only visualizing your own goals but the experience you want other people to have as well.”

Kathleen Gaga presents Teleseminars - One of the Best Ways to Build Your Business and Your Revenues posted at Street Smarts Marketing & Promotions, saying, “Holding live workshops and seminars are a good way to build a business. However due to current economic trends, the traditional methods of holding and conducting workshops make it very difficult to execute and get participation. In addition, the costs involved in getting a venue, audio visual aids and providing refreshments for the participants make it quite expensive and there are many factors that could prevent the event from being successful and profitable. Learn why teleseminars are one of the best ways to build your business.”

Jeff Roh presents Home Business Ideas and Opportunities at Secrets-Success.com posted at Secrets To My Success Online, saying, “Too many businesses fail to plan, which is nothing more than planning to fail. Don’t go wrong with these tips!”

Brian Terry presents 5 Hot Tips For A Big Selling Squeeze Page posted at Big Selling Website Design.

Sam presents NEW !! New Small Business Tax Tips. For Business Owners, Start-Ups and Entrepreneurs posted at Surfer Sam and Friends.

Sweet Success presents Best Work From Home Jobs posted at How To Work From Home, saying, “How to choose the best home based business for you - and why I decided to develop websites from home.”

Marie presents How to Tame Out of Control Business Cards posted at The Errand World of Personal Assistants, saying, “Small business owners receive a lot of business cards. Here’s a way to organize and store them in a meaningful way.”

Mike King presents Open Ended Questions Make Better Conversations posted at Learn This.

Helen Trump presents Slimy Internet Marketing Salesletters posted at Social Marketing by Michelle MacPhearson, saying, “Blog on how to effectively apply internet marketing through salesletters”

Thursday Bram presents Protect Your Business Information From Identity Theft posted at thursdaybram.com.

Dan-O presents How to Make a Blog and Avoid Mistakes posted at beingpad, saying, “Blogging is the very best way to market your work at home business online. Learn mistakes you don’t want to make when setting up this critical Web-based aspect of your small business.”

Eras Mokei presents Create Your Elevator Speech posted at Integrity Business Blog by Terry Dean, saying, “Creating an elevator speech that you can use in just about any setting is a great way to market your business.”

Thursday Bram presents CPSIA Letter: Not the Result I?d Hoped For posted at Solo Mode.

Rich Vosler presents It Takes A Lifetime To Master Time posted at Sales Training Tips.

Fiona Lohrenz presents Why You Should Start A Day Care In A Recession posted at Child Care Only.

Dr. Rachna D. Jain presents Growing Your Business in the New Year posted at Sales and Marketing Secrets.

Michael Beck presents 5 Secrets To Powerful Chiropractic Ads posted at Chiropractic Marketing | Chiropractic Advertising, saying, “Follow these 5 steps to create effective advertising for any small business”

Elliott presents HOW TO: Build a Small but Powerful Network posted at Good Plum | Personal Develpment, Productivity & Attracting Success.

Melissa Cassera presents Top Things to Do for your Business in 2009 posted at Cassera Communications Blog.

Scott Mahler presents Tips for Creating a Successful Blog posted at JBerry Marketing Consultants, saying, “Blogging has been around for a while, but a lot of people still think of it as something people do to spout off random thoughts. Surf around the internet a bit, and you will see how wrong that thought is. Just about every business I know has either added a blog as a companion to their website, or they are in the process of doing it. But, many of them don’t know how to go about starting it, or helping it grow.”

Susan Tatum presents Simplify Your Marketing – Take Aim | Technology Marketing by Tatum Marketing posted at Technology Marketing by Tatum Marketing.

Shawn M. Driscoll presents Career Portfolio Planning: Your Key to Long Term Success posted at Shawn Driscoll.

Melissa Newby presents Balancing Diapers and Deadlines posted at Daycare News and Articles.

MWM presents 7 Steps to Eating an Elephant (or 7 Steps to Starting a Business) posted at Pizza For A Dream, saying, “Great list of 7 steps for starting a business.”

Robert Hazlewood presents How To Write A Business Plan posted at Ways to Survive Life.

Anja Merret presents What are you offering posted at marketing fundi, saying, “One of the biggest problems facing a new entrepreneur is deciding what service or product he is in actual fact offering to future customers. It really is not as straight forward as you might think.”

Dave Dunn presents The Importance of Creating an Email List - Why You Need To Build Trust posted at Dave Dunn, saying, “One of the first things you will hear when starting out in Internet Marketing is ‘the money’s in the list’. Yes that’s right folks, the money is in the list, and this will hold true for any business online. No matter whether you are selling information products or designer jewelry; you will not have much long-term success in online sales without having the email list to sell to.”

Tisha Tolar presents Overwhelming Workload - YES! You Can Do it! posted at Empowering Mom.

Will Edwards presents On Giving Up posted at Inspiration, saying, “There is no question about it, if you want to be successful on the internet, you need to be persistent. I think most people think they are persistent enough when they start out, but when they give-up, they demonstrate that they just are not.”

Kelly Sonora presents Top 100 Blogs For Small-Business Cost Cutting Inspiration posted at Web Design Schools Guide.

American Entrepreneurship presents Understanding the Functions of Management posted at American Entrepreneurship.

Great Management presents Sports And Business Have Much In Common posted at The GreatManagement Blog, saying, “Sports and business have much in common. Each is about teamwork, graft, discipline and success. And each can learn from each other by sharing knowledge of how best to get to the top.”

Money Smart Life presents Incorporate Online With MyCorporation - Start Your Business For Free posted at Money Smart Life.

Insurance Toolbox presents Are You Self Employed? Get Inexpensive Health Insurance With Sam’s Club posted at Insurance Toolbox.

Shaun Connell presents The Get-Rich-Quick Lie posted at Financial Planning, saying, “Finally, someone explains -why- get rich quick schemes don’t work. I explain why it simply isn’t possible to get rich without -creating- something or finding a way to trade something of value. Basic business and economics… a must read for all internet marketers.”

apply4-credit presents Credit Cards Can Help Separate Your Personal From Your Business posted at Credit Card Applications Expert.

nickel presents How do Federal Income Tax Brackets Work? posted at fivecentnickel.com.

Destroy Debt presents Make Your Own Debt Reduction Plan posted at Destroy Debt.

Matthew Paulson presents Asking a Friend or Family Member For Money to Fund Your Business posted at American Consumer News.

Thursday Bram presents Tax Hacks » Blog Archive » Pre-Payment Makes for More Tax Deductions — Sometimes posted at Tax Hacks.

Jimson Lee presents Toll-free, Cheap or Free Conference Calls and Web Presentations posted at CRM Help Desk Software.com, saying, “How to Save Money on International Conference Calls and Web Presentations”

Credit Shout presents Consolidation of Higher APR’s, Worth the Hassle? posted at CreditShout.

Robert D Flach presents KEEPING TRACK OF BUSINESS EXPENSES posted at THE WANDERING TAX PRO.

Dave Cheong presents Bootstrapping Mobiusly posted at Mobiusly, saying, “Details the benefits of Bootstrapping a business and why embracing constraints can be advantageous.”

Doug Ragan presents How YOU Can Help Save The Economy posted at I’m A Pundit Too, saying, “Who’s going to save us from our failing economy? Do you really think that Congress can save both big business and you at the same time? It is obvious to everyone that the economy is in big time trouble. But what everyone doesn’t understand is how to put it back together. There is much debate about fixing the economy, bank bailouts (thanks Paulson), auto manufacturer bailouts (thanks Bush), freezing foreclosures (thanks Fannie), expansion of government programs that take jobs from the private sector(thanks Obama), the list goes on. One of the interesting things about this very long list is that it mostly seems to be about what the government can do to fix the economy, instead of what the individual can do. The government has a habit of trying to tell business what to do, then trying to prop business up to keep it from failing. This has created problems that won’t be fixed by more of the same. If you really want to talk about “Change” then you need to talk about what individuals can do to put the US economy back on track instead of what the government is going to attempt to do.”

The Dough Roller presents Small Business Credit Cards | Compare, Review, and Apply Online posted at The Dough Roller, saying, “Small business credit cards make it easy to keep business and personal expenses separate, and come with industry leading rewards such as 0 APR and unlimited rewards.”

Diane Corriette presents Want an easy and low cost way to make money online? Get yourself a blog posted at Online business building with blogs, podcasts and membership sites, saying, “If you are looking for an easy and low cost way to make money online then a blog is one of the easiest ways to get started. Relatively low cost to get started (all you need is a good hosting provider and a domain name) and easy to set up/maintain running your own blog is definitely low investment costs and high potential return”

Jack S. Keifer presents The Ten Commandments For a Stable Internet Business posted at Jack S. Keifer.

Todd Johnson presents Blogging and Social Bookmarking For Maximum Traffic posted at Internet Business And Traffic Generation Blog.

Tushar presents A List of 100 Top Directories posted at TUSHARVICKKIE, saying, “Directories are an important way to obtain a valuable link back to a website. Directories are not maintained by software tools, or run by search engine spiders, but rather Human Editors, which makes them unique. Now continuing from the last post, here one can find the list of top 100 web directories. Here is the list of top 100 web directories.”

Scott Mahler presents SEO and Your Website: How Does it Work? posted at Datex Media, saying, “Got a website or a blog? If so, than you are at least familiar with the term SEO, or search engine optimization. It has become an integral part of any web design, especially if it’s for a business. So we all know it’s important, but many people are still confused as to exactly what it is or how it works. Because of this confusion, many businesses hire companies that claim to be SEO experts, and often times, they are making lofty promises and charging even loftier prices for their service.”

Tushar Mathur presents Do your Marketing Emails look like SPAM? posted at Build Websites & Start a Business, saying, “Spam is a bigger and bigger problem nowadays. Recently Ralph Wilson, Paul Myers, and other Net marketing gurus have written about the problems that spam is causing honest, hard working Net marketers.”

Dr Martin Russell presents Word of Mouth Marketing For Small Business posted at Word of Mouth Marketing, saying, “I just finished speaking with a woman who runs her own studio. She contacted me because she realized one thing. She has lots of happy client …But She Is Getting ZERO Referrals!”

Paul Gallion presents GUARANTEED Commissions of at Least $125 Within 24 Hours posted at Paul Gallion.

Marcus Hochstadt presents Using A CMS For A Content-Rich Website posted at Marcus Hochstadt, saying, “Marcus describes how he migrated one of his static HTML sites into a Content Management System. Which platform did he choose and why?”

That concludes this edition. Submit your blog article to the next edition of the small and home business carnival using our carnival submission form.

Past posts and future hosts can be found on our blog carnival index page.

20090112

Warsaw Stock Exchange

14ª desvalorização do Rublo

Russia’s ruble slid to the weakest level in almost six years against the dollar after the central bank devalued the currency for a second day as declining oil prices threaten to deepen the country’s economic crisis (…)

Bank Rossii devalued the currency for the 14th time since Nov. 11 as Urals crude, Russia’s main export blend, slid to $42.99 a barrel, below the $70 average required to balance this year’s budget, and the halt in gas supplies to Europe damped the outlook for export earnings. The ruble may retreat 10 percent against the basket this month as companies buy foreign currency to repay more than $80 billion of debt this year, according to Societe Generale SA, France’s second-largest bank.(…)

The dispute between Russia and Ukraine over natural gas, which resulted in at least 20 European countries experiencing supply disruptions, is further deterring investors, said Kieran Curtis, a fund manager in London at Aviva Investors Ltd., which holds Russian 30-year government bonds among its $787 million in emerging market holdings.(…)

Russia is experiencing its worst economic crisis since defaulting on $40 billion of debt in 1998, after credit markets froze and the U.S. and Europe slide into recession. Standard & Poor’s cut the country’s credit rating last month amid concern about the depletion of reserves and the government has pledged a more than $200 billion rescue package.

Industrial output sank the most in 10 years in November and unemployment rose to 6.6 percent. An index of Russian service industries plummeted to a record low last month as consumers curbed spending, VTB Bank Europe said on Jan. 6.(…)

The cost of protecting Russian government debt from default rose 10 basis points to 660 points today, according to CMA Datavision in London. Credit-default swaps protect bondholders against default by paying the buyer face value in exchange for the underlying securities or cash equivalent should the borrower fail to adhere to debt agreements. The contracts traded at a record 1,233 on Oct. 24.

A Ucrânia que se cuide…

Network Engines Inc (NASDAQ:NENG)

Network Engines Inc (NASDAQ:NENG) is a perennial inclusion on lists of net net stocks and so it should come as no surprise to see it back in net net land. In November 2007, an activist investor, Trinad Management, pushed the company to “immediately [implement] a share buy-back program.” The company demurred and has now seen its stock sink to all-time lows. In after-hours trading yesterday, NENG was up a little from those lows to $0.38 (it closed yesterday at $0.40), which gives it a market capitalization of $16.5M. We estimate its liquidation value at around 55% higher at $25.5M or $0.59 per share.

About NENG

NENG develops and manufactures application platform solutions that enable original equipment manufacturers, independent software vendors, and service providers to deliver software applications in the form of a network-ready device. The company offers application platform customers a suite of services associated with the design, development, manufacturing, brand fulfillment and post-sale support of these devices. It produces and fulfills devices for its customers, and derives revenues primarily from the sale of value-added hardware platforms to these customers. These customers subsequently resell and support the platforms under their own brands to their customer base. The company’s investor relations website can be found here.

The value proposition

NENG’s earnings and cash flow are patchy (its most recent 10K can be found here).  Earnings have fallen in each of the last five quarters from $1.8M in the 2007 September quarter to -$9.7M in the 2008 September quarter. Cash from operating activities has been as high as $10.6M in the 12-months ending September 2007 and as low as -$5.4M in the preceding 12 months. As a result,   there is some vestigial value on the balance sheet (the “Carrying” column shows the assets as they are carried in the financial statements, and the “Liquidating” column shows our estimate of the value of the assets in a liquidation):

NENG has $29M in receivables that we’ve written down by 20% to $23.2M or $0.54 per share, inventory or $21.4M that we’ve discounted by a 33% to $14.3M or $0.33 per share and cash in the amount of $10M or $0.23 per share. The company has no debt. Deducting liabilities of $23.7M or $0.55 per share, we estimate NENG’s liquidation value at around $25.5M or $0.59.

NENG’s most recent 10K specifically sets out that it is not party to any special-purpose or off balance sheet entities created for the purpose of raising capital, incurring debt or operating parts of its business that are not consolidated into its financial statements.

The catalyst

Trinad Management filed its original 13D in November 2007 disclosing a 6.4% holding in NENG and attaching the following letter to NENG’s board:

We support Greg Shortell and the new management team at Network Engines and are encouraged by their accomplishments to date. We believe the focus of the sales and marketing efforts on diversifying the company’s customer base is yielding results and should allow for the continued generation of substantial free cash flow from operations.

Furthermore, we approve of management’s decision to acquire Alliance Systems, Inc. In our estimation, this acquisition should significantly increase shareholder value. It is our belief that the Company can realize increased sales through product portfolio expansion and cross selling opportunities. At the same time, synergies of the acquisition have provided Network Engines with the opportunity to significantly grow its business. The post-acquisition Network Engines should achieve economies of scale and will likely incur integration savings during FY 2008. The Alliance Systems acquisition and the shift in sales and marketing focus should result in an improved ability to successfully execute its business strategy.

Taking these positive events and Network Engines’ current and long term commitments into account, our financial analysis suggests that the Company currently has approximately $10 million in cash on its balance sheet and no funded indebtedness. In addition, our conservative projections indicate that the Company will generate an additional $10 million (or more) in free cash flow during the next 12 months. Accordingly, we strongly believe that this board and management has an obligation to dedicate a portion of its cash reserve and free cash flow to projects which have the greatest return to shareholders such as a share buy-back program. We request that the Board of Directors consider whether shareholder returns on other proposed uses of these excess funds are indeed superior to a share buy-back.

New Lows Coming?

Recent movements in the financial markets suggest that we might possibly test the November lows if several important trendlines and support levels are broken. Again, I would like to reiterate that I do not incorporate any news or fundamental analysis in my analysis; it is strictly technical. However, I do not disregard them completely because news does tend to move markets (in an irrational and unpredictable fashion).

This week is the start of the (lack of) earnings season, options expiration Friday, January 16th and President-elect Barack Obama’s inauguration next Tuesday, January 20th. Expect an increase in volatility until then as the markets try and find support or completely breakdown.

I have several charts which show important trendlines and support levels which each indice must hold onto in order to prevent the same breadth of selling we saw in November.

A break below 8350-8400 will send the Dow Jones to at least the 8000-8100 level. If that 8000 level is broken, look out below! Relative strength turned bearish as it crossed the 50 level and stochastics show that this current weakness is not yet over. The Dow Jones [Big Cap/Blue Chips]  is the weakest index compared to the NASDAQ [Tech], S&P 500 [Mid Caps], and the Russell 2000 [Small Caps].

The Russell 2000 is one of the stronger indexes (mainly because of the January Effect). A bearish flag was confirmed as the uptrend line was broken and the 440-460 levels are the next short-term targets. MACD crossed over bearishly and will cross the 0 line while stochastics also show there is more room to the downside.

The reason why I (and many others)  look at the R2K is because of the TNA and TZA 3x leveraged ETFs. While risky, these exchange-traded funds can create or destroy wealth in almost a blink of an eye.

Oil’s longer-term trends are obviously down, but the recent conflict in Gaza has sent Oil up a good amount in the short-term (nearly 50%) but it has nearly given up all of those gains. Oil seems to be building a bottom for now. A break above $40.00 on the USO will put Oil into a short/intermediate uptrend while a break below $27.73 will confirm another leg down for Oil. Keep in mind that if oil goes down, it tends to drag XOM (Exxon-Mobil) and CVX (Chevron) down which will also drag down the Dow (points-wise). I definitely wouldn’t mind $1.75/gal premium for gasoline though!

The financials (and REITs) are the weakest sectors and has been crippling the markets. The XLF crossed below its important $11.50 support level within the first 10 minutes of trading and saw relentless selling until the end of the day. I participated by buying the FAZ (3x inverse financials ETF) which gained 17% (3x financials ETF) today while the FAS lost 17% today. C (Citigroup) and BAC (Bank of America) sold off extremely hard and on massive volume as it broke support and is almost flirting with its November lows.

Odds do not favor the bullish case at this moment as there is nothing I see other than “hoping” that the markets turn around. The path of least resistance is lower as price-action indicates and the news coming out do not support the bulls. The “Santa Claus” rally is quickly losing all of its gains, but keep in mind that on election-years, the markets have historically risen until the new president-elect’s inauguration day.

If one were to go long however (for a counter-trend/contrarian trade), I would suggest placing a stop order at or a little below the support levels I drew if your trade moves against you to limit your losses.

Islamic Banking in 2009, industry at a crossroads

Watch out for news alert!

Noor Investment’s press conference on the sixth of January was set up to announce the creation of Noor Takaful, the latest Islamic insurance firm.

But in fact, Noor had to two messages, with the second no less important than the first: Noor Islamic Bank (NIB) will put its planned expansion abroad on hold in order to focus more on domestic affairs.

NIB was created almost a year ago, and it was announced at the same place, in the 27th floor ballroom of the Burj Al Arab.

But twelve months ago the future was looking much brighter. Stock indices were advancing on all fronts in the GCC. Conventional banking got into trouble step by step, but Islamic Finance did not follow.

The launch of NIB was followed by new Islamic banks, Ajman Bank and Hilal Bank in Abu Dhabi. Commercial Bank of Dubai launched its Shariah finance-section ‘Attijari Al Islami’ (Islamic commerce) in September 2008.

The shock came after Ramadan. Then it became clear that the liquidity crunch also weighed heavy on the issuance of Sukuk. Global Sukuk volume dropped by 60% to $15bn between January and October compared to the same period in the previous year.

Ongoing discussions about the Shariah-compliance of certain Sukuk, triggered by renowned scholar Sheikh Taqi Usmani, Chairman of the board of scholars at the AAOIFI (Islamic accounting organisation), also sent volumes down.

An increasing ‘copy-paste-mentality’ is regarded as a threat to the industry. ‘Who needs an Islamic hedge fund?’, was a frequently heard question asked at Islamic finance conferences in 2008.

A justified point. Islamic Banks, by nature, bear lower risks than their conventional counterparts since they do not invest in any loans (due to the prohibition of interest (Riba)) and do not trade options, futures or hedge fund (because gambling is banned as well). But: If Islamic banks merely label conventional products as ‘halal’, they manoeuvre themselves into the conventional risk class.

‘Ex oriente Lux’, lights comes from the East, again. And while Western banks reduce staff in their home markets, they are building their teams up in the Middle East and Asia.

Swiss giant UBS will establish a presence in Qatar and Riyadh this year. Credit Suisse is looking for 200 relationship managers until 2010 for its branch in Singapore, the international Islamic finance centre of the Far East.

Watch for more Islamic banks in the GCC to put their expansion strategy on hold, as Noor Islamic Bank has, and focus on their basic mission: To provide a non-interest, non-conventional, ethical style of investment.

Source: www.ameinfo.com

Try that New Exercise With Chinese Handcuffs for Trading Success

Trading, surfing, and my extensive art collection discussed here

According to Bloomberg,

By Elizabeth Lopatto

Jan. 12 (Bloomberg) — Traders whose ring fingers were longer than average, compared with their index fingers, made ten times more money than those whose two fingers were close to the same size, a study of London traders found.

The secret to prosperity may be contained in their digit ratio, which reflects the length of the index finger divided by the length of the ring finger, according to a study of 44 London traders in the Proceedings of the National Academy of Sciences. Traders with a lower digit ratio made an average of 679,680 pounds (or about $1 million U.S.), compared with 61,320 pounds ($90,956 U.S.) by those with a higher ratio, the report said.

Previous research has found that the digit ratio reflects how much testosterone an unborn baby was exposed to in the womb. Those exposed to high levels of the hormone are more sensitive as adults to testosterone that creates feelings of confidence and encourages risk-taking, said study author John Coates. Recognizing the physical characteristics of employees may help companies weigh their reaction to events, he said.

“Economics hasn’t actually looked at the physiology of people in stock market bubbles and crashes to see if their rationality is being impaired by their physiology,” said Coates, a professor at the Judge Business School at the University of Cambridge in the UK, in a telephone interview.

Earlier studies have identified several physical characteristics that reflect prenatal hormone exposure, including the digit ratio.

University of Cambridge

The new study was funded by the University of Cambridge. Coates and his team photocopied the right hands of 44 traders, all men, in London. He then measured the length from the tips of the fingers to the crease closest to the palm; the measurement was replicated by an independent observer.

The team found those with a lower digit ratio of 0.93, on average, earned ten times more than those with an average ratio of 0.988. Men typically have a ratio below 1, indicating their ring fingers are longer, Coates said. Women typically have a ratio of 1 or above.

The study also found traders who have long ring fingers stayed in their jobs longer. Participants worked in a type of trading known as “high-frequency” trading, which lends itself to risk-taking and quick reactions, the authors wrote. In other types of asset management, such as mutual fund or pension managers, these types of traders may not be as successful, Coates said.

Even within high-frequency trading, comparing the finger ratio only works if traders have equal access to capital and information, and similar risk limits, said Coates, who worked as a derivatives trader at Deutsche Bank in New York from 1996 to 2001, during the dot-com bull market. He was able to adjust the study data to minimize the influence of these factors.

“This was the trickiest part,” Coates said.

To contact the reporter on this story: Elizabeth Lopatto in New York at elopatto@bloomberg.net.

Two stories of bad economic news

Chief Economist: It’s A Depression

Morici one of first senior analysts to admit U.S. faces 1930’s style collapse

Robert Shiller, Professor of Economics at Yale University, who predicted the end of the internet bubble seven years ago, said: “We could have many years of a very weak economy. Big recessions are followed by years of weakness and typically unemployment keeps rising.

“To say that this will last years is not a dramatic statement. What is happening now is much worse than 1990. We could be facing a decade of real weakness.

“This is no ordinary recession. There are signs that people see this as a different story. People are talking about a depression, something that we haven’t seen previously.”

Professor Shiller’s comments come as the unemployment rate in America is rising astonishingly fast.

Last week official figures showed that the US lost 524,000 jobs in December, with the overall unemployment rate rising to 7.2 per cent — the highest level for 16 years.

With about 11.1 million people out of a job, the total number of unemployed is about 50 per cent higher than a year ago.

Some economists, such as Kenneth Rogoff, the former chief economist at the International Monetary Fund and now a Professor of Economics at Harvard University, believe that America will be lucky if unemployment peaks at 9 per cent of the workforce and that there is a high chance that it will reach at least 10 per cent.

Professor Shiller, who said that he has talked to the incoming Obama Administration about possible solutions to the housing crisis in the US, took a swipe at the Federal Reserve.

He said: “This recession is by no means mechanical. People have lost a sense of confidence, a sense of trust in institutions and in each other. It is very hard for a central bank to address that by just cutting interest rates.”

Professor Shiller, who has recently published The Subprime Solution How Today’s Global Financial Crisis Happened, and What to Do About It, also warned that plans to try to limit foreclosures had met with resistance from those who felt “they had paid their mortgages, they had done everything right, but that they are now being taxed for those who did not”.

The housing market in the United States is widely seen as one of the main causes of its economic troubles.

Spurred by low interest rates and initiatives to promote home ownership, residential real estate boomed for a decade.

Professor Shiller, who co-founded the authoritative S&P Case/Shiller home price index, was one of the first to predict that the housing market would slump and that this could bring down financial institutions.

He said: “So far the Government isn’t doing much. [President-elect Barack] Obama has not made any announcement. They do not have anything going. I would have thought that Obama would be receptive [to a rescue plan to stem the rate of foreclosures].”

Sony may post $1.1 billion op loss, the first loss in 14 years

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Sony Corp may post an operating loss of  approx 100 billion yen (or $1.1 billion) this financial year, its first such loss in 14 years, due to weak sales and a stronger yen, a source close to the matter said on Tuesday. full story : http://tinyurl.com/79xbdw

Central Bankers expect global recovery

The global economy will recover in 2010, from a sharp slowing this year as official steps to lift growth hit home, central bankers said on Monday.

The European Central Bank president, Jean-Claude Trichet, who chaired talks here on the world economy, said restoring confidence was absolutely crucial as emerging markets join the industrialized world in feeling the impact of the financial crisis. Full : http://tinyurl.com/9uw7m4

Citi inches toward deal

Citigroup  got closer to selling a stake in its Smith Barney retail brokerage to Morgan Stanley, but its shares fell on concerns about the bank’s balance sheet along with  its fourth quarter results.

Citigroup shares closed down $1.15, or 17 %, to $5.60 on the NYSE, bringing the company’s market value down to $30.5 billion. The shares hit their lowest level since November 24, a day after the company received a $20 billion capital infusion from the United States  government. full read : http://tinyurl.com/8lo8lm

Putting together two brokerage networks (Morgan Stanley/Smith Barney) will be quite a challenge.  (WSJ.com, Market Movers, DealBook, Deal Journal)

The bond vigilantes are asleep at the switch if they think the Fed cannot bring about inflation.  (Telegraph.co.uk)

The worst quarter for dividends.  Ever.  (FT Alphaville also Free exchange)

On the value of stop loss orders.  (Big Picture)

Pimco launches the new Pimco Global Advantage Bond Index.  Index fund to follow.  (IndexUniverse.com)

Oil traders are scrambling to hire supertankers to store oil.  (Times Online via Keith Shepard)

60 Minutes missed the market on its “oil speculation” story.  (Crossing Wall Street, Big Picture)

Some signs of hope from the money markets.  (Econbrowser)

The drop in exports from Korea and Taiwan is stunning.  (Follow the Money)

The opinions of supposedly smart people differ widely on the prospects of deflation vs. inflation.  (Capital Spectator)

The case for ‘demolition as stimulus.’  (Calculated Risk)

Believe it or not, there is a silver lining in the employment figures:  higher productivity.  (Real Time Economics)

Why is it that economics is a Teflon discipline, seemingly unable to admit or recognize its errors?”  (naked capitalism)

A “teachable moment” and the value of checking your assumptions.  (Sabernomics.com)

Why the Mediterranean is the Achilles’ heel of the web.  (NewScientist.com)

In your career, will you be Pittsburgh or Detroit?  (lazerow.com via Howard Lindzon)

China’s Red Dragon Turns Financial Crisis into Opportunity

http://www.moneymorning.com/2009/01/07/china-outlook-2009/

The Chinese word for crisisis weiji.

But get this - when translated literally, wei means danger and ji means opportunity. So to the Chinese, a crisis - or danger - represents an opportunity.

Of course, you don’t have to actually speak Chinese to understand what this mindset means for investors.

What you’re seeing in China today is nothing less than the classic definition of a crisis presenting the profit opportunity of a lifetime.

While investors in U.S. markets are mostly concerned about saving their necks, China has been stacking the deck in favor of those who have the guts to pull the trigger on the most undervalued market in memory.

Here’s why you should consider taking an early position in China in 2009.

The Mother of All Stimulus Plans

While it’s not old news, the current crisis in U.S. financial markets is all too familiar. The Standard & Poor’s 500 Index is down almost 40% from its 52-week high and there seems to be no end in sight.

Worse, the malaise encompassing the United States has clearly spread to the rest of the world, including China.

So it appears that what investors once considered to be the greatest investment opportunity of our lifetime has imploded - just another financial black hole where portfolios go to die.

Truth be told, however, there is ample evidence that China’s economy and markets will weather the storm and ultimately thrive in the year ahead.

The Chinese economy has been the fastest growing in the world for the last three decades, averaging double-digit growth for the last seven years. And while the credit crisis has slammed on the brakes in terms of growth in the West, China is still on track for a solid 8% growth in 2009.

But the Red Dragon isn’t about to take any chances. With $2 trillion in foreign exchange reserves available, China can increase the growth rate of its economy - even as it works to boost economic recovery efforts elsewhere in the world.

And that’s just what it’s about to do.

The People’s Republic of China has already announced a $586 billion (4 trillion yuan) spending package. To put that in perspective, this plan amounts to a staggering 20% of China’s gross domestic product (GDP). Compare that to the $1 trillion in U.S. bailouts, which equate to about 8% of GDP.

And China’s reserves won’t be doled out in dribs and drabs. The plan calls for spending the whole amount in just a few years.

To further grease the recovery skids, China has reduced interest rates five times in the last three months, and loosened lending rules. Now China’s banks are perfectly positioned to get the ball rolling, flush with cash from a world-leading savings rate of 35%. And because they are state-owned, the cash will flow quickly from the banks to government projects.

The convergence of the recent market swoon and the stimulus plan means you now have the opportunity to buy great companies at the dawn of the Chinese century.

But specifically, where should you look to park investment capital in the Chinese market?

Well, there are solid plays across all spectrums of China’s economy, but the best are in infrastructure, consumer goods and energy.

Infrastructure Paves the Way to Profit

The first place to look is infrastructure development, which has been the main engine of China’s explosive growth over the past two decades.

While most believe China’s economy is export driven, statistics show public works spending accounts for 4%-6 % of the country’s GDP growth. From 2007-2010, China will spend a whopping $725 billion on infrastructure improvements in a race to accommodate its rapidly migrating populace.

By 2030, 1 billion of its people will live in cities, up from 600 million today. About 170 mass-transit systems will be needed. Another 40 billion square meters of floor space will be built in 5 million buildings - 50,000 of which could be skyscrapers.

And all of these developed regions will be connected by new roads. Shorter transport times drive down costs, and smooth the transition to city living for China’s exploding middle class.

Plans for China’s road system call for 12 major routes across the country from north to south and east to west connecting millions to new routes of commerce, according to The Wall Street Journal. The system will stretch 53,000 miles by 2020, surpassing the 47,000 miles of roadways in the United States.

It will take massive amounts of steel, cement, and bulk transportation to build those roads.

Money Morning Contributing Editor Martin Hutchinson believes one big winner from the infrastructure boom will be Vale (ADR: RIO) the world’s largest producer of iron ore. As the world’s leading producer and consumer of steel, China is also the world’s leading importer of iron ore, which - along with coking coal - is a key component in steel production.

And while prices and demand for Chinese steel fell sharply in the second half of 2008, they are already beginning to pick back up.

In fact, steel production in the Chinese city of Tangshan, in the Hebei province, has risen to more than 70% of capacity as companies resumed output after prices stabilized, the Tangshan Evening News reported Dec. 26. About 39 out of 57 iron and steel factories in Hebei, China’s biggest steel-producing province, are operating now, compared with 25 in August.

Tangshan is an industrial-level city in that steel-rich region.

“The iron-ore stocks have been overly poorly treated in the past couple of months with all the fear over China,” Michael Heffernan, a client adviser with Austock Securities Ltd., told Bloomberg News.

“Negativity over the Chinese situation is overdone,” Heffernan added. “In the past couple of months the Chinese may have been posturing to get the best possible deals they could when negotiations over contract prices reopen.”

That’s good news for Vale, which looks attractive with a Price/Earnings (P/E) ratio of only 8.6.

A big source of China’s iron-and-steel demand has to do with the country’s commitment to railroads. A full $100 billion of the stimulus package will be spent on rail services.

That makes Guangshen Railway Co. Ltd. (ADR: GSH) a good play.

Guangshen Railways is the biggest rail operator in China with cargo and passenger operations between Guangzhou and Shenzhen, as well as Hong Kong.

There is an acute shortage of rail capacity to carry raw materials from China’s western provinces to manufacturing centers on the Red Dragon’s East Coast. Right now, cargo capacity is only 35% of demand, according to the Chinese Railway Ministry.

That helped revenue at this $94 billion company to jump 17% in the first three quarters of 2008, despite a crippling snowstorm in January. Guangshen also yields about 3%, rewarding investors who are willing to hold the shares as they wait for the stimulus to kick in.

China’s Urban Migration and Growing Consumer Class

The opening of new highways is providing greater mobility to China’s population, accelerating the massive move from the hinterlands to the cities. Incredibly, China will have 221 cities with more than one million inhabitants by 2025 - compared with 35 in Europe and nine in the United States today.

Quite simply, that urban migration is responsible for creating the largest consumer class the world has ever seen - a middle class greater than the entire population of the United States.

Retail sales in China are estimated to have risen about 21% in 2008, according to the Ministry of Commerce. And now that weakness in the global economy has dented exports, the government is making an even greater effort to boost domestic consumption.

That’s why Money Morning Contributing Editor Horacio Marquez likes China Life Insurance Company Ltd. (ADR: LFC).

China Life is experiencing continued growth for reasons unique to government regulations. Without a social security system, Chinese consumers must fund their own retirement - one reason the Chinese save an amazing 35 cents of every dollar they earn.

Also, China Life’s investment portfolio hasn’t been hit by the market meltdown, because government regulations prevented the company from owning subprime-related mortgages and securities. With 43% market share, Moody’s Corp. (MCO) expects premiums to grow between 30% and 40% in 2008. And right now, only 3% of China’s consumers own life insurance, leaving plenty more room for growth.

Another company worth looking at is China Mobile Ltd. (ADR: CHL).

With 443 million subscribers, China Mobile is the dominant provider in the world’s largest mobile telecom market. And in terms of growth, an additional 3 million to 4 million consumers become mobile phone subscribers in China each month, according to the Chinese Ministry of Information.

The company’s earnings per share (EPS) increased 31% in the first three quarters of 2008 and China Mobile stock yields a healthy 3.2%.

Now, the mobile services giant is in talks with Apple Inc. (AAPL) to introduce the iPhone to the burgeoning Chinese market. And with the global slump hurting smaller players, it’s on the hunt for acquisitions with attractive valuations in emerging markets.

Soaring Energy Demand = Growing Profit

Despite a slight slowdown in the economy, China’s energy appetite continues to grow at a ravenous pace. And even though the country is building one coal-fired power plant a week, China’s unable to keep up with exploding demand.

China’s electricity consumption rose 5.2% in 2008 and investment follow. A total of $84 billion (576 billion yuan) was invested in the sector in 2008 - a 1.52% over to 2007. Power grid spending rose 17.69% to $42 billion (288.5 billion yuan).

As with other forms of infrastructure, China plans to up its investment in electricity over the next several years. China has already announced $29 billion in new energy projects, including a new natural gas pipeline, construction of 10 new nuclear power plants, and a new coal mine, set to produce 14 million tons of coal a year.

Here are two solid profit plays on the new infusion of cash:

Money Morning Investment Director Keith Fitz-Gerald likes Yanzhou Coal Mining Co. Ltd. (YZC).

China burns more “black rock” than the United States, Japan and Europe combined, and this company is one of China’s biggest coal suppliers. It produces lots of high-grade, low-sulfur coal, which burns cleaner and fetches a premium price. The company also boasts profit margins of 22% in an industry where the margins average about half that amount. For the first three quarters of the year, the company posted profits that were up 364% from a year ago. This kind of growth, in a stock that’s trading at three times earnings, is a big time potential bargain - especially given its dividend yield of 4.3%.

Both Fitz-Gerald and Hutchinson recommend like Huaneng Power International Inc. (HNP), as well.

Huaneng is the largest utility in China, and is a virtual lock to benefit from growth in any form. It owns 16 operating power plants, and has controlling interests in 13 others. As a state-owned enterprise, it has the contract to produce the power for the entire eastern region of China, including Shanghai and Beijing. Although it’s been generating losses lately due to high coal prices, the power company is likely to increase output and profits with any economic expansion.

If you’re leery of investing in individual stocks you might want to look at the Templeton Dragon Fund Inc. (TDF). Over 80% of the closed-end’s assets are directly invested in China. And with roughly 50 positions, it provides ample diversification.

[Editor's Note: As the whipsaw trading patterns energy investors have endured this year have shown, the ongoing financial crisis has changed the investment game forever. Uncertainty is now the norm and that new reality alone has created a whole set of new rules that will help determine who profits and who loses. Investors who ignore this "New Reality" will struggle, and will find their financial forays to be frustrating and unrewarding. But investors who embrace this change will not only survive - they will thrive.

Money Morning Investment Director Keith Fitz-Gerald has already isolated these new rules and has unlocked the key to what he refers to as "The Golden Age of Wealth Creation." But Fitz-Gerald brings more than a realization - and an understanding - to the table, here. After a decade of work, he's also developed a new computerized trading model based on a mathematical concept known as "fractals." This system allows him to predict price movements of broad indexes, or individual stocks, with a high degree of certainty. And it's particularly well suited to the kind of market we're all facing right now. Check out our latest report on these new rules, and this new market environment.]

Poor Sleep Linked To More Colds


US researchers found that people who slept fewer than seven hours a night, and who spent more of that time awake, were nearly three times more likely

to develop a cold than people who had eight hours or more of undisturbed sleep.



colleagues, and was published in the 12 January issue of the Archives of Internal Medicine.



Poor sleep is thought to be a predictor of low immunity, and thereby more readily predisposing people to the common cold, although there is no direct

evidence tying sleep quality in the weeks leading up to exposure to the risk of infection. The researchers said that studies had also shown that people

who slept between seven and eight hours per night had the lowest rates of heart disease, illness and early death.



For this study, which took place between 2000 and 2004, Cohen and colleagues examined the links between sleep quality and sleep duration in the

weeks leading up to being exposed to a cold virus, to the susceptibility to catching it.



The researchers recruited 153 healthy male and female volunteers aged 21 to 55 years and interviewed them every day for fourteen days to find out how

long they had slept the previous night, how efficient their sleep had been, that is what percentage of the time in bed was actually spent sleeping, and

whether they felt rested. The researchers then worked out the average quantities of sleep duration and sleep efficiency for each person for the 14

nights.



The volunteers then went into quarantine and took nasal drops containing the common cold virus (rhinovirus). They were kept under close

observation for signs of a cold during the day before their exposure and for 5 days afterwards. They also gave mucus samples during this observation

period, which were tested for virus cultures, and 28 days or so later they gave a blood sample that was tested for antibody response to the cold virus.




Before the 14 days of monitoring, each participant also underwent a “pre-challenge” examination, where the researchers obtained information about

potential confounders such as virus-specific antibody levels in their blood, demographics, body mass index, psychological variables and health

behaviours.



The results showed that:

Cohen and colleagues concluded that:



“Poorer sleep efficiency and shorter sleep duration in the weeks preceding exposure to a rhinovirus were associated with lower resistance to

illness.”



The researchers also looked at separate components of illness and how they linked to the variables they measured.



“When the components of clinical illness (infection and signs or symptoms) were examined separately, sleep efficiency but not sleep duration was

associated with signs and symptoms of illness,” they wrote, but “neither was associated with infection.”



“A possible explanation for this finding is that sleep disturbance influences the regulation of pro-inflammatory cytokines, histamines and other

symptom mediators that are released in response to infection,” they suggested, recommending that seven to eight hours sleep a

night would appear to be a reasonable target.



The editors noted that the study was supported by the National Heart, Lung and Blood Institute, by the National Institute of Allergy and Infectious

Diseases and by supplementary funds provided by the John D. and Catherine T. MacArthur Foundation Network on Socioeconomic Status and

Written by: Catharine Paddock, PhD

[Via http://www.medicalnewstoday.com]

Poor Sleep Linked To More Colds


US researchers found that people who slept fewer than seven hours a night, and who spent more of that time awake, were nearly three times more likely

to develop a cold than people who had eight hours or more of undisturbed sleep.



colleagues, and was published in the 12 January issue of the Archives of Internal Medicine.



Poor sleep is thought to be a predictor of low immunity, and thereby more readily predisposing people to the common cold, although there is no direct

evidence tying sleep quality in the weeks leading up to exposure to the risk of infection. The researchers said that studies had also shown that people

who slept between seven and eight hours per night had the lowest rates of heart disease, illness and early death.



For this study, which took place between 2000 and 2004, Cohen and colleagues examined the links between sleep quality and sleep duration in the

weeks leading up to being exposed to a cold virus, to the susceptibility to catching it.



The researchers recruited 153 healthy male and female volunteers aged 21 to 55 years and interviewed them every day for fourteen days to find out how

long they had slept the previous night, how efficient their sleep had been, that is what percentage of the time in bed was actually spent sleeping, and

whether they felt rested. The researchers then worked out the average quantities of sleep duration and sleep efficiency for each person for the 14

nights.



The volunteers then went into quarantine and took nasal drops containing the common cold virus (rhinovirus). They were kept under close

observation for signs of a cold during the day before their exposure and for 5 days afterwards. They also gave mucus samples during this observation

period, which were tested for virus cultures, and 28 days or so later they gave a blood sample that was tested for antibody response to the cold virus.




Before the 14 days of monitoring, each participant also underwent a “pre-challenge” examination, where the researchers obtained information about

potential confounders such as virus-specific antibody levels in their blood, demographics, body mass index, psychological variables and health

behaviours.



The results showed that:

Cohen and colleagues concluded that:



“Poorer sleep efficiency and shorter sleep duration in the weeks preceding exposure to a rhinovirus were associated with lower resistance to

illness.”



The researchers also looked at separate components of illness and how they linked to the variables they measured.



“When the components of clinical illness (infection and signs or symptoms) were examined separately, sleep efficiency but not sleep duration was

associated with signs and symptoms of illness,” they wrote, but “neither was associated with infection.”



“A possible explanation for this finding is that sleep disturbance influences the regulation of pro-inflammatory cytokines, histamines and other

symptom mediators that are released in response to infection,” they suggested, recommending that seven to eight hours sleep a

night would appear to be a reasonable target.



The editors noted that the study was supported by the National Heart, Lung and Blood Institute, by the National Institute of Allergy and Infectious

Diseases and by supplementary funds provided by the John D. and Catherine T. MacArthur Foundation Network on Socioeconomic Status and

Written by: Catharine Paddock, PhD

[Via http://www.medicalnewstoday.com]

Poor Sleep Linked To More Colds

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US researchers found that people who slept fewer than seven hours a night, and who spent more of that time awake, were nearly three times more likely

to develop a cold than people who had eight hours or more of undisturbed sleep.



colleagues, and was published in the 12 January issue of the Archives of Internal Medicine.



Poor sleep is thought to be a predictor of low immunity, and thereby more readily predisposing people to the common cold, although there is no direct

evidence tying sleep quality in the weeks leading up to exposure to the risk of infection. The researchers said that studies had also shown that people

who slept between seven and eight hours per night had the lowest rates of heart disease, illness and early death.



For this study, which took place between 2000 and 2004, Cohen and colleagues examined the links between sleep quality and sleep duration in the

weeks leading up to being exposed to a cold virus, to the susceptibility to catching it.



The researchers recruited 153 healthy male and female volunteers aged 21 to 55 years and interviewed them every day for fourteen days to find out how

long they had slept the previous night, how efficient their sleep had been, that is what percentage of the time in bed was actually spent sleeping, and

whether they felt rested. The researchers then worked out the average quantities of sleep duration and sleep efficiency for each person for the 14

nights.



The volunteers then went into quarantine and took nasal drops containing the common cold virus (rhinovirus). They were kept under close

observation for signs of a cold during the day before their exposure and for 5 days afterwards. They also gave mucus samples during this observation

period, which were tested for virus cultures, and 28 days or so later they gave a blood sample that was tested for antibody response to the cold virus.




Before the 14 days of monitoring, each participant also underwent a “pre-challenge” examination, where the researchers obtained information about

potential confounders such as virus-specific antibody levels in their blood, demographics, body mass index, psychological variables and health

behaviours.



The results showed that:

Cohen and colleagues concluded that:



“Poorer sleep efficiency and shorter sleep duration in the weeks preceding exposure to a rhinovirus were associated with lower resistance to

illness.”



The researchers also looked at separate components of illness and how they linked to the variables they measured.



“When the components of clinical illness (infection and signs or symptoms) were examined separately, sleep efficiency but not sleep duration was

associated with signs and symptoms of illness,” they wrote, but “neither was associated with infection.”



“A possible explanation for this finding is that sleep disturbance influences the regulation of pro-inflammatory cytokines, histamines and other

symptom mediators that are released in response to infection,” they suggested, recommending that seven to eight hours sleep a

night would appear to be a reasonable target.



The editors noted that the study was supported by the National Heart, Lung and Blood Institute, by the National Institute of Allergy and Infectious

Diseases and by supplementary funds provided by the John D. and Catherine T. MacArthur Foundation Network on Socioeconomic Status and

Written by: Catharine Paddock, PhD

[Via http://www.medicalnewstoday.com]

1st US Mutual Fund to use Sustainability Index

Announced on December 18th, the Dreyfus Global Sustainability Fund is the 1st US Mutual Fund to use the DJSI Global Index as its investable universe. In plain english, this means the Fund will only select investments that have passed the fund’s strict sustainability criteria.

Dreyfus, part of BNY Mellon Asset Management, will join the Chicago Climate Exchange and State Street Global Advisors as the 3rd US Licensee of DJSI. Germany counts 11 Licensees, Switzerland 6 and Japan 2.

Dreyfus’ Chief Investment Officer, Phil Maisano, believes the fund is being launched at an ideal juncture in US government spending priorities:

Also on:  SocialFunds

Press Releases: DJSI, BNY Mellon

Credit to Jerome Tseng of CSR Taiwan for putting this on Twitter.

To answer slegg

Darling Slegg Queries:

“Hey, let’s say that you got around $10,000 tomorrow. What would be the best way to make that grow in a year’s time?”

The Non-Answer:

The correct question is, what do I want to do with the money in a year’s time?

The Short Answer:

CDs.

The Long Answer:

That depends on a number of factors. Do I have any debt? Do I need the money to be liquid for the duration of that year for any reason? Am I expecting to make any big, unavoidable purchases in the next year (car repair, dental work)? How’s my job security? Do I have a lucrative college degree?*  Ever the skeptic, why do I suddenly have $10,000 and do I owe anyone — aka, THE MAN — anything for it?

*Not a non-sequitur.

I suspect what she’s asking me is where I would put the money so that it would create the most passive income, but there are a number of issues that arrive with an arbitrary, hypothetical situation.

If I had $10,000 and needed to access it in a year’s time, I would not invest in anything that is not FDIC insured. Very generally speaking, CDs tend to have the best interest rates for FDIC insured accounts (a quick Google search for CD savings rates brings me to bankrate.com, and right now GMAC bank is showing the best rate — 3.68% with 3.75% APY and a $500 minimum)**. See, the nice thing about CDs is that the rates won’t change — my high-yield savings account won’t promise that, which is why I just transferred my emergency savings account from FNBO Direct (~2.85%) to Dollar Direct (4% intro APY). I’d make a reliable couple hundred bucks. I’m basically being paid a pittance for patience.

**You’ll notice that my savings account has a better interest rate than CDs these days.  That’s why research is key.

The Longer Answer:

$10,000 is a good chunk of money for anyone, but everyone values it differently. This is why it’s important to have goals, both financial and personal, and ideally, your financial goals are set in order to help you reach your personal goals. It’s called “maturity” — not just for Certificates of Deposit anymore!

See, maybe you’re going to be emotionally and financially ready to buy a house in a year — then that $10,000 needs to be worth at least $10,000 to help with the down payment, so you can’t risk it in anything that’s not insured.

Or maybe you’re more professionally focused.  You could put $10,000 towards a degree or a certificate that will make you more qualified and thus worth more money and more valuable in the job market. There is nothing more worth your money than yourself, and educating yourself will increase your lifetime income exponentially. Unless you’re a liberal arts grad student, in which case you’ve already prepared yourself for poverty.

Maybe you have omnipresent student loans, or a car payment, or a few thousand in credit card debt you keep swearing you’re going to pay off.

Maybe you have a higher tolerance for risk, or a greater need for financial security.

The Responsible Anwer:

If I wanted to be really sexy and wise, I’d pretend like the money never existed in the first place and I’d put it all in an index fund and not think about it for fifty years, when it would be like receiving a gift all over again, except it would be something like $50,000 I would have to contemplate spending. Ah, compound interest. How you razzle-dazzle in the face of inflation.

The Actual Answer:

For me, personally, and this applies only to my lifestyle choices, with my current financial and personal goals in mind, here’s what I would do with a $10,000 gift (which, I believe, is the maximum amount before the taxman cometh):

The “If This Isn’t A Hypothetical Question And You Are Coming Across $10,000 Tomorrow” Answer:

You should donate a portion of the proceeds to me, your friendly, neighborhood, non-professional, distinctly amateur, hobby personal finance advisor.

Hope this helps, slegg.  Xoxo, m

1.12.2009 Minneapolis Minnesota Mortgage Update: Week Ahead

1.12.2009

Here is a brief breakdown of the week ahead of us in the markets.  This synopsis was provided to Uptown Financial Corp. via one of our Wholesale Lenders and is intended for educational purposes only.

 

 

 

 

Super Big Bang

The Story of His Driving Vision

M y father is most widely known for his famous techno- 

logical innovations – the mouse, interactive comput- 

ing, hypermedia, groupware, human computer interface, etc. 

But his most important breakthrough innovation of all was 

not technological or tangible. The incredible stream of break- 

through innovations coming out of his lab – and the amazing 

demo in 1968 was just a snapshot of his work at that moment 

in time  – all that stuff didn’t just happen! Yes he had a brilliant 

idea, a brilliant team, great facilities at SRI, great support from 

ARPA. But that still doesn’t account for the rate and scale of 

innovation they ramped up to in a relatively short time. There 

was a powerful phenomenon at work that Doug Engelbart de- 

signed and embedded in his lab, and that’s the story I’m here 

to tell. 

At the time of the 1968 demo I was 13 years old. It was a 

local conference, so my mom, my two sisters and I got to attend. 

This was my fi rst time seeing Dad give a talk. I had a front row 

seat. And the truth is, I had no idea how signifi cant his work 

was! All that technology was nothing new to me; I had grown 

up with it in our home, visiting Dad’s lab. He used us as guinea 

pigs for some of his inventions, taught us and our friends how 

to use the chorded keyset when he fi rst conceived it, telling us it 

was a secret code. I had no idea how this demo compared with 

other work being done at the time, and besides, it was just my 

Dad up there – the guy who took us camping and canoeing, 

organized games for us and the neighbor kids and took out the 

garbage. Someone came up to me after the presentation and 

said “Wow, now your Dad’s famous!” I thought “Huh, what do 

they know?” 

I didn’t really start to appreciate his work until I had 

 

graduated from college with a degree in Cultural Anthropol- 

ogy with a special focus on applying anthropology to the study 

of organizations. Talking to Dad one day about his work and 

realizing, he wasn’t all about technology! He was about some- 

thing much grander, something much more important: he was 

all about people and helping mankind solve important human 

problems, and most of all he was about innovating the human 

potential for solving those problems! This was the moment 

where I fi rst thought “Way to go, Dad!” 

Doug Had a Vision 

It all started when he got engaged to my Mom. All of a sud- 

den he realized that he had run out of goals – getting an educa- 

tion, getting a decent job, and getting engaged to start a family 

were now achieved. Well what kind of goals am I looking for, he 

wondered? So (this always astounds me) he set about methodi- 

cally working out what his goals would be. He would like to 

make a difference in the world, help solve important problems. 

Well, what problems would he like to solve? What would make 

the biggest difference to the world? (He never was one to think 

small). 

And then he realized that no matter what problem you are 

working on, whether it’s political, economic, technical, environ- 

mental, whether it’s world peace or world hunger, getting better 

products out the door faster, or improving our social institu- 

tions, it’s how you go about it that makes all the difference. You 

can’t solve important problems alone, so it takes some kind of 

working collectively. 

And if you look at all the problems out there to solve versus 

our collective capability to solve them, well, there’s already a 

huge disparity there; already there are more problems, bigger 

problems out there than we, as a people, can fi nd answers to fast 

enough. And recognizing that the world is getting increasingly 

complex and global, the problems will only be getting expo- 

nentially more complex and urgent, and the rate and scale of 

 

change is making everywhere you turn more complex, problems 

are more interlocked and scaling up. This was back in 1951, by 

the way—even more true today! 

He realized that if the rate and scale of important problems 

is on an S-curve, and our ability to solve problems is only im- 

proving incrementally, then we are in serious trouble. 

He thought, OK, this is a really important complex, urgent 

problem, and in fact this could be the most urgent question 

of all because if you could solve the problem of how we as a 

people could be dramatically more effective in solving complex 

urgent problems collectively, then you could solve most any- 

thing, anywhere! 

This was a great discovery (I think of this like he was isolat- 

ing a gene in the DNA). He saw that how we work together is 

a cross-cutting capability, that if you could boost that, you’d of- 

fer incredible leverage to everyone solving problems on a global 

scale. 

OK, he said, that’s the crusade I’ll dedicate my career to. 

Doug worked out a strategy for speeding up progress toward 

that vision 

He realized it was a race, how fast things are getting out of 

hand versus how you could get the most effective organizations 

and initiatives working infi nitely more effectively on important 

problems. So it’s not enough to just start a project to work on 

tools to help improve this collective intellectual capability. You 

need a strategy for taking this collective IQ capability up the 

S-curve. So he set to work hammering out that strategy and 

emerged with a set of strategic organizing principles with some 

crucial built-in accelerators to catapult the way we work to a 

whole new level. 

And it’s this strategy for speeding up progress toward this 

vision that has been his greatest breakthrough of all – way more 

signifi cant than the demo, way more signifi cant than any of his 

lab’s other accomplishments. Doug Engelbart’s greatest break- 

through was developing a strategic approach for dramatically 90 

innovating how we work on important problems collectively. 

He implemented this approach in his lab from the very start 

(at least as much as his team would tolerate), and that is what 

drove these breakthrough innovations coming out of his lab. 

That’s what drove probably the most innovative lab ever before 

or since. 

Now, if you could plug that same driving vision for inno- 

vating the way we work into today’s organizations, networks, 

institutions and initiatives, just imagine how quickly we could 

climb that innovation S-curve now. Just think of how much 

more effective we could be collectively. Just think of what kind 

of human race we could be. 

So that’s what I’m here to tell you about. The great secret of 

what was behind the incredible breakthrough innovations com- 

ing out of Doug Engelbart’s lab, the great secret of his strategic 

organizing principles with the built-in accelerators for rapidly 

raising our Collective IQ. 

I’ll give some examples of how he put it to work in his lab, 

and how you might put it into play today. 

Basic Orgranizing Principles 

1. First Organizing Principle: Focus on Collective IQ 

The fi rst thing he did in fl eshing out his strategic vision was 

to nail down key capabilities we need to focus on innovating 

to afford the greatest leverage to this grand pursuit. Number 1 

was our ability to tackle important problems collectively, which 

he initially called “augmenting human intellect,” and later our 

“Collective IQ.” This is the key to how we work collectively – 

a measure of how effective we are at tackling complex urgent 

problems collectively, how quickly and intelligently we can re- 

spond to a situation collectively, leveraging our collective mem- 

ory, perception, planning, reasoning, foresight, and experience 

into applicable knowledge. 

That’s the primary capability he sought to improve, and 

never wavered from that focus.

 

2. Capability Co-Evolution Accelerator 

As a radar technician in World War II in the Philippines, 

he had read Vannevar Bush’s article “As We May Think” which 

had inspired him to think about new mediums for information, 

which he recognized would play a key part in raising Collective 

IQ. If radar could be displayed on a screen, then information 

could be displayed on a screen. He had a vision of intellectual 

workers looking into screens as a portal into their information 

space, fl ying around and navigating and sharing information in 

entirely new ways, and how dramatically that could help people 

solving important problems collectively! 

Then he realized, OK, it’s not just the tools that we need to 

innovate. Any capability we have is part tool and part human 

– how we think, act, approach a problem, our customs, con- 

ventions, our language, that human part is huge. If we want to 

boost this Collective IQ capability we have to pay attention to 

innovating the human part too! And we’re talking about moving 

onto a whole new medium of computers where so much more is 

possible. How we work collectively now is based on centuries of 

co-evolution of language, writing, and organizing ourselves, all 

based on fairly primitive tools – pens, typewriters, desks, meet- 

ing rooms. 

We want to build new tools for a whole new way of work- 

ing together, based on the potential for what tools we could 

have, and how we could work together. We can’t sit here and 

make a plan for what that looks like. We have no idea what 

that should end up looking like. So the best thing we can do is 

create a hyper-evolutionary environment where we can evolve 

the new tools in concert with the new ways of working. Throw 

out all the old paradigms and experiment on every front. Noth- 

ing is sacred about the way we’ve always done things; this is 

an opportunity for a completely different paradigm. We’re not 

“developers”, we’re explorers of a new frontier, scouts, pioneers 

who build and try stuff. 

Right from the start, if you worked in the lab you were a 

pioneer of a whole new capability. He instilled this in the cul- 

ture. And he brought in psychologists and organizational devel- 

opment consultants. A few years after the big demo he instituted 

“innovation quality circles” – he required each lab member to 

participate in one of fi ve cross-functional mixed-gender teams 

to talk about ways to improve the co-evolution and the experi- 

ment as a whole. 

So co-evolving the tools and human side as a deep experi- 

mental pilot operation, cutting a path for others to follow – this 

will really speed our innovation cycles for raising our Collective 

IQ the fastest. 

3. Bootstrapping Accelerator 

He realized, OK, we’re charting new territory. We’re not just 

developing tools and practices for those people out there who 

are working on important problems, we’re in the thick of it right 

here, and we’re working on a very important, complex, urgent 

problem, and if this works for us it will work for anyone. Con- 

versely, if it doesn’t really support us here, it’s not worth much 

out in the world. So we are both user and developer, in fact we 

will be the most demanding users of our system – and that is a 

very powerful feedback loop for accelerating innovation! 

Furthermore, every advancement we make in moving the 

tool/human experiment forward, and learning to really harness 

the power of it ourselves, will boost our Collective IQ, too. If 

we were innovating a manufacturing process, our work product 

would not offer us much benefi t, but in this line of work our 

work product offers tremendous benefi t. 

There’s a special opportunity there. If the people working on 

co-evolving the tool and human systems for heightened Collec- 

tive IQ capability use the tools and practices they are innovat- 

ing – wow, think of how heightened their collective IQ will be 

and how much more effectively and quickly and intelligently 

they can co-evolve the tools and human-organizational stuff and 

deliver increasingly innovative results to the target ends.   We’re getting better at getting better. 

And if you think about that, there’s a compounding effect: 

every time you make an improvement in the collective IQ capa- 

bility, you immediately put that to use and you are that much 

more effective at innovating how we work together, so your in- 

novation index can rise exponentially instead of incrementally. 

He called this “bootstrapping” – using what you have to get 

you to the next level, and using that to get you to the next level. 

It reminded him of the fable of the guy who couldn’t see over 

the trees so he lifted himself up by his bootstraps so he could 

see better. 

I mentioned he isolated two genes in the capability DNA 

chain. The fi rst was focus on Collective IQ. The second gene he 

isolated was the ability to apply our heightened Collective IQ to 

the problem of raising our Collective IQ. 

4. Examples: 

The fi rst big development push was to get a real computer 

up and running with some rudimentary functionality. To do 

that they fi rst had to get a smaller computer up and running and 

use that to get the bigger computer up and running. So four or 

fi ve software guys took over a conference room and moved in 

their teletypes (the display technology was not there yet), and 

used all the wall space all the way around to write what they 

were doing, who was doing what, changes being made, and so 

forth. They kept that up to date as they programmed, some- 

times round the clock. This was before there were any online 

tools for keeping the documentation; they had the entire evolv- 

ing memory of what they were doing on the walls. 

As soon as something was working, they immediately 

started using it to make it easier to get the next part working, 

and so on. Eventually they were writing their documentation 

in the shared information space they created online, writing 

and editing and browsing their structured source code, de- 

signs, commentary, bug reports, status reports, memos – a dynamic swirl of captured-in-process work, what Doug later 

came to call a dynamic knowledge repository. It was never 

about automating anything; it was about augmenting human 

potential. The new computer medium afforded a completely 

new paradigm for working with information and with people, 

you could get any view of the information you wanted, you 

could cross link, you could share and email documents and 

have attachments posted on an online bulletin board that ev- 

eryone could link to instead of everyone receiving a duplicate 

copy. You could update the source code. You could experiment 

broadly with new ways of working. 

5. Second Organizing Principle: ABC Improvement 

Infrastructure 

All along they’d been mindful of who the target end us- 

ers of this whole new way of working we’re pioneering could 

be (including themselves in the lab), what basic cross-cutting 

tools and practices could make the biggest difference? Those 

end users are really busy working on complex, urgent problems 

out in the world. How can we best help them start shifting to 

the new ways without slowing them down too much, and yet 

as quickly as they can? Let’s start with the intermediaries, the 

people in their organizations who are responsible for helping 

to implement new tools in the organization, and we can help 

them move it on up the chain to the target end users. But again, 

they can’t just take what we have and insert it into their end user 

population. They need to really engage with us, and experience 

working this way themselves, and engage the end users and de- 

termine together how much they can change the way they work, 

and how fast. 

6. Networking Accelerator 

Doug Engelbart’s lab was already primed when they fi rst 

learned of ARPA’s Information Processing Techniques Offi ce’s 

plans to network their R&D contractors’ computers together 

around the country. Doug proposed that his SRI lab would run the Network Information Center, the fi rst online community. 

At last he could start to cultivate a community of NLS users 

through a network. 

He attracted a handful of potential end user organizations in 

the Department of Defense who were linked in to the ARPANet 

early on, and engaged intermediaries from each of those organi- 

zations, and dubbed them Knowledge Workshop Architects rep- 

resenting their respective organizations. He got them networked 

into the lab computer and they got trained and set up to learn to 

use NLS, and then he networked them together so they could 

collaborate as to how they would learn and use NLS and start 

introducing it into their organizations. He called them KWAC for 

Knowledge Workshop Architects Community, and they visited 

the lab and elected a leader who was the King KWAC. And the 

experiment grew out from there. So we had vertical networking 

between the lab, the intermediaries, and the end users, and we had 

horizontal networking between Doug Engelbart’s lab and other 

labs and associations working on different pieces of the puzzle, 

and between the KWAC members, and among the end users. 

7. Dynamic Knowledge Repositories 

A foundational piece underlying all of the above, a core 

cross-cutting component of our Collective IQ capability ap- 

plied to any important endeavor, is innovating how we facili- 

tate, develop, capture, integrate and apply the emerging ideas, 

interactions, and know how into applicable knowledge. How 

we track all the input, the successive drafts and commentary, 

new information from the outside. How the left hand knows 

what the right hand is doing. How each person involved can 

get their hands on whatever piece of the puzzle they need in 

the moment. This is very different from the traditional view of 

repository, which is more of a library of published or formally 

circulated documents. 

So how do we put all this together? The vision, the organiz- 

ing principles, the accelerators … these strategic activators for speeding up progress toward the Collective IQ vision. 

On the one hand, this set a high bar for the lab to aim 

for – everything they developed needed to innovate the way 

we work collectively on important problems, and facilitate the 

way we went about innovating the way we work collectively 

– the rapid co-evolution, learn by doing, use what you build, 

engage the stakeholders at every level, network up and down the 

transfer chain to the end users, and across to others on a similar 

path, and facilitate the knowledge evolution in very robust ways. 

With all this in play, the lab aimed high and accelerated up the 

S-curve. 

This strategic vision was key to the incredible rate and scale 

of innovation coming out of this lab. And what’s even more 

amazing, is that you can go back to the seminal report he pub- 

lished at SRI in 1962 on “Augmenting Human Intellect” and 

fi nd his earliest documented version of this driving vision, all 

worked out before he even had a lab or a research team to de- 

velop any of what he envisioned. Plugged into this process were 

Bob Taylor’s vision at ARPA to fund the lab, and a hand-picked 

team of extremely bright, adventurous who contributed signifi - 

cantly to the vision moving forward (many times they were even 

a step ahead of him). 

Strategic Vision to Solve Important Problems 

To date, I believe all of Doug Engelbart’s vision and predic- 

tions that have been really tested out in the world have proven 

correct, except for one thing – how long it would take people to 

see his strategic vision, and the power of putting it into practice 

on a larger scale. The complexity, urgency and globalization of 

the problems we are facing in business and society are increas- 

ing at more alarming rates, and it’s still a race to get ahead of 

the curve. 

What if we could double the collective IQ of organizations 

and initiatives working to solve important problems – what if 

we could solve more problems more effectively, and much faster than ever before? Doug Engelbart’s strategic vision that took his 

lab up the S-curve is the only one I know of designed to take us 

there. Just think what you could accomplish if you put it into 

play today! According to SRI’s current President Curt Carlson, 

W. Edwards Demming was the solution for the Industrial Age, 

and Doug Engelbart is the solution for the Knowledge Age.

A crack at J.P. Morgan

Don’t be fooled by the recent rally. Stock investors will be served a paltry helping in 2009.

Slimming down should be our goal for the next couple of years in the stock market and the economy. We are undergoing an important transition, and things are simply not going to be the same as they were … not ever again.

Count on a new paradigm on the part of the public. There will be caustic erosion in trust, especially trust in the government’s ability to solve problems and in financial institutions’ ability to serve the public. There will be more Ponzi schemes exposed, and more corrupt actions on the part of officials will be uncovered.

Investigating Goldman Sachs’ shorting its own mortgage-backed securities when Henry Paulson was CEO would be a good start in cleaning up the mess and restoring confidence. Prosecuting JPMorgan Chase’s involvement in sucker-punching gold prices last August would be another step toward restoring confidence.

Corruption, manipulation, and insider trading are bad enough, but the long-term effects of past excesses on the behavior of the public are yet to be fully felt. The public is going to be forced to be more conservative going forward. Consumer loans will be all but impossible to attain, and this includes credit card debt, auto loans, etc. Economic activity is going to slim down to a “pay as you go” pace.

The separation between the “haves” and “have-nots” will widen.

Corporate profits will decline, and the stock market will struggle while the public finds it increasingly difficult to believe the pap they are fed by the media. Distrust will grow, but the long-term reliable market motivators will not change. Fear and greed will continue to run the markets. The “have-nots” will struggle, but the “haves” must be careful. Bear market rallies are not bull markets.

We are currently engaged in a bear market rally. The averages are coming off the bottom of trading ranges that will persist for another five to seven years. The long-term range is bonded by 800 on the down side and 1,500 on the up side for the S&P 500. The Dow industrials will be confined between 8,000 and 14,000. At first glance, a 75% to 85% move from bottom to top is not a bad profit.

The rub is that the moves from the bottom to top of the trading ranges will not be linear or pleasant. Currently, the Dow faces stiff overhead resistance at 9,000, and the S&P 500 is facing strong winds at 1,000. Journeys in the trading range will be choppy and volatile. The outside trading limits are not solid, but general. We will see dips below the lower limits and failures to meet upside expectations, but most of the time, trading will be within these confines. The overall theme is contraction — slimming down — and that is not bullish. Declines will be quicker and steeper than the rallies will be strong. Fear and greed will put folks out at the lows and in at the highs … as always.

The popular averages are going to be fertile farming for those with a trading strategy, but they will not provide much for the typical long-term investor looking for growth.

What do I want to own in January 2010? Not dollars, not bonds and not stocks, unless they are advantaged by higher commodity prices. Gold and crude oil will remain at the heart of my investment philosophy, along with other tangibles.

I look for the commodity market and the stock market to decouple in 2009. However, that may not appear to be the case over the next few weeks. Near term, gold needs to correct for its own technical reasons. The point to be watching is $743.40 basis the April futures. That is the next Critical Price Point for gold, and if prices break that level, it would be a negative. Frankly, I don’t expect that to happen. More likely, we will see a period of profit-taking push prices back to about $800 or so. A sell-off here would be an excellent opportunity to add to positions.

The dollar topped at 89.74 March basis in November, and although it may take a shot here at the 85 to 86 level, it will resume its long-term down trend soon. I have held to a downside target for the Dollar Index of 60 since early in the decade, but with all the government is doing on the financial front, that target should be re-evaluated. I think the index can easily reach 48 to 50, and this decline could end up being amazingly fast.

You might take a look at buying some euro exchange-traded funds if you have an opportunity to snag some at 132.50 or better.

A brief attempt on the upside in the dollar fits with some profit taking in gold over the next few weeks. I continue to recommend that you put new money in the major producers. The juniors have been looking better, but the best risk to return will be found in the majors like Goldcorp, Yamana, and Kinross.

The downside buy price for Yamana is now $5.50, and I am raising Kinross to $12.50. I am raising Goldcorp to $22.50. These are my favorite majors, but Agnico-Eagle is also attractive for further accumulation if it falls back to $39.50 or lower.

I think all gold portfolios should hold some of the Spyder Gold Trust, but pay attention to diversification and balance. I am raising the downside buy price to $75.

Crude is setting up to be a big winner in 2009. Crude has overshot on the low end, as have many other commodities that are now selling for less than the cost of production. Production will not continue at a loss, and you can rarely go wrong investing at prices below production costs.

Take a look at the ING Risk Managed Natural Resource Fund. It is moving to the upside very well in this rally, but it should meet some overhead resistance soon. If it pulls back to $12.20, it looks like a good buy with a stop at $11.33. The indicated yield at that price should be just shy of 14%.

[book reviews] sciences_sociales_14/01/2009

(source: Library Journal)

Biography

Communications

Economics

Education

History

Younger’s book follows logically from his earlier Endangered Species: How We Can Avoid Mass Destruction and Build a Lasting Peace. Younger certainly knows the high-level policy issues, having been a former director of the U.S. Defense Threat Reduction Agency. He wants to dispel dangerous myths and inform the debate about the role of nuclear weapons. So while he adds some interesting details to the standard nuclear history of the world, the key chapters are about defense against attack, maintaining our forces, and what the future might bring; these chapters could have been even longer at the expense of the history chapters. Younger believes that nuclear weapons will always be with us, certainly as a deterrent to other countries, and that we should modernize our forces to make them safer and less vulnerable. According to the author, there is no bibliography or reference notes in the interest of fairness and security. Suitable for academic and public libraries. (Index not seen.)

Tucker, a former nuclear engineer aboard the submarine U.S.S. Alabama, gives us two stories. The first is about the explosion of army nuclear reactor SL-1, probably caused by poor design, maintenance, performance, and procedures, that killed three men in Idaho on January 3, 1961. More importantly, he describes the development of nuclear power from experimental reactors to practical applications for military purposes, with small and powerful designs. There are interesting details about fantastically expensive (and dangerous) proposals for nuclear-powered bombers and an extensive mobile missile system under the Arctic ice, but the centerpiece of the book is a project tightly managed by Adm. Hyman Rickover that led to nuclear submarines and surface ships, now the core of the U.S. Navy. The Cold War was just the bitter context; desperate bureaucratic infighting and program survival at times seemed more important to the Pentagon brass. This is interesting scientific and administrative military history, though the SL-1 event is covered more extensively in William McKeown’s Idaho Falls: The Untold Story of America’s First Nuclear Accident. Suitable for academic and large public libraries. (Index not seen.) All three books convey the message that we must maintain constant vigilance, though Reed and Stillman deliver the best work.—Dan Blewett, Coll. of DuPage Lib., Glen Ellyn, IL

Law & Crime

Political Science

Psychology

Social Sciences

Travel & Geography

Weekly Commentary January 12, 2009

Last week seemed like a slow week for the stock market. While various news releases came out during the week, on the whole the first full trading week of 2009 was much like the end of 2008: The street appears to be waiting with bated breath to find out what the Obama administration plans to do as soon as inauguration is over. Will the stimulus plan move forward quickly or will it take a little while? With Obama asking President Bush to request that Congress release the remaining $350 Billion under the TARP program, it appears as though hammering out the stimulus package will take some time. Hopefully the $350 Billion will make it through the House and Senate and bridge the gap until our leaders design and enact a more robust stimulus plan. The economy will certainly be the number one issue for Obama once he is sworn in.

Part of the news from last week which pushed the market lower was the release of The Fed minutes from December, which showed that The Fed is very concerned about the rising unemployment in the country and that the current recession looks like it will last longer and run deeper than initially thought. The unemployment number came in at 7.2 percent, which was higher than the market expected. One bright spot of the week was that oil receded from its recent highs, caused by the unrest in Israel, and fell back to under $40 per barrel on the world-wide demand continuing to drop. The more oil prices fall, the lower prices at the pump should go. This, in turn, would leave the US consumer with a little bit more money to spend on consumable goods, ultimately helping to pull the US out of its current economic predicament.

The bull market, as some people were calling the end of last year and the beginning of this year, appears to be in a tenuous state. Just when the market looks like it could gain a little and add some confidence to the current trend, it breaks down on bad news. We probably hit a plateau of sorts and will most likely maintain these levels for the next week, provided that we have an okay start to earnings season, which kicks off this week. So far earnings that have been previewed or released early have not been good but they have also not been as poor as they could be. The earnings of the DOW 30 components (the largest 30 publicly traded companies) will really be examined under a microscope for any signs of unforeseen weakness that could affect the market in the coming months.

For the trading week ending 1/9/2009 the returns in our portfolio models are as follows:

Last Week

Year to Date

S&P 500 (benchmark)

-4.39 %

-1.36 %

Aggressive Model

-0.48 %

0.28 %

Growth Model

-0.33 %

0.20 %

Moderate Model

-0.19 %

0.11 %

Stable Model

-0.13 %

0.02 %

Two small changes were made last week in our models, with the purchase of two new funds, American Century High Yield (ACYVX) and Calamos High Yield (CHYDX). Although we remain focused on wealth preservation, we have invested in the aforementioned high yield bonds as a trading position. We expect these investments to advance if Congress stimulates the economy decisively, but will sell if no action is taken.

Last week in economic news, there were a few surprises that moved the market. The largest surprise was the higher than expected unemployment numbers (7.2 percent versus 7.0 percent) released on Friday. The figure, while bad, would have seemed worse had there not been a survey that preceded the release and signaled that jobs numbers would be worse than expected. Construction spending continued its decline, albeit at a much slower pace than previous months and auto sales continued to slide, which could put the big three in front of congress again asking for more money in the near future. Consumer Credit also took a hit according to the figures released on Thursday, coming in at -$7.9 Billion while the market expected +$2.0 billion. The consumer credit numbers really show that although the credit markets are loosening up a little bit, they are still not running smoothly.

This week is a very busy week for economic news releases. The week starts off with the trade balance on Tuesday, and then on Wednesday the big piece of economic news – the retail sales figures for the month of December. These sales figures will include the pre-Christmas number as well as post-Christmas sales figures, and could paint a grim picture about the retail industry in the US for the near future. On Thursday we get the Producer Price Index and the initial jobless claims for the previous week as well as the Philadelphia Fed reading. Wrapping up the week on Friday we receive the Consumer Price Index. There are some big economic news releases slated for this week and it will be interesting to see how the market takes any surprises.

Financial Planning Tip: New Online Social Security Application

The Social Security Administration put together a new online service that will allow people to receive benefits without ever traveling to a Social Security field office. The agency introduced the program last Tuesday and says most people will be able to apply for their retirement or disability benefits in 15 minutes or less. It now takes about 45 minutes for a field officer to finish an application form for a person who visits a Social Security office.

There have been other versions of online applications since 2000, but they still required applicants to mail or deliver paper documents with their signatures and copies of birth certificates or W-2 forms. With the new online service the application process should be paperless in the majority of cases. People with more complicated applications or questions can still call the agency or visit a field office.

The administration is betting that a great majority of baby boomers, the first to grow old in the computer age, will prefer to apply for benefits online. Estimates show that, soon, 10,000 baby boomers will become eligible for retirement each day and this rate will continue for the next 20 years. The current Social Security office infrastructure cannot support the expected number of benefit applicants.

In 2008, the Social Security system paid out $614 billion to 50 million retirees and their dependents, disabled workers and survivors. To use the new online benefit application, go to http://www.socialsecurity.gov and click on “Appling Online for Retirement Benefits.”

**Please remember that we do not accept trade orders via email or voicemail**

Roger Biduk; Wall Street Lower on Earnings

Roger Biduk writes:

 

 

 

California ,Brooklyn and Israel Lubavitch money laundering,tax fraud, and diamonds

From the New York Times:

In some cases, the contributions were returned as cash payments through what the government called “an underground money transfer network” involving businesses in and around Los Angeles’s jewelry district, the government said.

Three men in California were charged with taking part in the money transfer network: Yaacov Zeivald, 43, a professional scribe from Valley Village, Calif.; Yosef N. Naiman, 55, a tour company owner from Los Angeles; and Alan Friedman, 43, a businessman, also from Los Angeles. A fourth man, Moshe A. Lazar, 60, a diamond dealer, was charged in the scheme as well and was believed to be in Israel, the government said.

The contributions were repaid by a sophisticated series of wire transfers from businesses controlled by the Spinka sect to secret accounts in Israel, the government said. The accounts were established with the help of an official at the Israeli bank, Joseph Roth, 66, of Tel Aviv, who was arrested in Los Angeles, and a Tel Aviv lawyer, Jacob Kantor, 71, who remained at large in Israel, the government said.

According to the indictment, Mr. Roth helped the contributors get loans from a Los Angeles branch of the bank so their money would be available to them in the United States. The contributors could also hire officials of the Spinka sect to repatriate their money for them, albeit for a fee, the government said.

For about a decade, Yossi Ross aka Joseph Roth, 66, of Tel Aviv, was Mizrachi Bank’s L.A. rep. Traditional Jews had the attitude, “Let’s bank with Mizrachi Bank and make Israel some money.”

Orthodox Jews knew Yossi. He lived in the Valley. He lived an Orthodox life. At Shaarey Zedek, he’d daven from the bima (pulpit). He had a nice voice. He was a nice guy.

“You can’t tell me more people weren’t involved,” says a source. “Yossi Roth knew every frum Jew in Los Angeles.”

“I’m sure there’s going to be another indictment.”

December 19, 2007

The Grand Rabbi of Spinka, a religious group within Orthodox Judaism, was arrested this morning along with several associates charged in an indictment that alleges a wide-ranging conspiracy to defraud U.S. government agencies, to operate a underground money transfer system and to launder money through an Israeli bank.

Grand Rabbi Naftali Tzi Weisz, 59, and Gabbai Moshe E. Zigelman, 60, both of Brooklyn, New York, were indicted yesterday by a federal grand jury in Los Angeles. The 37-count indictment, which was unsealed this morning, alleges that Weisz and Zigelman solicited millions of dollars of contributions to several Spinka charitable organizations by promising to secretly refund up to 95 percent of the contributions. In this manner, the contributors could claim as tax deductions the full amounts of their contributions, while actually having contributed as little as 5 percent of the amount they would declare on their federal income tax returns.

Weisz and Zigelman would surreptitiously refund up to 95 percent of the contributions through several methods, according to the indictment. In some cases, the contributors received cash payments through an underground money transfer network involving various parties, some of whom operated businesses in and around the Los Angeles jewelry district. Several participants in the underground money transfer network were also indicted yesterday and arrested this morning. They are: Yaacov Zeivald, 43, of Valley Village, California; Yosef Nachum Naiman, 55, of Los Angeles; and Alan Jay Friedman, 43, all of Los Angeles. Another man allegedly involved in the underground money transfer network, Moshe Arie Lazar, 60, of Los Angeles, was not arrested and is believed to be in Israel.

A second method used to reimburse contributors was wire transfers from Spinka-controlled entities into accounts secretly held at a bank in Israel. The accounts were established with the assistance of an international accounts manager at the bank, Joseph Roth, 66, of Tel Aviv, and Tel Aviv attorney Jacob Ivan Kantor, 71, both of whom are charged in the indictment. Roth allegedly assisted contributors in the United States obtain loans from the Los Angeles branch of the Israeli bank, loans that were secured by the funds in the secret bank accounts in Israel, so the contributors could have the use of the funds in the United States. After their money was placed in the secret accounts at the Israeli bank, contributors also could hire Spinka to help secretly repatriate the money into the United States in exchange for an additional money laundering fee, the indictment alleges. Roth was arrested this morning in Los Angeles. Kantor has not been arrested and is believed to be in Israel.

The indictment charges Weisz and Zigelman with one count of conspiracy to defraud the Internal Revenue Service and other crimes, 19 counts of mail fraud, one money laundering conspiracy count, 11 counts of international money laundering, and one count of operating an illegal money remitting business. Zigelman is also charged with two counts of aiding in the preparation of fraudulent income tax returns. Roth is charged in both conspiracy counts; several mail fraud counts; and several international money laundering counts. Kantor is charged in both of the conspiracy counts and several international money laundering counts. Zeivald, Lazar, Naiman, and Friedman are charged in the main conspiracy count and with operating an illegal money remitting business. Zeivald is also named in one mail fraud count. If convicted, all of the defendants face substantial federal prison sentences.

In the money laundering conspiracy charge, five Spinka charitable organizations – Yeshiva Imrei Yosef, Yeshivath Spinka, Central Rabbinical Seminary, Machne Sva Rotzohn, and Mesivta Imrei Yosef Spinka, all based in Brooklyn – are named as defendants. These entities allegedly issued fraudulent receipts for bogus charitable contributions and were the beneficiaries of fees charged for transfers of funds as part of the money laundering conspiracy.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Weisz, Zigelman, Roth, Zeivald, Naiman and Friedman were all arrested in the Los Angeles area this morning and are scheduled to make their initial appearances in United States District Court this afternoon.

The case is part of an ongoing investigation being conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation.

Release No. 07-164

BLUE CHIPS FALL ON CORPORATE EARNINGS GLOOM

Catch you tomorrow evening

Awful day

Awful day 14 January 2009

Obituary: Colonel David Smiley: Blues officer and MC recipient

Smiley, bareheaded, in Yemen with Amir el Hassan, the royalist Prime Minister, right, during the rebellion by republican forces in the 1960s

Letters:

Guardian:

Independent:

Times:

I like the career advert in the window of my local branch of HBOS, showing a happy young man expressing his pride in being part of a big, successful retail business!

Gives new meaning to several words..

Irish Times:

He goes on to list the conditions set by the international quartet (the EU, Russia, US, UN) for Hamas to meet before it should be permitted to enter any peace process.

However, Mr Shatter fails to mention that Israel has also made no serious effort to fulfil the conditions set out in the same quartet road-map for peace in 2003. The road-map called on Israel to cease assassinations of Palestinian leaders and activists, end house demolitions, freeze development of Israeli settlements in the Occupied Territories, remove the settlements built after 2001, and ease movement restrictions on the Palestinian population. No meaningful progress has been made on any of these issues.

A progressive policy by Israel to tackle the underlying root causes of Palestinian violence and aggression would directly address these substantial human rights grievances. The overwhelming use of military force does not. It is only further alienating the Palestinian people and will certainly not bring the long-term peace and security which the Israeli and Palestinian peoples deserve.– Yours, etc,

DAVID WHITE,

Stonebridge Avenue,

Clonsilla,

Dublin 15.

Madam, – Charles Krauthammer has surpassed himself – and that takes some effort on his part – but in doing so he has done us all a favour in reminding us why the passing of the neo-con agenda in the US is one to be celebrated.

He asserts that it would be shameful for a ceasefire to happen now before Hamas is removed. In fact what is shameful is the plight of children clinging on to the dead bodies of their dead mothers, or the Red Cross not being allowed to care for the wounded, or the potential flooding of large areas of Gaza with raw sewage, or the fact that 1.5 million people are imprisoned without charge or trial in the worlds biggest prison. The list is endless.

Mr Krauthammer is just exhibiting the same cold, calculated, neo-con world view which has been seen to fail miserably in Iraq and South America – and even in his own country where millions are below the breadline and the economy stutters from one crisis to another – Yours, etc,

BARRY WALSH,

Church Road,

Blackrock,

Cork.

Madam, – On the current conflict in the Middle East, there are two principal fallacies which cloud the thinking of the already nebulous “international community” to a point of irrelevancy.

One is that nothing can be achieved through military conflict. Regrettably, history has shown us that this is far from true. European settlers employed guns and biological weapons to clear most of the North American continent of its native people, while the fact that I, an Irishman, am writing this letter in English owes much to the military superiority of Anglo-Saxon invaders over my Gaelic forebears.

Through the principle of might makes right, military supremacy also secures moral high ground by forcing weaker combatants to resort to guerrilla tactics, nowadays dismissed under the dysphemism “terrorism”. One need only be casually acquainted with history to appreciate the irony of Britain, France or the United States claiming that violence achieves nothing.

The second fallacy is to confound weakness with virtue. The fact that Hamas lacks sufficient means to execute its threat of wiping Israel off the map in no way excuses its desire to do so. A relevant thought exercise in determining the balance of morality in this conflict is this: Imagine it were possible to swap the respective arsenals of Hamas and the Israeli army tomorrow. Does even the harshest critic of Israel for a second believe this would result in anything other than a second Holocaust?

Thus, the current campaign being waged by Israel is neither senseless nor depraved. Rather, it follows exactly the military and moral logic of the international community itself. Any positive step towards peace must be premised on this reality. – Yours, etc,

GRAHAM STULL,

Brussels,

Belgium.

Madam, – Senator David Norris (January 12th) sees fit to pursue his ridiculous comparison the Gaza situation to the Warsaw Ghetto by citing a series of totally false analogies which are easily refutable, point by point.

1. “In Gaza a sizeable ethnic group is concentrated in a tiny area under the arrogant and contemptuous supervision of military overlords.” This at least is true. The people of Gaza are in effect being held hostage by a murderous band of military overlords, the Hamas terrorist organisation, which uses them as human shields with total disregard for their safety.

2. “This entire population group has been slowly strangled in preparation for military incursion.” The strangulation is a result of Hamas using all resources for amassing rockets, instead of seeing to the needs of the civilian population. Recall that when Israel vacated Gaza in 2005, it left a thriving greenhouse-based economy, which Hamas saw fit to destroy.

3. “There has been an almost total collapse in terms of sewage, food and energy delivery as well as medical facilities.” This is in spite of the thousands of deliveries of truckloads of supplies by Israel since 2005. Israel has also since 2005 been supplying electricity and other energy to Gaza – in full knowledge that munitions manufacturing is one of the uses to which it has been applied.

4. “The outside world has been deliberately kept at bay and apart from Al-Jazeera virtually no independent reporting is permitted while the noose has been remorselessly tightened.”

Has the good Senator, from his eyrie in the mountains of Cyprus, failed to notice that Gaza is the most reported area in the world today? In military campaigns, for example the Falklands, the press are excluded from the battlefield for their own safety. In a confined area such as Gaza this is imperative – and the Israelis know only too well that, should reporters lose their lives, the IDF will be blamed.

5. “There have been attempts on the part of the besieged to overcome supply difficulties through the digging of tunnels.” Yes, true. But the “supply difficulties” – that is, primarily the supply of rockets from Iran – seem to have been overcome, as shown by more than 6,000 rockets shot into southern Israel in the past few years.

6. “Resistance has been organised by commando groups and this has been met by the unleashing of a massive mechanised assault.” Resistance to what? May I remind Senator Norris that there has not been a single square inch of Gaza occupied by Israelis since 2005? The “resistance” that Hamas talks about is to the very existence of a Jewish state, which it makes very clear in its covenant.

The final point made by Senator Norris is that “Hamas was legitimately elected in Gaza”. This is absolutely correct, just as Hitler was the democratically elected leader of the German people. But that did not prevent Britain from declaring war on the whole German nation, with far less provocation than Israel has had to endure from Gaza over the past three years. – Yours etc.

ALLAN SOLOMON,

Watford,

Hertfordshire,

England.

Madam, – The profusion of letters to The Irish Timeson this subject is both heartening (in that readers recognise the enormity of a political situation that is outside of the local), and depressing (in that firm and resolute positions are adopted with conviction and immutability on either side, with little expectation that either side will even minimally modify the view of the other).

The language used is becoming repetitive. On the one side, there are comments such as “Hamas is using the civilian population as human shields”; on the other, “the Israelis are responding with disproportionate violence to Hamas rockets, and the monstrous death toll on the Palestinian side proves this”.

The only way to break into new understanding, it seems to me, is to read the narratives of those writers whose personal interests might have been to stay with “their side”, or “keep quiet on the issue”, but who were overcome by a determination to seek out difficult truths, at great expense to themselves.

The case of Ilan Pappé, now lecturing in history at the University of Exeter, is exemplary. Born in Israel to German-Jewish parents who fled Nazi persecution in the 1930s, he was a lecturer in political science at Haifa University from 1984 to 2007, until he was forced to resign because he dared to state that “Zionism is a clear ideology of exclusion, racism and expulsion”. I challenge anyone to read his book The Ethnic Cleansing of Palestine, and not be educated into truth by its fair-minded, detailed, calm and disinterested argument.

Two people who have done much to bring young Israelis and Palestinians together have been the Argentine-Jewish conductor and pianist Daniel Barenboim and his close friend – now, alas, deceased – the Palestinian-American academic and writer, Edward Said. Together they set up the West-Eastern Divan Orchestra in 1998, consisting of musicians from Israel and Arab countries.

Barenboim, when interviewed last week on BBC radio about the Gaza situation, showed he has a humane and sagacious grasp of the situation in Gaza. Edward Said’s writings on the Palestinian question demonstrate the most profound responsiveness to what he saw as a catacylsmic failure of understanding, and a gross abdication of responsibility on the part of Western governments to play some positive part in a resolution process.

Just before he died in 2003, Said wrote: “Palestinians feel that they have been turned into exiles by the proverbial people of exile, the Jews. It is as if the reconstructed Jewish collective experience, as represented by Israel and modern Zionism, could not tolerate another story of dispossession and loss to exist alongside it.”

At the very least, it behoves us all to try to understand this conflict by immersion in some fresh reading. That would at the very least disallow astonishing comments such as the claim by Senator Eoghan Harris (January 9th) that “Israel’s actions in Gaza are morally acceptable, achievable and aimed at the general good”. – Yours, etc,

CIARAN COSGROVE,

Glenageary,

Co Dublin.

Madam, – One description suffices: Israel’s incursion into Gaza constitutes the first great war crime of the 21st century, with the possible exception of rebel forces in eastern Democratic Republic of Congo.

This argument has nothing to do with the theocratic Hamas and its pea-shooters. When a high-tech modern army moves into a civilian area and is prepared to kill as many civilians as may stand in the way of its aims, or get in the way accidentally, woolly words and obfuscation will not do. An army which leaves children to starve beside the bodies of their dead parents is beneath contempt.

It’s interesting that the usual contrarian journalists, who like nothing so much as expressing their “difference” from the “politically correct”, rather as teenagers express their differences by dressing in the same way, are boringly, predictably and callously uninterested in those slaughtered by the Israelis. But then, Arab lives have a lesser value.

What can we do? One, shout as loud as we can about the savage and unjust nature of these deeds. Two, don’t buy anything from Israel. – Yours, etc,

PIARAS MAC EINRI,

Model Farm Road,

Cork.

Madam, – I congratulate The Irish Timeson opening its pages to an extensive and well edited debate on all aspects of the Israe-Palestinian controversy, not least its impact on Irish politics.

In that regard, may I raise the question of Chris Andrews TD’s one-sided input to that debate. By calling for the expulsion of the Israeli Ambassador to Ireland, Mr Andrews shows scant regard for the complex nature of the arguments and instead opts for the simple “solutions” already voiced by knee-jerk activists.

His statement is an embarrassment to all who value genuine debate and should have been withdrawn, even on “mature reflection”. – Yours, etc,

NIALL GINTY

(Conor Cruise O’Brien Society),

Killester,

Dublin 5.

Madam, In response to international criticism of its actions in Gaza, the Israeli government seems to be propounding that the end justifies the means. This is an extremely dangerous and utterly flawed philosophy.

There is no justification for Israel’s current operations in Gaza, which constitute nothing short of crimes against humanity. – Yours, etc,

SARAH-KATE FOLEY,

Rossymailley,

Westport,

This would demonstrate leadership. And if pay-cuts cuts are in proportion to salary (10 per cent from a Government minister, TD, hospital consultant or university president is more acceptable than 10 per cent from a nurse or teacher), they would more palatable to the public sector. – Yours, etc,

Dr DAMIAN Ó MAONAIGH,

An Ghallbhuaile,

An Clochán,

Tír Chonaill.

Madam, – I believe – and I hope others agree – that it is essential to separate nurses, teachers and gardaí from other public servants in the pay negotiations that are obviously needed in our current circumstances. – Yours, etc,

MARGARET TURVEY,

Abbey Terrace,

Howth,

Co Dublin.

Madam, – Most newspapers report that Minister for Finance Brian Lenihan is planning to cut pay for public sector workers by 5 to 10 per cent. The trade unions say they will fight this measure tooth and nail. I presume this could mean a campaign of strikes across the public services with appalling consequences for citizens. It would, therefore, be risky for Mr Lenihan to proceed with such a plan.

However, he has at his disposal the most efficient method of relative pay reduction – personal income tax rates. By changing current bands and rates, he can raise the same amount of money – and do so in an equitable way with protection of the lower-paid. Highest earners will pay the highest rates. Sadly, the upper rates will have to be very high indeed.

With such an alternative available to him, it would be foolish to risk total alienation of public-sector workers (typists, nurses, teachers, gardaí, etc.)and prolonged civil chaos by implementing selective, public-sector-only pay cuts. – Yours, etc,

GARRY FITZGERALD,

Maypark Lane,

Douglas,

Royal Irish Academy,

Dawson Street,

Eccles Street,

Mount Prospect Avenue,

Clontarf,

Dublin 3.

Well I must be off

best wishes John

Faith in the Market

Politics is a hobby - Statecraft is a lifestyle. Live the difference.

By Carla Power, Wall Street Journal

Amid the worst economic crisis in nearly a century, Yusuf Talal DeLorenzo sells peace of mind. A Muslim convert who is the product of both a Massachusetts prep school and a Karachi madrasa, DeLorenzo issues pronouncements on the spiritual soundness of modern finance for the world’s Muslims.

Islamic law, or sharia, forbids pious Muslims from paying interest or investing in morally questionable companies. So, DeLorenzo serves as a well-paid counsel to the international hedge-fund managers, bankers, and asset managers who are determined to invest in line with the Koran’s principles. With his rare ability to move easily between medieval Islamic texts and 21st-century financial instruments, DeLorenzo has emerged as one of the world’s chief gatekeepers for the fast-growing market in Islamic finance.

He’s a member of an elite group of fewer than 20 top-tier experts. Sheikh Nizam Yaquby issues fatwas for blue-chip institutions such as Dow Jones and HSBC from the back office of an electronics shop in a Bahraini bazaar. “There is no sin in the Koran—not even drinking, not even fornicating, not even homosexuality—which could be as abhorrent and serious as dealing in riba [interest],” he has said. Pakistan-born Muhammad Taqi Usmani, with the trademark cap of a religious scholar and his beard stained henna red, bears little resemblance to the Wall Street bigwigs who eagerly seek his advice. He is the chair of the powerful sharia board of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), a Bahrain-based regulatory institution that sets standards for the global industry. DeLorenzo and Yaquby sit on the board, too, just as they both sit on the sharia board of the Dow Jones Islamic Market Index, which screens companies for Muslim investors to make sure they don’t peddle in the defense or entertainment industries or are in any way connected to forbidden activities such as pornography, gambling, and pork production.

That the same few names appear again and again on sharia boards—Yaquby sits on more than 60, according to the Islamic Finance Information Service—reflects the unlikely name-brand status these Islamic scholars have attained in the world of modern finance. “It’s only natural that if it’s a big bank going out with a big product, they want to make a big splash,” DeLorenzo says. “I would rather have Tiger Woods endorse my product than some no-name golfer.”

Until the credit crunch of 2008, Islamic finance was a fast-growing, if still relatively obscure, new specialty of international finance. But after Wall Street’s implosion, Islamic finance’s champions have begun to promote the sector as a safe haven from the ills of the global economy. At a Doha conference in late 2008, Sheikh Yusuf al-Qaradawi, arguably the world’s most influential Islamic scholar, asserted that “the collapse of capitalism . . . shows that the Islamic economic philosophy is holding up.” DeLorenzo is even more sweeping in his claims. “If you had sukuk [or interest-free bonds based on actual assets], the subprime crisis never would have happened,” he says.

But how truly Islamic is the Islamic finance these men promote? To their critics, many are nothing more than rent-a-sheikhs, willing to give the spiritual nod to just about any financial product for the right price. Within their own ranks, the top sheikhs debate vigorously over which new products and transactions are permissible—and which have been unjustly allowed. One recent study from the AAOIFI concluded that 85 percent of bonds marketed as sharia-compliant were illegitimate. And the fees many of these scholars take in—at times, six figures for a single decision—only add to such critiques.

“There’s a whole industry now—supported by a show of religious authority provided by Islamic scholars—with banks promoting conventional products as Islamic,” says Mahmoud El-Gamal, a professor at Rice University and author of Islamic Finance: Law, Economics, and Practice. “They’re preying on the religiously insecure.” And as the financial crisis continues to unwind, there are a lot of insecure people out there.

THE BUSINESS OF ALLAH

Whether scholars like DeLorenzo and Yaquby offer merely pious packaging or a genuine reconciliation of sharia and modernity, demand is growing enormously for their services. What began several decades ago with a few Middle Eastern banks trying to circumvent the Koran’s ban on interest has become one of the world’s fastest-growing financial sectors. And it has been propelled by record oil revenues in the Gulf, deepening Islamic sentiment in countries from Pakistan and Egypt to Britain and France, and the flight of Arab capital out of the United States after September 11.

Islamic finance accounts for just 1 percent of the global market, but the industry’s yearly value is estimated at about $500 billion, with annual growth of 15 percent. In five years, it could hit $4 trillion, according to a 2008 report from Moody’s Investors Service. And its potential could be even greater.

Islam is the world’s fastest-growing religion, with 1.3 billion adherents, many of whom are young and new to personal finance. Standard & Poor’s estimates that in the Muslim countries of Asia and the Gulf, 1 in 5 banking customers would opt for Islamic financial products over conventional ones if given the opportunity. By 2012, nearly a third of all business deals in the Gulf will be done through Islamic finance, according to the Middle East Economic Digest. Add a booming Muslim middle class and non-Muslims eager to profit, and it is easy to understand why some of the world’s biggest banks are spending millions to enter the market. The 300 dedicated Islamic banks and funds worldwide, operating in 75 countries, are beginning to face stiff competition from top-tier global firms such as Deutsche Bank, HSBC, and Citibank.

This competition is fueling even grander aspirations among scholars such as DeLorenzo. Islamic finance, he says, is not just a way for Muslims to turn an honest profit; it is the vehicle that will make Islamic law relevant for the 21st century, a far cry from debates over “marrying and burying” that dominated his own madrasa education in the 1970s.

“Islamic finance scholars say that what’s happening in the conventional world of finance is at the heart of the difference between Islamic and ordinary finance,” says Davide Barzilai, a partner specializing in Islamic finance at the international law firm Norton Rose. Muslim investors haven’t suffered from falling bank stocks, Islamic scholars point out, because their faith forbids investment in financial institutions. Since the Koran bans gambling, the related practice of risk is forbidden. So too is the short-selling of stocks (on the grounds that you can’t sell what you don’t own) and the sale of debt. Indeed, the practice of repackaging and trading debt, as well as credit-default swaps, both so central to the financial crisis, never could have happened under Islamic law.

MARKET FUNDAMENTALISM

Sharia scholars such as DeLorenzo see Islamic finance as the path to a distinctly spiritual end. Like political Islam, Islamic finance began as a search for authenticity and independence from the West. Its origins lie in the postcolonial Islamic identity that emerged in the 1950s and 1960s, when Muslim economists returned to the Koran to develop what they called Islamic economics.

The central concept is justice. Transactions that could be unjust for either the borrower or the lender are discouraged. For any financial undertaking, risks must be shared. To get around the Koran’s ban on interest, Islamic banking has relied heavily on what is called murabaha: a loan or sale in which a markup is added to the transaction’s cost. So when a Muslim borrower goes to a bank to buy a car or house, he agrees to a contract in which he pays back the cost of the item, plus a certain amount of profit. The bank is technically a partner, rather than just a financier. These methods are believed to meet the spirit of the law because they avoid the exploitation of the borrower.

Using this model, Islamic banks have created scores of financial products for Muslims to avoid Western-style interest or risk. The result is a parallel system of Islamic offerings that mirror those available from conventional banks: Islamic mortgages, Islamic car loans, Islamic credit cards, Islamic insurance. An ijara, or Islamic lease, allows a bank to buy a car or a house for a customer and then earn a profit by renting it to them. An Islamic investor who wants to start a business can go to a bank and embark on a mudharaba, or partnership, in which the bank supplies the money and the customer brings the business skills. Profits are shared in a predetermined ratio; losses are borne by the bank. For insurance, companies offer policies in which a group of subscribers creates a pool of funds that can then be invested and drawn on in cases of legitimate claims. Unclaimed profits are then distributed among policyholders.

To many, including some Islamic scholars, such offerings look a lot like conventional finance in disguise. But for many devout Muslims, the fact that they are technically avoiding interest makes such practices acceptable. Under sharia, money must be exchanged for a real good or service. “Money itself creates no value,” observes Mohamed Elgari, a top sharia scholar. “[Under Islamic law], it is only a medium of exchange.” It’s a nimble balancing act, and for those banks willing to attempt it, there are plenty of willing customers.

In Britain alone, the value of the Islamic mortgage market has topped $900 million, up 50 percent between 2006 and 2007. The global Islamic insurance market is growing 25 percent annually and is slated to reach $14 billion a year by 2010, according to HSBC. And non-Muslims are increasingly keen takers. Half of HSBC’s Islamic mortgages in Malaysia went to non-Muslims the first year the company offered them. Saturna Capital, a Washington-based investment firm, estimates that 60 percent of customers for its sharia-compliant mutual funds aren’t Muslim. All of which raises the ironic possibility that Islamic finance, in its quest to develop a more spiritually pure alternative to modern materialism for the world’s Muslims, may have ended up creating a large and attractive market for Western investors.

PIETY FOR A PRICE

But not everyone is convinced. Take the claim of Islamic finance as a safe haven from the global economic crisis. “Now is a golden opportunity for Islamic finance to provide an alternative model . . . just what the world needs right now,” Islamic finance conference organizer Swati Taneja recently told Emirates Business 24/7. “There has never been a more interesting time for cautious investors burned in the conventional credit crunch to begin looking at what the Islamic markets have to offer.” But even someone as bullish as Taneja concedes that a globalized market means Islamic investments are exposed along with mainstream ones. According to Standard & Poor’s, sharia-compliant stocks lost 23 percent of their value during the first three quarters of 2008, compared with a 25 percent fall for non-sharia-sanctioned stocks. And Islamic finance, just like conventional finance, is vulnerable to sloppy vetting of customers’ creditworthiness.

Potential pitfalls for Islamic finance, then, are the same as those for conventional finance: greed and lax regulation. So, at what point do the scholars’ fatwas only serve to perpetuate the industry that feeds them, thereby consolidating their own power? “They’re not going to kill the goose that lays the golden egg,” El-Gamal says. “[By issuing bans on certain financial products], they want to continue to build up the religious insecurity of people who are afraid to use conventional [finance].” And banks that benefit are happy to see the current system maintained. Very few scholars dominate the field, says Tarek El Diwany, an analyst at Zest Advisory, a London-based Islamic financial consultancy, because “there’s a shortage of scholars who will give the judgments that the banks are looking for.”

The industry’s chief critics see in Islamic finance the same rhetorical spin as Islamist politics. “The whole idea of giving [finance] a religious identity is just a form of identity politics,” says El-Gamal. “The claim that Islam has the perfect solution is questionable in economics, just as in politics.” Still others see outright deception. Mohammad Akram Nadwi, a prominent Britain-based scholar of Islamic jurisprudence, advises his students against taking out Islamic mortgages, because he thinks their structure is merely interest-bearing debt in disguise. “At least conventional mortgages are honest,” he shrugs.

At industry conferences, there have been mutterings about too few sheikhs serving on too many boards, and even advising direct competitors. Malaysia, which arguably has the world’s best-developed legal framework for sharia finance, banned scholars in 2005 from serving on more than one bank board at a time. And in an effort to groom more young sheikhs to enter the field, Malaysia’s central bank and the Saudi-based Islamic Development Bank recently created a $53 million endowment to support sharia scholarship. But, in an industry that respects longevity and seniority, especially among Wall Street investors unfamiliar with the nuances of madrasa education, breaking in can be tough.

A larger issue is whether Islam and the modern economy can be reconciled at all. Is it enough to create banking products that mimic those of traditional finance but also meet the letter of Islamic law? Or must the goals of the financial system itself be reworked fundamentally? The question, in short, is whether a growing Islamic financial sector can really bring about the material and spiritual justice that its advocates claim it will—or whether it will enrich a select few. Such a debate cuts to the heart of whether Koranic admonitions must be strictly applied or can be subject to greater interpretation. That the Islamic financial sector has largely been designed by a small group of men paid handsomely for their services has led some observers to declare that much of what passes for Islamic finance today fails to meet the intentions of sharia.

For every observer who thinks that sharia scholars have become too reckless in their judgments, there are many more who believe that a broad rethink of the financial system should carry the day. “To date, most Islamic financiers have been looking at . . .examples of financing in Islamic history and figuring out how to apply them today,” says El Diwany, the London-based Islamic financial consultant. “That’s a very narrow way of doing things. There’s potentially much more innovation we could be doing—and potentially, much less.” It may not win Islam more converts, but it could provide an entirely new generation of customers.

Carla Power is a London-based writer on Islamic and social issues.

January 14, 2009 at 7:15 pm

Slumdog Millionaire:CORPORATE PRIME MINISTER FACE NARENDRA MODI Against OSAMA BIN LADEN JIHAD Call!

“The policy of foreign direct investment in the publication of facsimile edition of foreign newspapers include permitting 100% FDI with prior approval of the government, provided the FDI is by the owner of the foreign newspaper…,” an official release said.

The policy specifies that the publication can be taken up only by an entity incorporated or registered in India under the Companies Act. The publication would also adhere to the guidelines for newspapers and periodicals dealing with news and current affairs.

Earlier, the facsimile editions of foreign newspapers were allowed FDI up to 26%.

Modi for Prime Minister? India Inc is convinced

Neevertheless, as the latest study about BEAUTIFUL Woman creates more ROMANCE and LOVE resultant in INFINITE Couplation with or withot CONDOM, the PROJECTED DEVELOPED SHINING Gujarat has become the latest ICON of SLUMDOG INDIA Toilet Media. Ananda bazar group in Kolkata has launched an allout HATE Campaign against Mraxist Government in Waest Bengal as it it fails as par as MODI`s Gujarat inviting so much so ALL TIME FUCKING capital! despite Nandigram, Singur and Lalgarh Insurrections!  West bengal CPIM and the pet Master Media have been engaged overtime themselves to ensure RETURN of SHANTINIKETAN ELITE BRAHMIN DON to party fold. It also making BACKGROUND solid to support UPA Government in the Centre provided if the Sonia Brigade succeeds to hold on POWER despite infinite CUPBOARDS exposed as FULL of SKELTONS. HIRE FIRE india Incs consist the FREEsenSEX Economy destroying the Production system, natural resources, nature and Environment and the Entire ABORIGINAL INDIGENOUS Black Untouchable Population! Now it has got a PRIME MINISTER FACE , too! And it is no one else, Narendra Modi. Perhaps like all Beautiful women in ELITE BEDROOMS he may prove more faithful than the RSS ICON Lal KRISHNA ADWANI or the WASHINGTON PLANTED Italia Controlled DR Manmohan Singh And his World Gank gang. Worldbank Gangsters may not be trusted anymore as being the part of the World wide ILLUMINITY, the CHETTIYAR Brigade could not save either Stayam or WIPRO being blacklisted and the ULTIMATE FUCKING INDUTRY runs in trouble!

“Because of this investment the projection of employment generation is 8500 Memorandum of Understandings (MoU), and possibility of employment is 2.5 millions, 2.5 million and the amount is 12,000 billion rupees,” he added.

Leading Indian industrialists such Ratan Tata, Mukesh Ambani, Anil Ambani, Sunil Mittal,Kumarmanglam Birla and K V Kamath also attended the summit which began on January 12. Representatives from over 40 countries also took part in the meet, which has Japan as the partner for this year’s summit.

Govt may not take up fuel price cut tomorrow

“I don’t think the Cabinet will take up the issue tomorrow,” a senior Cabinet minister, who wished not to be identified, said.

The Petroleum Ministry is pushing for a Rs 5 per litre reduction in petrol prices, Rs 2 a litre on diesel and Rs 25 per domestic LPG cylinder.

Alongside, retail pricing of petrol and diesel is also proposed to be freed from government control, which would effectively mean a revision in price every fortnight in step with changes in the international market.

“While it is easy to free pricing today when international crude oil prices are below $ 40 a barrel but there is no consensus yet on if the companies should be allowed to raise prices when oil moves up,” he said.

An alternate proposal of giving oil companies limited freedom of adjusting prices within a specified band may also be put up before the Cabinet “in next few days”, he said.

State-run oil companies are currently making Rs 9.70 a litre profit on sale of petrol, Rs 3.70 a litre on diesel, but are loosing Rs 31.70 per LPG cylinder and Rs 11.69 on every litre of kerosene.

“The foreign investments have done no good to the sector. At the most, they are responsible for the sky high land prices,” Omaxe chairman and managing director Rohtash Goel told the media on the sidelines of a business meet.

“India has enough domestic fund and demand to support the industry. Therefore I feel that FDI (foreign direct investment) in the realty sector should be discouraged,” he added.

According to him, foreign funds posed a “serious challenge” to affordable housing. “FDIs in real estate do not increase supply and demand for affordable housing. Their entry into this segment will enhance price of land and should be discouraged.”

Omaxe is coming up with 10,000 dwellings in Indore, all priced below Rs.1 million (Rs.10 lakh).

“It will be our first full-fledged initiative in affordable housing. The carpet area starts from 300 square feet onwards and dwellings will be open for bookings by February. We have already got the clearances for this project,” Goel said.

“We have another 10,000 affordable housing unit ready for booking by March. Once the clearances are done we will make a formal announcement,” he added.

Last year, Omaxe said it would invest about Rs.800 billion over the next three to five years to develop affordable housing projects.

Kolkata gets its own cord blood bank

Express News Service

Cordlife, a foreign network of private cord blood banks in Pan Asia, after obtaining a five-year operating licence from Drug Controller General of India in March, officially launched its first venture in Kolkata on Tuesday.

The cord blood bank with a storage capacity of up to 1,50,000 cord blood units that can support stem cell therapies can be kept.

“We take the umbilical cord and draw the stem cells, which can be stored for a lifetime and in course of fatal diseases can help in regenerating specific tissues,” said Dr Prosanto, a haematologist.

The initial storage costs can run as high as Rs 38,000 and then Rs 3,500 per month.

“The number of diseases that can be treated with stem cells has increased from 46 in the year 2000 to more than 80 today. Stem cells can be used to treat lifestyle-related diseases such as heart disease, stroke and diabetes,” said Steven Fang, group CEO, Cordlife Ltd.

With an approximate investment of Rs 30 crore and an initial investment of Rs 10 crore in the Kolkata facility, the company is looking at developing collection centres and such similar facilities in Delhi next in the line followed by Mumbai, Chennai, Bangalore and others within 2009-2010.

“In India, retail gasoline prices were reduced by about 10 per cent (Rs 5 a litre) and diesel prices by about 6 per cent (Rs 2 a litre) on December 5, even though under-recovery by the oil companies in 2008-09 is estimated at some USD 25 billion,” ADB Executive Director Ashok Lahiri said at Petrotech here.

“The key policy question that should be asked is- given that consumers had already accepted the higher priced gasoline and diesel, would it have made sense to continue with those prices to encourage consumers to conserve fuel with some marginal, but desirable impact on the oil import bill, while giving the companies some relief?” Lahiri said.

Lahiri, who held the post of Chief Economic Advisor in India before his posting to ADB, later told reporters that does it make sense to decrease prices when global prices fall, when global price increase was not fully passed on to the consumers.

Meanwhile, India may cut prices of petrol, diesel and domestic LPG prices tomorrow for the second time after June 2008, when it had revised prices upwards.

Rs 2000 crore government package to bailout Satyam?

Shortly after the Prime Minister Manmohan Singh’s review meeting on Satyam on Tuesday, there was media speculation that government would be considering a financial assistance ranging between Rs 500 crore and Rs 2,000 crore but the PMO office declined to comment on it.

“We have nothing to say on this,” a top PMO official said when asked about if the government was considering giving financial aid to Satyam which is confronting a cash crisis.

Satyam has 53,000 employees and needs over Rs 500 crore a month to meet the staff cost.

Commerce Minister Kamal Nath, who attended PM’s review meeting, had said yesterday that the government was open to consider a financial package for Satyam

Infosys made this position clear, a day after its Chairman and Chief Mentor N R Narayana Murthy reiterated that his company would not act on any CVs received from Satyam employees to ensure that nothing is done that would adversely impact the Hyderabad-based firm’s future.

At a press conference to announce the company’s third quarter results here today, Infosys CEO S Gopalakrishnan confirmed that some of Satyam’s customers have approached the Bangaluru-headquartered, NASDAQ-listed company.

Gopalakrishnan stressed that Infosys would not proactively go after (to acquire) Satyam’s customers but if the latter approached his company, it would be treated as any new business and Infosys would take the offer if its terms and conditions are agreeable for these clients. There are many customers for whom Infosys and Satyam are working together.

“…some of the companies (Satyam’s customers) are our clients also, they have approached us”, he said.

“If one Narendrabhai can be so much for Gujarat, imagine what is the possibility of India by having Narendrabhai as the next leader of India?” said Anil Ambani, group chairman of Reliance Anil Dhirubhai Ambani Group.

High praises have come from top industrialists for the Gujarat Chief Minister and with due reason, too. While an economic slowdown has hit global markets, Gujarat seems to have become immune.

In just two days of the Global Investors’ Summit, the state managed to get investment commitments worth Rs 12 lakh crore.

Not surprisingly, India’s top industrialists showered the Gujarat CM with abundant praise.

Praising Gujarat Chief Minister Narendra Modi, Bharti Airtel Chairman Sunil Bharti Mittal said, “Modi has a magnetic personality, which has attracted several companies to the state. I have had the opportunity to observe him closely during work and I must say that we run only companies and earn money but if there is one person who can run not only a company, a sector, but a whole nation as a CEO, it’s Narendra Modi.”

Apart from large Indian corporates, more than one-third of the investment came from foreign players, whether it was the Japanese implementing a metro rail project or the Koreans aiming for a share in the telecom market.

“I really noticed that this state provides very good environment for business and I can see the real success story of private partnership projects in Gujarat,” said Joon Yun Kim, project head at S K Telecom.

The state government is naturally pleased.

“Today Gujarat is the ideal destination for investments in India,” said Gujarat Industries Minister Saurabh Dalal.

 

Palash Biswas

 

 

 

 

WHY WALL STREET ALWAYS BLOWS IT (and where the money went)

Atlantic Article Submitted by multiple readers, I read this as soon as my issue was delivered. It’s true.

December 2008

The magnitude of the current bust seems almost unfathomable—and it was unfathomable, to even the most sophisticated financial professionals, until the moment the bubble popped. How could this happen? And what’s to stop it from happening again? A former Wall Street insider explains how the financial industry got it so badly wrong, why it always will—and why all of us are to blame.

by Henry Blodget

WHY WALL STREET ALWAYS BLOWS IT

Image credit: John Ritter

Well, we did it again. Only eight years after the last big financial boom ended in disaster, we’re now in the migraine hangover of an even bigger one—a global housing and debt bubble whose bursting has wiped out tens of trillions of dollars of wealth and brought the world to the edge of a second Great Depression.

Millions have lost their houses. Millions more have lost their retirement savings. Tens of millions have had their portfolios smashed. And the carnage in the “real economy” has only just begun.

What the hell happened? After decades of increasing financial sophistication, weren’t we supposed to be done with these things? Weren’t we supposed to know better?

Yes, of course. Every time this happens, we think it will be the last time. But it never will be.

First things first: for better and worse, I have had more professional experience with financial bubbles than I would ever wish on anyone. During the dot-com episode, as you may unfortunately recall, I was a famous tech-stock analyst at Merrill Lynch. I was famous because I was on the right side of the boom through the late 1990s, when stocks were storming to record-high prices every year—Internet stocks, especially. By late 1998, I was cautioning clients that “what looks like a bubble probably is,” but this didn’t save me. Fifteen months later, I missed the top and drove my clients right over the cliff.

Later, in the smoldering aftermath, as you may also unfortunately recall, I was accused by Eliot Spitzer, then New York’s attorney general, of having hung on too long in order to curry favor with the companies I was analyzing, some of which were also Merrill banking clients. This allegation led to my banishment from the industry, though it didn’t explain why I had followed my own advice and blown my own portfolio to smithereens (more on this later).

I experienced the next bubble differently—as a journalist and homeowner. Having already learned the most obvious lesson about bubbles, which is that you don’t want to get out too late, I now discovered something nearly as obvious: you don’t want to get out too early. Figuring that the roaring housing market was just another tech-stock bubble in the making, I rushed to sell my house in 2003—only to watch its price nearly double over the next three years. I also predicted the demise of the Manhattan real-estate market on the cover of New York magazine in 2005. Prices are finally falling now, in 2008, but they’re still well above where they were then.

Live through enough bubbles, though, and you do eventually learn something of value. For example, I’ve learned that although getting out too early hurts, it hurts less than getting out too late. More important, I’ve learned that most of the common wisdom about financial bubbles is wrong.

Who’s to blame for the current crisis? As usually happens after a crash, the search for scapegoats has been intense, and many contenders have emerged: Wall Street swindled us; predatory lenders sold us loans we couldn’t afford; the Securities and Exchange Commission fell asleep at the switch; Alan Greenspan kept interest rates low for too long; short-sellers spread negative rumors; “experts” gave us bad advice. More-introspective folks will add other explanations: we got greedy; we went nuts; we heard what we wanted to hear.

All of these explanations have some truth to them. Predatory lenders did bamboozle some people into loans and houses they couldn’t afford. The SEC and other regulators did miss opportunities to curb some of the more egregious behavior. Alan Greenspan did keep interest rates too low for too long (and if you’re looking for the single biggest cause of the housing bubble, this is it). Some short-sellers did spread negative rumors. And, Lord knows, many of us got greedy, checked our brains at the door, and heard what we wanted to hear.

But most bubbles are the product of more than just bad faith, or incompetence, or rank stupidity; the interaction of human psychology with a market economy practically ensures that they will form. In this sense, bubbles are perfectly rational—or at least they’re a rational and unavoidable by-product of capitalism (which, as Winston Churchill might have said, is the worst economic system on the planet except for all the others). Technology and circumstances change, but the human animal doesn’t. And markets are ultimately about people.

To understand why bubble participants make the decisions they do, let’s roll back the clock to 2002. The stock­-market crash has crushed our portfolios and left us feeling vulnerable, foolish, and poor. We’re not wiped out, thankfully, but we’re chastened, and we’re certainly not going to go blow our extra money on Cisco Systems again. So where should we put it? What’s safe? How about a house?

House prices, we are told by our helpful neighborhood real-estate agent, almost never go down. This sounds right, and they certainly didn’t go down in the stock-market crash. In fact, for as long as we can remember—about 10 years, in most cases—house prices haven’t gone down. (Wait, maybe there was a slight dip, after the 1987 stock-market crash, but looming larger in our memories is what’s happened since; everyone we know who’s bought a house since the early 1990s has made gobs of money.)

We consider following our agent’s advice, but then we decide against it. House prices have doubled since the mid-1990s; we’re not going to get burned again by buying at the top. So we decide to just stay in our rent-stabilized rabbit warren and wait for house prices to collapse.

Unfortunately, they don’t. A year later, they’ve risen at least another 10 percent. By 2006, we’re walking past neighborhood houses that we could have bought for about half as much four years ago; we wave to happy new neighbors who are already deep in the money. One neighbor has “unlocked the value in his house” by taking out a cheap home-equity loan, and he’s using the proceeds to build a swimming pool. He is also doing well, along with two visionary friends, by buying and flipping other houses—so well, in fact, that he’s considering quitting his job and becoming a full-time real-estate developer. After four years of resistance, we finally concede—houses might be a good investment after all—and call our neighborhood real-estate agent. She’s jammed (and driving a new BMW), but she agrees to fit us in.

We see five houses: two were on the market two years ago for 30 percent less (we just can’t handle the pain of that); two are dumps; and the fifth, which we love, is listed at a positively ridiculous price. The agent tells us to hurry—if we don’t bid now, we’ll lose the house. But we’re still hesitant: last week, we read an article in which some economist was predicting a housing crash, and that made us nervous. (Our agent counters that Greenspan says the housing market’s in good shape, and he isn’t known as “The Maestro” for nothing.)

When we get home, we call our neighborhood mortgage broker, who gives us a surprisingly reasonable quote—with a surprisingly small down payment. It’s a new kind of loan, he says, called an adjustable-rate mortgage, which is the same kind our neighbor has. The payments will “reset” in three years, but, as the mortgage broker suggests, we’ll probably have moved up to a bigger house by then. We discuss the house during dinner and breakfast. We review our finances to make sure we can afford it. Then, the next afternoon, we call the agent to place a bid. And the house is already gone—at 10 percent above the asking price.

By the spring of 2007, we’ve finally caught up to the market reality, and our luck finally changes: We make an instant, aggressive bid on a huge house, with almost no money down. And we get it! We’re finally members of the ownership society.

You know the rest. Eighteen months later, our down payment has been wiped out and we owe more on the house than it’s worth. We’re still able to make the payments, but our mortgage rate is about to reset. And we’ve already heard rumors about coming layoffs at our jobs. How on Earth did we get into this mess?

The exact answer is different in every case, of course. But let’s round up the usual suspects:

• The predatory mortgage broker? Well, we’re certainly not happy with the bastard, given that he sold us a loan that is now a ticking time bomb. But we did ask him to show us a range of options, and he didn’t make us pick this one. We picked it because it had the lowest payment.

• Our sleazy real-estate agent? We’re not speaking to her anymore, either (and we’re secretly stoked that her BMW just got repossessed), but again, she didn’t lie to us. She just kept saying that houses are usually a good investment. And she is, after all, a saleswoman; that was never very hard to figure out.

• Wall Street fat cats? Boy, do we hate those guys, especially now that our tax dollars are bailing them out. But we didn’t complain when our lender asked for such a small down payment without bothering to check how much money we made. At the time, we thought that was pretty great.

• The SEC? We’re furious that our government let this happen to us, and we’re sure someone is to blame. We’re not really sure who that someone is, though. Whoever is responsible for making sure that something like this never happens to us, we guess.

• Alan “The Maestro” Greenspan? We’re pissed at him too. If he hadn’t been out there saying everything was fine, we might have believed that economist who said it wasn’t.

• Bad advice? Hell, yes, we got bad advice. Our real-estate agent. That mortgage guy. Our neighbor. Greenspan. The media. They all gave us horrendous advice. We should have just waited for the market to crash. But everyone said it was different this time.

Still, except in cases involving outright fraud—a small minority—the buck stops with us. Not knowing that the market would crash isn’t an excuse. No one knew the market would crash, even the analysts who predicted that it would. (Just as important, no one knew when prices would go down, or how fast.) And for years, most of the skeptics looked—and felt—like fools.

Everyone else on that list above bears some responsibility too. But in the case I have described, it would be hard to say that any of them acted criminally. Or irrationally. Or even irresponsibly. In fact, almost everyone on that list acted just the way you would expect them to act under the circumstances.

That’s especially true for the professionals on Wall Street, who’ve come in for more criticism than anyone in recent months, and understandably so. It was Wall Street, after all, that chose not only to feed the housing bubble, but ultimately to bet so heavily on it as to put the entire financial system at risk. How did the experts who are paid to obsess about the direction of the market—allegedly the most financially sophisticated among us—get it so badly wrong? The answer is that the typical financial professional is a lot more like our hypothetical home buyer than anyone on Wall Street would care to admit. Given the intersection of experience, uncertainty, and self-interest within the finance industry, it should be no surprise that Wall Street blew it—or that it will do so again.

Take experience (or the lack thereof). Boom-and-bust cycles like the one we just went through take a long time to complete. The really big busts, in fact, the ones that affect the whole market and economy, are usually separated by more than 30 years—think 1929, 1966, and 2000. (Why did the housing bubble follow the tech bubble so closely? Because both were really just parts of a larger credit bubble, which had been building since the late 1980s. That bubble didn’t deflate after the 2000 crash, in part thanks to Greenspan’s attempts to save the economy.) By the time the next Great Bubble rolls around, a lot of us will be as dead and gone as Richard Whitney, Jesse Livermore, Charles Mitchell, and the other giants of the 1929 crash. (Never heard of them? Exactly.)

Since Wall Street replenishes itself with a new crop of fresh faces every year—many of the professionals at the elite firms either flame out or retire by age 40—most of the industry doesn’t usually have experience with both booms and busts. In the 1990s, I and thousands of young Wall Street analysts and investors like me hadn’t seen anything but a 15-year bull market. The only market shocks that we knew much about—the 1987 crash, say, or Mexico’s 1994 financial crisis—had immediately been followed by strong recoveries (and exhortations to “buy the dip”).

By 1996, when Greenspan made his famous “irrational exuberance” remark, the stock market’s valuation was nearing its peak from prior bull markets, making some veteran investors nervous. Over the next few years, however, despite confident predictions of doom, stocks just kept going up. And eventually, inevitably, this led to assertions that no peak was in sight, much less a crash—you see, it was “different this time.”

Those are said to be the most expensive words in the English language, by the way: it’s different this time. You can’t have a bubble without good explanations for why it’s different this time. If everyone knew that this time wasn’t different, the market would stop going up. But the future is always uncertain—and amid uncertainty, all sorts of faith-based theories can flourish, even on Wall Street.

In the 1920s, the “differences” were said to be the miraculous new technologies (phones, cars, planes) that would speed the economy, as well as Prohibition, which was supposed to produce an ultra-efficient, ultra-responsible workforce. (Don’t laugh: one of the most respected economists of the era, Irving Fisher of Yale University, believed that one.) In the tech bubble of the 1990s, the differences were low interest rates, low inflation, a government budget surplus, the Internet revolution, and a Federal Reserve chairman apparently so divinely talented that he had made the business cycle obsolete. In the housing bubble, they were low interest rates, population growth, new mortgage products, a new ownership society, and, of course, the fact that “they aren’t making any more land.”

In hindsight, it’s obvious that all these differences were bogus (they’ve never made any more land—except in Dubai, which now has its own problems). At the time, however, with prices going up every day, things sure seemed different.

In fairness to the thousands of experts who’ve snookered themselves throughout the years, a complicating factor is always at work: the ever-present possibility that it really might have been different. Everything is obvious only after the crash.

Consider, for instance, the late 1950s, when a tried-and-true “sell signal” started flashing on Wall Street. For the first time in years, stock prices had risen so high that the dividend yield on stocks had fallen below the coupon yield on bonds. To anyone who had been around for a while, this seemed ridiculous: stocks are riskier than bonds, so a rational buyer must be paid more to own them. Wise, experienced investors sold their stocks and waited for this obvious mispricing to correct itself. They’re still waiting.

Why? Because that time, it was different. There were increasing concerns about inflation, which erodes the value of fixed bond-interest payments. Stocks offer more protection against inflation, so their value relative to bonds had increased. By the time the prudent folks who sold their stocks figured this out, however, they’d missed out on many years of a raging bull market.

When I was on Wall Street, the embryonic Inter­net sector was different, of course—at least to those of us who were used to buying staid, steady stocks that went up 10 percent in a good year. Most Internet companies didn’t have earnings, and some of them barely had revenue. But the performance of some of their stocks was spectacular.

In 1997, I recommended that my clients buy stock in a company called Yahoo; the stock finished the year up more than 500 percent. The next year, I put a $400-a-share price target on a controversial “online bookseller” called Amazon, worth about $240 a share at the time; within a month, the stock blasted through $400 en route to $600. You don’t have to make too many calls like these before people start listening to you; I soon had a global audience keenly interested in whatever I said.

One of the things I said frequently, especially after my Amazon prediction, was that the tech sector’s stock behavior sure looked like a bubble. At the end of 1998, in fact, I published a report called “Surviving (and Profiting From) Bubble.com,” in which I listed similarities between the dot-com phenomenon and previous boom-and-bust cycles in biotech, personal computers, and other sectors. But I recommended that my clients own a few high-quality Internet stocks anyway—because of the ways in which I thought the Internet was different. I won’t spell out all those ways, but I will say that they sounded less stupid then than they do now.

The bottom line is that resisting the siren call of a boom is much easier when you have already been obliterated by one. In the late 1990s, as stocks kept roaring higher, it got easier and easier to believe that something really was different. So, in early 2000, weeks before the bubble burst, I put a lot of money where my mouth was. Two years later, I had lost the equivalent of six high-end college educations.

Of course, as Eliot Spitzer and others would later observe—and as was crystal clear to most Wall Street executives at the time—being bullish in a bull market is undeniably good for business. When the market is rising, no one wants to work with a bear.

Which brings us to the last major contributor to booms and busts: self-interest.

When people look back on bubbles, many conclude that the participants must have gone stark raving mad. In most cases, nothing could be further from the truth.

In my example from the housing boom, for instance, each participant’s job was not to predict what the housing market would do but to accomplish a more concrete aim. The buyer wanted to buy a house; the real-estate agent wanted to earn a commission; the mortgage broker wanted to sell a loan; Wall Street wanted to buy loans so it could package and resell them as “mortgage-backed securities”; Alan Greenspan wanted to keep American prosperity alive; members of Congress wanted to get reelected. None of these participants, it is important to note, was paid to predict the likely future movements of the housing market. In every case (except, perhaps, the buyer’s), that was, at best, a minor concern.

This does not make the participants villains or morons. It does, however, illustrate another critical component of boom-time decision-making: the difference between investment risk and career or business risk.

Professional fund managers are paid to manage money for their clients. Most managers succeed or fail based not on how much money they make or lose but on how much they make or lose relative to the market and other fund managers.

If the market goes up 20 percent and your Fidelity fund goes up only 10 percent, for example, you probably won’t call Fidelity and say, “Thank you.” Instead, you’ll probably call and say, “What am I paying you people for, anyway?” (Or at least that’s what a lot of investors do.) And if this performance continues for a while, you might eventually fire Fidelity and hire a new fund manager.

On the other hand, if your Fidelity fund declines in value but the market drops even more, you’ll probably stick with the fund for a while (“Hey, at least I didn’t lose as much as all those suckers in index funds”). That is, until the market drops so much that you can’t take it anymore and you sell everything, which is what a lot of people did in October, when the Dow plunged below 9,000.

In the money-management business, therefore, investment risk is the risk that your bets will cost your clients money. Career or business risk, meanwhile, is the risk that your bets will cost you or your firm money or clients.

The tension between investment risk and business risk often leads fund managers to make decisions that, to outsiders, seem bizarre. From the fund managers’ perspective, however, they’re perfectly rational.

In the late 1990s, while I was trying to figure out whether it was different this time, some of the most legendary fund managers in the industry were struggling. Since 1995, any fund managers who had been bearish had not been viewed as “wise” or “prudent”; they had been viewed as “wrong.” And because being wrong meant underperforming, many had been shown the door.

It doesn’t take very many of these firings to wake other financial professionals up to the fact that being bearish and wrong is at least as risky as being bullish and wrong. The ultimate judge of who is “right” and “wrong” on Wall Street, moreover, is the market, which posts its verdict day after day, month after month, year after year. So over time, in a long bull market, most of the bears get weeded out, through either attrition or capitulation.

By mid-1999, with mountains of money being made in tech stocks, fund owners were more impatient than ever: their friends were getting rich in Cisco, so their fund manager had better own Cisco—or he or she was an idiot. And if the fund manager thought Cisco was overvalued and was eventually going to crash? Well, in those years, fund managers usually approached this type of problem in of one of three ways: they refused to play; they played and tried to win; or they split the difference.

In the first camp was an iconic hedge-fund manager named Julian Robertson. For almost two decades, Robertson’s Tiger Management had racked up annual gains of about 30 percent by, as he put it, buying the best stocks and shorting the worst. (One of the worst, in Robertson’s opinion, was Amazon, and he used to summon me to his office and demand to know why everyone else kept buying it.)

By 1998, Robertson was short Amazon and other tech stocks, and by 2000, after the NASDAQ had jumped an astounding 86 percent the previous year, Robertson’s business and reputation had been mauled. Thanks to poor performance and investor withdrawals, Tiger’s assets under management had collapsed from about $20billion to about $6billion, and the firm’s revenues had collapsed as well. Robertson refused to change his stance, however, and in the spring of 2000, he threw in the towel: he closed Tiger’s doors and began returning what was left of his investors’ money.

Across town, meanwhile, at Soros Fund Management, a similar struggle was taking place, with another titanic fund manager’s reputation on the line. In 1998, the firm had gotten crushed as a result of its bets against technology stocks (among other reasons). Midway through 1999, however, the manager of Soros’s Quantum Fund, Stanley Druckenmiller, reversed that position and went long on technology. Why? Because unlike Robertson, Druckenmiller viewed it as his job to make money no matter what the market was doing, not to insist that the market was wrong.

At first, the bet worked: the reversal saved 1999 and got 2000 off to a good start. But by the end of April, Quantum was down a shocking 22 percent for the year, and Druckenmiller had resigned: “We thought it was the eighth inning, and it was the ninth.”

Robertson and Druckenmiller stuck to their guns and played the extremes (and lost). Another fund manager, a man I’ll call the Pragmatist, split the difference.

The Pragmatist had owned tech stocks for most of the 1990s, and their spectacular performance had made his fund famous and his firm rich. By mid-1999, however, the Pragmatist had seen a bust in the making and begun selling tech, so his fund had started to underperform. Just one quarter later, his boss, tired of watching assets flow out the door, suggested that the Pragmatist reconsider his position on tech. A quarter after that, his boss made it simpler for him: buy tech, or you’re fired.

The Pragmatist thought about quitting. But he knew what would happen if he did: his boss would hire a 25-year-old gunslinger who would immediately load up the fund with tech stocks. The Pragmatist also thought about refusing to follow the order. But that would mean he would be fired for cause (no severance or bonus), and his boss would hire the same 25-year-old gunslinger.

In the end, the Pragmatist compromised. He bought enough tech stocks to pacify his boss but not enough to entirely wipe out his fund holders if the tech bubble popped. A few months later, when the market crashed and the fund got hammered, he took his bonus and left the firm.

This tension between investment risk and career or business risk comes into play in other areas of Wall Street too. It was at the center of the decisions made in the past few years by half a dozen seemingly brilliant CEOs whose firms no longer exist.

Why did Bear Stearns, Lehman Brothers, Fannie Mae, Freddie Mac, AIG, and the rest of an ever-growing Wall Street hall of shame take so much risk that they ended up blowing their firms to kingdom come? Because in a bull market, when you borrow and bet $30 for every $1 you have in capital, as many firms did, you can do mind-bogglingly well. And when your competitors are betting the same $30 for every $1, and your shareholders are demanding that you do better, and your bonus is tied to how much money your firm makes—not over the long term, but this year, before December 31—the downside to refusing to ride the bull market comes into sharp relief. And when naysayers have been so wrong for so long, and your risk-management people assure you that you’re in good shape unless we have another Great Depression (which we won’t, of course, because it’s different this time), well, you can easily convince yourself that disaster is a possibility so remote that it’s not even worth thinking about.

It’s easy to lay the destruction of Wall Street at the feet of the CEOs and directors, and the bulk of the responsibility does lie with them. But some of it lies with shareholders and the whole model of public ownership. Wall Street never has been—and likely never will be—paid primarily for capital preservation. However, in the days when Wall Street firms were funded primarily by capital contributed by individual partners, preserving that capital in the long run was understandably a higher priority than it is today. Now Wall Street firms are primarily owned not by partners with personal capital at risk but by demanding institutional shareholders examining short-term results. When your fiduciary duty is to manage the firm for the benefit of your shareholders, you can easily persuade yourself that you’re just balancing risk and reward—when what you’re really doing is betting the firm.

As we work our way through the wreckage of this latest colossal bust, our government—at our urging—will go to great lengths to try to make sure such a bust never happens again. We will “fix” the “problems” that we decide caused the debacle; we will create new regulatory requirements and systems; we will throw a lot of people in jail. We will do whatever we must to assure ourselves that it will be different next time. And as long as the searing memory of this disaster is fresh in the public mind, it will be different. But as the bust recedes into the past, our priorities will slowly change, and we will begin to set ourselves up for the next great boom.

A few decades hence, when the Great Crash of 2008 is a distant memory and the economy is humming along again, our government—at our urging—will begin to weaken many of the regulatory requirements and systems we put in place now. Why? To make our economy more competitive and to unleash the power of our free-market system. We will tell ourselves it’s different, and in many ways, it will be. But the cycle will start all over again.

So what can we learn from all this? In the words of the great investor Jeremy Grantham, who saw this collapse coming and has seen just about everything else in his four-decade career: “We will learn an enormous amount in a very short time, quite a bit in the medium term, and absolutely nothing in the long term.” Of course, to paraphrase Keynes, in the long term, you and I will be dead. Until that time comes, here are three thoughts I hope we all can keep in mind.

First, bubbles are to free-market capitalism as hurricanes are to weather: regular, natural, and unavoidable. They have happened since the dawn of economic history, and they’ll keep happening for as long as humans walk the Earth, no matter how we try to stop them. We can’t legislate away the business cycle, just as we can’t eliminate the self-interest that makes the whole capitalist system work. We would do ourselves a favor if we stopped pretending we can.

Second, bubbles and their aftermaths aren’t all bad: the tech and Internet bubble, for example, helped fund the development of a global medium that will eventually be as central to society as electricity. Likewise, the latest bust will almost certainly lead to a smaller, poorer financial industry, meaning that many talented workers will go instead into other careers—that’s probably a healthy rebalancing for the economy as a whole. The current bust will also lead to at least some regulatory improvements that endure; the carnage of 1933, for example, gave rise to many of our securities laws and to the SEC, without which this bust would have been worse.

Lastly, we who have had the misfortune of learning firsthand from this experience—and in a bust this big, that group includes just about everyone—can take pains to make sure that we, personally, never make similar mistakes again. Specifically, we can save more, spend less, diversify our investments, and avoid buying things we can’t afford. Most of all, a few decades down the road, we can raise an eyebrow when our children explain that we really should get in on the new new new thing because, yes, it’s different this time.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

COMMENTARY: am still trying to digest the assertion Blodget makes, “all of us are to blame.” Each element did what was expected of it, yes, but how about behind-the-scenes factors to which we were not privy?

Clearly, what happened, and what will again happen, is that those who predict “the sky is falling,” will be driven to the margin.

With so many conflicting opinions competing for our belief, to whose warnings and predictions will we ultimately listen? Will we be ready the next time? The next new, new, new thing? Doubtful.

Wednesday links: too big to succeed

Citigroup (C) is going through the great unwind.  (WSJ.com, DealBook, naked capitalism, Information Arbitrage)

Are financial supermarkets simply “too big to succeed“?  (Big Picture)

Private equity firms are in “fundraising purgatory.”  (peHUB.com)

The bullish percentage index (BPI) for the major stock averages are all negative.  (Fallond Picks)

Does the appearance of the January effect mean risk taking is on the rise?  (Marketwatch.com)

Just what constitutes a blue chip stock these days?  (WSJ.com)

The railroad stocks are looking sickly.  (InVivoAnalytics.com)

A sign of a top in volatility?  (Daily Options Report)

Research into idiosyncratic risk and fund performance.  (SSRN.com)

Retail sales have fallen off the cliff.  (Calculated Risk)

The federal budget deficit in pictures.  (EconomPic Data)

Just how inflationary has Fed policy been?  (macroblog)

A dramatic turnaround for the Irish economy.  (FT Alphaville, Clusterstock, EconomPic Data)

Should there be a warning label on caffeine?  (LiveScience.com)

Want to make sure you don’t miss any Abnormal Returns posts? Feel free to add our fan-friendly feed to your favorite feed reader.

Dr. Salami extols indexing Africa

id="blog-title">Frontier Markets

id="tagline">random macro musings centered around the frontier

DOW SLUMPS 248; APPLE

ETF/CEF Discussion: The carnage continues, this prompted by bad retail sales news. And expectations for a tech selloff will weigh on the market overnight. Not a pretty sight. With that background RSI has continued with picking low volatility bond funds and high volatility short funds. Take your pick.

Way Forward to Inclusive Growth

Chart I. Current Account & Capital Account as a % GDP

Chart II. GDP Growth: India & World (3-Year Moving Average)

Given this correlation, one did not need to be a clairvoyant to say that a global slowdown will singe India badly. It did. World food prices were going through the roof and export bans were the order of the day in the first quarter of this year. India’s food stocks had virtually run out and imports were on the anvil not to bring down inflationary pressures but simply to avoid food shortages. Today as a result of record food grain procurement, domestic warehouses are overflowing and world commodity prices have crashed. Oil was $100 per barrel in January 2008 and rose to $146 per barrel in June, with several experts predicting $200 per barrel before the year end. And now we are at five year lows of $40 per barrel! In April and May there were fears of over-appreciation of the Rupee hurting our exports and the economy attracting unmanageable volumes of foreign direct and foreign equity inflows resulting in a huge build up of foreign exchange reserves. And now we have seen our reserves decline by more than $60 billion between May and November as FDI inflows have sharply declined and there has been a net outflow of more than $2 billion by equity funds. From the highs of thinking of India emerging as one of the engines of global economic growth, we are today faced with a sharp deceleration and the talk is that of trying to prevent the downturn from becoming avoidably long and deep. One couldn’t have imagined that a mere twelve months could pack so much economic drama in to them. Interesting times indeed.

Chart III. GDP Growth 1997-8Q1 to 2008-9Q2

 

The food and fuel price hike in the early months of this year, which caused the inflationary scare, also masked the reality that the economic downturn had already started in the second quarter of 2007. This is clearly revealed in Chart III below which shows that after enjoying high GDP growth rates for over four years, the Indian economy had begun to slowdown about twelve months ago. However, monetary policy continued to be tightened until July 2008 to bring down inflation. This contractionary stance was also prompted by the knowledge that economic growth remained higher than the economy’s potential growth rate that has been estimated at between 8-8.5% by the IMF and the OECD. With economic growth of higher than nine percent in 2006-07 and also 2007-08, a justifiable fear was that the economy was overheating and if not corrected, inflationary expectations would take root. What was perhaps not noticed was that the current inflationary rate as measured by the month on month inflation rate (as different from the year on year measure, commonly used to describe inflation) had already begun declining since June 2008 and so there was not much danger of re-igniting inflationary expectations. As it turned out however, contractionary macro policies combined with the global slowdown resulted in the GDP growth rate in the first half of 2008-09 (April to September) coming down to 7.6% as compared to about 8.5% during the first half of 2007-08.

Chart IV. Daily Call money rate (Sep 2008 to Dec 2008 )

The Indian economy was therefore already precariously positioned when it was impacted by the shock of the global financial sector meltdown that started with the demise of the Lehman Brothers and the subsequent nationalization of the world’s largest insurance company the AIG. Driven by the withdrawal of liquidity from global inter-bank markets, Indian financial markets also suffered severe liquidity shortages as demonstrated by the sharp spike in overnight interest rates which touched nearly 20% in September 2008 (See Chart IV). By October it was clear that the global financial sector crisis that started in August 2007, had engendered a serious economic downturn in North America, the Euro zone and Japan. According to some observers this was perhaps the only real crisis in the center of capitalism since the depression of the 1930s. It is bound to affect all the economies in the periphery. It was therefore, \not surprising to find that Indian exports declined in October and November and industrial growth rate became negative in November for the first time in the last twelve years. The Indian economy has well and truly entered the downward phase of the business cycle. The longest industrial sector boom that had lasted more than 62 months and which had generated irrational exuberance amongst our industrialists and political leaders had finally ended. Henceforth, policy must focus on measures to make this downturn as shallow and short as possible.

Chart V

 

The prognosis for the second half of the current year (2008-09) and the first half of next year (2009-10) is however not bright. The Index of Leading Economic Indicators (LEI) that has been developed by a group of researchers working at ICRIER forecasts that economic growth in the second half of this year (2008-09) will come down to about 5% yielding an overall GDP growth rate of about 6% for the year as a whole. This is well below the rates achieved in the previous three years. (see Chart V for annual growth rates since 1991). More importantly, this estimate is nearly two percentage points lower from forecasts made at the beginning of the year, demonstrating the extraordinary speed at which the global and domestic environment for growth has deteriorated. More unfortunately our estimates point towards a further slowing down of the economy in the first half of next year (April-September 2009-10) with the LEI index pointing to a GDP growth of about 4% for that period. Whether this slowdown will persist and gets worse or will we see an economic upturn in the second half of 2009-10, will depend crucially on the state of the global economy and domestic policy measures that are taken now.

Fortunately for us, GDP growth, though linked to global economic performance, is not as dependent on it as for example that of China. As the Table below shows, net exports (exports minus imports of goods and services) contributed a negative -3.6% in India’s GDP growth between 2000 to 2007 as compared to a positive -7.9% for China during 2000 to 2005.

Table1. Decomposition of GDP Growth: China Vs India

Source: Computed from WDI and CSO data.

Yet the global economic scene will continue to affect us both negatively in the form of weak demand for our exports and lower level of remittances and positively in the shape of lower prices for essential imports like energy and other commodities. But a major concern should be the likely sharp decline in the Chinese economic growth rates. Its first negative impact will be a further decline in our exports of iron ore and other primary products that fetched us close to $10 billion in export revenues last year. Second, an increasing volume of manufactured exports from China will now be directed to the Indian market. We must also watch out for major global economic churning in case of an unexpectedly sharp decline in Chinese growth rates which could result in serious socio-political convulsions within China and in its extended neighborhood.

The mainstay of our growth will be domestic demand. This needs to be shored up with appropriate fiscal and monetary policies that will stimulate both consumption and more importantly investment demand. Some initial steps have already been taken by the government when it announced a three pronged economic stimulus package at the beginning of December. This comprised reduction in fuel prices, lowering of interest rates across the board with special cuts for relatively smaller housing loans of up to Rs twenty lakh and a fiscal stimulus of about $6 billion or Rs 30,000 crore. These are steps in the right direction and will help boost the sagging consumption demand. Thankfully, there is sufficient space available to further bring down interest rates and lower the cost of capital, which will hopefully increase investment demand. On the fiscal side, however, there is not much headroom despite the decline in global oil prices which have sharply reduced the burden imposed by oil and fertilizer subsidies. Nonetheless, the government, in conjunction with state governments, should consider further lowering of excise duties and sales taxes to try and push up consumption demand. Increasing the fiscal deficit will raise the level of public debt and this can be a cause of some worry. But with the current (2007-08 ) public debt to GDP ratio of 77% there is clearly some room for expanding public expenditure.

Let me at this stage emphasize as much as I can, the critical need for maintaining a high rate of economic growth. Growth is a necessary condition for tackling poverty. Maintaining a reasonable growth rate is also essential for social stability and peace. Growth provides the context for generating the much talked of ‘demographic dividend’ which is derived only when young people are absorbed in the work force and are productively employed. They then generate incomes that fuel consumption and add to the pool of national savings. Without rapid growth, potential entrants to the workforce will not find a satisfactory job. This will heighten social stress and unrest. With middle class expectations now at all time high as a result of the decade long growth and the media explosion, job losses or lack of employment opportunities can have significant and avoidable social and political fall outs. Therefore, it is important for policy makers to give growth the due importance while addressing the inevitable trade off between growth, equity and price stability.

It is important to realize that while fiscal stimulus and loosening of monetary policies can help to raise demand and growth rates in the immediate and short term, they cannot be relied upon to sustain a high growth rate over time. To sustain growth, the structural constraints on investment and capacity expansion that are essential to generate the necessary supply response have to be removed. Therefore, policy attention needs to be focused on removing these structural constraints that prevent our potential growth rate from rising above eight percent. India needs to achieve a potential growth rate of ten percent or more if we are to eliminate dehumanizing poverty in the foreseeable future and also meet the rising aspirations of our burgeoning middle classes.

The most important constraints on raising the potential rate of growth of the economy are: poor delivery of public goods and services; infrastructure underdevelopment; and rent generating government procedures and regulations. The scope of public goods and services needs to be adequately defined. This is important because in India as in some other emerging economies like the Philippines or Latin American countries, it is mistakenly believed that growth can be achieved not only without the government playing its due role but even ‘despite the government.’ This is a dangerous mantra which unfortunately is too often parroted by India’s capitalist class and even the intelligentsia, which should know better. This perhaps comes from our centuries long lack of trust in the ruling authorities and expecting nothing from the country’s rulers expect exploitation and arrogance. This prompts all of us to try and find a private solution rather than look to the State or its various agencies for the more appropriate public solution. This ranges from law and order, which has become the fastest growing industry in our country, to potable water, electricity, sanitation and judicial arbitration. This is simply not workable as it is not only an exclusionary model of development but is unviable on all counts whether social, political or environmental. A development model that does not factor in the due role of the State cannot generate the desired rate of growth. If somehow the desired growth rate is achieved ‘despite the government’ it will end up trapping all of us in a most inequitable society that will be full of stresses and unsustainable. This is certainly avoidable.

Therefore, we must now work to achieve a greater accountability of the State and its agencies in delivering the entire gamut of public goods and services. These will include education, health, social security, urban utilities and security. While each of these five components is critical for achieving inclusive and sustained rapid growth, perhaps the most critical is the provision of good quality and equally accessible public education at all levels. The key to the East Asian success in achieving rapid and equitable growth is the provision of high quality public education duly supplemented by private providers who fill the gaps as they emerge. The Sarva Shiksha Abhiyan should be lauded fro raising our primary school enrolment ratios to hundred percent but quality is still badly lacking as revealed repeatedly by the painstakingly undertaken Pratham surveys. Drop out rates remain unacceptably high. How can India hope to compete in the knowledge intensive global economy with less than 13% of our children reaching higher education? The present government should be given the credit for significantly raising allocations for education and expanding the number of universities, model schools and the number of scholarships. But let us be clear that this is just the mere beginning. This effort at making our education more accessible and generating better quality must be sustained over the next few decades if we are to achieve our true potential and avoid social upheavals. IN the realm of higher education, serious consideration should be given to winding up the UGC and letting multiple accreditation agencies be established to certify the quality of education being provided in both the private and public sector institutions. It is time also to think of endowing our universities with a large enough corpus so that they can become financially independent and achieve the necessary autonomy from political and bureaucratic interference.

The necessity for addressing our perennial infrastructure weaknesses has been discussed at length in our country. Here I want to emphasize only two aspects. First, that hopefully vote bank politics or the pressure to appear politically and socially correct will not take away from the importance of developing our urban infrastructure. The poor will be increasingly concentrated in urban slums with unacceptable living conditions as more than 400 million migrate to towns over the next three decades. At present urban development for the most part is practically completely unplanned and private sector driven with all its attendant problems. This must change if we are not to end up in an unholy mess where neither human beings, animals or nature will be able to survive. Second, we cannot continue to flog the private-public partnership horse for too long. The much vaunted PPP model has significant practical problems, the least of which is generation of significant rents with the increase in the private and public sector interface. It has not delivered the desired results in any country so far. The public sector has been the mainstay and the chief provider of physical infrastructure in all those countries which have successfully tackled poverty and achieved the desired high rates of economic growth. It is time for us to ask the government at all levels to recognize its duty and efficiently deliver the infrastructure we need.

The security conundrum that faces us perhaps does not need much elaboration after the tragic Mumbai incidents. But let us not make the mistake that raising special forces and passing new legislation will solve the country’s security and law and order problems which are very deep seated. All these ‘specialized efforts and schemes’ will come to nothing if the more fundamental reforms of our police and security system is not undertaken. Commission reports gather dust and political classes in cahoots with bureaucracy continue to use the security establishment for serving private objectives. The men in uniform do not enjoy the respect and trust that is necessary for them to perform their functions. Instead they are seen as persons who are best avoided and in any case cannot be relied upon. Unless the basic causes for this sorry state of affairs are addressed, the security system will not improve. And how can we have economic growth if entrepreneurs fear for their lives and the safety of their near and dear ones. Can each state government identify five to six districts in which authorities are assigned annual law and order targets that are are monitored at the highest level.

Rapid and equitable growth will be generated when our small and medium enterprises find that the business environment encourages and supports them. I focus on the SME sector because they currently contribute the largest share of employment, mostly in the informal sector, and generate the majority of India’s exports. This sector generates strong growth impulses and given its spread across the country, it can make growth also regionally balanced. But today it is weighed down by the plethora of rules, regulations and procedures that impinge on every aspect of its operations. The large majority of these rules and procedures are such that their compliance will render all the SMEs uncompetitive and loss making. Consequently, almost all these rules, regulations and procedures are observed in their breach. They thus effectively become a web of rent seeking and corruption that sucks out all the vitality and surpluses from the SMEs and the self employed, leaving them quite incapable of further expansion and growth. Entrepreneurs and workers engaged in this sector are consequently destined to a life of low productivity and stagnation. This state of affairs must change if India is to take full advantage of its vast reservoir of entrepreneurial talent and energy. The entire gamut of these rules and procedures needs thorough review and simplification. Some minimal rules like not allowing child labor or observing reasonable working hours and paying a small premium for social security provisions that matches the workers’ contribution should be put in place and strictly enforced. The present system of having a very large number of rules, which can never be enforced is completely dysfunctional and only breeds dishonesty and corruption.

The belief that India can grow only on the basis of a globally competitive services sector and does not need a vibrant and expanding manufacturing sector is not valid. The services sector cannot hope to absorb the rising numbers of entrants to our workforce. We need the manufacturing sector to grow rapidly and compete effectively with Chinese imports which are increasingly visible in our markets. An economic downturn is a good time to focus on these structural reforms as both the policy makers and the industry have more time and energy to devote to these issues. If implemented, these reforms will ensure that India’s manufacturing sector can become globally competitive and take on the Chinese exporters both within the Indian domestic market and abroad. This will ensure that the next upturn is stronger and is sustained for even a longer period than previous ones.

The Jewish Propagandists Try to Switch the Facts

The Jewish propagandists either in CNN, Fox or in the Internet try to switch the Facts. They try to turn the facts when Israel soldiers killing women, children, and babies as it is a war against terrorists.

http://islammyreligion.wordpress.com/2009/01/07/photos-of-israel-barbarism-against-palestine

Just watch the Aljazeera TV so you could get the real facts. http://aljazeera.com, dsb.

http://answers.yahoo.com/question/index?qid=20090114213510AACdamw

Credibility Collector Credibility Collector Member since: October 22, 2007 Total points: 2783 (Level 4) Why is the Islamic rhetoric in support of the Palestinian people not matched by more supportive actions? And shouldn’t the support (and more charitable giving) include encouraging more constructive leadership and strategies for the benefit of the Palestinian people? And I was shocked to see that so much of the material aid for the Palestinian people comes from the west and “Christian infidels” rather than Islamic sources — despite the “alms pillar” of Islam. (And if you disagree with my observations of the aid situation,I’m very much open to seeing documentation that proves otherwise. My Palestinian friends claimed that even charitable funds coming from the Red Crescent society were often diverted to militant and terrorist purposes and even the personal enrichment of Palestinian leaders. Do you agree with their claims?) {{ The TEXT BELOW IS PURELY OPTIONAL for answering my primary question above. }} Surely anyone who has traveled extensively in the Middle East and is willing to observe and make honest comparisons will at least admit that the average Palestinian living in Israel (despite the disadvantages of being discriminated against there) has far more civil rights and a better standard of living than the average Palestinian living under Palestinian rule anywhere else — and more civil rights and a much better standard of living than the average Palestinian living in any neighboring Islamic nation where factors of war and refugee conditions should not be an issue. (I came to this conclusion not only by my own observations, but through the conclusions of my Palestinian friends who have lived there and made comparisions of their own.) Of course, the average Palestinian “refugee” [or whatever term you prefer] rarely gets the opportunity to live in any neighboring Islamic nation — because despite the supportive rhetoric, neighboring Islamic nations want nothing to do with them and will do little to help them. They call the Palestinians “our brothers” but — according to my Palestinian friends and my own experiences there — do the bare minimum, if anything, to treat them as brothers. ESPECIALLY IF ANYONE who has actually traveled and LIVED in the Middle East DISAGREES with me, I would love to hear your story and observations. I care very much for the plight of the Palestinian people — which is why I spent so much time and energy there — but I lost all respect for their leaders after almost two years of personal observation and the realities of daily life with my Palestinian “brothers”. My focus in these questions is toward the welfare of my Palestinian friends and the role of Islam in helping (or potentially helping) them. (I’m not asking for comparisons of body counts or rockets/mortars attacks or who has the most or earliest historical rights to the land(s). And I’m not asking whether the Jews, Muslims, or Christians are the most evil. Shouting has not improved the lives of the Palestinian people nor does name-calling improve the chances for peace — so I’m sincerely hoping for some respectful dialogue in this forum (even if the probability is low). . * 3 hours ago * - 3 days left to answer. Report Abuse * 0 stars - mark this as Interesting! Who found this interesting? Be the first person to mark this question as interesting! * Email * Save o Add to private Watchlist o Save to My Web o Add to My Yahoo! o Add to Del.icio.us o RSS Answers (2) Show: * teran_realtor by teran_re… Member since: October 22, 2006 Total points: 16891 (Level 6) o Add to My Contacts o Block User “Why is the rhetoric not matched by action?” Simple. The goal is not to “help the Palestinians”. The goal is to eliminate the Jews. Right now, the “Palestinians” are a large form of suicide bomber. To the Muslim world, it is acceptable for the women, children and families in Palestine to be sacrificed as long as the media assists in getting the entire world to unite against Israel. The book of Revelation basically shows that their goal will be achieved someday - at the battle of Armageddon, there is no mention of any nation that sides with or comes to the aid of Israel. Where is the USA at that point? Perhaps no longer exists by then, perhaps becomes a Muslim led nation by then. Maybe the whole world will say that it’s OK to sacrifice Israel to stop the threat of Muslim rioters and terrorists against any nation that sides with Israel? Nizami by Nizami Member since: April 23, 2007 Total points: 742 (Level 2) Well, just read the real action here: http://aljazeera.com http://islammyreligion.wordpress.com After killing Muslim children and babies, please don’t insult Muslims more…. == Facebook Censorship: http://globalvoicesonline.org/2009/01/05/is-facebook-censoring-information-on-israel-and-palestine/ Elimination of Palestine from facebook: http://facebookblogged.com/2007/10/20/facebook-palestine-debate/ Connecting Mark to Israel: http://www.israelenews.com/view.asp?ID=1365 On May there is convention for Jews Internet Defender league maybe including google dan yahoo: http://www.haaretz.com/hasen/spages/970667.html === http://groups.google.com/group/soc.culture.usa/browse_thread/thread/71682dd07d5ef4cc?hl=en# DoD View profile More options Jan 15, 9:21 am Newsgroups: soc.culture.israel, alt.activism.death-penalty, soc.culture.europe, talk.politics.mideast, soc.culture.usa From: DoD Date: Wed, 14 Jan 2009 18:21:39 -0800 (PST) Local: Thurs, Jan 15 2009 9:21 am Subject: Israel’s Fight For Survival Reply | Reply to author | Forward | Print | Individual message | Show original | Report this message | Find messages by this author Israel’s fight for survival is not only against Hamas, Hezbollah, and their state sponsors Syria and Iran. Equally formidable, if more insidious, are those in the West whose virulent hatred of Israel imperils her existence. This antipathy among Western academics, commentators, and reporters is itself a reflection of the larger moral and intellectual corruption that endangers not just Israel but Western civilization. The media coverage of the current Israeli offensive against Hamas and its rockets in Gaza bears all the signs of this irrational and incoherent hatred of the only country in the Middle East in which the rule of law, human rights, and political freedom–– all the boons we Westerners take for granted––are respected in ways impossible to duplicate in any Muslim Arab country.

All neat and tidy

All neat and tidy 15 January 2009

Obituary: Patrick McGoohan: Actor in the television series The Prisoner

McGoohan: he had a clipped, almost metallic delivery and a persistent stare that was ideal for the movies

http://www.timesonline.co.uk/tol/comment/obituaries/article5518785.ece

Letters:

Guardian

Times:

Telegraph:

Irish Times:

Well I must be off

Best wishes John

Tulsa Mortgage Refinance Specialist - ZFG Mortgage

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Sensex tumbles on weak global trends, selling in realty, IT - Daily News and Analysis


United Nations chief Ban Ki-Moon is heading for talks with Israeli leaders, amid signs of progress in efforts to secure a ceasefire in the Gaza Strip.More than 1,000 Gazans and 13 Israelis have reportedly died as Israel’s war on Hamas militants enters its 20th day.Hamas officials on Wednesday said they were happy with the broad outlines of an Egyptian peace initiative, but details remained to be worked out.Israel’s chief negotiator Amos Gilad is expected in Cairo for talks later.The diplomatic initiatives have not stopped fierce fighting between Israeli troops and Hamas gunmen around Gaza City.The intensive fighting came after militant rocket attacks continued on Wednesday despite Israel striking some 60 targets.Palestinian medics said seven people were killed in two separate airstrikes on Gaza City in the early hours of Thursday.Palestinian deaths in the Gaza Strip have passed 1,000, according to Gaza medical sources. Nearly a third of the dead are said to be children and more than 4,500 people have been injured. Intense diplomacyMr Ban is meeting regional leaders as part of the most intensive diplomatic efforts yet to end the fighting.Aid diary: Water shortageBowen diary: Syrian warningGazan families: Pulling togetherIn pictures: Inching into GazaEgypt has been leading efforts to broker a ceasefire that could include a peacekeeping force being deployed along its border with Gaza to prevent the smuggling of weapons.After talks with Egyptian President Hosni Mubarak in Cairo on Wednesday, the UN chief said he hoped Egypt’s initiative would deliver results.He said it was intolerable that civilians were bearing the brunt of the conflict.Egypt and other key Arab players can do some coaxing and arm-twisting with Hamas, says BBC Arab affairs analyst Magdi Abdelhadi, but there is little pressure they can bring to bear upon Israel: only the US has that sort of influence.Hamas official Salah al-Bardawil said his movement had presented a “detailed vision” of how to bring about a ceasefire to Egyptian negotiators.These details concerned how to ensure border crossings into Gaza could be re-opened under international supervision, he said, and would be presented to Israeli envoys visiting Cairo.Hamas, which controls Gaza, has said any ceasefire agreement would have to include a halt to Israeli attacks, the complete withdrawal of Israeli forces and the opening of border crossings to end the blockade of Gaza.Israel has said it will not agree to a deal that does not guarantee an end to Hamas’s smuggling of weapons across the Egyptian border and the cessation of rocket attacks into southern Israel, our analyst adds.Fuelling extremismIsrael launched its offensive on the coastal enclave on 27 December.Since then, nearly a third of the 1,025 Gazans killed have been children, the Ministry of Health in Gaza says, adding that a further 4,500 people have been injured.Israel says 13 Israelis, including three civilians, have died.It is impossible to independently confirm casualty figures as Israel has refused to allow international journalists to enter Gaza.The Israeli offensive has provoked widespread international condemnation at the cost in civilian casualties and the ongoing humanitarian crisis in the coastal enclave.A BBC correspondent in Egypt who saw children with gun shot wounds said he had been given detailed accounts by Palestinian civilians of how they and their children had been fired at by Israeli soldiers.An Israeli army spokeswoman said Israel did not deliberately target civilians.”We don’t shoot innocent people, not underhand, not deliberately,” Major Avital Laybovitz told the BBC. “We only shoot when there is a life and death situation or when there is fire opening at us.”President Bashar al-Assad of Syria has warned Israel’s campaign was fuelling extremism in the Arab and Muslim world.GAZA CRISIS BACKGROUNDIn depth: Gaza conflictQ&A: Gaza conflictWho are HamasMiddle East conflict: History in maps”The effect of war is more dangerous than war. It is sowing seeds of extremism around the region,” Mr Assad said in an exclusive BBC interview.A meeting of countries belonging to the Organisation of the Islamic Conference in Turkey on Wednesday condemned Israel’s military offensive and demanded an immediate ceasefire.Venezuela and Bolivia have broken off diplomatic relations with Israel in a protest against its Gaza offensive.Meanwhile, a newly-released audiotape said to feature the voice of al-Qaeda leader Osama bin Laden called for a holy war to stop the Israeli offensive in Gaza.The authenticity of the tape could not be independently verifiedThis article is from the BBC News website. © British Broadcasting Corporation

A&E must do more on pain control
Thousands of people have expressed concern about pain management in A&E units in a poll of patients.The Healthcare Commission survey of nearly 50,000 people found less than two thirds felt staff did everything they could to manage pain.But overall nine in 10 patients said they were happy with the standard of service in hospitals in England.A&E doctors admitted there were some areas that needed improving, but the government said it was pleased.In total, 88% of patients rated their care as good, very good or excellent, with the numbers giving hospitals the top score rising slightly since the last survey in 2004.’Worrying’But the watchdog said the overall performance could not hide some worrying trends for individual aspects of the care package.Less than two-thirds of patients said they felt staff did everything they could to manage pain.Concerns were also raised about the information patients were given.Only 37% said they were given a complete explanation of possible side-effects of medicine they were given."Pain management is a critical part of care"Katherine MurphyPatients AssociationAnother third reported they were not told about the danger signs associated with their illness or injury that they should look out for after being discharged.The poll also showed slight drops compared to the last survey in the ratings for privacy and respect and the way patients felt they were involved in their care.And it revealed regional variations in the quality of services with London performing worse on many aspects of care.The performance of hospitals in the capital has been an issue in previous reports from the watchdog and officials said they were looking into the trend.Healthcare Commission chief executive Anna Walker said while the overall rating was good, hospitals still had lessons to learn.”Patients have raised important issues.”And Katherine Murphy, of the Patients Association, claimed patients deserved better, adding: “Pain management is a critical part of care.”The watchdog also highlighted a concern about the four-hour waiting time target.More than a quarter of patients said they were in A&E for longer than four hours.AccusationThe Healthcare Commission suggested this could be because patients were being sent to assessment units, a kind of half-way house between A&E and the rest of the hospitals.Managers have been accused of using these units as a way of getting round the target when they have not been able to treat or admit the individual within four hours.Time spent in the assessment unit does not count towards the target.The watchdog refused to get drawn into whether this was a deliberate tactic to hit the target or part of the proper assessment process.But both the Lib Dems and Tories said hospitals were being pressured into manipulating waiting times.Martin Shalley, of the College of Emergency Medicine, agreed it was probably happening “in some places”.And on pain he said: “More needs to be done.”I think it is probably to do with time pressures. Staff do not always have the time to keep asking patients about pain during their visit to A&E. It is something we are trying to improve.”But he added: “Overall, however, we should be pleased with the performance.”Health minister Ben Bradshaw also said he was pleased with the results.”There has been a dramatic improvement in recent years.”

Southend 1-4 Chelsea
By Sam LyonChelsea displayed all the resilience Luiz Felipe Scolari asked for as they came from a goal down to beat Southend in a tough FA Cup third round replay.Adam Barrett headed the hosts into the lead from Junior Stanislas’s corner - but otherwise it was one-way traffic.Michael Ballack’s drive levelled it up and Salomon Kalou slid in a second.Chelsea ran away with it after that, Nicolas Anelka prodding home and Frank Lampard grabbing another, as the Blues sealed a fourth-round tie with Ipswich.Even Lampard’s late strike was little more than Chelsea deserved, despite a brave backs-to-the-wall performance from Southend, who belied their position 56 places behind the Blues down in League One with a performance full of heart and determination.In fact had Chelsea not matched the endeavour of their opponents it might have been a different story, but as it was it was exactly the wrong time for Southend to face Scolari’s men.Sunday’s Premier League defeat to Manchester United prompted declarations that Chelsea’s title bid is over, while Scolari himself called this Cup tie as “the game of the year” - and right from the off it was clear the Blues were under no illusions as to the tie’s importance.It had initially looked as if Chelsea would have to wait for their chance to put Sunday’s defeat to Manchester United behind them as referee Chris Foy called the game off due to fog just over an hour before kick-off - but the fog lifted and the game began on time.And straight away the visitors went on the offensive, Kalou and Ballack going close in the early exchanges and Joe Cole forcing a smart near-post save from Mildenhall after good work from Frank Lampard.So it was against the run of play when Southend took a shock lead - with Scolari’s new zonal marking system exposed at the first opporunity - as Barrett headed in Stanislas’s corner unmarked from eight yards.606: DEBATE"Anelka played brilliant in my eyes so do we need Drogba"giants no1 fan That was not Southend’s only chance of the half and it took a superb point-blank save from Petr Cech to keep out Alex Revell’s header on 40 minutes to keep the scores level.However, in truth, other than that it was near total domination of the football from Chelsea - and the only surprise was that their leveller was so long in coming.Lampard had a great best chance when his close-range volley was aimed straight at the keeper, while Joe Cole saw his effort on the rebound blocked and Nicolas Anelka aimed a subsequent header narrowly wide.As it was, the equaliser came giftwrapped by the Shrimpers, Mildenhall and Peter Clarke getting in each other’s way and allowing the ball to fall to Ballack, who crashed home.It was the German’s first goal since his strike dumped Scolari’s Portugal out of the 2008 World Cup at the quarter-final stage in June - evidence if it was needed of just how out of sorts he has been this season - but it was just the fillip Chelsea were after before half time.To their credit, the hosts refused to buckle in the face of their exhalted opponents, but the second half followed a similar pattern to the first and it was not too long before the Blues were ahead.Joe Cole was the orchestrator - the winger finding Kalou with an exquisite crossfield pass with the outside of his boot - and the Ivorian danced past two defenders before sliding into the far corner.Scolari, whose exasperation was clear for all to see until that point, was visibly relieved - and the players also seemed to calm as they stroked the ball around with increasing confidence thereafter.Anelka made it three late on with a neat finish after good work from Lampard and Kalou, and there was still time for Lampard to add a fourth with a close-range finish from Kalou’s pass.And so while Southend had caused the odd moment of alarm among the Chelsea backline - Jean-Francois Christophe headed a corner unmarked over early in the half - few could argue the Blues did not fully deserve the victory, as well as some semblance of redemption after Sunday’s defeat to Man Utd.Southend: Mildenhall, Sankofa, Barrett, Clarke, Herd, Revell (Betsy 86), Grant (Francis 80), Moussa, Christophe, Stanislas, Barnard (Freedman 73).Subs Not Used: Joyce, Walker, O’Keefe.Goals: Barrett 16.Chelsea: Cech, Bosingwa, Alex, Terry, Ashley Cole, Mikel (Belletti 46), Joe Cole (Di Santo 76), Ballack, Lampard, Kalou, Anelka.Subs Not Used: Cudicini, Ivanovic, Carvalho, Mancienne, Stoch.Booked: Mikel.Goals: Ballack 45, Kalou 60, Anelka 78, Lampard 90.Att: 11,314Ref: Christopher Foy (England).BBC Sport Player Rater man of the match: Southend’s Anthony Grant 8.15 (on 90 minutes).Please note that you can still give the players marks out of 10 on BBC Sport’s Player Rater after the match has finished.Player Rater


Mumbai: The Bombay Stock Exchange benchmark Sensex on Thursday saw a one-month low before ending with a loss of over 323 points mostly due to funds selling realty and information technology stocks. The Sensex, which remained under pressure and dipped
Source: www.dnaindia.com

Financial Times 100-share index is down 12.79 at midday to 4,167.85 - Canada East
LONDON - At midday on Thursday at the London Stock Exchange, the Financial Times 100-share index is down 12.79 points to 4,167.85. Logged in visitors may comment on articles, enter contests, manage home delivery holds and much more online. Your ONE
Source: www.canadaeast.com

XELR8 Holdings Announces Plan to Appeal Notice of Proposed Delisting - Earthtimes
DENVER , Jan. 15 /PRNewswire-FirstCall/ — XELR8 Holdings, Inc. (Amex: BZI), a provider of functional foods, beverages and nutritional supplements, announced it has received notification from NYSE Alternext (formerly known as the American Stock
Source: www.earthtimes.org

End of post.

New Year, New Saving Strategies

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Foreclosures in U.S. Rose 81%, Topping 2.3 Million Last Year

By Dan Levy

Jan. 15 (Bloomberg) — U.S. foreclosure filings jumped 81 percent last year as falling house prices, tighter mortgage lending and the longest recession in a quarter century battered property owners, RealtyTrac Inc. said.

More than 2.3 million properties got a default or auction notice, or were seized by lenders, the Irvine, California-based seller of default data said today. That’s the most RealtyTrac has documented in four years of recordkeeping. Filings rose 41 percent in December from a year earlier to 303,410.

The nation lost more than 2.6 million jobs last year, the most since 1945, and U.S. stocks had their worst performance since the Great Depression. President-elect Barack Obama has said the country needs to prevent foreclosures to revive the housing market and economy.

“If we don’t adopt a comprehensive national policy, we’ll have 5 million to 8 million new foreclosures in the next three years,” Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, said in an interview. “The single most important thing is making credit available for the average person.”

Obama may use part of the remaining $350 billion in funds from the Troubled Asset Relief Program to help reduce mortgage payments for people facing foreclosure, Lawrence Summers, his top economic adviser, said this week in a letter to congressional leaders.

Barney Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, said up to $100 billion may be allocated to curb homeowner defaults.

Relief Efforts Fail

Foreclosure prevention programs offered by U.S. banks and state laws that temporarily delayed property seizures “have not had any real success in slowing down this foreclosure tsunami,” James Saccacio, RealtyTrac’s chief executive officer, said in a statement. One in 54 housing units, or 1.8 percent of homes, received at least one filing in 2008.

About 55 percent of loans modified in the first quarter of 2008 were 30 days or more delinquent six months later, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a Dec. 22 report.

Proposed changes to bankruptcy laws that would allow judges to reduce the principal borrowers owe on their mortgages also may fail to stem foreclosures, according to Glenn Boyd, head of U.S. asset-backed securities strategy at Barclays Capital in New York.

Some borrowers will re-default while others whose income is too high to qualify for the plan will walk away from their obligations if neighbors get bailed out, he said.

Prices Plummet

Home prices in 20 major U.S. cities fell at the fastest rate on record in October and have dropped every month since January 2007, according to the S&P/Case-Shiller index. The gauge declined 18 percent after falling 17.4 percent in September.

“The biggest driver of the housing market has been the drop in home prices, but now it’s the economic risk of the job market collapsing and consumer sentiment,” said Sam Khater, a senior economist at the Santa Ana, California-based mortgage data firm First American CoreLogic.

December foreclosure filings rose 17 percent from November, RealtyTrac said. The total for the year reached 3.2 million, which includes multiple filings against some of the 2.3 million properties affected.

Nevada, Florida, Arizona

Nevada had the highest foreclosure rate in 2008, with 7.3 percent of housing units in some stage of default. A total of 77,693 properties received a filing, more than double the number in 2007 and a six-fold increase from 2006, according to RealtyTrac.

Florida had the second-highest rate with 4.5 percent of housing units in default. The state had 385,309 properties with filings against them, a 133 percent jump from a year earlier and up 412 percent from 2006.

Arizona had the third-highest rate at 4.49 percent. Properties with filings surged to 116,911, triple the number in 2007 and up 655 percent from 2006, said RealtyTrac, which collects data from more than 2,200 counties that are home to more than 90 percent of the U.S. population.

California, Colorado, Michigan, Ohio, Georgia, Illinois and New Jersey were also among the states with the 10 highest rates. New York ranked 35th with 50,032 properties receiving default notices.

California had the most properties with filings: 523,624, representing a 110 percent increase from a year earlier and a six-fold jump from 2006. Florida was second and Arizona third, followed by Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey.

California also had the most cities among the top 10 metro areas with the highest foreclosure rates, led by Stockton, where 9.5 percent of housing units were in default, according to RealtyTrac. Riverside-San Bernardino ranked third, Bakersfield was fourth and Sacramento ninth.

Crisis May Deepen

Las Vegas had the second highest rate with 8.9 percent of housing units receiving a filing and Phoenix ranked fifth with 6 percent. Fort Lauderdale, Orlando and Miami, all in Florida, ranked sixth through eighth.

The foreclosure crisis will probably deepen this year as lenders put thousands of bank-owned properties on the market, said real estate broker Mike Novak-Smith in Moreno Valley, California, near Riverside. He said he expects one U.S. lender that he declined to identify to put 3,000 foreclosed homes on the market next month in Southern California.

“I think it will get substantially worse,” Novak-Smith, of the RE/MAX Results brokerage, said in an interview. “You’ve got people losing jobs right and left and the general business climate is bad. We’ve got an economy built on easy credit, and now it’s got to revert.”

To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net

STOCKS BOUNCE BACK FROM STEEP LOSSES

Have a nice evening/night and I’ll catch you tomorrow.

A Common Sense Observation on the Supreme Court

One thing the Obama administration will be confronting in the next 4-8 years is supreme court nominations.  This is not an ideological argument however I do find constructionist arguments to be somewhat hypocritical and lazy intellectually.  Constructionism also seems to miss the point of America’s progressive traditions.  Women and minorities would not have fared well in a constructionist’s theoretical America,  which makes Clarence Thomas all the more of an enigma.

All the financial information below comes from the official financial disclosures from 2005.  For whatever reason that was the latest information I was able to find except in the case of Ruth Bader Ginsberg.  A 2006 disclosure was available for her but I used the 2005 disclosure for a more accurate comparison among the justice’s.

My ideological argument aside I do agree with Clarence Thomas’s approach to private investing as a supreme court justice.  He owns a part of a rental property,  an annuity fund and a few retirement funds.  Anthony Kennedy is even more of an extreme example,  he owns no funds or stocks just 3 life insurance policies.  I point this out to blatantly differentiate from the other side of the coin,  Stephen Breyer who owns 44 Individual stocks ranging from Wal-Mart,  Pepsico,  National City Bank,  Wells-Fargo,  Bank of America,  Excelon,  Duke Energy,  B.P.,  Merck,  Schering-Plough,  Teva Pharmceutical, Alltel, Cisco Systems,  and IBM.  I have nothing against stock investment by private citizens but I’m bothered by it when it comes to politicians and especially supreme court justices.

How many cases involving banks will be before the court in the future as a result of this financial debacle,  hopefully many.  Will Justice Breyer recuse himself if Bank of America is involved.  With the oil companies constantly in the court are we to believe in total objectivity.  It becomes harder to believe when examples of Exxon having the penalty from the Valdez disaster constantly lowered exist.  After twenty years the court lowered the penalty to $250 million,  hardly compensation for the villages that lived on the fish those waters provided.  The fish population has still not returned to the levels before the spill.

I don’t mean to single out Justice Breyer,  Chief Justice Roberts owns roughly the same amount of stock in every bit as potentially conflicting corporations as Justice Breyer. His stock investments include such companies as Time-Warner, Astra-Zeneca,  Disney,  BB&T,  State Street Bank,  Pfizer,  and Microsoft.  Samuel Alito owns stock in Disney,  Bristol-Meyers Squibb,  McDonalds,  and Exxon Mobil.  Ruth Bader Ginsberg owns stock in Avi Holdings.  John Paul Stevens is a trustee at a Chicago bank.

With the exception of Anthony Kennedy all the justices have investments in the market.  Justice Scalia has four pages of financial disclosures.  However he has no ownership of individual common or preferred stock.  His investments are all money market,  index,  or mutual funds.  Other than Justice Kennedy all the justices also have these types of funds and even though they do contain common shares within them it’s less of a conflict of interest,  thought the conflict does still remain.  I should point out the only reason Justice Thomas isn’t excepted like Justice Kennedy is a MONY annuity fund.  Justice Souter does not own many stocks but has an investment of between 100,000 and 1,000,000 dollars (this is as exact a figure as provided in the disclosure) in Chittendon Corporation.  He also owns Citibank stock.

I am not passing judgment on stock ownership nor the individual companies mentioned.  This is just to say inevitably a conflict of interest is going to arise when supreme court justices own stock in some of the largest corporations in the world.  These are not local companies who’s cases will first be argued in local or state courts and may never make it to the federal level.  Cases involving these corporations will almost always end up in front of the supreme court.  To own index or mutual funds does somewhat remove the conflict,  however somewhat should not be good enough.

Private investment should be disallowed in the Supreme Court.  With only nine justices surely this country contains enough well qualified people with no stake in the companies they will most likely be called to rule upon.  As I have tried to make clear,  this is an issue that involves both sides of the political spectrum.  In fact the two best examples of not involving themselves in private investment are Justice Thomas appointed by H.W. Bush and Justice Kennedy appointed by Reagan.  While Justice Kennedy has proved to be a moderate pragmatic judge unfortunately the same can’t be said for Justice Thomas.  Kennedy’s moderate pragmatism has actually been a disappointment to many members of the party that nominated him.   I point this out only to make it obvious this is not a condemnation of one party or the other or one ideology or the other.

An important area of questioning of anyone appointed in the future should be his or her’s financial history.  If they do have private investment it should be sold.  Under the current conditions I feel any case involving a company a justice is invested in should require an automatic recusal of that justice.  Unfortunately a case during the summer of ‘08 could not be heard because enough of the justices did recuse themselves there was not a sufficient number left to hear the case.

Current justices had to recuse themselves from a case involving fantasy league baseball because they played themselves and didn’t feel they could be impartial.  If they felt they could not maintain impartiality in something as trivial as fantasy league baseball how are we to believe it can be maintained when involving their retirement funds or stock portfolios?

Perhaps in the future we cold see appointments of law professor types with no investments other than a house and a couple of cars.  The fact associate justices make $208,100 a year and the Chief Justice makes $217,400 and sit on the bench until death if they like takes away the necessity of investing,  even in retirement plans in most cases.  I know in a capitalist country these ideas are almost blasphemous but I think maybe we need to look into them at least when the Supreme Court is involved.

16 January 2009 Newz Bits

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Book Review: Winning The Loser

I selected this book because I was intrigued as to why Ellis described investing in the stock market the loser’s game. In reality, the loser’s game is not investing in the stock market, but trying to beat the stock market.

Ellis contends that trying to beat the stock market has evolved from a winner’s game to a loser’s game. The reason for the evolution is due to the number of professionals associated with the stock market. Investing institutions currently make up 90% of total public transactions. For this reason, in order to beat the market, investors must find and exploit other professional investor’s mistakes. Attempts to beat the market usually leads to active investing, where returns are eroded by trading costs and taxes on top of the already powerful eroding force that is inflation.

Ellis’ solution to the loser’s game is to just not play. If you don’t play you can’t lose. He does not suggest stuffing your money under the mattress for preservation. Ellis believes in applying a long-term investment policy to take advantage of compound interest. He advocates developing a long-term investment policy that is based on selecting an appropriate level of risk. The appropriate level of risk is determined by the highest ratio of equities that you handle during a bear market.

A large portion of the book is spent breaking down the investment client and investment manager relationship. Ellis claims that the client must play the most important role in this relationship. Most individuals think they are paying an investment manager to make all of the decisions. This is not the case. The client should be responsible for defining an investment policy (optimally a long-term policy), after which the manager must adhere to this policy.

Knowing the history of the stock market goes a long way in developing a long-term investment policy to win the loser’s game and establish a successful relationship with your investment manager. An understanding of the turbulent nature of stocks in the short-term goes a long way towards developing an appropriate ratio of equities, while also tempering your expectations from an investment manager. Ellis argues that you should select an investment manager based on your willingness to double up with him when he is losing to the market based on the reversion to the mean theory.

“Winning The Loser’s Game” can be slightly more difficult of a read than I was hoping. A few times I had to re-read sections to truly understand his argument. Otherwise, it was a very interesting read that put a different twist on the stock market. I had never thought of the stock market as being run by professionals with limitless information. I would recommend this book, but it does not even come close to matching “A Random Walk Down Wall Street”.

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Shares, not dollars

Shares, not dollars: this is my way mantra to cope with Mr. Market’s relentless assault on my retirement portfolio.

Looking at the value of my retirement holdings is an exercise in self-inflicted pain. I don’t plan to decrease my investments OR to adjust my overall fairly aggressive asset allocation, but that doesn’t mean I don’t grimace a little over a 30% drop in the value of my contributions.

But – if I just change my perspective a bit, and turn my focus from dollars to number of shares, this downturn has been great! I’m picking up shares at all kinds of discounts. At the beginning of 2008, $5,000 bought maybe ~170 shares in my funds. Now, $5,000 can buy ~240 shares. 170 vs. 240 = HUGE difference.

The expectation, of course, is that these shares will (over the long run) grow in value. Capitalism is the essential exercise in optimism - the optimism that things will keep getting better, that productivity will increase, that people will prosper. That’s why I buy into America (literally, I buy America - well, the U.S. market index, anyway).

Of course, shares can lose most -or all- of its value (exhibits A, B, and C). But I don’t hold any individual stocks. In addition to the U.S. market index, I hold an international index and a bond index.

So, if my shares become worthless, the world has probably gone to hell in a hand basket. At that point, retirement will be the least of my worries. I’ll probably be foraging for berries and hunting small rodents for sustenance.

Israel, Palestine and Gaza: Part IV

All the usual caveats apply, needless to say.  I’ll edit this through the evening.  Comments are welcome, if non-abusive.

The current war in Gaza has witnessed a huge surge in anti-Israeli sentiment world wide. Animus toward Israel has been steadily growing for many years, and even prior to the launch of Operation ‘Cast Lead’ had achieved a level of cultural embedment that in many respects is both baffling and disconcerting. It has been particularly alarming to see how, over the past few years, the decades-long aversion to anti-Semitism has broken down over much of the western world, and classic Jew-hatred has unmistakeably re-surfaced as part of the anti-Israel discourse.

I say baffling and disconcerting because, on any objective measure, Israel hardly rates at all on the index of pure evil. During the period that Israel has been in existence, the world has witnessed nations conducting themselves in ways that completely eclipse the worst that can be said of Israel: the Soviet Union, the PRC and Cambodia, to name three.

In today’s world, atrocities by the governments of Burma, Uganda, Sudan, Zimbabwe, Somalia, the Congo, North Korea, Iraq, Iran and Syria should totally overshadow the crimes alleged against Israel. Some of these the world has largely ignored; some it has deplored – often quite gently. But none of them have attracted the avalanche of fury that has been directed, with steadily increasing intensity, against the lonely Jewish state lodged precariously on the eastern rim of the Mediterranean Sea.

Some context

Israel has done much that can be disagreed with or even vehemently opposed. Its carrying of the war against PLO terrorists to the streets of Europe was probably unwise, and it made bad mistakes, such as when its intelligence services executed the wrong man in Oslo in 1973 (they mis-identified a Moroccan waiter as Ali Hassan Sulameh, mastermind of the Munich Olympics massacre).

Targeted assassinations are a repugnant instrument for a democracy to employ even against its deadliest enemies, although I can see the rationale and – almost – the need. The establishment of settlements in territories occupied as a result of war was wrong – at least morally, although many sympathisers argue that it was not technically illegal. But Israel has demonstrated that it is prepared to regard the settlements as negotiable: those in the Sinai and Gaza have been dismantled and the territories returned to Egyptian and Palestinian sovereignty. Recently Prime Minister Olmert urged the West Bank settlers to psychologically prepare themselves for the day they must return to Israel proper.

Israel has fought many wars, all of which – perhaps with the exception of the 1982 invasion of Lebanon – were forced upon it by its enemies. Three times Israel has fought off and defeated the combined armies of the neighbouring Arab states, whose war purpose was to annihilate Israel and kill or expel its citizens. No war can be conducted without major mistakes or blemishes, but Israel has committed remarkably few.

Its greatest was the massacre of Palestinians in the refugee camps of Sabra and Shatila in December 1982. Although the Phalangist militia were responsible for the atrocities, the IDF commanders should have recognised the potential for such actions and guarded against them – as Israel acknowledged, through the findings of the Kahan commission. Ariel Sharon was found to bear personal responsibility and was forced to resign as Defence Minister. The number of victims at Sabra and Shatila is uncertain, but the best estimates appear to be around 500.

World public opinion has never forgiven Israel for Sabra and Shatila, but it has completely forgotten, if it ever really knew, that President al-Assad of Syria, in February that same year, massacred between 20,000 and 40,000 of his own citizens in the city of Hama in reprisal for an attempted coup. Similarly, at around the same time, the number of political prisoners estimated to have been executed by the Khomeinist regime in Tehran ran into tens of thousands. The world paid no mind. I recall Israeli diplomats bitterly remarking, even then, on the double standards that applied to Israel.

The most common charge against Israel is that it is an occupying power, which it has been since 1967 when it captured the Gaza Strip, the West Bank and East Jerusalem during the Six Day War. It appears little known that Israel offered the territories back in exchange for peace almost before the echoes of gunfire had faded. The Arab answer, delivered at the Arab League’s September 1967 summit in Khartoum, was: no peace with Israel, no recognition of Israel, no negotiations with Israel.

Many anti-Israel bloggers and commentators commonly assert that these territories are Palestinian by right or by nature, and that in occupying them Israel is somehow preventing the state of Palestine from constituting itself. Yet during the period that Jordan occupied the West Bank and Egypt the Gaza Strip (1948-1967) there was never any question that a state of Palestine should be created there. Both territories were used as platforms to launch terrorist attacks on Israel, both by fedayeen supplied, armed and trained by Jordan and Egypt, and by military units of both nations. Dozens of attacks were launched in the four months prior to the June 1967 war alone. Given that, and in light of the ‘three noes’ of Khartoum, Israel could hardly be expected to return to the status quo ante.

Serious talk of a ‘two state solution’ only emerged after Israel defeated yet another annihilating invasion by Egypt, Syria and Jordan in 1973, and it became clear that the Arab states could not destroy Israel by military force, which they had been determined to do since 1948.

It is a historical fact beyond any serious dispute that the Arabs could have created a state of Palestine in 1937, when the Peel Royal Commission recommended it; in 1947, when the UN voted for it; at any time between 1948 and 1967, when the Arabs occupied Gaza and the West Bank; at any time, provided that the terms did not pose an existential threat to Israel, between 1967 and 1977, when the Likud won its first electoral victory, and Israeli irredentism got the upper hand; and in 2000, when Barak offered it.

Each time, the Arabs refused.

The other major charge against Israel is that it is responsible for the current plight of the Palestinians who fled (most) or were expelled (a comparative few) from what became Israel in 1948, who along with their descendants are still maintained in refugee camps as persons of no nationality. Very few people are aware that Israel offered to take back 100,000 refugees after the War of Independence, and that the Arab states refused to allow them to do so. They would only return, the Arabs said, in the wake of victorious Arab armies.

Meanwhile, the Arab states did not allow the Palestinians to settle or gain citizenship within their borders. Instead, the UN’s Work and Relief Agency was set up to fund and run the camps, making the Palestinians refugees in perpetuity. In post-WWII world that witnessed the transfer, often forced, of millions of people – Hindus to India, Muslims to Pakistan, ethnic Germans from a re-constituted Poland, Jews from Arab lands to Israel – only the Palestinians were never permitted to settle and establish themselves in lands of refuge. The Arab states and the UN were determined that the Palestinians should remain unsettled, often in squalid conditions, as a constant weapon and reproach against Israel.

Against that backdrop, it is difficult to understand why international support for Israel (other than in the US) seems to have collapsed so comprehensively. The settlements apart, the most that can be said against Israel, it seems to me, is that it has acted on occasion with unnecessary brutality in executing reprisal raids for terrorist incursions or rocket barrages, and that its religious extremists are a pretty bad lot who hold disproportionate power in the Knesset, thanks to Israel’s foundational mistake in opting for proportional representation as its electoral system.

On the other hand, it has often acted with extraordinary restraint, wittingly putting its soldiers in harm’s way in order to minimise civilian casualties, as was the case in Jenin (despite the mythology) six years ago. The airstrikes which began the current offensive against Hamas in Gaza are far more accurate and careful of civilian casualties than were, for example, the high-altitude NATO strikes against Serbia ten years ago.

But there is more to the current climate against Israel than the lack of sympathy or political support. It’s the level of visceral hatred that seems so extraordinary. The venom on open display is out of all proportion to the crimes - whether real or imagined – alleged against Israel.

Around the world, tens if not hundreds of thousands of people have taken to the streets, chanting ‘We are all Hamas now’. The ugliest kind of anti-Semitic invective has been employed, including taunts of ‘Back to the ovens, Jews’, and ‘Finish Hitler’s work’, and ‘The Jews are our dogs’, and many others. What is going on here? Such sentiments are common across the Middle East, but why are they now openly proclaimed across the streets of Europe and the Americas?

Many of the demonstrators have been expatriate Arabs or Muslims, but at least as many were not. As was the case during the war in Lebanon two years ago, people of normally good will and kindly temperament are allying themselves with a movement sworn to the extirpation of a state and a people from the face of the earth, and chanting its slogans on the street.

The new rise of anti-Semitism

I have always been reluctant to ascribe anti-Israel sentiment to anti-Semitism. But it has now become impossible not to see what purports to be ‘anti-Zionism’ as offering a cloak for the old anti-Semitic hatreds.

In May last year, Martin Bright, of Britain’’s New Statesman – part of the anti-Israel axis in the UK media which also includes The Guardian and The Independent – wrote an article pondering why Israel represented a “terrible fault line” of the British (and international) left. He never really answered his own question, but he did note that responses to stories about Israel in his and the other journals of the left always, these days, brought forth vituperation that no-one could fail to recognise as the tropes of classic anti-Semitism. He is quite right: even a cursory read through comments on The Guardian’s CommentIsFree site leave one in no doubt of that.

Even opponents of Israel have been troubled by the trend. A couple of years ago, divestment campaigner Sue Blackwell wrote in Egypt’s Al-Ahram newspaper that activists associated with the divestment movement frequently approached her saying, ‘You should read this. It explains everything!’ ‘This’ was The Protocols of the Elders of Zion.

Last year, the doyen of Western scholars of Arabs and Islam, Bernard Lewis, came under a lot of fire from the right in the US for asserting that the anti-Semitic sentiment with which the Islamic Middle East is awash was imported from Europe. Arguing against Lewis, various commentators and bloggers pointed to anti-Jewish passages in the Quran and the Hadiths to demonstrate that Islam is inherently malignant towards Jews.

I think Lewis is right. There are ugly passages in the Islamic texts, it is true – but as much could be said of the Old Testament. The importation into the Middle East of European anti-Semitism goes back at least as far as the Grand Mufti of Jerusalem, who toured the concentration camps in occupied Poland, and urged the exterminators on to greater efforts.

Arab government sponsor the propagation of blood libels against the Jews which exactly parallel the old European fantasies. Videos of inexpressible vileness have been produced by the governments of Iran and Jordan depicting Jews killing babies to produce blood for baking in ceremonial breads. Cartoons of hook-nosed Jews engaged in acts of villainy, greed and evil abound throughout the Arab media. The Protocols and Hitler’s Mein Kampf are found in every bookshop. When Iran participates in book fairs in Europe, most of its display space is taken up, not with books about Iran, but with European-sourced anti-Semitic tracts.

The extraordinary process we are witnessing today is this: the Middle East, having imbibed the Europe’s anti-Semitic fetishes during the decades when Europe had largely abandoned them, is now re-exporting them back to Europe where they are finding a new, receptive audience.

Some have argued that Europe is still trying to expiate its guilt as the extermination of its Jews by the Nazis. A widely-distributed graphic image juxtaposing a picture of the death of Mohammed al Durah (long ago exposed as a hoax) with the small Jewish boy with hands raised in the Warsaw Ghetto – with the clear implication that the former ‘crime’ erased the latter – is a perfect illustration of this.

One victim over-wrote the other.

The pathology of victimhood

There is a difference between victim and victimhood. Victim is a real, single state; victimhood is an imagined, continuous condition.

The world is terrifyingly full of victims. Victims of the Lord’s Resistance Army in Uganda have their faces cut off and are sent back to their loved ones as a mocking jeer. Victims of Sierra Leone’s militia are asked whether they want their punishment ‘long’ or ‘short’. Depending, their arms will be macheté-ed off at the wrist, or above the elbow. Victims of the North Korean regime eat grass when they run out of food, and North Koreans when they run out of grass. Half a million Sudanese have been victims of rape and murder. Non-combatant casualties in Gaza are victims. The people of Sderot are victims. Teenagers killed in pizza bars by Palestinian suicide bombers are victims. Women killed in Islamic lands for infringing medieval codes of honour are victims.

Victimhood is an assumed or imparted condition. It allows people to ascribe their failures in life to the fact that they are victims: victims of their parents, of a loveless childhood, of poverty, of their gender, sexual preference, race, colour, temperament, not-good-enough looks, or religion or political affiliation. On a bad day, if you’re cynical enough, it seems that the very condition of being alive makes you a victim of something, or many things.

Western public opinion does not care much for victims, beyond sporadic events such as LiveAid, but it cares very much for victimhood. Victimhood carries with it a cachet, a badge of honour, a sense of aggrievement, a claim for entitlement and a demand for restitution. It’s a powerful and compelling instrument, which is why so many use it. The prizes are endless – emotionally, politically and financially.

Many seek the prizes of victimhood, but not all can realistically assume the condition. So, if you yourself cannot claim victimhood, the next best thing is to adopt someone who does, and claim their cause as your own. For many western progressives, with little cause to claim victimhood for themselves, their adoptive claimants of choice are the Palestinians. They project the desired condition of victimhood on to the Palestinians, and celebrate it in the demonstrations we have recently seen. Fed by media images, the pressure of the crowd and its own self-intoxication, it readily turns to the kind of hatred so obviously manifest.

It’s hard, indeed to believe that these people do not actively enjoy their hatred: that it gives them a rush that nothing else could give them.  In this they reflect the crowds of Tehran, Gaza City, Ramallah and Damascus, for whom the only permissible outlet for discontent at whatever cause (tyranny, stagnant economies) is the public celebration of hatred for Israel.

Around the world, millions of people have self-identified with Palestinian victimhood. In a real sense, they (especially the intellectuals) have colonised the Palestinians’ own sufferings in support of objectives they aspire to for themselves. They participate vicariously in the pain of their adoptees, celebrate it and weaponise it to further their own programs and agenda. The names Noam Chomsky, John Pilger, Juan Cole and Robert Fisk come readily to mind as standard-bearers in this process. Half-forgotten political movements – Trotskyites, Spartacists, Anarchists, neo-Nazis – have all picked up the weapon.

It is often said that the western left’s sympathy for Israel waned after 1967, when the Jewish state demonstrated the efficacy of its military might. David became Goliath. The underdog became the neighbourhood Rottweiler. In other words, Israel could no longer claim victim status, so that condition was imputed to the new underdog, the Palestinians.

What the world may not have understood is that the foundation by the Jews first of a Homeland, and then a State in Palestine was itself a rejection of their own history (and assumption) of the burden of victimhood. Menachem Begin, the most repugnant of all of Israel’s leaders and a terrorist to boot, expressed this in an extreme form in his memoirs (‘The Revolt’). The purpose of forming the Irgun, he said, was to create a new kind of Jew, the like of which the world had not seen since Masada: the Jew who did not wait to be attacked. In less immoderate terms, it may be said in justification of Israel’s military prowess that David may have been the underdog in the fight, but he was never a victim. He fought his enemy, and won.

So the ‘victim’ status previously conferred (falsely) on Israel was transferred to Palestine. It followed that the Arabs’ and Palestinians’ own rationale should be adopted along with the cause itself. And the west’s progressives – many, too in Israel itself – colonised the Palestinian cause to confirm their own emotional and ideological predilections. They were not necessarily ill-meaning, but they identified with the ‘victim’, to the extent that, goaded above all by the images propagated by the media, they were prepared to go over to the side of barbarism.

Thus Iran’s Ahmadinejad is embraced by the Bolivian President of the UN General Assembly, and receives a standing ovation, when he denies the Holocaust, demeans the Jews and calls for the destruction of the their state. Thus, in OpEds around the world, columnists of impeccably liberal persuasion are now prepared to give at least tacit, and sometimes overt support for the assertion that Israel, a member state of the United Nations and home to more than seven million people, has no right to exist. This would have been unimaginable even a decade ago. Thus, in the streets of the world’s cities, thousands call unblushingly for the extirpation of Israel and the completion of Hitler’s enterprise.

Next: The role of the media

The Sources of Arabs

The Israelis are following their old method of destroying everything that makes a society a society, the infrastructure. The collective punishment of the Palestinians for what Hamas or Islamic Jihad is supposed to be doing or has done, reminds one of the collective punishments that Nazis meted out in the occupied areas in Eastern Europe during the WWII.

International Red Cross just issued a statement condemning Israel for its brutality against civilians. There are several things that seem to have shocked the Red Cross. In one episode after several days of heavy pressure from the Red Cross, several ambulances were allowed to enter a neighborhood to evacuate the injured civilians. In one house they found 12 bodies all civilians and mostly women and children. They also found four very young children still alive next to their dead mothers, too weak to stand. They have been holed-up in the same house for close to 4 days.

Apparently the whole neighborhood was full of dead and injured civilians with Israeli forces only 80 meters away. According to the Red Cross the Israeli forces knew of the situation and not only didn’t do anything to help the civilians, but also were stopping Red Cross from providing assistance. Representative of the Norwegian Red Cross’ People’s Action calls this a war crime.

But this is only the tip of the ice berg. The Israeli forces have begun to use civilians as human shields. According to Amnesty International Israeli forces occupy civilian houses and keep the civilians as hostages on the first floor, while they position their soldiers on the second floor; ensuring that any fire on the house (especially with anti-tank or RPG missiles) kills the civilians as well.

In yet another report, the United Nations condemned Israel for targeting civilians. The head of the UN agency in Gaza running the school that was attacked by Israel forces categorically rejected the claim by Israel that Hamas fighters were in or even near the school. Israel bombed the UN run school, killing 43 children and injuring 100.

Israel also targets ambulances and humanitarian relief convoys in Gaza. According to UN, at least one Palestinian was killed when UN relief convoy came under fire from Israeli forces. “The attack took place as the lorries traveled to the Erez crossing to pick up supplies that were to have been allowed in during a three-hour ceasefire.”

The atrocities committed by Israel is a genocide of a conquered people. Gaza is a concentration camp and no amount of PR can reduce the magnitude of this horrible crime against humanity and decency.

But Israel is Israel. She has shown that cruelty is in her nature. Here I am talking about the successive Israeli governments and not Israeli people in general. I am sure there are many in Israel that if became aware of what really is happening would not approve of it. This of course excludes the settlers and the Zionist movement. These groups like the South African white supremacists consider others to be inferior to them; or that they have the God given right to do as they please.

But states seldom are representative of their people. It is the elite and / or the governing class that makes the decisions. The state of Israel is determined to never allow the Palestinians to have a viable state. The maximum that they are willing to allow is some form of Bantustan (South African) or North American reservation (for Native Americans). With carte blanche from U.S. and most of the European powers, Israel has been implementing this policy. Setting-up such a system takes many years. People’s spirit has to be crushed through collective punishment, economic strangulation and above all excessive and continuing violence. This has to continue for many years so the people lose hope of ever achieving anything more than what is on offer.

This of course cannot be done without the approval of other countries. Israel has the approval of the world’s most powerful nation, the United States. In addition, because of her U.S. connections, she has managed to get a nod and a wink from the Europeans as well. So with this carte blanche in hand she has set forth to change the “reality” on the ground in her favor.

By systematically settling extremists in the middle of populated Palestinian areas, she has made the creation of a viable Palestinian state almost impossible. A simple look at the map of the Palestinian territories resembles a Swiss cheese, with pockets of densely populated Palestinian areas surrounded by settlements and their protective military garrisons.

The violence both official (state sponsored) and unofficial (settlers) has been incessant. Couple this violence with economic strangulation and you will see the reasons behind the Palestinians’ anger and frustration. Any resistance is automatically branded as an act of terrorism and punished with even more violence, with U.S. and Europeans cheering the Israelis on the side lines.

If you recall when Georgia invaded the Russian protected enclave of Abkhazia, and met Russian counter attack, the whole Western world with U.S. at its head condemned Russia. Pushing for UN action and even sending warships with “humanitarian” supplies. Russians did not commit one thousandth of the Israeli atrocities and we had the Georgian president and other politician talking day and night about the horrible things the Russians were doing.

Yet today we have U.S. and European governments sitting silently watching this genocide taking place without doing anything. U.S. even vetoes resolutions condemning Israeli actions, forgetting that no peace is ever made possible by killing so many innocent women and children.

But whenever a power tries to relocate a group of people by force, the Newton’s Third Law of Motion comes into effect. Newton’s Third Law states that for every action there is an equal and opposite reaction. This means that if you try to imprison a person that person will try to break out. If you try to subjugate a people they will resist. This is the underlying causes of most liberation movements. The same applies to the Palestinians. They are resisting. We can agree or disagree with their methods, but theirs is a reaction to actions taken against them; we call this self-defense.

Israel is trying to push Palestinians into submission and in the process forcing many to leave the occupied territories. They are trying to show the Palestinians that they are alone and resistance in the face of an overwhelming force is suicide. Israel has tried this tactics before and has failed. The children that had to stay with their dead mothers for four days will not forget. The starved people of Gaza are not going to forget this barbarity; and neither shall the people of honor and conscious, regardless of their nationality, Israelis included.

But as for one of those who have followed the Israel’s actions for the past 30 years, I can say that I didn’t expect anything different from Israel. The lies and deceits are all too familiar to fall for again. The current Israeli action in Gaza was not a reaction to the recent event, but planned a year ago. Just read the New York Times article in which among others they interview a senior Israeli military officer.

Israel is now trying to portray herself as a nation that is defending itself, while the truth is that Israel is a cruel occupying power trying to force a people out of their land. And this is being done with the help of some Arab nations; the very same nations that constantly talk about Arab and Muslim solidarity. These nations are: Egypt, Saudi Arabia and Jordan.

—— The Arab collaborators ———

The often asked question, when it comes to the Palestinians, is about the role of Arab countries in the Palestinian struggle for freedom. The people not familiar with the political landscape of the area often see the Middle East as two camps, Arab countries on one side and Israel on the other. The reality is totally different. Israel has seldom been alone. Beside its usual American, French, British and other staunch allies, she has had the hidden backing of several Arab countries.

For close to 30 years now, many Arab countries have been collaborating with Israel; some like Egypt (gained independence: 1922) and Jordan (gained independence: 1946) openly while others like Saudi Arabia (founded: 1932), UAE (founded: 1972) and Kuwait (founded: 1961) from behind the scenes.

The reasons for this collaboration vary from country to country but they all have one thing in common: the rulers of these countries are all dictators and need foreign protection from their own people. Some such as Saudi Arabia, Jordan, Kuwait and UAE were put in power by the British. The founder of Saudi Arabia, Abdul-Aziz bin Saud (the kingdom is name after him) was put in power by the British. The same goes for the others, except Egypt which experienced a coup by the army officers in 1952 resulting in the ousting of the monarchy and the accompanying British influence.

But the Western influence returned with Anwar Sadat. All these countries are dictatorships and all are under pressure from their people. What they cannot accept is any democratically elected form of government in their mist. They fear that if an Arab government becomes democratic they may have to become one themselves, hence losing power.

One of the things that they love about Mahmoud Abbas, the Palestinian president, is that he won the election not by popular vote but by popular method of rigging the election; something that these Arab leaders understand and respect.

In contrast Hamas really represented the aspiration of the people. Soon, Mahmood Abbas term as president is over and he had to stand for re-election something that he would surely lose. In contrast Hamas really won the municipal elections in 2005 and the Parliamentary election in 2006. The elections were supervised by international observers, many from Europe, and U.S.

Palestinians were fed-up with the corrupt regime of Mahmoud Abbas and the Fatah. They wanted to clean house. But as soon as Hamas took over, the U.S. and the Europeans put an embargo on Hamas. Israel closed the borders and refused to let anything into Gaza. Egypt also did the same.

What is not mentioned much in the media is that this was done with the complete approval of the Saudi Arabia, Egypt and Jordan. After all, Egypt could have opened its border for transfer of food and fuel.

Muslim Brotherhood has a branch or related organization in Jordan as well. Egypt and Jordan are worried that should Hamas survive and show its resistance, their people may get the idea that they can also resist the tyrannical rule of these despots. One must not forget that Muslim Brotherhood represents the only serious challenge to the Mubarak’s rule in Egypt.

—- Egypt ——-

The 81 year old Hosni Mubarak of Egypt has been “president” since 1981 (28 years). He has won every election with a comfortable majority. He is much loved by his secret services. Prior to every election he arrests and imprisons all the opposition, ensuring a “clean” election.

Torture is so widely used and accepted in Egypt that U.S. out sources torturing of some its prisoners to Egypt. This alone should tell you volumes about the nature of Mubarak’s rule. He is now trying hard to crown his playboy son as his successor. But the Americans are not so sure if the son is capable of keeping the 80 million Egyptians in line and is therefore looking for alternative candidates.

The head of the feared main secret service is one of the prime candidates along with some of the top generals. Challenging him is the Muslim Brotherhood organization, enjoying grass root support from all sections of the Egyptian society including lawyers, doctors, judges and student associations. ?????????? Not surprisingly, U.S. and Israel call Muslim Brotherhood a terrorist organization.????????????

By all accounts, the Muslim Brotherhood be it in Jordan, Egypt or the occupied territories such as Gaza runs a clean operation, running many charity organizations and providing services to the poor and the needy. As such wherever they are, they pose a threat to the corrupt regimes, since they provide an alternative to the people of that area.

—– Jordan——

King Abdullah II of Jordan, born of a British mother, educated in the West, including the Jesuit Center of Georgetown University, was brought to power by the CIA. His Uncle was a long time crown prince, yet after his father died in a U.S. hospital, Madeline Albright, Clinton’s Secretary of Estate flew to Jordan to inform the Jordanians that the King on his death bed had changed his will and named his son Abdullah as his successor. The new king Abdullah II married the Princeton graduate Lisa Halaby, the daughter of the former head of Pan American Airlines. She is now called Queen Noor; Noor meaning Light in Arabic.

The majority of this Kingdom of 5 million people are Palestinians who are not very friendly to this King. In 1967 there was a Palestinian uprising (led by PLO) against King Hussein (ruled: 1952-1999, the father of the current king), which resulted in heavy casualties among Palestinians.

In addition, the Kingdom is currently full of Iraqi refugees who resent the King’s help to the Americans in invasion of their country. On top of all this, we have the Muslim Brotherhood which tries hard to abolish the monarchy. King Abdullah relies heavily on the U.S. support and backing for staying in power. King Abdullah also sees a natural ally in Israel, a country that can come to its aid in case of another uprising.

—Saudi Arabia (House of Saud)——

I don’t have to tell you much about Saudi Arabia. The Kingdom is run by the 84 year old, ailing Abdullah bin Abdul Aziz Al Saud. His personal wealth is estimated at $21 billion USD. He rules a clan of 8000 princes who in turn rule the country. Saudi Arabia is the centre of corruption in the Arab world. The Saudi rulers corrupt everything with their money. Lacking the necessary mental power or physical courage, they try to stay in power by subterfuge, lies, and deception.

They fund the real extremists on the one hand while portraying themselves as the protectors of the Western interest on the other. They preach intolerance and xenophobia to their people decrying the Western decadence, while spending a lot of time enjoying the life in the West. They pay the West for protection against their own people and they pay the extremists to do their fighting elsewhere. Saudi rulers are indeed the worst of them all.

House of Saud is also the financier of the so called “Arab Moderates” and extremism that they cause. House of Saud financed the Mujahedeen in Afghanistan to fight the Soviets. They later financed the Taliban. They also paid the Saddam Hussein to fight Iran. Then they paid the Americans and Egyptians to fight Saddam Hussein. They are the financiers of death and misery. They finance anything, anywhere, as long as this reduces the threat to their illegitimate rule.

They are currently financing the civil war in Somalia, bandits in Baluchistan and God knows what else. They are detested by their own people and neighbors yet loved by Bush, Cheney and the oil companies. As long as they provide the money and oil the U.S. is willing to tolerate them. And guess what? Muslim Brotherhood hates the House of Saud too. This makes them a threat and hence has to be dealt with.

—- The Collaboration ——-

As can be seen each country has a good reason to eliminate Hamas, but each is restrained by its population. Israel has no such a restrain imposed on it. She not only can wage a terrible war, but also get assistance from Arab countries. Indeed it is the second time (the first was the Lebanon invasion of 2006) that Israel is getting open and solid support from these Arab countries. The invasion of Gaza was discussed in Egypt before its implementation. Egypt, Jordan and Saudi Arabia are Israel’s active partners.

Egypt is actively involved in stopping all aids from getting to Palestinians in Gaza save a token few trucks. These few trucks are allowed to go through so they can be filmed and shown to Egyptian people. All demonstrations are banned and all Egyptian volunteers for Gaza are either arrested or sent back.

There are hundreds of thousands of volunteers across the Muslim world that are willing to go to the aid of the Palestinians, but the Egyptian authorities don’t allow them passage. Egyptians even stop medical aid from passing through their territories.

This is part of a report from Associated Press:

“RAFAH, Egypt: Frustration is mounting at Egypt’s border with the Gaza Strip, where many local and foreign doctors are stuck after Egyptian authorities denied them entry into the coastal area now under an Israeli ground invasion.

Anesthesiologist Dimitrios Mognie from Greece idles his time at a cafe near the border, drinking tea and chatting with other doctors, aid workers and curious Egyptians.

“”This is a shame,”" said Mognie, who decided to use his vacation time to try help Gazans. He thought entering through Egypt, which has a narrow border with the Hamas-ruled strip, was his best bet.

“”That in 2009 they have people in need of help from a doctor and we can go to help and they won’t let us. This is crazy,”" he added.”

In addition there are many Iranian cargo planes full of food and medicine which have been sitting on the tarmacs in Egypt for days waiting for permission to deliver their cargo. Egyptians even denied the medical aid sent by the son of the Libyan President Qaddafi to land in Egypt.

One thing is clear: these three countries do not want the Israelis to fail in their mission of totally destroying Gaza. Hosni Mubarak said so himself. The daily Haaretz reported that Hosni Mubarak had told European ministers on a peace mission that Hamas must not be allowed to win the ongoing war in Gaza.

As Egypt physically aids the Israeli military by denying food, fuel and medicine to the civilians, The House of Saud helps Israel by giving her time and diplomatic cover. When Israel started its invasion there was an immediate call for an Arab summit. Saudi Arabia and Jordan (along with Egypt of course) delayed the summit.

The Saudis along with the UAE said that they had another meeting to attend to and therefore Palestinian issue had to wait. After a few days when the summit was eventually held, they issued the same old statements. Yet this time same as the Israel’s invasion of Lebanon in 2006, they blamed the victims.

In a statement Saudi Arabia blamed Hamas for Israel’s continuing offensive in the Gaza Strip. Saudi Arabia, after blaming Hamas, declared that it will not even consider an oil embargo on Israel’s supporters. She then again blamed Hamas.

By this time, the three Arab countries along with Kuwait and UAE began singing the old song: international community is not doing anything about the catastrophe that is taking place in Gaza. It seems that these Arab tyrants have no shame at all. This reminds me of a quote from Marquis De Sade (1740-1814): “One is never so dangerous when one has no shame, than when one has grown too old to blush.”

These Arab leaders (many are indeed too old to blush) are complicit in the murder of so many civilians, especially young children. According to Agence France-Presse, quoting the medics on the ground, fully one third of all people killed have been children. How can these Arab leaders justify this to their people?

The answer is that they cannot. Israel knows this and for the second time can show the Arab street that their leaders are nothing but a bunch of old hypocrites. These Arab leaders are now exposed and can do nothing but to cooperate fully with Israel and U.S. What stand between them and their people’s rage is their army and secret services; which in turn are supported by U.S.

Israel has cleverly exposed these leaders for what they are: collaborators of the worst kind. These Arab leaders have brought an unimaginable shame to their people. To quote Lucien Bouchard: “I have never known a more vulgar expression of betrayal and deceit. Our hope is now with the people of these countries to clean this stain from their honor.”

 

Exposure Basic

We start, however, by summarizing some fundamental principles of investment performance measurement.

A basic principle of performance analysis is that returns should be calculated using market values (rather than historical cost). 

There are a number of operational challenges in conducting valuation of investment portfolios.

Traditionally, a lot of performance measurement and attribution has been based on calculating monthly returns using monthly valuations.  However, when cashflows are present, monthly calculations give rise to approximation errors.  These errors are discussed on the Measurement Errors page.  Accordingly, it is best practice to calculate daily returns using daily valuations.

Having accurate market values is very important for high-quality investment performance measurement.  But it is not always enough.  In particular, for derivatives, one needs to know the exposed market value (often known simply as the Exposure) of each holding.

Futures contracts are a great example of the kind of instrument for which one needs exposure data.

Consider an S&P 500 futures contract, as traded on the Chicago Mercantile Exchange.  The pricing for these contracts is $250 per index point.  Suppose that one bought an S&P 500 futures contract at 1400, then sold it at 1500.  The gain is 100 index points, which at $250 per point amounts to $25,000.  This indicates what the market value would have been just before the contract was sold: approximately $25,000.

In calculating the return for this holding, the numerator would be $25,000.  But what would the denominator be?  Cutting to the chase, it would be 1400 x $250 = $350,000.  This is the exposure of this holding.  The exposure is used for several purposes:

The concept of exposure is not really necessary for instruments such as stocks and bonds.  For these non-leveraged instruments, the exposed market value is identical to the unexposed market value.  For example, if a portfolio holds $10 million of IBM stock, the market value and the exposure are both $10 million.

Some software systems for investment performance measurement and attribution do not incorporate the notion of exposure.  These systems are fine, except for the fact that they give crazy results when futures or options or other kinds of derivatives are involved.  In other words, they are best avoided.

For a detailed treatment of the role of exposure in investment performance measurement and attribution, see the Exposure page.

A short position exists when one holds a negative exposure to an instrument.  In normal (long) holdings, one holds a position hoping to make a profit if the instrument increases in value.  However, for a short holding, the payoff is exactly reversed.

For example, consider an ordinary investment in one share of IBM.  If one purchases this share at $100, then sells it at $120, one makes a profit of $20.  However, short selling works differently.  To open the short position, you sell one share of IBM (even though you don’t own it) at $100.  To close the position, you need to buy back one share of IBM.  Since the price in the meantime has moved by $20, you will have lost $20 on the short position.

The arithmetic for calculating the returns for these positions in IBM is:

Return on long position = (EMV - BMV) / BMV = (120 - 100) / 100 = 20%

Return on short position = (EMV - BMV) / BMV = (-120 - -100) / -100 = -20 / -100 = 20%

Can that be right?  Should the return for the short position the same as for the long position?  Specifically, should both of these returns be of the same sign?  Indeed they should.  We will go into a full justification further below, but at this stage it will help you to avoid confusion if you know the golden rule for returns on short positions: The return on a short position is no different from the return on a long position.  The different contribution to overall portfolio return arising from a short position results from the portfolio weights being of opposite signs for long and short positions.

It seems, however, that agreement on this golden rule is not universal.  A number of influential people still advocate approaches where one takes the absolute value of the denominator in the return calculation in order to get returns where the signs are opposite for long and short positions.  In a letter published in the Journal of Performance Measurement (Spring 2002), Damien Laker tried to make it clear why this is indeed a big mistake, and a source of great confusion.

That letter explains some key points:

Another problem for the method that uses an absolute value on the denominator is that the returns it produces simply do not compound properly!  This is a fairly grievous problem.  For a worked example, please refer to the spreadsheet Crazy method for short returns does not compound properly.xls.

For those who wonder how the effect of their short positions can come out in performance reporting, the answer is that short positions have a negative weight in the portfolio.  Therefore, the weights and the returns need to be considered together.  Perhaps your portfolio held a security last month whose return was 55%.  This would be wonderful news if the portfolio was holding that security at a weight of 10%, but on the other hand, if the portfolio was holding that security at a weight of -20% (i.e. it was a large short holding), this news is disastrous.  Contribution reports and attribution reports always take weights into account, so it is important to educate people that if they want to know what made the portfolio go up or down last month, they should not look at the holding returns: rather, they should look at a contribution report.

To understand a portfolio’s position with respect to market risks, it is vital to have a clear picture of the market exposures.  For example, a diversified global portfolio might hold 20% domestic equities, 60% international equities, 15% global bonds, and 5% domestic cash.  In most different kinds of investment performance analysis, an essential piece of information is the percentage of total assets allocated to each different market sector.  “Market sectors” might be broad asset classes (as in the example we just mentioned).  For a domestic equities portfolio, “market sectors” might be different industries.  Or, in global bonds, “market sectors” might be different countries or regions of the world.  Whichever classification scheme one chooses, this paradigm of classifying holdings into market sectors is a mainstay of investment performance analysis.

The correct way to calculate a portfolio’s weights in different market sectors is by using exposures (rather than market values).  This is why it is really quite essential to know the exposure of each asset.  The Exposure page provides details of how to do these calculations.

In multicurrency portfolios, the currency weights comprise a completely separate dimension.  This currency dimension is just as important as the market exposure dimension.  Without the use of currency derivatives, a portfolio’s currency exposures will simply be determined by its market exposures.  For example, if an equities portfolio was 60% Japan, 30% Korea, and 10% USA, then the currency exposures would accordingly be 60% Japanese Yen, 30% Korean Won, and 10% US Dollar.  However, by using currency derivatives (principally Forward Rate Agreements), one could alter the currency exposure of this portfolio to anything one chose.  For example, if the portfolio was being managed on behalf of Japanese investors, the currency exposure might be hedged back into 100% Japanese Yen.  Or, if the investment manager had a bullish view on the US Dollar, they might adopt a position where the currency allocation was mostly in US dollars.  Indeed, it would be equally possible to completely hedge this portfolio across into Euro or Australian Dollars.  Going further, one could even take a currency position of +300% Russian Ruble, -200% US Dollar.  Something this extreme is more likely to be adopted by a hedge fund rather than a run-of-the-mill investment portfolio.

From the perspective of investment performance analysis, the important thing to grasp is that, in general, a portfolio’s currency exposures can be analyzed quite independently of the market exposures.  The term “currency overlay” has often been used in the past to describe the way that currency positions can be managed quite separately from market positions.

Even in a passively managed (indexed) portfolio, currency is a very important topic.  For example, an investment manager might offer two global equities products: one fully hedged for currency, the other unhedged.  It would not be particularly unusual for a fully-hedged benchmark to outperform (or underperform) an unhedged benchmark by 10% per year over several consecutive years.  There is a very big difference between calculating a global equity index (unhedged) in US dollars, and a global equity index hedged into US dollars.  This difference arises solely from the currency positioning of the benchmark.

 

Some instruments can introduce unexpected difficulties in understanding a portfolio’s market exposures and currency exposures.

For example, many companies that are listed on exchanges outside the USA choose to access the US capital markets by issuing American Depository Receipts (ADRs) on a US exchange.  Without going into all the implementation details, each ADR simply gives exposure to a specified number of underlying shares.  For example, XYZ Bank in Australia might issue ADRs where each ADR represents 5 ordinary shares in XYZ Bank.  The ADR is an instrument traded in US dollars on a US exchange.  The XYZ share is an instrument traded in Australian dollars on an Australian exchange.  At first glance, one might think that a US investor buying the ADR was not assuming foreign currency risk.  However, you would be wrong.

Just because the ADR is priced in US dollars, this does not mean that it gives a currency exposure to US dollars.  Rather, it gives a currency exposure to Australian dollars.  A simple way of understanding this is to consider the potential for arbitraging between one position and the other.

For example, the data for day 0 may be:

Note that AUD means Australian Dollars, and USD means US Dollars.

Suppose that the XYZ share price does not change on day 1.  However, the exchange rate moves dramatically.  The data for day 1 might then be:

The return on XYZ shares in Australian Dollars is exactly zero.  But the return on the XYZ American Depository Receipts (in US Dollars) is $157.89 / $166.67 - 1 = -5.26%.  This is exactly the same return that a US investor would have obtained by purchasing XYZ shares on the Australian Securities Exchange, with no currency hedging in place.  This demonstrates clearly that the ADR, while priced in US Dollars, actually provides an exposure to Australian Dollars.  This is a very subtle issue for performance analysts to deal with: the ADR is priced in one currency (US Dollars), but gives economic exposure to a different currency (Australian Dollars). 

Another interesting instrument is Exchange-Traded Funds (ETFs).  Like ADRs, ETFs can also have an economic currency exposure that differs materially from their pricing exposure.  For example, an ETF traded in US Dollars on a US Exchange might be managed to closely track a particular global equity index.  The currency exposures of this ETF will therefore be very close to those of the benchmark global equity index (assuming that the ETF is unhedged).  Some ETFs are offered in different countries, where different currencies may apply.  For example, the global equity index ETF might have originally been developed as a US product, but it might now be sold in Australia, Singapore, Japan, and the UK.  This would mean that it was possible to trade the ETF in numerous different currencies.  The key point to remember is that none of these currencies is particularly important for understanding how this ETF really works.  Rather, the ETF gives you an exposure to the various currencies of the world index, regardless of the currency you use to purchase the ETF

WeBuildDane.org: Informing the Home Building Experience

WeBuildDane.org or the ‘WeBuild Network’ is an idea for a web 2.0, social networking site I’ve been mulling over for some time now, that would function something like craiglist, but be simply dedicated to sharing information about building and designing homes on a county or region-specific basis.  I thought I would share the idea on this blog in hopes that someone might want to help build it, fund it, share some ideas about how it could be more effective, or just tell me why I should give up on it altogether!

I drafted a very crude version of how it might work, posted here: http://crescendodesign.com/webuildprelim

Having worked in the residential construction and design industry for several years now, I have witnessed a tremendous disconnect and frustration on behalf of people who have knowledge of residential construction, matched only by an equal frustration found in people who want to build, but have no idea where to start.  The magnitude of knowledge related to home design and construction is ultimately a moving target, and incredibly vast; with material prices and best practices changing every day.  As a matter of practicality, the magnitude of information, both time-tested and hot off the press, is far far too vast for any single company to fully comprehend and employ in daily practice.

Another reason a network like this might be beneficial is that the knowledge you find in books or online resources is generally not region-specific.  This becomes critically important when trying to learn about strategies and materials available in your county.  A construction practice or material might be commonplace or widely available in one county, but scarce or non-existent just 100 miles away in another county.  However idealistic or impractical this might seem, building a county-specific resource would be helpful in bringing the right information to the right people at the right time.

Plus, one common and universal characteristic I’ve seen is that people who recently built a home are, for the most part, eager and willing to share everything they learned.  Many of them already write blogs, or publish stories of their process - good or bad.  They are often incredibly proud of their new home, and are willing to share that knowledge - primarily because they remember what they had to go through, and don’t want others to have to go through the same tribulations if they can help them avoid it.  This site would give people a centralized place to share knowledge.

Ideally a username/password log-in would augment the site, and perhaps even a reputation index for contributors, or a means of rating the quality of posts, etc. Maybe even a twitter-style ‘micro-post’ line where people can just post very short blurbs of some material they found at some store, etc.  Maybe people could create Project Pages, where they gather pictures, questions, observations, and resources related to their project  - and share their project with others in hopes that they might know of ways to improve their process and connect them to appropriate resources.

If the WeBuildDane.org site did become a useful resource, it could then branch into other counties and communities - and connect them all to the same backbone - the WeBuild network - with individual counties accessed from the main site.

So that’s the idea, now can WeBuild it?  Does anyone have any thoughts about how to get this built or funded?  I had hoped to slowly build and fund the project with bootstrap funding as time and money permits, starting very simple then building functionality over time.  But that will realistically take years, and I don’t think a single company like Crescendo Design should ‘own’ a public, community portal like this, anyway.

Is there any way we can jump-start this?  Please email me if you have ideas, or add your comments to this post.  jbrouchoud (at) gmail (dot) com.  Thanks!

ALL IN THE FAMILY VII: THE PRIMEX SCAM

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Now, we go from hero Sullenberger III to zero Madoff XIII.  It is no puzzle that the vultures and gnomes of the biggest trading houses avoided being sucked into this particular black hole created by this greedy con man.  Why is this, we ask?  So far, no black pool or scam has attracted these guys.  Why didn’t they go for Madoff’s tricks?  I suspect, they all knew he was breaking the law and none wanted to issue warnings because they were all involved in some sort of hanky panky.  Also, Israel is being financially hammered by these scandals run by Jewish financiers.  I fear that they will try to make up their losses and maintain their socialist state of Israel by tapping into US funds.  After all, our government is handing over hundreds of billions of dollars, every week, to the same guys who destroyed our entire banking system, no questions asked.

 

But we must ask many questions.  Just like it is bad for America to let Bush and his gang slip away in the night with no investigations, no jail time, the same is true with Wall Street’s criminal class.

 

Bloomberg.com: Exclusive

Billionaires Burn Israeli Savers on New York, U.K. Land Deals 

 

Madoff and his buddies are unrepentant criminals.  They feel, they have a divine right to loot.  This moral abyss is bad enough when one is trapped in a ghetto, but when the former ghetto victims end up running whole nations as well as international financial systems, acting like con artists is hazardous to everyone, especially the Jewish community.  These people must be severely punished.  Not coddled.  Both Israel and US pension funds are being hammered.  Israel must make up for this by taxing its own people, not raiding the US Treasury.  

 

Jews working within our government must not give in to the temptation to save their own ethnic group while forcing our children to shoulder Israeli retirement costs.  This is why the flames of anti-semitism can and will rage when US citizens are presented these many bills.  The US is, right now, bailing out all systems that were ruined by people who cynically milked it for their own benefit.  The US government must protect the US people first and foremost.  This is why we have to discuss the ethnic angle of this economic collapse.  Evading this is dangerous in the extreme.

 

CounterPunch: Tells the Facts, Names the Names

 

This is a good summary of the past.  Pam Martens is an honest person and we should thank her for giving us a good analysis of what is going on.  Counterpunch isn’t shy about talking about the things I try to talk about.  This is why the major media never mentions Counterpunch despite the founder being the son of a famous woman.  

 

 

DiPascali is a Catholic.  I hope readers understand, ALL ethnic groups and ALL religions spawn con artists.  This is because all humans have, buried inside our brains, a natural con artist.  We have to have rules and regulations to prevent this inner con from taking over everything and destroying it all.  DiPascali is probably aware of the nature of this con game run by Madoff.  And took cynical advantage of it to enrich himself.  Pam’s article is about why the very most powerful investment houses [I keep writing 'inFESTment houses'] didn’t play along with this con.  She is probably right in guessing, they thought this con was too obvious.  Which brings up the question, why didn’t the SEC do something.

 

We already know that the SEC was warned about Madoff.  We know they investigated him. We also know that Cox didn’t pursue this very hard and I want Cox investigated.  Too bad, the Democrats have decided to investigate none of these crimes.  They want to ’start over again’ only we can’t if most of the characters involved get off not only scot-free but with their own personal fortunes intact.

 

I pulled up some more past articles about the Primex business launched by Madoff.  I want to thank Pam for bringing this up.  It is very interesting.

 

Primex’ structure leaves Madoff holding the aces

June 20, 1999

As details emerge about the structure and ownership of Primex Trading N.A. LLC, the new electronic trading system that hopes to compete with the New York Stock Exchange when it debuts in the first quarter of next year, it appears that Bernard Madoff Investment Services is holding all the aces when it comes to controlling key elements of Primex.

4 Leading Securities Firms Join Forces to Back Primex - New York Times

Citigroup’s Salomon Smith Barney and Morgan Stanley Dean Witter yesterday said that they had joined three earlier backers, Goldman, Sachs & Company, Merrill Lynch & Company and Bernard L. Madoff Investment Securities, as Primex’s partners. Although several other new electronic trading networks have attracted investments from multiple banks and securities firms, support from the four leading Wall Street firms seems likely to secure Primex a substantial flow of trading orders from the moment it begins, probably next summer….

These two early articles clearly show that the biggest investment houses WERE deeply involved in the launching of this platform which, evidently, Madoff hoped to use to hide his true criminal operations.  The biggest crooks on Wall Street were quite happy to join him in this venture.

 

Primex Trading and Nasdaq Agree to Move Forward With Implementation of Primex Auction System | Business Wire | Find Articles at BNET

Primex Trading N.A., LLC is pleased to announce that the Board of the National Association of Securities Dealers (NASD(R)), parent of Nasdaq(R), approved moving forward with its agreement to license Primex Trading’s electronic auction system for U.S. equities.

A year later, it grew rapidly.  Everyone was happy.  Only the stock market was now blowing up due to the Dot Com Bubble.

 

Family Influence

Madoff tops charts; skeptics asks how 

This story is from when the stock markets hit bottom.  It is very hostile and asks pertinent questions.  Obviously, the stock collapse exposed Madoff’s affairs.  Explaining how he evaded the crash while not answering direct questions raised many red flags.  We now know that the first complaint about Madoff was filed a decade earlier.  Now, with a bad stock market, questions were being raised in public.  

 

http://nakedshorts.typepad.com/files/madoff.pdf

Questions abound

Madoff was saved by Greenspan. Greenspan created the second stock market bubble and this lulled Madoff critics to sleep.  Below is a Madoff story from 2001 that praises him for being so clever during the bubble bursting.

 

Wall Street Manna: MAR Hedge fund report on Madoff in 2001

After all, Madoff Securities, with its 600 major brokerage clients, is ranked as one of the top three market makers in Nasdaq stocks, cites itself as probably the largest source of order flow for New York Stock Exchange-listed securities, and remains a huge player in the trading of preferred, convertible and other specialized securities instruments.

Primex continues to roll on and grow even as the market collapses:

 

domain-b.com : Primex trading up 60% with Nasdaq-100

Then, suddenly, out of left field, comes this announcement which was posted at the official Primex web site:

 

The Primex Auction

The tent was suddenly folded!  It vanishes into thin air!  No big row in the press, either.  The collapse of the Primex scam exposed Madoff’s affairs.  From that day onwards, he was running away from his own shadow.  He was helped in this by a bull market that concealed his massive losses.  When the market turned down, the ability to float along on its tide fell and Madoff was ‘exposed naked as the tide goes out.’ 

 

It is astonishing that this criminal isn’t in jail, waiting trial.  Shame on the Jewish judge, handling this snake with kid gloves.  He should have thrown the book at him.

 

FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

Gold Is Up!

Home

We Can

300 FABIANS JANUARY 2009 KNOWN…NOT 200..

http://www.namastepublishing.co.uk/Previous%20Editorial’s.htm

ALL IN THE FAMILY VII: THE PRIMEX SCAM

Now, we go from hero Sullenberger III to zero Madoff XIII.  It is no puzzle that the vultures and gnomes of the biggest trading houses avoided being sucked into this particular black hole created by this greedy con man.  Why is this, we ask?  So far, no black pool or scam has attracted these guys.  Why didn’t they go for Madoff’s tricks?  I suspect, they all knew he was breaking the law and none wanted to issue warnings because they were all involved in some sort of hanky panky.  Also, Israel is being financially hammered by these scandals run by Jewish financiers.  I fear that they will try to make up their losses and maintain their socialist state of Israel by tapping into US funds.  After all, our government is handing over hundreds of billions of dollars, every week, to the same guys who destroyed our entire banking system, no questions asked.

 

But we must ask many questions.  Just like it is bad for America to let Bush and his gang slip away in the night with no investigations, no jail time, the same is true with Wall Street’s criminal class.

 

Bloomberg.com: Exclusive

Billionaires Burn Israeli Savers on New York, U.K. Land Deals 

 

Madoff and his buddies are unrepentant criminals.  They feel, they have a divine right to loot.  This moral abyss is bad enough when one is trapped in a ghetto, but when the former ghetto victims end up running whole nations as well as international financial systems, acting like con artists is hazardous to everyone, especially the Jewish community.  These people must be severely punished.  Not coddled.  Both Israel and US pension funds are being hammered.  Israel must make up for this by taxing its own people, not raiding the US Treasury.  

 

Jews working within our government must not give in to the temptation to save their own ethnic group while forcing our children to shoulder Israeli retirement costs.  This is why the flames of anti-semitism can and will rage when US citizens are presented these many bills.  The US is, right now, bailing out all systems that were ruined by people who cynically milked it for their own benefit.  The US government must protect the US people first and foremost.  This is why we have to discuss the ethnic angle of this economic collapse.  Evading this is dangerous in the extreme.

 

CounterPunch: Tells the Facts, Names the Names

 

 

This is a good summary of the past.  Pam Martens is an honest person and we should thank her for giving us a good analysis of what is going on.  Counterpunch isn’t shy about talking about the things I try to talk about.  This is why the major media never mentions Counterpunch despite the founder being the son of a famous woman.  

 

 

DiPascali is a Catholic.  I hope readers understand, ALL ethnic groups and ALL religions spawn con artists.  This is because all humans have, buried inside our brains, a natural con artist.  We have to have rules and regulations to prevent this inner con from taking over everything and destroying it all.  DiPascali is probably aware of the nature of this con game run by Madoff.  And took cynical advantage of it to enrich himself.  Pam’s article is about why the very most powerful investment houses [I keep writing 'inFESTment houses'] didn’t play along with this con.  She is probably right in guessing, they thought this con was too obvious.  Which brings up the question, why didn’t the SEC do something.

 

We already know that the SEC was warned about Madoff.  We know they investigated him. We also know that Cox didn’t pursue this very hard and I want Cox investigated.  Too bad, the Democrats have decided to investigate none of these crimes.  They want to ’start over again’ only we can’t if most of the characters involved get off not only scot-free but with their own personal fortunes intact.

 

I pulled up some more past articles about the Primex business launched by Madoff.  I want to thank Pam for bringing this up.  It is very interesting.

 

Primex’ structure leaves Madoff holding the aces

June 20, 1999

As details emerge about the structure and ownership of Primex Trading N.A. LLC, the new electronic trading system that hopes to compete with the New York Stock Exchange when it debuts in the first quarter of next year, it appears that Bernard Madoff Investment Services is holding all the aces when it comes to controlling key elements of Primex.

4 Leading Securities Firms Join Forces to Back Primex - New York Times

Citigroup’s Salomon Smith Barney and Morgan Stanley Dean Witter yesterday said that they had joined three earlier backers, Goldman, Sachs & Company, Merrill Lynch & Company and Bernard L. Madoff Investment Securities, as Primex’s partners. Although several other new electronic trading networks have attracted investments from multiple banks and securities firms, support from the four leading Wall Street firms seems likely to secure Primex a substantial flow of trading orders from the moment it begins, probably next summer….

These two early articles clearly show that the biggest investment houses WERE deeply involved in the launching of this platform which, evidently, Madoff hoped to use to hide his true criminal operations.  The biggest crooks on Wall Street were quite happy to join him in this venture.

 

Primex Trading and Nasdaq Agree to Move Forward With Implementation of Primex Auction System | Business Wire | Find Articles at BNET

Primex Trading N.A., LLC is pleased to announce that the Board of the National Association of Securities Dealers (NASD(R)), parent of Nasdaq(R), approved moving forward with its agreement to license Primex Trading’s electronic auction system for U.S. equities.

A year later, it grew rapidly.  Everyone was happy.  Only the stock market was now blowing up due to the Dot Com Bubble.

 

Family Influence

Madoff tops charts; skeptics asks how 

This story is from when the stock markets hit bottom.  It is very hostile and asks pertinent questions.  Obviously, the stock collapse exposed Madoff’s affairs.  Explaining how he evaded the crash while not answering direct questions raised many red flags.  We now know that the first complaint about Madoff was filed a decade earlier.  Now, with a bad stock market, questions were being raised in public.  

 

http://nakedshorts.typepad.com/files/madoff.pdf

Questions abound

Madoff was saved by Greenspan. Greenspan created the second stock market bubble and this lulled Madoff critics to sleep.  Below is a Madoff story from 2001 that praises him for being so clever during the bubble bursting.

 

Wall Street Manna: MAR Hedge fund report on Madoff in 2001

After all, Madoff Securities, with its 600 major brokerage clients, is ranked as one of the top three market makers in Nasdaq stocks, cites itself as probably the largest source of order flow for New York Stock Exchange-listed securities, and remains a huge player in the trading of preferred, convertible and other specialized securities instruments.

Primex continues to roll on and grow even as the market collapses:

 

domain-b.com : Primex trading up 60% with Nasdaq-100

Then, suddenly, out of left field, comes this announcement which was posted at the official Primex web site:

 

The Primex Auction

The tent was suddenly folded!  It vanishes into thin air!  No big row in the press, either.  The collapse of the Primex scam exposed Madoff’s affairs.  From that day onwards, he was running away from his own shadow.  He was helped in this by a bull market that concealed his massive losses.  When the market turned down, the ability to float along on its tide fell and Madoff was ‘exposed naked as the tide goes out.’ 

 

It is astonishing that this criminal isn’t in jail, waiting trial.  Shame on the Jewish judge, handling this snake with kid gloves.  He should have thrown the book at him.

 

* FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

Barack Obama

The President-Elect Barack Obama has campaigned on a platform of change and simultaneously has united Americans. His inauguration marks a change in American history. The following lists include biography, his autobiography, and other books.

by Barack Obama (call number E901.1.O23 A3 2006)

“Ilinois’s Democratic senator illuminates the constraints of mainstream politics all too well in this sonorous manifesto. Obama (Dreams from My Father) castigates divisive partisanship (especially the Republican brand) and calls for a centrist politics based on broad American values. His own cautious liberalism is a model: he’s skeptical of big government and of Republican tax cuts for the rich and Social Security privatization; he’s prochoice, but respectful of prolifers; supportive of religion, but not of imposing it. The policy result is a tepid Clintonism, featuring tax credits for the poor, a host of small-bore programs to address everything from worker retraining to teen pregnancy, and a health-care program that resembles Clinton’s Hillary-care proposals. On Iraq, he floats a phased but open-ended troop withdrawal. His triangulated positions can seem conflicted: he supports free trade, while deploring its effects on American workers (he opposed the Central American Free Trade Agreement), in the end hoping halfheartedly that more support for education, science and renewable energy will see the economy through the dilemmas of globalization. Obama writes insightfully, with vivid firsthand observations, about politics and the compromises forced on politicians by fund-raising, interest groups, the media and legislative horse-trading. Alas, his muddled, uninspiring proposals bear the stamp of those compromises. (Oct. 17) Copyright 2006 Reed Business Information.” Publishers Weekly, 20061002

A biography of Barack Obama’s life, which includes full-color photographs and an index. Included is a list of websites to refer to for further reading.

Information about this title found at European bookstore.com, http://www.eurospangroup.com/display.asp?isb=9781604133240&

Barack Obama: a biography

“With all the hoopla about Barack Obama’s history-making campaign for president, Price (a writing coach/author of Martha Stewart: A Biography, Greenwood, 2007) provides a refreshingly balanced account of his upbringing, influences, struggles, hopes, and achievements. As part of a series specifically designed for high school students and general readers, the biography includes a timeline of events significant to his life (starting with the Emancipation Proclamation), photographs, and references. Annotation 2008 Book News, Inc., Portland, OR (booknews.com)” Reference and Research Book News, 20081101

Barack Obama, the new face of American politics

“Dupuis (political science, U. of Central Florida) and Boeckelman (political science, Western Illinois U.) examine the national political career of Democratic presidential contender Barack Obama. Following a brief biographical overview, they present accounts of his successful primary and general election campaigns for the US Senate in 2004, followed by discussion of his fundraising abilities, his campaign’s use of media, and the influence of race on his political career. They also offer a description of his first two years in the Senate and consider the evolution of his “post-partisan” political message. Annotation 2008 Book News, Inc., Portland, OR (booknews.com)” Reference and Research Book News, 20080501

“Regarding freshman U.S. Senator Barack Obama’s quixotic (at least by conventional standards) quest for the Oval Office, these books fall between the usual extremes of unabashedly promotional and critical policy analysis. The more thought-provoking is Steele’s (senior fellow, Hoover Inst., Stanford Univ.; White Guilt), who argues that while he shares much in common with Obama, he is convinced that the senator cannot prevail in his race for the White House. In his brief polemic, almost a literary jazzlike riff on U.S. politics, race relations, and contemporary sociology, Steele examines the significance and implications of Obama’s candidacy, concluding that while it is historical-even iconic-he cannot be elected because he is “a bound man.” By this he means that although Obama seeks to transcend superficial racial identities, he is in a double-bind, suspended between black racial solidarity and white liberal guilt. Steele admires Obama yet questions his character and policy commitments. If Steele is an Obama agnostic, Wilson (How the Left Can Win Arguments and Influence People), who studied law under Obama at the University of Chicago, is an Obama disciple. While Obama’s candidacy is perhaps the “improbable quest” that he himself declared it in his announcement speech in 2007, Wilson contends that Obama is the most electorally appealing progressive candidate, one who has truly sparked a grassroots movement. While Steele argues that race may be the downfall of Obama’s campaign, Wilson counters that Obama, through his policy proposals and charisma, has transcended race in large measure, and, if elected in 2008, would help the country move further down the road toward what Martin Luther King called the “beloved community.” With caucuses and primaries upon us, we soon will find out which of these books proves the more deeply insightful. Neither is fully persuasive but each is essential reading for anyone wishing to try to make more sense of contemporary American presidential politics and social policy. Highly recommended for all libraries.-Stephen K. Shaw, Northwest Nazarene Univ., Nampa, ID Copyright 2008 Reed Business Information.” Library Journal, 20080201

Dreams from my father: a story of race and inheritance

by Barack Obama (call number E185.97.O23 A3 2004)

“Obama, the Democratic candidate for Illinois’s open Senate seat, strode into the national spotlight last month with his keynote speech at the Democratic National Convention. With a chance to become the Senate’s only African-American member, Obama, a Harvard-educated civil rights lawyer, has been called ”the new Tiger Woods of American politics.” Obama’s memoir, reissued with a new preface, traces his unusual family history. His father, a black Kenyan, and his mother, a white American from Kansas, met and married in Hawaii (his father returned to Kenya when Obama was still young). Paul Watkins, writing in the Book Review in 1995, said Obama’s memoir ”persuasively describes the phenomenon of belonging to two different worlds, and thus belonging to neither.” from New York Times Book Review byIhsan Taylor, published 08/29/2004

Websites

Barack Obama

http://www.barackobama.com/learn/meet_barack.php

Barack Obama’s MySpace Page

http://www.myspace.com/barackobama

The Office of the President-Elect

http://change.gov/

Anderson Cooper 360: Blog Archive - Financial Dispatch: Banks, bailouts and bankruptcies

A busy day in the banking world… Bank of America is getting another $20 billion from the federal government’s bailout fund, along with guarantees on $118 billion of assets at the bank, to absorb its recent purchase of the ailing Merrill Lynch. Details of the deal were announced by the government in the wee hours of the morning. And Citigroup reported a much bigger-than-expected $8.3 billion quarterly loss today and also unveiled plans to split up into two businesses, effectively bringing an end to the company’s “financial supermarket” model.

Consumer prices fell in December for the third straight month, with plunging energy costs contributing to the drop. The Consumer Price Index, a measure of inflation, declined a seasonally adjusted 0.7% from the prior month, the Labor Department said. The core CPI, which strips out volatile food and energy prices, was unchanged from the prior month. The December decline was driven by plunging energy prices, which fell 8.3%. Transportation costs also fell by 4.4%. The cost of food, beverages and housing was unchanged. And for all of 2008, The CPI edged up 0.1%, the slightest annual increase since 1954.

After weeks of talks with President-elect Barack Obama’s top aides, House Democrats on Thursday released an expansive economic recovery plan that calls for $550 billion in spending and aid to states and $275 billion in tax cuts. House Speaker Nancy Pelosi said lawmakers tried to assemble a package of measures that would be most effective in stimulating the U.S. economy, which is now in its 14th month of recession.

President-elect Obama also secured access to the second half of the $700 billion financial rescue package Thursday, after the Senate voted 52-42 to kill a measure that would have blocked the funds’ release.

General Motors cut its forecast for industrywide U.S. auto sales Thursday, a development that could lead the company to ask for additional loans from the federal government. In a presentation to analysts, GM said it’s now planning on total vehicle sales of 10.5 million cars and trucks in the U.S. this year. That’s down from an earlier forecast of 12 million vehicles that GM gave to Congress in early December when it first sought federal assistance to keep it out of bankruptcy.

Japanese automaker Honda said today it will cut production and eliminate its temporary, part-time workforce of 3,100, while smaller rival Subaru’s parent company warned it would post losses for 2008. Both companies blamed slumping global demand for the moves.

Sharply declining newspaper advertising sales have claimed another victim. The Minneapolis Star Tribune is seeking bankruptcy protection less than two years after being bought by a private-equity firm. The 141-year newspaper joins Tribune Co. in bankruptcy after the recession exacerbated an industrywide ad slump. Tribune, owner of the Chicago Tribune and the Los Angeles Times, sought protection in December, one year after being taken private by billionaire Sam Zell in a deal that loaded it up with debt.

Gas prices rose 1.7 cents overnight to $1.816 a gallon. The current national average is $2.298 below the record high price of $4.114 that AAA reported on July 17, 2008. 3 states have regular unleaded gas prices of $2 and higher. 47 states and the District of Columbia have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.511). The cheapest is in Wyoming ($1.473).

Barack Obama railed against a high deficit while campaigning, but now he wants to add to the deficit. Is this the “change” we can believe in?

What is most concerning to me is all the chatter about bailing out the banks but not the people. My point being that if BofA is doing well for itself does not help people who are out of work and in debt. Fortunately I am still employed but I am in no position to make a big purchase because our sales are extremely low and the company’s may focus is surviving the storm. It seems unfair to me that the people are bailing out failing lenders with our tax dollars but aren’t able to make the loan payments. I am not saying that the people be bailed out free and clear just a stimulus or bailout, tag it what you want, but something to free up some money on the main street level. What I purpose, hypothetically speaking is bailout the people let them pay off or on their debts, the banks will get bailed of their defaulting loans and the banks will get their bailout just indirectly all the while helping “the average Joe”.

Say people how many millions would 850 billion mean to everyone out here? In the end that money will be gone we will still be broke and not able to pay house payments or buy cars or even keep the utilitys from being shut off,all that money would have done more if given to the people instead of the rich who take it and horde it…..nick

Let’s quit our *itching here. If Bank of America can get $18B more at the snap of their fingers, then Barack can get mega $$$’s to help out Joe Little Guy “meaning US”. I think BofA has some NERVE asking for more $$’s. What did the do with the other $$’s given to them?

Have a Great Weekend ALL and God Bless America

Ken Lewis, CEO of Bank of America, was the first executive to sell out and strike a deal with the government when he agreed to absorb the fraud factories known as Countrywide and Merrill Lynch.

When the US government realized their colossal lack of oversight, they sought a partner who would be willing, in exchange for cold hard cash, to sell out and absorb all the fraudulent loans.

Lewis, a hack for the ages, sold out Bank of America and allowed the US government to sweep all the fraud under their carpets.

Now poor Ken Lewis needs even more money for his incompetence; now that’s executive leadership.

As an autoworker family from Ohio whose income is in jeopardy, I see I am not alone in having financial troubles…. If Bank of America needs another 20 Billion from the Fed govt…. the economy must be bad…

Where is that big mouthed Senator Corker who played the fool blaming the CEO’s of the Big 3 automakers for their own financial woes? And did I see Honda in the mix up there having to cut some jobs? Arent they the foreign auto makers that Corker said the BIG 3 need to emulate? LOL

Corker, you made a fool of yourself for your senior senators….They weren’t dumb enough to make the silly claims you did.

The whole country needs a bailout, who you gonna blame that on? thank God, Obama gonna save us all.

As an unemployed worker who was laid off during the reign Stan O’Neil, who also put Merrill Lynch into bankruptcy with his poor management and greed, I am livid with the extra money given to Bank of America today. They purchased Merrill Lynch and now need more money to distribute unnecessary bonuses.

I worked in the Salt Lake office of Merrill Lynch where my best friend is still employed. She has informed me the brokers in her office are being paid “Retention Bonuses” to stay with Merrill Lynch. She indicated some may get as much as $500,000 each in her team. I am not certain of the exact amount they are receiving, but I think someone should research this nationwide and inform whoever is in charge of dispersing the money to see if this is how taxpayer money should be spent. They already have salaries far above the national income level ($250,000 to $500,000 a year.) Why should we keep padding Wall Street’s employees pockets with our tax money? Morgan Stanely in the same area is also offering large bonuses to them to transfer to their firm. Again - - should tax payer dollars cover this Wall Street game?

Mary Jensen

Let me see if I understand what is going on. Bank of America purchases another large bank, Merrill Lynch, only to make Bank of America bigger and more powerful. Now it gets $20 billion in bailout. What are they going to do with the $20 billion? Purchase Citigroup or another bank with taxpayer money?

President elect Obama said that “if someone has some better ideas on how to better stimulate the economy, then I want to hear it”. Alright I have one, however I don’t know how to get my idea to him. Since I was awarded the SEMA 2005 International, Best New Product trophy, I have come up with a Power Source design where I could convert hybirds and all electric cars where they would be able to run until the tires wear out without needing any fuel or needing to be plugged in. With my design these cars would be totally self sustaining, and would run completely on their own power. I believe a lot of good jobs would be created if I could develop my product. I don’t want a hand out, I need a federal grant, but I don’t have a corporate jet to fly to Washington D.C.in-order to ask for one.

This whole bail out of financial instutions has got my mind a rolling. Maybe they should give homeowner a certain amount of money to help with their morgages and non home owners a certain amount to help by a home. This way we are helping the people and at the same time helping the banks get money back. Giving the banks the money to do what the will with, is not help us home owners much when they are not willing to lend it.

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Don

More grim economic news today.

But those aren’t the stories that grabbed my attention. Instead, a little followed economic indicator (at least in MBA world, which is dominated by talk of the markets and job numbers), the Producer Price Index, reported the first year over year drop in producer prices since 1950. This matches up with steep declines in the Consumer Price Index over the last five to six months. What does this mean in English? One word: Deflation.

You might be thinking, “Wouldn’t deflation help us right now? After all, steep drops in oil prices have brought gasoline prices way down, providing relief for people all over America.” Yes, deflation brings prices down, but that’s not the only effect it has. Deflation also brings cuts in wages, pay freezes and cuts in benefits because now companies are reaching a point where they’d rather cut salary than lay more people off. The LA Times reports:

Union workers at YRC Worldwide Inc., the nation’s biggest trucking company, voted last week to accept an across-the-board 10% pay cut to help their employer weather the slump in freight traffic.

At the Newport Beach office of MBH Architects, salaries for partners and many professional staff were slashed 25% to 50% as clients canceled projects and billings fell off a cliff.

The trend is also hitting workers at nonprofit organizations and in state and local governments, and experts say it is a sign that some employers are resorting to exceptional measures to deal with the crumbling economy.

“Companies would rather cut jobs than cut pay,” said John Challenger, chief executive of consulting firm Challenger, Gray & Christmas. “If a company is cutting wages, that’s a sure sign of recession.”

Not only is deflation a sure sign of a recession, but it might be considered a delineation mark between a severe recession and a depression. After all, the last real deflationary wage spiral we saw was the Great Depression 75 years ago.

iLike talks about OpenSocial

I know what I I see some of the little.I. need you and I can accompany sure I is out of Pretoria CEO I like practical argument with my time brother Hardy I m the CEO and his presidents and delivery builds a company that s one of the fastest growing music services on the planet am I like is a social music discovery service that s based on the premise that the bus would discover music is through friends and the buffalo of Internet is to facilitate but what about the story of people already been engaging in for for ages of the things we hope it will do onto share playlists with each other share of the music they discovered with each other check artificial each other to the consulates of one of favorite artists are coming to town and find out which of your friends like Nixon going with you to those shows so little things that we originally built on unlike.com is a stand-alone service level retire expanded to also build the same kind of Fox Valley into other social platforms and that s where very excited about the be a open social graph APIs will be titled out why IATA card game and a lot of the social while it s annoying when it immediately that this bit of me that we were going where already because we ve been looking at a lot of different other social networks and social platforms that we could ve wanted to go to would ve been very time consuming to build new versions of our code for every dollar of different platform out there and since we been a godsend to have a single, unified standard where we can build it once and have it just work all over the place so really it s a no-brainer for assistance with the somebody else to campaign at this thinking chocolate and not on the 19 challenges by your testing sat and building confidence nothing major so far as it s an ongoing work in progress and the notes is exactly harder on the ground floor to the it s been actually bought was it s been easy because we can reuse so much of the code that already was working on her own website the instructions we can use Ajax and it should on things which we have already essentially built as new treatments work inside these containers they actually do look at your gap patient market sure so I m actually here Des Moines with the my bona fides profile page and you can see here his standard or to profile him but though these new areas here showing the sort of music that is added to to go farther as was another container showing his friends music is music to theater chain has been listened to and so on. Love Avril level of our solar monitors for one show about how you can now play music with an orchid something that was not possible before when he notices that this is a fully working Ajax or were on the same expanded when I play the songs in a load of new constant in here and opposite to the new songs and play with Ajax driving Ajax driving in the flash player that plays music here is Mrs. Clinton s move I like election very similar to the UI that we have on unlike.com and were pretty rapidly able to build the same functionality into him into this orchid playing field here because of the way is open social at this reuse index_look for the bound show you how I would add add music to your profile and click on this ad song link and will notice is the just opened up right here without navigating to new page is another example of the benefits of having Ajax being usable in this environment make a new search right here in my Google search again without navigating away my right within the stage I see the results for the difference different music by kiddie console they got close on.so I want I can click here to add it and write there has been added to concede the new songs right here in Seoul that has been done without leaving the page and really the benefits are both huge event to outdoor engineers the fact we can reuse the code that we had already built for lobbies functions from our own website also very national consumer not having to go through multiple pages to perform those actions on any other social network if you were to plot out a saunter profile would at least go through a couple of additional patients whereas here we did the search find sample and add all without leaving the page will show now is how to click on any of these August names in others a deeper was called the canvas area that was created off staying within the orchid ecosystem so I m left or to run all going to a page that is created awful lot like half of the common database we have Mrs. B. Katie talks all profile page and we have all pages for over half 1 million artists now and have already grown over the past year to about 15 million registered users before open social and those artists are using us as a mechanism to communicate with growing fan base is open social it s a sheer drop tray for these artists because also it opens up potential Russell market of hundred million plus new consumers that the artist and you can reach out to without doing any additional works with the same existing mechanisms other than building the viral factory as I like business, ride to ride the wave threw us into the new platforms that open social opens up to this particular example on kitty tonsils page you can see the should just does matter days ago posted this exclusive music video to her new single and you can see says the singles for release on November 12 through iTunes or so what s was away here first this was an example of an artist that is using us as a child which the fans and the note because of open social that a potential audience of fans whose reaching his is expending enormous I found a kind of enough that the later era what features I like to label you see any open social platform coming month since a question I would say generally the thing that I think is best for both us and for the for the users is ways to con of what you see when your friends are doing and so wasted on a drive that and what to do and where that s not spamming them that a direction or the solution is the in a 191 a bill to let consumers follow each of his actions and not miss anything we ll want to have something to cause inflation overloads getting that right would be great the other quests actually as to not change too frequently one of the one of my systems open social was the because it s kind of a standards-based concept and both engineers are what the developers of the opticians and the platforms are hosting them, have to stick to standard it is a soccer change every week which means we can have some some comfort in knowing that we can build something in old work original limit rental improvements or later changes only once in a while and the plot is change possible so that stability like that actually is quite important to having a functioning the healthy ecosystem will do anything in July thinking that I like him I think I covered everything in it is unsafe if you re a musician but from the checkout our new services for artists we ve been rolling out funds and services just the last few weeks where musicians can now create profiles to claim their profile that s already there and throughout some messages to you fans across no cross on.com Facebook and now to open social 105 hole became a professor

20090116

Warsaw Stock Exchange

MediaPost: US not ready for digital t.v.; Broadband expansion

Source:  MediaDailyNews, “Nielsen: We’re still unprepared for digital transition,” by Joe Mandese, 1/16/09.

Mandese reports on a Nielsen study that finds that America is unprepared for the digital t.v. transition.   A report on the transition can be found here:

(pdf) “The February 2009 Digital Television Transition: Overview of the Digital Readiness of U.S. Households and Analysis of Viewing to Unready Sets” The report is posted to Nielsen’s Trend Index - Television page.

Source: OnlineMediaDaily, “House approves funds for Broadband Expansion,” by Wendy Davis, 1/16/09.

Davis’s lead:

STOCKS RISE ON ENERGY GAIN, FINANCIALS CUT LOSSES

Have a good weekend

THE ECONOMY

Yet hope springs eternal that the second half will be better than the first. Economists polled by the Federal Reserve Bank of Philadelphia in May believe the economy will grow at an annual rate of 1.7 percent and 1.8 percent in the third and fourth quarters, respectively. Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that “home sales and prices in most of the country will improve during the second half of 2008.” (Yun is the Little Orphan Annie of forecasters. He’s always sure the sun will come out tomorrow.) Last month, Treasury Secretary Henry Paulson said, “We expect to see a faster pace of economic growth before the end of the year.”

The cause for optimism: the U.S. has called in the economic cavalry, which has responded in textbook fashion. The Federal Reserve has aggressively cut interest rates, bringing the Federal Funds rate down from 5.25 percent last September to 2 percent. Earlier this spring, Congress and President Bush, in a rare moment of bipartisan accord, passed a stimulus package, which will shove nearly $100 billion into the pockets of American consumers by mid-July.

But this downturn is likely to last longer than the eight-month-long recession of 2001. While the U.S. financial system processes popped stock bubbles quickly, it has always taken longer to hack through the overhang of bad debt. The head winds that drove the economy into this dead calm— a housing and credit crisis, and rising energy and food prices—have strengthened rather than let up in recent months. To aggravate matters, the twin crises that dominate the financial news—a credit crunch and the global commodity boom—are blunting the stimulus efforts. As a result, the consumer-driven economy may not bounce back as rapidly as it did in the fraught months after 9/11.

THE WORLD today!

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1. Barack Obama wins Presidential Election and becomes the 44th President of the United States starting January 20 - Hope for a Change - Yes we can -

130 Million Americans, more than in any other election since 1960, voted for a change and choose Obama, obtaining a historic victory to become the first black President of the United States, congratulating and celebrating world leaders, expressing hope, expectations and confidence in a fresh approach to the world’s challenges. Obama won the popular vote with 52% to 46% of McCain and the decisive electoral vote with 365 to 173 of McCain, requiring the Presidential election 270 electoral votes and the Democratic Party is strengthening its majorities in both Houses of Congress, in the House reaching 257 seats/up 21 seats remaining 178 seats for the Republican Party and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota, falling disapointed Democrats short to obtain a 60-vote majority in the Senate. Obama has to confront as he starts Presidency on January 20, 2009, inherited big problems like how to revive economy and the wars in Iraq and Afghanistan, and one has to accept that there are no quick and easy solutions and it will take time to solve troubles; nevetherless it seems to be important that he keeps promises made during his campaign and helps to overcome divides bringing the country together. The President-elect has nominated Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team have cooperated with President Bush to inject confidence into the market, coordinating the rescue plans for Citigroup and Bank of America, urging Congress to release the second $350 Billion of the $700 Billion bailout fund and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats had shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Obama talked also about a redistribution of the tax burden to reduce economic inequality, a real plan focusing on fairness and growth. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1,186 Trillion or more, considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by President-elect Obama, who said his economic team is working on an ambitious and significant economic recovery plan, called ‘American Recovery and Reinvestment Bill of 2009′, including permanent middle-class tax cuts, tax cuts for individuals and businesses could reach with about $275  Billion an important proportion of the new stimulus package , and the creation and preservation of 3 Million and up to 4 Million jobs during the next two years through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, costing  up to $550 Billion, totalling tax breaks  and spending about $825 Billion, 5% to 6% of the US gross domestic product, to enter into effect as soon as possible after his inauguration on January 20, 2009.  To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department has asked Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position President Bush said he would be open to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance, pulling Kirk Kerkorian, the billionaire investor out of the company, selling his remaining shares. The President-elect is frustrated that the actual administration refused to discuss the urgently needed second economic stimulus package  and worried as Bush issued a record of so-called ‘midnight regulations’, last minute regulations designed to reward supporters, enraging opponents and undermining his new administration, like coal waste dumping into valleys and streams  and easing the building of coal-fired power stations nearer to national parks, having  his transition team already a list of controversial measures that will take months to undo. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a measured response from Obama and a forcefully demand from President Bush, requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, made it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. NATO foreign ministers urged President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops were withdrawing from Georgia, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict moved from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. The NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, and the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, declared to be prepared to resume a constructive dialogue with Russia, but would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia. Finally Russian troops retreated from Georgia to the two enclaves of Abkhazia and South Ossetia, having Moscow established diplomatic relations with both. US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama Administration to restore relationship. President Bush concentrating on the weakening US economy, addressed the nation to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act/EESA, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The Bush Administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks.  The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans, announcing  the Federal Reserve  it will take a stake of $5 Billion in GMAC  against preferred shares paying a dividend of 8%, lending another $1 Billion to GM to help GMAC to reorganize itself as bank holding company, enabling GMAC to improve its financing offers to vehicle buyers. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies. The Treasury Department disclosed guidelines for Systemically Significant Failing Institutions/SSFI program, it uses to justify emergency aid under the Emergency Economic Stabilization Act/EESA  out of the $700 Billion bailout fund, preventing disruption of financial markets to limit impact on the economy, protecting American jobs, savings and retirement security. The Senate approved release of the remaining $350 Billion of the $700 Billion bailout fund, while the House is expected to introduce with its vote stricter conditions on how to manage the package, considering also recommendations to create a Government owned ‘Bad Bank’ with the sole purpose to buy up the toxic assets from banks, as financial sector is reporting new huge losses requiring Government aid.

http://www.BarackObama.com/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Excessively indebted Government & Overindebted Households & Undercapitalized Banks & Oversized Financial Sector& Underregulated Markets & Speculations & Contracting Economy Wordwide in 2008 & Deepening Global Recession in 2009 - Market Adjustment - New Opportunities - Recovery -

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. President Bush has signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25% and lowering the federal discount rate to 0,5%,  coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, expecting the weakest Christmas shopping season in decades, dropping consumer confidence 23,4 points to an all time low of 38 the same month, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 5,7% in July, increasing to 6,1% in August, remaining steady at 6,1% in September, hitting  6,5% in October and 6,8% in November, climbing claims for unemployment benefits to the highest level in 26 years and jumping jobless rate to a record high of 7,2% in December with a total of 2,6 Million jobs lost in 2008. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Manufacturing activity suffers declines worldwide, dropping in the United States in December to its lowest level in 28 years. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US car sales of Ford, General Motors and Toyota fell more than 31% and of Chrysler 53% in December in comparision with one year earlier, increasing concerns about the prospects for survival of US automakers. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,96 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles. US retail-sales declined another 2,7% in December and dropped 10,8% compared with one year earlier, a record fall since 1992. US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and is expected to slow down even more in the fourth quarter of this year, expecting the IMF a weak 0,5% US gowth for 2008. US growth projections for 2009 have been adjusted to -2,2%, lasting recession at least until the second half of the year. The IMF  lowered its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand. The US one year inflation increased to 5,60% in July (including food and energy), but declined to 4,94% in September, 3,66% in October, 1,07% in November and 0,09% in December. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 16-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling from 2,1% in November to 1,6% in December, where it is expected to average 2,2% in 2009. The European Central Bank/ECB had raised its main interest rate from 4% to 4,25%, alarmed about inflation trends combined with lower growth increasing stagflation fears in the Eurozone, holding the rate steady at 4,25% in September as inflation risks have fallen but not disappeared, insisting that it is crucial to bring Eurozone inflation back within the target of an annual rate of 2%, but in a joint emergency decision with the world’s most important central banks lowered its key rate to 3,75%, also reducing direct lending rates. The financial crisis has changed economic outlook slowing growth worldwide, falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, lowering the European Central Bank its key rate by another half percentage point to 3,25% and with inflation falling and Europe already in recession decided new interest rate cuts to actually 2%. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! BRIC countries Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 5,2% and 7% respectively lower growth rates in 2008, while the somewhat frenetic growth in India and China, both commodity consumers, could slow down temporarely but will continue with estimated 7,5%and 9,9% respectively in 2008, projecting China a growth of probably 8% for 2009. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standards Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday, however deepening losses, declining confidence, additional capital needs, suffering more than other major banks from the financial crisis, force the financial giant to reshape its organization, considering to integrate its brokerage operation Smith Barney into a  joint venture with Morgan Stanley, receiving Citigroup about $2,5 Billion, leaving Morgan Stanley with a controlling 51% stake and the right to purchase all of the new unit over a period of up to 5 years. Citigroup reported for the fourth quarter a loss of $8,29 Billion, the fifth consecutive quarter loss, and for the full year 2008 a loss of 18,72 Billion, putting new pressure on the company to dismantle its money losing operations, isolating them into the new unit called Citi Holdings, keeping  its healthy key businesses in a unit called Citicorp. In a deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. It now appears that after Citigroup and Bank of America also Wells Fargo will need further Government help. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion and reported stronger than expected third quarter earnings of $1,64 Billion. Merrill Lynch revealed for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital, the company encouraged by the Federal Reserve, which officially approved its  merger with Bank of America, agreed to be bought in a rescue take over for about $50 Billion by the bank, making BofA the second largest financial institution in the world. BoFA said it made a fourth quarter loss of $1,79 Billion plus a $15,31 Billion loss at troubled Merrill Lynch, but is still showing a profit of about $4 Billion for 2008, receiving a fresh Government capital injection of $20 Billion, after having obtained already $25 Billion out of the bailout fund, making the Government with a 6% stake the bank’s largest shareholder, absorbing also against an additional $4 Billion stake in preferred stock with a yield of 8% up to $98,2 Billion in losses on illiquid assets of $118 Billion, 75% of those are from Merrill Lynch. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. JPMorgan Chase posted for the second quarter a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. JP Morgan Chase showed a modest profit for the fourth quarter of $702 Million and for the full year of 2008 a net income of $5,6 Billion, 64% lower than in 2007. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw about $150 Billion in December from hedge funds, which had borrowed also heavily money, a

Lauren Booth - Incitement to Racial Hatred charge (S.5 of the Public Order Act)?

17th January, 2009

Flicking burning matches into boxes of gelignite! That’s the only way to describe the irresponsible antics of the far-left as they use the distant conflict in Gaza as an excuse to wind up young Muslims. Their aim is to spark clashes with the police that would ‘radicalise’ the Muslim community in the hope that they could then be recruited to Marxist revolutionary organisations such as the Socialist Workers Party and Respect.

Just how frighteningly close these white atheist cranks are to sparking riots that could tear many parts of Britain apart can be judged from the two pieces of video footage accompanying this report.

The first was filmed outside the Israeli Embassy in London a fortnight ago. It shows graphically the extent to which the police have lost the ability and the will to face down threats and violence from angry Muslims (compare this pathetic retreat with the truncheon-wielding head-cracking of peaceful Countryside Alliance demonstrators outside Parliament).

The second five minutes of film was shot by an iron-nerved team from BNPtv in Blackburn on Sunday 11th January. As you’ll see the first short section is silent, but still gives a good impression of the scale of the protest.

Despite – or rather, because of – the size of the demo, and its exclusively Muslim nature, none of the broadcast media or national newspapers carried a single word on the story. The BBC in particular gave extensive air-time to rival pro-Palestinian and pro-Israeli protests in London over the same weekend, and mentioned a left-wing rally in Manchester, but all covered up what was probably the largest Islamic protest march in the UK since the Bradford book-burnings against Salman Rushdie and free speech twenty years ago.

The main camera crew, which included Burnley BNP Councillor Derek Dawson and former Blackburn BNP Councillor Robin Evans, were threatened with arrest and escorted out of the town by the police. A second back-up crew with an amateur video camera, however, were not picked up by the police and managed to attend the protest rally itself. This was held in Blackburn’s Corporation Park and included a short but inflammatory speech by Tony Blair’s sister-in-law Lauren Booth, which was recorded under very difficult circumstances by our brave volunteers.

Self-confessed Marxist

A self-confessed life-long Marxist, Lauren Booth speaks for the far-left front group the so-called Stop the War Coalition. Last year she joined Respect’s George Galloway on a fund-raising stunt for them, which was praised in Socialist Worker.

Ms Booth addressed the almost totally male Muslim crowd with a large part of her hair and head covered with a woolly hat, and she also pointedly made no reference to her thoroughly unIslamic support for feminism, atheism, abortion on demand and the abolition of the family. She did, however, make a fiery speech attacking Israel, complete with what at present appear to be totally unsubstantiated allegations about the women and children of Gaza being ‘blasted’ with chemical weapons. Making things up as she goes along is nothing new for Ms Booth – last year she visited Gaza and claimed that she was forbidden to leave by Jewish soldiers, even though the checkpoint in question was manned by the Egyptians.

Addressing the huge and already wound up crowd in Blackburn, she attacked the authorities for making them meet in the park, and called on the Muslim community to bring 40,000 next time and “go to the centre of your city and stay there” until the Government agreed to close down the Israeli Embassy in London.

“Today we are all Palestinians”, she ranted, “Israel is the nation of hate”. Displaying the coded anti-Semitism which pervades so much of the left, she then used the plural (thus showing she was addressing Jews rather than Israel) “you are the criminals that we detest”.

“Chemical are weapons raining down on Gaza …. we want Israel out of this country”. Not, note, just the Israeli Embassy. She and her Red-Green alliance would like to go much further than that.

The near hysterical crowd loved it all of course. Ms Booth had her few minutes of revolutionary glory and then went home to her posh pad in Islington. The event ended, as far as we know, peacefully.

But the far left are playing a very dangerous game here. They think that their propagandists and ‘spokespeople’ can play on Muslim anger and paranoia, turning it on and off like a tap in a bid for votes, recruits and donations.

Left sparked Bradford riot

This is what they were trying to do in Bradford in 2001 when they seized on the empty threat of a National Front march to bring thousands of young Muslims onto the streets, wind them up into a frenzy with wild tales of threatened racist attacks and alleged official indifference to the mythical ‘threat’ to their community.

Job done, the SWP-run Anti-Nazi League then made their excuses and departed – leaving the angry mob to attack innocent local whites and cause £20 Million-worth of damage in the riot that sparked a wave of unrest, anti-white racist attacks and destruction across northern England.

Note the SWP posters in this video footage; they’re at it again. Whatever their petty internal differences, the various far-left fractions are united in their desire to bring mayhem to the streets of Britain. Their targets? The police, any institution or business with an Israeli connection, and the British National Party. These people provide the organisation and the manpower for the Labour party’s systematic and repeated efforts to undermine and pervert the democratic process by smearing and harassing the BNP at every election in which we stand.

Increasingly frantic over the failure of their propaganda offensives to stop our votes rising, the left’s strategists are seeking to incite their foot-soldiers and ethnic minority allies to use violence in a last ditch attempt to stop us. Unfortunately for them, however, the average crowd of middle class student protesters may think they look menacing when they put scarves over their faces, but in truth couldn’t fight their way out of a paper bag. Hence the attraction of trying to recruit young ‘street’ Muslims, who are generally obsessed with martial arts training and weapons.

What they either don’t realise, or don’t care about, however, is the fact that anti-Kuffar racism and hatred is so strong among the new generation of young Muslims that any trouble that starts as a protest against Israel or the British National Party has the very real potential to become a pogrom against all non-Muslims and the detonator not for a Marxist-style popular uprising but for a Muslim intifada and communal violence on a truly horrific scale

If the far-left don’t grow up and get responsible, if the police fail to put a stop to their provocations and incitement, and if the liberal-left TV companies don’t temper their nightly one-sided propaganda orgy of dead and injured Palestinian school-children, this could all end in blood as well as tears.

Lesson from Brixton

Indeed, it may already be too late to stop – the circumstances were rather different, but we’ve been here before. On 18th January 1981, a reveller who had been thrown out of a party in New Cross, South London, returned and set fire to the house. Thirteen innocent black youngsters were burned to death, in what the (mainly white) far-left set about insisting was a racist attack.

On 2nd March, 10,000 angry black protesters marched, with about 1,000 nervous white leftists bringing up the rear, from Lewisham to central London. I joined the march about a mile south of the Thames and watched as groups repeatedly broke off to raid building sites and skips to collect bricks and lumps of wood. The police took no action, marching stony-faced to their front, increasingly covered with gobs of spit.

Only as the angry mob reached Blackfriars Bridge did the police try to stop them going any further, with a three deep police riot shield line blocking the bridge. As the mood grew more and more ugly, every last one of the leftists vanished, leaving me as virtually the only non-uniformed white face to watch as a big lorry carrying a Rasta sound system smashed through the police lines and the huge crowd poured in to the City of London. “Babylon must fall! Murder, murder, Babylon must fall!”

Fleet Street was quickly strewn with the empty wallets of mugging victims, and jewellers and other shops were later looted in the West End. All the police either could or would do was to keep the mob out of Whitehall and Downing Street. The authorities were beaten and humiliated, the mob swaggered, drunk on power.

The next morning I gave my eye-witness account to the colleagues with whom in those days I produced the monthly magazine Nationalism Today. I also predicted that the scale of the young black community’s victory over the Metropolitan police was such that it guaranteed an explosion of further violence within a matter of weeks. Having beaten brushed aside the police of the English ‘Babylon’ like bluebottles, it was obvious that the angry black ‘street’ would now apply its new-found confidence by using force to stop the hated police Stop and Search routine. It was only a matter of time before the attempted arrest of one young black lad would draw a crowd and spark serious trouble.

A few weeks later, this was precisely what happened. The Brixton riots of April 1981 left hundreds of policemen injured, saw enormous damage to looted and firebombed shops and pubs, and sparked off a wave of riots in Afro-Caribbean communities all over England.

Urban uprising?

Now the far-left hope to inflame young Muslims into being their shock-troops for an urban uprising that would far outdo the troubles of 1981. If a fresh truce in Gaza removes that particular excuse for mass mayhem, then they will switch to Plan B – using scare-stories and demonstrations about the BNP’s European Election campaign to mobilise and excite the mob, sparking attacks on the police which are all too likely to spill over into attacks on local white residents and Jewish-owned businesses

In an effort to hamper this cynical exercise in provocation, and to press for the law to be applied equitably, I have today written to the Chief Constable of Lancashire Constabulary making an official complaint against Lauren Booth and her speech, which was clearly likely under the circumstances to incite racial hatred against members of the Jewish community in Britain.

Time for Action

If a spokesman for a group on the neo-Nazi fringe had made such a speech to an angry crowd of ten thousand working class English football fans, describing the entire Pakistani community as “criminals” who should be driven from Britain, then he would be in court faster than you can say ‘race hate’. Why should Lauren Booth be allowed to get away with inciting violence just because she is the sister-in-law of Tony Blair and her targets are Jewish?

Finally, while on the subject of big-mouthed Marxists, if Jo Brand and the BBC programmer responsible for her Saturday Night Live at the Apollo comedy slot think that they can incite people to send ‘poo’ to BNP members without incurring consequences, they’ve got another think coming. We’re organising at a new level now, and part of that involves a determination to ensure that anyone who tries to persecute our people will find that there is a serious price to pay for doing so.

The following letter has today been emailed and posted to Chief Constable Steve Finnigan at Lancashire Police HQ, Preston.

17th January 2009

Dear Chief Constable Finnigan,

I wish to make a formal allegation of incitement to racial hatred, contrary to S.5 of the Public Order Act, whereby it is an offence to use words intended or, having regards to all the circumstances, likely to incite racial hatred.

The offence was, I believe, committed by Lauren Booth in the course of her speech to the Muslims for Gaza rally in Corporation Park, Blackburn, on Sunday 11th January 2009, a copy of which may be found on the BNPtv footage posted together with my analysis of the speech and situation on the main news section of www.bnp.org.uk on Saturday 17th January.

As you should already be aware, this rally was attended by many thousands of mainly young Muslim men, already in a high state of anger as a result of media coverage of the Israeli/Palestinian conflict in Gaza. As one of Britain’s leading experts in this particular piece of legislation, I have no doubt whatsoever that there is a prima facie case against Ms Booth. In particular, her use of the plural in the phrase “you are the criminals we detest”, juxtaposed with comments such as “we want Israel out of this country”, (not, please note, “the Israeli Embassy”, but simply “Israel”) are clearly likely – if not intended – to be taken by those present as a green light for hatred, indeed quite possibly actual physical violence, against individual Jews and against Jewish businesses in our High Streets.

That she intended mischief is indicated by her deliberately setting out to enrage the audience with stories – totally fictitious as far as any news reports coming out of Gaza would suggest – of “chemical weapons” being used by Israel in the targeted attacks on Hamas terrorists which she presents as random attacks aimed at innocent women and children.

Given the deep-rooted traditional hostility to Jews, simply on account of their being Jews, in the Koran and the Haddith, to make such a speech to a large Muslim audience can only incite hatred against Jews; the legal threshold of ‘likelihood’ cannot fail to be crossed.

If it should be that a ‘softly softly’ policing policy meant that you did not feel able to station a police video team in the park to capture speeches as evidence in the event (clearly foreseeable under the circumstances) of incitements to violence or racial or religious hatred, then you only need to ask and BNPtv will supply you with the original footage recorded by our camera crew in the park. Although it is shaky it is clearly audible throughout and the speaker can be very clearly identified.

I am also told that Wayman Bennett of the criminal conspiracy operation ‘Unite Against Fascism’ addressed the same rally and said, among other provocative statements that “Israeli Jews should go back to wherever they came from – New York or wherever it is”. I have not seen this footage myself, but urge that you also investigate this.

As the Gold Commander during the 1981 Burnley riots, you must have a very good appreciation of the very serious danger involved here, with outside agitators doing their very best to increase tensions in Blackburn. Should the situation in Gaza not be permanently resolved very soon, it is highly likely that Ms Booth’s call for a far larger demonstration in the town will be answered. That being the case, it is vital if the peace is to be maintained and the law upheld that the police force take action now to show that incitement to racial hatred and violence is unacceptable not only if the alleged victims are Pakistani Muslims, but also members of other races and religions.

I look forward to hearing that you have set in motion the appropriate action very shortly, not least because – as my analysis which accompanies the video makes clear – we do not have much time left in which to damp down the growing hysteria and alienation being produced by agitators such as Ms Booth.

This person, Lauren Booth, has form on this. After the Lebanon war where some in the Labour party turned on Tony Blair for not speaking out against Israel’s action, she spoke at a rally telling him it was “time to go.”

Well, he went.

Ecstasy, Manufactured Where?

Ecstasy, Manufactured Where?

http://www.planetnetopia.com/forum/posts/id_1011/title_ecstasy-manufactured-where/

Ha'aretzSat., November 13, 2004 Cheshvan 29, 5765

Oded Tuito died innocent, at least according to American law. He was facing legal proceedings in Brooklyn, Pittsburgh and Los Angeles, but none of them had been completed. Still, Tuito in large measure personifies the Israelis who are increasingly being targeted by the U.S. law enforcement authorities as the dominant figures in the transfer of Ecstasy from European labs, where it is manufactured, to U.S. clubs.

Israelis involved in the Ecstasy trade in the U.S. are scattered around the country, and according to the authorities are not necessarily organized in large groups, and certainly not under one criminal umbrella organization. There is no Israeli mafia that deals in Ecstasy, but wherever the drug is trafficked on a significant scale, there are sure to be Israelis in the vicinity. Israelis figure prominently in cases currently under investigation in Las Vegas, Los Angeles, New York and Miami — cities that constitute the primary source of drug consumption at parties in the U.S.

“Israeli drug-trafficking organizations are the main source of distribution of the drug to groups in the U.S, using express mail services, commercial airlines, and recently also using air cargo services,” the report states. The authorities do not provide official data on the scope of the Israeli trade in Ecstasy, but the most commonly heard estimate is that Israeli criminals control no less than 75 percent of the Ecstasy market in the U.S.

How did Israel become a central player in this dubious game? The explanation is apparently historical in character. A report of the U.S. Drug Enforcement Administration (DEA) explains, in understated language, that

“Israeli drug traffickers, perhaps thanks to their long-standing ties in Antwerp, continue to be the major elements in the transfer of large shipments of Ecstasy from Belgium [to the United States].”

Underlying this cautious formulation is the assumption that Israeli mobsters have been operating for years in Belgium, mainly in diamond smuggling, and that when the country became a source of Ecstasy production in Europe and Antwerp became the drug’s major export hub to the U.S., Israeli criminals naturally became involved. After all, they were already there.

The Israeliness of the Ecstasy smugglers is a relative matter. Law-enforcement sources in the States and Israel emphasized that few Israelis are involved, and often they can be described as “former Israelis.” Frequently they are young people who left the country of their own volition and hooked up with the underworld and the drug trade overseas. Some of them were, in fact, already connected with Israeli criminal organizations back at home, while others operate without any connections there. In some cases the struggle over control of the Israeli crime families has been exported to the drug market in the U.S., though the Israeli players in the Ecstasy market in America are only loosely connected to the major criminal organizations back home.

The change began with the exposure of an Israeli crime syndicate, which the American media dubbed the “Jerusalem Network” and which, according to the police, seized control of the Ecstasy market in the city. At the beginning of this month, Gabriel Ben-Harosh, 39, who is suspected of being the head of the Jerusalem Network, was extradited from Canada to the U.S.

Ben-Harosh, along with four other Israelis, is accused of committing a series of crimes involving extortion and money laundering. However, the indictment, filed in April, does not cite drug offenses. Law-enforcement officials in Las Vegas believe that the major source of the network’s income derives from the distribution of Ecstasy to clubs in the city. According to Sergeant Blake Quackenbush, from the Las Vegas Metropolitan Police: “A lot of the Ecstasy we see in Las Vegas comes from Israeli dealers.” Apart from the current gang, he notes, a good many Israelis have been arrested in the city in recent years, most of them in connection with attempts to smuggle Ecstasy and distribute it to local clubs.

The investigation against the Israeli gang in Las Vegas lasted 14 months, and when the indictment was issued last April, it turned out that the tracks led from Las Vegas via drug and other criminal activity throughout the U.S., to drug suppliers in Europe and to the group that is considered one of the largest organized crime gangs in Israel: the Abergil family. Quite possibly the term “Jerusalem Network” stems from a misunderstanding, as in Israel the nickname of “Jerusalem Gang” is actually applied to a different crime family, and the major activity of the Abergils has not taken place in Jerusalem.

The local descriptions of the Israeli group are hardly flattering. Its members are said to be flashy, not especially careful (during the lengthy surveillance of the group, police discovered that most of the suspects attended a lavish Passover Seder at one of the most expensive hotels in the city), and not deterred by the use of violence or threats of violence to get what they want.

GABRIEL Ben-Harosh was arrested in Canada at the request of the U.S. authorities and held in custody for several months in Toronto before being extradited — with his full consent, according to his lawyer — to Las Vegas. The lawyer, David Chesnoff, says his client requested to go to the U.S. to prove his innocence. “He is looking forward to his day in court,” Chesnoff says, adding that Ben-Harosh “does not know anything about any `Jerusalem Network’ and about any allegations [against him].”

Chesnoff, a prominent lawyer who was part of the team that defended Martha Stewart, adds: “I met with him in Canada and he told me he is 100 percent innocent. I believe he will be acquitted.”

At this stage it’s not clear what the probe into “an Israeli organized crime syndicate,” as it is called in the indictment, will turn up. The charges, as stated, don’t yet include drug-related clauses. Meanwhile, the prestigious lawyers involved promise a lengthy judicial process. A source in the Las Vegas police said one of the results could be a decision by the Israeli mob to leave town, if they feel that the police are hot on their heels. On the other hand, the large profits and the Israelis’ absolute control of the Las Vegas Ecstasy market make this unlikely.

Be that as it may, the information uncovered by the law-enforcement authorities about the activities of Israeli criminals in Las Vegas sheds light on the scope of the phenomenon today — ties with organized crime in Israel, various centers in Europe and across the U.S., and criminal activity that combines classic Mafia deeds with niche operations involving trafficking in Ecstasy.

The indictments in Las Vegas are perhaps the most recent and most detailed, but they are certainly not the only ones concerning Israeli involvement in the distribution of Ecstasy in the U.S. The list is long and extends from coast to coast: two Israelis in their twenties who were arrested with a million Ecstasy tablets in their possession in New York in the summer of 2001; two others who were picked up when they received a Fed Ex package containing 200 kilos of Ecstasy tablets; three residents of the city of Givatayim, adjacent to Tel Aviv, who were extradited to the U.S. last year after a shipment containing 500,000 tablets that they sent to Brooklyn was seized by the authorities, a few years after they were extradited to south Florida after a scheme to smuggle drugs into Miami was exposed; and many others.

Along with the small fry, some Israelis in the top ranks of the Ecstasy business have also been arrested — notably Jacob “Cookie” Orgad, who controlled the market in Los Angeles, and Ilan Zarger, who was the Ecstasy supplier to the well-known Mafia figure Salvatore (Sammy the Bull) Gravano, from the Gambino crime family.

The numerous charges against the late Oded Tuito cast some light on how the Israeli networks operate. Tuito was suspected of having ties with Ecstasy suppliers in Europe and of being a major recruiter of couriers in the U.S., who were carrying millions of tablets into the country from Europe. The prosecution alleged that Tuito developed a fondness for strip joints in New York during his visits to the U.S. and hired strippers to fly to Europe in return for a payment of $10,000 to bring back suitcases filled with tens of thousands of tablets. The luggage the women took with them to Europe contained tens of thousands of dollars in cash — Tuito’s earnings from previous drug deals.

Hundreds of thousands of Ecstasy pills reached the U.S. this way. Later he also started to recruit elderly ultra-Orthodox, again in return for thousands of dollars per delivery.

Tuito was initially detained in France, but was released by mistake and got to Spain, from where he was extradited to the U.S. after a years-long legal battle. In testimony to the U.S. House of Representatives Appropriations Committee last March, DEA administrator Karen Tandy stated that Tuito “was known as the world’s largest trafficker of MDMA [Ecstasy].” Tuito, she added, was responsible for the importation of over 7 million tablets of MDMA into the U.S. during his period of activity. The investigation against him completely “dismantled Tuito’s MDMA trafficking organization and seriously impacted the ability of Israeli organized crime groups to distribute MDMA into domestic consumer markets,” she stated in her testimony.

Alexi Schacht, Tuito’s lawyer, believes that the description of his client’s exploits in the Ecstasy market was greatly exaggerated.

“The government behaved as if Ecstasy is the same as cocaine and heroin, as if he is one CEO that runs the operation, but it doesn’t work that way. With Ecstasy, people buy and sell to everyone.”

Schacht adds that it was unreasonable to place his client on the “drug kingpins” list. One way or another, the lawyer maintains, the effect of the arrest and lengthy incarceration of Oded Tuito — who was known to investigators as “Fat Man” — on the trafficking of in Ecstasy in the U.S. was no more than marginal, as most of the activity attributed to him took place years ago and he had been out of the game since being arrested in France and Spain. “He was a very nice and friendly man, he spoke several languages and even though he had no formal education, he was very smart,” Schacht says, summing up his opinion of the person who was called the world’s greatest trafficker in Ecstasy.

The new Israelis who are active in the Ecstasy market in the States are different from Tuito, not only in the scale of their trafficking but also in their methods of operation. When Ecstasy came onto the drug market it was a new phenomenon. It was manufactured in the underground and penetration of it in the U.S. required mainly thought, boldness and a great deal of money. In recent years the picture has changed: The federal authorities in the U.S. have greatly stiffened the punishment for trafficking in Ecstasy so that in practice, it is now comparable to the punishment stipulated for dealers of addictive hard drugs. As a result, the Ecstasy industry has passed into the hands of the organized crime bosses, who are willing to take the risk and who have the connections and the wherewithal to cope with the hard hand of the law-enforcement agencies.

However, this situation, too, is thought to be on the brink of change. Whereas in the past decade Europe was the principal source for the Ecstasy supply in the States, and Israeli traffickers dominated the trans-Atlantic lines of shipment, more recently there has been an increase in the manufacture of Ecstasy in Latin America. If the major source of the drug’s supply shifts southward, it’s unlikely that the Israeli mobsters will succeed in maintaining their control of the market. The reasons: the mechanism for smuggling drugs from Central and South America into the U.S. has operated for years without Israeli involvement; and it will be difficult to keep up a competitive price in European Ecstasy in the face of the goods that will arrive from south of the border.

Ecstasy, Manufactured Where? israel

Ecstasy, Manufactured Where?

http://www.planetnetopia.com/forum/posts/id_1011/title_ecstasy-manufactured-where/

Ha'aretzSat., November 13, 2004 Cheshvan 29, 5765

Oded Tuito died innocent, at least according to American law. He was facing legal proceedings in Brooklyn, Pittsburgh and Los Angeles, but none of them had been completed. Still, Tuito in large measure personifies the Israelis who are increasingly being targeted by the U.S. law enforcement authorities as the dominant figures in the transfer of Ecstasy from European labs, where it is manufactured, to U.S. clubs.

Israelis involved in the Ecstasy trade in the U.S. are scattered around the country, and according to the authorities are not necessarily organized in large groups, and certainly not under one criminal umbrella organization. There is no Israeli mafia that deals in Ecstasy, but wherever the drug is trafficked on a significant scale, there are sure to be Israelis in the vicinity. Israelis figure prominently in cases currently under investigation in Las Vegas, Los Angeles, New York and Miami — cities that constitute the primary source of drug consumption at parties in the U.S.

“Israeli drug-trafficking organizations are the main source of distribution of the drug to groups in the U.S, using express mail services, commercial airlines, and recently also using air cargo services,” the report states. The authorities do not provide official data on the scope of the Israeli trade in Ecstasy, but the most commonly heard estimate is that Israeli criminals control no less than 75 percent of the Ecstasy market in the U.S.

How did Israel become a central player in this dubious game? The explanation is apparently historical in character. A report of the U.S. Drug Enforcement Administration (DEA) explains, in understated language, that

“Israeli drug traffickers, perhaps thanks to their long-standing ties in Antwerp, continue to be the major elements in the transfer of large shipments of Ecstasy from Belgium [to the United States].”

Underlying this cautious formulation is the assumption that Israeli mobsters have been operating for years in Belgium, mainly in diamond smuggling, and that when the country became a source of Ecstasy production in Europe and Antwerp became the drug’s major export hub to the U.S., Israeli criminals naturally became involved. After all, they were already there.

The Israeliness of the Ecstasy smugglers is a relative matter. Law-enforcement sources in the States and Israel emphasized that few Israelis are involved, and often they can be described as “former Israelis.” Frequently they are young people who left the country of their own volition and hooked up with the underworld and the drug trade overseas. Some of them were, in fact, already connected with Israeli criminal organizations back at home, while others operate without any connections there. In some cases the struggle over control of the Israeli crime families has been exported to the drug market in the U.S., though the Israeli players in the Ecstasy market in America are only loosely connected to the major criminal organizations back home.

The change began with the exposure of an Israeli crime syndicate, which the American media dubbed the “Jerusalem Network” and which, according to the police, seized control of the Ecstasy market in the city. At the beginning of this month, Gabriel Ben-Harosh, 39, who is suspected of being the head of the Jerusalem Network, was extradited from Canada to the U.S.

Ben-Harosh, along with four other Israelis, is accused of committing a series of crimes involving extortion and money laundering. However, the indictment, filed in April, does not cite drug offenses. Law-enforcement officials in Las Vegas believe that the major source of the network’s income derives from the distribution of Ecstasy to clubs in the city. According to Sergeant Blake Quackenbush, from the Las Vegas Metropolitan Police: “A lot of the Ecstasy we see in Las Vegas comes from Israeli dealers.” Apart from the current gang, he notes, a good many Israelis have been arrested in the city in recent years, most of them in connection with attempts to smuggle Ecstasy and distribute it to local clubs.

The investigation against the Israeli gang in Las Vegas lasted 14 months, and when the indictment was issued last April, it turned out that the tracks led from Las Vegas via drug and other criminal activity throughout the U.S., to drug suppliers in Europe and to the group that is considered one of the largest organized crime gangs in Israel: the Abergil family. Quite possibly the term “Jerusalem Network” stems from a misunderstanding, as in Israel the nickname of “Jerusalem Gang” is actually applied to a different crime family, and the major activity of the Abergils has not taken place in Jerusalem.

The local descriptions of the Israeli group are hardly flattering. Its members are said to be flashy, not especially careful (during the lengthy surveillance of the group, police discovered that most of the suspects attended a lavish Passover Seder at one of the most expensive hotels in the city), and not deterred by the use of violence or threats of violence to get what they want.

GABRIEL Ben-Harosh was arrested in Canada at the request of the U.S. authorities and held in custody for several months in Toronto before being extradited — with his full consent, according to his lawyer — to Las Vegas. The lawyer, David Chesnoff, says his client requested to go to the U.S. to prove his innocence. “He is looking forward to his day in court,” Chesnoff says, adding that Ben-Harosh “does not know anything about any `Jerusalem Network’ and about any allegations [against him].”

Chesnoff, a prominent lawyer who was part of the team that defended Martha Stewart, adds: “I met with him in Canada and he told me he is 100 percent innocent. I believe he will be acquitted.”

At this stage it’s not clear what the probe into “an Israeli organized crime syndicate,” as it is called in the indictment, will turn up. The charges, as stated, don’t yet include drug-related clauses. Meanwhile, the prestigious lawyers involved promise a lengthy judicial process. A source in the Las Vegas police said one of the results could be a decision by the Israeli mob to leave town, if they feel that the police are hot on their heels. On the other hand, the large profits and the Israelis’ absolute control of the Las Vegas Ecstasy market make this unlikely.

Be that as it may, the information uncovered by the law-enforcement authorities about the activities of Israeli criminals in Las Vegas sheds light on the scope of the phenomenon today — ties with organized crime in Israel, various centers in Europe and across the U.S., and criminal activity that combines classic Mafia deeds with niche operations involving trafficking in Ecstasy.

The indictments in Las Vegas are perhaps the most recent and most detailed, but they are certainly not the only ones concerning Israeli involvement in the distribution of Ecstasy in the U.S. The list is long and extends from coast to coast: two Israelis in their twenties who were arrested with a million Ecstasy tablets in their possession in New York in the summer of 2001; two others who were picked up when they received a Fed Ex package containing 200 kilos of Ecstasy tablets; three residents of the city of Givatayim, adjacent to Tel Aviv, who were extradited to the U.S. last year after a shipment containing 500,000 tablets that they sent to Brooklyn was seized by the authorities, a few years after they were extradited to south Florida after a scheme to smuggle drugs into Miami was exposed; and many others.

Along with the small fry, some Israelis in the top ranks of the Ecstasy business have also been arrested — notably Jacob “Cookie” Orgad, who controlled the market in Los Angeles, and Ilan Zarger, who was the Ecstasy supplier to the well-known Mafia figure Salvatore (Sammy the Bull) Gravano, from the Gambino crime family.

The numerous charges against the late Oded Tuito cast some light on how the Israeli networks operate. Tuito was suspected of having ties with Ecstasy suppliers in Europe and of being a major recruiter of couriers in the U.S., who were carrying millions of tablets into the country from Europe. The prosecution alleged that Tuito developed a fondness for strip joints in New York during his visits to the U.S. and hired strippers to fly to Europe in return for a payment of $10,000 to bring back suitcases filled with tens of thousands of tablets. The luggage the women took with them to Europe contained tens of thousands of dollars in cash — Tuito’s earnings from previous drug deals.

Hundreds of thousands of Ecstasy pills reached the U.S. this way. Later he also started to recruit elderly ultra-Orthodox, again in return for thousands of dollars per delivery.

Tuito was initially detained in France, but was released by mistake and got to Spain, from where he was extradited to the U.S. after a years-long legal battle. In testimony to the U.S. House of Representatives Appropriations Committee last March, DEA administrator Karen Tandy stated that Tuito “was known as the world’s largest trafficker of MDMA [Ecstasy].” Tuito, she added, was responsible for the importation of over 7 million tablets of MDMA into the U.S. during his period of activity. The investigation against him completely “dismantled Tuito’s MDMA trafficking organization and seriously impacted the ability of Israeli organized crime groups to distribute MDMA into domestic consumer markets,” she stated in her testimony.

Alexi Schacht, Tuito’s lawyer, believes that the description of his client’s exploits in the Ecstasy market was greatly exaggerated.

“The government behaved as if Ecstasy is the same as cocaine and heroin, as if he is one CEO that runs the operation, but it doesn’t work that way. With Ecstasy, people buy and sell to everyone.”

Schacht adds that it was unreasonable to place his client on the “drug kingpins” list. One way or another, the lawyer maintains, the effect of the arrest and lengthy incarceration of Oded Tuito — who was known to investigators as “Fat Man” — on the trafficking of in Ecstasy in the U.S. was no more than marginal, as most of the activity attributed to him took place years ago and he had been out of the game since being arrested in France and Spain. “He was a very nice and friendly man, he spoke several languages and even though he had no formal education, he was very smart,” Schacht says, summing up his opinion of the person who was called the world’s greatest trafficker in Ecstasy.

The new Israelis who are active in the Ecstasy market in the States are different from Tuito, not only in the scale of their trafficking but also in their methods of operation. When Ecstasy came onto the drug market it was a new phenomenon. It was manufactured in the underground and penetration of it in the U.S. required mainly thought, boldness and a great deal of money. In recent years the picture has changed: The federal authorities in the U.S. have greatly stiffened the punishment for trafficking in Ecstasy so that in practice, it is now comparable to the punishment stipulated for dealers of addictive hard drugs. As a result, the Ecstasy industry has passed into the hands of the organized crime bosses, who are willing to take the risk and who have the connections and the wherewithal to cope with the hard hand of the law-enforcement agencies.

However, this situation, too, is thought to be on the brink of change. Whereas in the past decade Europe was the principal source for the Ecstasy supply in the States, and Israeli traffickers dominated the trans-Atlantic lines of shipment, more recently there has been an increase in the manufacture of Ecstasy in Latin America. If the major source of the drug’s supply shifts southward, it’s unlikely that the Israeli mobsters will succeed in maintaining their control of the market. The reasons: the mechanism for smuggling drugs from Central and South America into the U.S. has operated for years without Israeli involvement; and it will be difficult to keep up a competitive price in European Ecstasy in the face of the goods that will arrive from south of the border.

01/17/2009

Political corruption

The activities that constitute illegal corruption differ depending on the country or jurisdiction. Certain political funding practices that are legal in one place may be illegal in another. In some countries, government officials have broad or poorly defined powers, and the line between what is legal and illegal can be difficult to draw.

Corruption also undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.

Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.

While bribery includes an intent to influence or be influenced by another for personal gain, which is often difficult to prove, graft only requires that the official gains something of value, not part of his official pay, when doing his work. Large “gifts” qualify as graft, and most countries have laws against it. (For example, any gift over $200 value made to the President of the United States is considered to be a gift to the Office of the Presidency and not to the President himself. The outgoing President must buy it if he wants to take it with him.) Another example of graft is a politician using his knowledge of zoning to purchase land which he knows is planned for development, before this is publicly known, and then selling it at a significant profit. This is comparable to insider trading in business.

Favoring relatives (nepotism) or personal friends (cronyism) is a form of illegitimate private gain. This may be combined with bribery, for example demanding that a business should employ a relative of an official controlling regulations affecting the business. The most extreme example is when the entire state is inherited, as in North Korea or Syria. A milder form of cronyism is an “old boy network“, in which appointees to official positions are selected only from a closed and exclusive social network – such as the alumni of particular universities – instead of appointing the most competent candidate.

Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. For example, trumped-up charges are often brought up against journalists or writers who bring up politically sensitive issues, such as a politician’s acceptance of bribes.

Embezzlement is outright theft of entrusted funds. It is a misappropriation of property.

Another common type of embezzlement is that of entrusted government resources; for example, when a director of a public enterprise employs company workers to build or renovate his own house.

A kickback is an official’s share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a contract to a company that is not the best bidder, or allocate more than they deserve. In this case, the company benefits, and in exchange for betraying the public, the official receives a kickback payment, which is a portion of the sum the company received. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption. (See: Anti-competitive practicesBid rigging.)

 

In the European Union, the principle of subsidiarity is applied: a government service should be provided by the lowest, most local authority that can competently provide it. An effect is that distribution of funds into multiple instances discourages embezzlement, because even small sums missing will be noticed. In contrast, in a centralized authority, even minute proportions of public funds can be large sums of money.

If the highest echelons of the governments also take advantage from corruption or embezzlement from the state’s treasury, it is sometimes referred with the neologismkleptocracy. Members of the government can take advantage of the natural resources (e.g., diamonds and oil in a few prominent cases) or state-owned productive industries. A number of corrupt governments have enriched themselves via foreign aid, which is often spent on showy buildings and armaments.

A corrupt dictatorship typically results in many years of general hardship and suffering for the vast majority of citizens as civil society and the rule of law disintegrate. In addition, corrupt dictators routinely ignore economic and social problems in their quest to amass ever more wealth and power.

In the political arena, it is difficult to prove corruption. For this reason, there are often unproved rumors about many politicians, sometimes part of a smear campaign.

Politicians are placed in apparently compromising positions because of their need to solicit financial contributions for their campaign finance. If they then appear to be acting in the interests of those parties that funded them, this gives rise to talk of political corruption. Supporters may argue that this is coincidental. Cynics wonder why these organizations fund politicians at all, if they get nothing for their money.

Even legal measures such as these have been argued to be legalized corruption, in that they often favor the political status quo. Minor parties and independents often argue that efforts to rein in the influence of contributions do little more than protect the major parties with guaranteed public funding while constraining the possibility of private funding by outsiders. In these instances, officials are legally taking money from the public coffers for their election campaigns to guarantee that they will continue to hold their influential and often well-paid positions.

Measuring corruption statistically is not a straightforward matter, since the participants are generally not forthcoming about it. Transparency International, a leading anti-corruption NGO, provides three measures, updated annually: a Corruption Perceptions Index (based on experts’ opinions of how corrupt different countries are); a Global Corruption Barometer (based on a survey of general public attitudes toward and experience of corruption); and a Bribe Payers Survey, looking at the willingness of foreign firms to pay bribes.

 

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In Focus 2008

id="blog-title">tilted halos

id="tagline">living out my faith one day at a time

2008 was a significant year for many. We lived through the continuing threat of terrorism, major natural disasters, soaring oil prices, inflation, global financial meltdown, tainted food and deepening political unrest. Many nations elected their new government in 08 too. And of course, who can forget the event that lifted China up on the world map. No, this one is good news - the 2008 summer Olympics.

What was it like for me?

Let me start by saying that 2008 was not a smooth sailing one for me by a long shot. I started the year with a general sense of impending doom in my marriage and finances. These alone were enough to keep me on the edge the entire year. You can imagine what it was like for me to hear pastor proclaimed to us at the start of the New Year that it will be a year of manifested blessings for many. It could feel like a slap to my face. I used the word could because although I had no inkling how this will work out for me, I said amen to it anyway. I know my God. Apart from loosing faith in Him, nothing that can happen could truly be called tragic. Now, please don’t think, “Wow…I wish I had her kind of faith.” The honest truth is that I am only able to write it this way on hindsight. At every point of crisis, I had my doubts and anxieties, coupled with helpless attempts to cling on to God. Sometimes I look shipwrecked….but always on the shore of His grace.

Yet the question remains, have those circumstances changed? People of the 21st century are very realistic people. We don’t need feel good stories and have little patience for philosophy, much less, theology. Yes, they are nice and inspiring but….show me the money! I want to know that my debts are cleared, that the tumor is gone, that my home has doubled in value, that I have a new husband! We want results and want them fast. Otherwise, we move on to the next thing that promises a quick fix. It is a very short-sighted view of life. We make judgments base on the material. If only we realize who we are directly affects our experiences of life, regardless of the conditions, we will be more willing to wait. I recently read the testimony of Jacelyn Tay, a Mediacorp artiste. She said that she no longer sees her misfortunes as something necessarily bad. To put it another way, all of life’s experiences can have a redeeming value. She brought God into the situation and rise above them.

But to answer the pragmatic question – I moved from zero savings to having an emergency fund. It is still small but growing steadily. The wonderful thing is that I did not have to sacrifice my tithes for it. I will write a little more about this experience another time. My mother-in-law stepped in to help save the home. It is safe for now at least. These came about in the most natural way. Money did not come out of nowhere. I did not suddenly win the state lottery. Instead God brought certain people and resources to me. They helped put me back on my feet. My husband is still pretty much the same but he did get back before the year is over. In the past I had struggled to pray for his blessing because I felt he deserved what was due him. Now I am able to look pass his failures and pray for him anyway even though I don’t feel like it. Along the way, I also witnessed relationships of people around me rise and fall and was surprised to find myself interpreting them with new eyes; less judgmental, more honest and certainly more objective. Things may not have change much in the materialistic sense but I feel I have grown much more this year compared to the last couple of years put together. When I look back, I discovered I am a different person now then I was the year before. Yet it didn’t all happen in one episode. It is an on-going process. Years of being washed in God’s word while in the training field of life’s arbitrariness has shaped the way I responded to life. Together, they made me who I am today. Looking back, I could see why all the shaking was necessary. May we all grow from strength to strength. But remember, we can also slip backwards. The determining factor is the condition of our inner man.

JASPER JOTTINGS Week 03 - 2009 Jan 18

JASPER JOTTINGS Week 03 - 2009 Jan 18

Jasper Jottings - The achievement journal of my fellow Jaspers, the alumni of the Manhattan College

http://www.jasperjottings.com/2009/jasperjottings2009W03.html

INDEX

* POSITRACTION: Oldest person dies; Not a Jasper

* JNews: Fluhr, George J. [MC????] 2009 chair of the Upper Delaware Council

* JUpdate: Schmidt, John (MC1972)

* JNews: Johnson, Sr. Elizabeth [MC1970] authors “Quest for the Living God: Mapping Frontiers in the Theology of God”

* JEmail: Email exchange about a 2007 Obit Burns, Lou [MC1938]

* JObit: Thompson, James Leo Sr. [MCatnd]

* JEmail: McEneney, Mike (MC1953) ids Yatto, Robert [MC1969]

* MFound: A yellow card at a Jasper basketball home game.

* JObit: Leone, Ron [1967 EE]

* JUpdate: Carpenito, Christopher (MC1996)

* MNews: MC is going GMAIL

* JObit: Brosnan, Frank C. [MC1951]

* JOY: Levendosky, John [MC????] becomes engaged

* MFound: “Herb Kopf” Wikipedia update

* MObit: Murtha, Sr. Catherine [MCxfac]

* JObit: Marren, John [MC1970]

* JNews: Meehan, Kathleen [MC1980] makes engineering news

* JFound: Guernsey, Nancy “Red” (MC1977 BEME) saves a life

* JObit: Hubbard, John H. (MC1941)

* MFound: MC students sighted doing good works; interesting characterization

* MFound: Riverdale Garden by MC has closed

* JUpdate: Siskowski, Frank (MC1969)

* Comment on JObit: Lou Burns, Class of 1938 by ulf lagerstrom

* ENDNOTE: Enright, Joe (MC1968) –The View From Argyle Heights blog —

# # # # #

POSITRACTION: Oldest person dies; Not a Jasper

http://www.breitbart.com/article.php?id=D95F59B00&show_article=1

*** begin quote ***

LISBON, Portugal (AP) - A woman who lived to see five of her great-great grandchildren born and was believed to have been the world’s oldest person living, has died in northwest Portugal at the age of 115, officials said Friday.

*** end quote ***

[JR: We most certainly don't know His Plan for us. But one has to see that life spans are lengthening. I guess to give us time to accomplish what we are supposed to get done? For some reason, I find this inspiring. How a society treats the too old, too young, and too poor is it's measure?]

# # # # #

* Posted on: Sun, Jan 11 2009 12:37 AM

* Updated: Tue, Jan 13 2009 8:20 PM

JNews: Fluhr, George J. [MC????] 2009 chair of the Upper Delaware Council

http://www.wayneindependent.com/news/x497785202/Upper-Delaware-Council-names-2009-officers

Wayne Independent

Sat Jan 10, 2009, 06:57 PM EST

*** begin quote ***

NARROWSBURG, NY - Shohola Township, PA Representative George J. Fluhr was sworn in as the 2009 chairperson of the Upper Delaware Council, Inc. at the UDC’s annual meeting held January 8 in Narrowsburg.

Justice Ronald J. Edwards, magistrate for PA District 22-3-04, administered the oath of office to Fluhr, who succeeds 2008 UDC Chairperson Alan Bowers of Westfall Township, PA.

{Extraneous Deleted}

Fluhr has served as an alternate or representative of Shohola Township on the UDC since the non-profit organization’s inception in 1988. He was the first recipient of the Council’s Distinguished Service Award in 1989, recognizing his role as a founder of the Conference of Upper Delaware Townships, a drafter of the “River Management Plan for the Upper Delaware Scenic and Recreational River”, and a strong advocate for local governments taking the lead in protecting both the river and private property rights.

A retired educator with degrees from Manhattan College and Columbia University, Fluhr was elected as a Shohola Township Supervisor for six consecutive, six-year terms from 1977 to 2008.

He has also served as the township’s official historian since 1972 and as Pike County Historian from 1977-87 and 1996 to the present. Fluhr is a current member of the Shohola-Lackawaxen Multi-municipal Comprehensive Plan Committee, a life member of Shohola Volunteer Fire & Rescue, a founding member of the Shohola Area Lions Club, and author of seven historical books, numerous articles and pamphlets.

Fluhr previously chaired the UDC in 1992 after two terms as vice-chairperson in 1991 and 1997. He is a member of all three of the UDC’s standing committees.

{Extraneous Deleted}

The Upper Delaware Council is a not-for-profit corporation which has operated since 1988 under a Cooperative Agreement partnership with the National Park Service to oversee the coordinated implementation of the River Management Plan for the Upper Delaware Scenic and Recreational River, a component since 1978 of the National Wild and Scenic Rivers System.

Council members are eight NY towns (Hancock, Fremont, Delaware, Cochecton, Tusten, Highland, Lumberland, and Deerpark) and five PA townships (Berlin, Damascus, Lackawaxen, Shohola, and Westfall) that border on the Upper Delaware River, as well as the State of New York and the Commonwealth of Pennsylvania. The Wayne County, PA townships of Buckingham and Manchester remain eligible to join to complete the full roster of municipalities. The Delaware River Basin Commission is a non-voting member. The National Park Service Upper Delaware Scenic and Recreational River is a partner.

{Extraneous Deleted}

# - # - #

Fluhr, George J. [MC????]

# # # # #

* Posted on: Sun, Jan 11 2009 1:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JUpdate: Schmidt, John (MC1972)

Schmidt, John (MC1972)

Professional ExperienceDirector, QA/ OperationsNASDAQ1979 - 2006Managed QA and Operations -responsible for managing the testing of all software products and implementation of all systems changes in the Production environment; Managed customer testing group and conducted large scale industry tests and user tests.EducationPace University-New York Financial Management, MBA, 1978Manhattan College Electrical Engineering, BEE, 1972

# - # - #

REPORTING LIVE FROM THE PLAXO NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM … 20090111

# # # # #

* Posted on: Sun, Jan 11 2009 3:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JNews: Johnson, Sr. Elizabeth [MC1970] authors

“Quest for the Living God: Mapping Frontiers in the Theology of God”

http://www.dailyrecord.com/article/20090111/LIFE/901110368/1005/NEWS01

dailyrecord.com

January 11, 2009

Her search for God touches politics, ecology

By Ellen S. Wilkowe

Daily Record

*** begin quote ***

Historical and current events continue to stoke a renaissance in the understanding of God in different parts of the church and around the world.

The book “Quest for the Living God: Mapping Frontiers in the Theology of God” (Continuum International Publishing Group, $24.95) explores how people of faith have adapted and applied their relationships with God to such events.

“I teach courses on this, and it was too good to be kept a secret from the people at large,” author Elizabeth Ann Johnson said in a phone interview. “It nourishes the faith of people in the church.”

A distinguished professor of theology at Fordham University and current president of the American Theology Society — to name just a few credits in a long line — Johnson will share insights into her book Wednesday at 7:30 p.m. at Drew University’s Seminary Hall in Madison.

Presented by the Northern New Jersey chapter of Voice of the Faithful, Johnson’s appearance keeps with one of the group’s missions of promoting discussions about changes in the church. The 300-member group formed in 2002 as a result of the sex abuse scandal in the Boston Diocese.

{Extraneous Deleted}

Born and raised in Brooklyn, N.Y., Johnson, the eldest of seven siblings, joined the religious order of the Sisters of Saint Joseph, headquartered in Brentwood, N.Y.

“As a little girl I wanted to be a tugboat driver but was told girls can’t do that,” she said. “I joined the convent and became an elementary school teacher, which was the route of most sisters.”

Energized by the Second Vatican Council, she fell in love with theology and pursued a master’s degree in religion from Manhattan College and a Ph.D. in theology from Catholic University of America.

A former president of the Catholic Theological Society of America, Johnson’s main areas of teaching and writing focus on God, Jesus Christ, Mary and the saints, science and religion, the problem of suffering, ecological ethics, and issues related to justice for women.

Her decorated career includes Fordham University’s Teaching Award and the John Courtney Murray Award of the Catholic Theological Society of America.

# - # - #

Johnson, Sr. Elizabeth [MC????]

# - # - #

Dear John,

I believe that Sister received her Masters in 1970.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

* Posted on: Sun, Jan 11 2009 5:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JEmail: Email exchange about a 2007 Obit Burns, Lou [MC1938]

*** begin quote ***

Author : ulf lagerstrom (IP: 201.53.106.191 , c9356abf.virtua.com.br)

I am a track writer and am writing a mini-bio on Lou Burns (as well as his team mate Howie Borck, both outstanding half milers).

Obviously Lou was a fine runner even as a teenager, at Bryant HS. Did he leave any clippings or notes from those days ?

Best regards

Ulf Lm

(ATFS/Brazil)

*** end quote ***

# - # - #

To: Ulf

Sent: Sunday, January 11, 2009 1:08 PM

Subject: Thank you for your comment - re: Lou Burns

>Submitted on 2009/01/11 at 7:56am

>

>I am a track writer and am writing a mini-bio on Lou Burns

I’m unaware of Lou Burns’ running. But perhaps one of my fellow alums will know more.

Due to spam, I’m waiting for your response to this message before “approving” the comment. Have to have some evidence of identity. It’s amazing what spammers do to get the credibility of a blog. It enables them to “sneak in” elsewhere.

Thanks, sorry to be a hold up,

fjohn

# - # - #

On Jan 11, 2009, at 11:11 AM, Ulf Lagerstrom wrote:

Your message rec´d ok.

Lou Burns was the intercollegiate (IC4A) champion at 880 yds in 1936. In 1937 he took the mile final in- and outdoors.

His Jasper team mate Howard Borck was also a standout in those years. However, none of them qualified for the 1936 Olympics.

Would it be possible for you to pass on my original message to his family ?

Regards

Ulf

# - # - #

From: “reinke, fjohn68″

Date: January 11, 2009 11:31:46 AM EST

To: Ulf Lagerstrom

Subject: Re: Thank you for your comment - re: Lou Burns

Ulf: I received that update via the College and don’t have the family’s address. That was back in 2007. I’ve bcced my contacts at the College for his son’s email address. Perhaps they would forward it along to the family and allow them to decide if they wish to participate in your article. (I would, but my family member hasn’t passed. They may prefer to NOT open old wounds.) All I can do is ask. I’ll also fjohn

Tom, Grace, and Mike: Ulf has a valid email address, and an apparently valid request. Can you pass this on to Jasper Lou’s family for their consideration? Thanks, fjohn68

# - # - #

From: “Ulf Lagerstrom”

Date: January 11, 2009 12:34:06 PM EST

To: “reinke, fjohn68″

Subject: Re: Thank you for your comment - re: Lou Burns

Thanks for your help.

Ulf

PS the coach at the time was Pete Waters. He took Manhattan to (collegiate) t & f leadership in the 1930´s.

# - # - #

[JR: Hope this works out. Any good stories about our fellow Jaspers I find inspiring.]

# # # # #

* Posted on: Sun, Jan 11 2009 7:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JObit: Thompson, James Leo Sr. [MCatnd]

http://www.legacy.com/StarNewsOnline/Obituaries.asp?Page=LifeStory&PersonId=122750681

JAMES LEO THOMPSON, SR.

James Leo Thompson, Sr., 84, died Saturday, January 10, 2009, at his home in Wilmington, North Carolina.

Mr. Thompson was born and raised in Staten Island, New York. In his youth he trained and became a champion diver, performing at various pools in Staten Island. In addition he played baseball with the Travelers Team. After graduating from St. Peters High School, he Went To Manhattan College For One Year Before Enlisting In The Navy. He served until the end of WWII in the Seabees, his duty including both the European and Pacific arenas.

Jim worked for over 40 years in the petroleum industry, managing terminals for Hess Oil in New Jersey and as East Coast District Manager for Apex Oil Company in Baltimore, MD, until his retirement in 1989.

While living in Baltimore his great love was sailing his boat on the Chesapeake Bay.

After retiring to Wilmington, NC, Jim was able to pursue his interest in golf which he so enjoyed playing. Some of his best hours on the golf course were when he could play with his son Jim, his grandsons Nate, Zach and Chris, his grandson-in-law Jamie and Jim’s good friend Donald Shaw. He loved to spend time at “his” beach in Wrightsville, and he also enjoyed taking care of his lawn, reading, watching sports, and particularly breakfasting with his wife Vicki as they watched the birds from their sunroom.

Jim’s surviving family include his wife Vicki; his son Jim Thompson (Roxanne) of Wilmington, and his daughters Eileen Kuehn (Frank) of Easton, MD, Sally Fortman (Mark) of Crofton, MD, and Amy Lundberg (Dave) of Owings Mills, MD, and his former wife and their mother Marion Thompson of Annapolis; his stepdaughter Lisa Cuevas (Ray) of San Diego, CA. “Pop” will be lovingly remembered by his grandchildren: Erin, Nathan, Lauren and Zachary of Wilmington, Michael, Matt, Chris, Kyle, Mariah, Megan and Joshua of Maryland and his great-grandson Luke of Wilmington and Jordan, Victoria and Gregory of San Diego. In addition he is also survived by his sister Mary Romanelli (Charlie) of Staten Island, sister-in-law Shanda Mahurin (Randy) of Spring Hill and numerous cousins, nieces and nephews.

A time of visitation for family and friends will be from 6 to 8 pm Tuesday at Andrews Mortuary Valley Chapel, 4108 S. College Road, Wilmington.

Mass of Christian Burial will be 11 am Wednesday, January 14, 2009 at St. Therese Catholic Church, Wrightsville Beach.

Condolences may be sent to the family at www.andrewsmortuary.com

A Valley Chapel Service

Online condolences at StarNewsOnline.com

# - # - #

Thompson, James Leo Sr. [MCatnd]

[JR: Attendees recognized on the theory "if it's important enough for someone to mention in an obit, then we can spare a few prayers".]

Guestbook: http://tinyurl.com/7l3lc8

# - # - #

From: Tom McGoey (MC1969)

Date: January 14, 2009 11:26:58 AM EST

To: reinkefj

Subject: Check out this page on SILive.com

Dear Jasper Jottings:

Tom McGoey thought you would be interested in this item from SILive.com

http://www.silive.com/obituaries/advance/index.ssf?/base/news/1231852511182390.xml&coll=1

Tom McGoey

Matriculation cut short by WW II.

[JR: Yes, I always try to report the "attendees", especially from the WW2 and Korean era. For two reasons. One, they may have gone into the service due to what they learned becomeing Jaspers. Two, if someone wrote the obit mentioning that MC time, then the deceased must have been proud of it. If they were, so am I of them. Third, (I lied) some of the attnedees have inspiring life histories with admirable accomplishments and long marriages. In short, I'm pretty flexible in these cases as to what is a "Jasper" and what we Jaspers should be reading for "inspiration". imho, open to feedback.]

# # # # #

* Posted on: Mon, Jan 12 2009 7:19 AM

* Updated: Wed, Jan 14 2009 2:20 PM

JEmail: McEneney, Mike (MC1953) ids Yatto, Robert [MC1969]

From: McEneney, Mike (MC1953)

Date: January 12, 2009 12:29:39 AM EST

To: “Jasperfjohn Reinke”

Subject: Robert P. Yatto, ‘69

>JFound: Yatto, Robert [MC1969] is a gastroenterologist on talk radio today

Dear John,

I believe that The Doctor is a member of the Class of 1969.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

* Posted on: Mon, Jan 12 2009 10:37 AM

* Updated: Tue, Jan 13 2009 8:20 PM

MFound: A yellow card at a Jasper basketball home game.

http://manhattancollegebasketball.yuku.com/topic/1172

* Manhattan College Basketball > General Discussion > Yellow Card

*** begin quote ***

How many people can say they got a yellow card at a Jasper basketball home game. Well I can clim 2 of them, one last year and one today, actually ckjasper also got a yellow card today as well. I can say that in close to 20 years of going to Jasper GAmes I have never received a yellow card not even a warning, the closest thing I ever got at a game to a yellow card was perhaps the famous look from Bro Scanlon. Until today I did not realize how sterile and bland things have gotten at Draddy, if you are not sitting with legs crossed as quiet as an alter boy at the game you are in violation!!! I am a little bit shocked and disappointed that this is what Draddy Gym has turned into.

*** and ***

i never have made a comment on this board but read it all the time. i know exactly what he is saying. i showed up to all the basketball games when at school and usually make a few loud comments usually during foul shots. i never curse but this year one of the first games of the year i showed up after class and yelled something out like morgan state thats a great academic school or something and brother scalan came up to me at half time and told me im pushing the limit and need to knock it off. like give me a break. in high school we had a cheering section and i went to a catholic school and we went nuts no one complained. this school its like we are 5 years old and will get detention for saying something to another team. in my opinion schools a joke. i play a sport here nd when i travel i hear some crazy things being said and not one word gets said to those players.

*** end quote ***

[JR: Interesting. Anyone have any details? Does Brother President actually have a yellow card? Fascinating!]

[JR: Upon reflection, can he revoke a diploma for bad conduct at a game? LOL]

# # # # #

* Posted on: Mon, Jan 12 2009 12:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JObit: Leone, Ron [1967 EE]

Dear John, FYI Mike

—– Original Message —–

From: “Grace Feeney”

To: “‘Mike McEneney’”

Sent: Monday, January 12, 2009 9:29 AM

Subject: FW: Ron Leone

—–Original Message—–

From: Jack Tuohy

Sent: Sunday, January 11, 2009 1:48 PM

To: grace feeney

Subject: Ron Leone

Grace

I received an error message on my first attempt to send this. I am resending just in case the first try did not go through.

Jack Tuohy

# - # - #

Grace

I spoke with you on Friday about Ron Leone (1967 EE). Ron was a volunteer at Manhattan and the way he lived his life is a credit to the education and principles that we learned at Manhattan. I was a classmate of Ron’s in High School as well as at Manhattan. You could not find a better man.

As I promised, I am forwarding information on the wake and funeral.

The link to the funeral home website is

http://martinfh.com/

Martin Funeral Home 1761 Rt. 31 Clinton, NJ 08809 908-735-7180

I cut and pasted some pertinent information from the site below.

Visiting Hours will be on Monday, January 12th from 2:00 to 4:00 & from 6:00 to 9:00 pm at the funeral home. At 8:00 pm there will be a “Time of Sharing”.

There will be a Funeral Mass on Tuesday, January 13th at 10:00 am at the Immaculate Conception RC Church, 316 Old Allerton Road, Annandale, NJ 08801 - #908-735-7180.

Note: Family and Friends are asked to meet directly at church Tuesday morning for the Funeral Mass.

Interment will follow at the Immaculate Conception Cemetery on the Church grounds.

In lieu of flowers, memorial donations may be in memory of Ronald A. Leone to:

Bergen Catholic High School, 1040 Oradell Ave, Oradell, NJ 07649 or to

Manhattan College, 4513 Manhattan College Parkway, Riverdale, NY 10471

# - # - #

[JR: On a personal note, Ron was Jasper Jottings subscriber from 2002. Makes me sad. I can't afford to lose any of my readers. Especially one who didn't complain. Good man; till we meet again. (I hope for my sake.)]

Leone, Ron [1967 EE]

# - # - #

* Posted on: Mon, Jan 12 2009 3:45 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JUpdate: Carpenito, Christopher (MC1996)

Carpenito, Christopher (MC1996)

Hometown: South Brooklyn, NY

Relationship: Married

Activities: Wine Collecting, Target Shooting

Favorite Music: Various

Favorite TV Shows: Scrubs, 24, House M.d., The Simpsons

Favorite Movies: Saving Private Ryan, Juno, Gladiator, Any Abbott and Costello movie, any Marx Brothers Movie

College:

* Manhattan College ‘96

* Accounting, Computer Info Systems

High School:

* Franklin K.Lane High School ‘91

Employer:

Hunter Roberts Construction

Senior Vice President of Finance

April 2008 - Present

Manhattan, NY

Turner Construction

Vice President of Finance

January 2001 - March 2008

Manhattan, NY

Arthur Andersen

Manager

September 1996 - January 2001

Manhattan, NY

Construction And Real Estate Audit and Consulting

# # # # #

* Posted on: Mon, Jan 12 2009 4:42 PM

* Updated: Tue, Jan 13 2009 8:20 PM

MNews: MC is going GMAIL

https://blog.manhattan.edu/computerservices/2009/01/02/jaspernet-email-20powered-by-google/

JasperNet Email 2.0……..Powered by Google!

RECOMENDED SITES FOR ASTHMA IN WORLD WIDE

 

The end of banking as we know it

NYT’’s Gretchen Morgenson comments on the changing banking lansdcape in the wake of 2008 and the developments at Citi and Bank of America and sees lower financial sector wages (and fewer jobs), larger capital requirements, reduced profitability and higher interest rates:

THE concept of the financial supermarket — the all-things-to-all-people, intergalactic, behemoth banking institution — bit the dust last week.

Citigroup, it turned out, was too big to manage, too unwieldy to succeed and too gigantic to sell to one buyer.

Clearly, the entire financial industry is in the midst of a makeover. And while no one wants to call it nationalization, perhaps we can agree on this much: The money business as we have come to know it over the last two decades — with its lush salaries, big-swinging risk-takers and ultrathin capital cushions — is a goner. Got that? Toast. Toe-tagged.

And that’s a good thing, because maybe we can go back to a banking model that is designed to do more than simply enrich the folks at the top of the enterprise while shareholders and taxpayers absorb all the hits.

Banking, because it oils the crucial wheels of commerce, has a special standing in our world. That will always be the case.

But in exchange for that role, our country’s leading bankers might have approached their jobs with a sense of prudence and duty. Instead, a handful of arrogant greedmeisters blew up their institutions and took our economy off the cliff along the way.

It’s too soon to say how much taxpayer money will be spent trying to rebuild banks hollowed out by bad lending practices. Paul J. Miller, an analyst at Friedman, Billings, Ramsey, thinks that the nation’s financial system needs an additional $1 trillion in common equity to restore confidence and to get lending — the lifeblood of a thriving and entrepreneurial free-market economy — moving again.

Larger capital requirements, beefed up to serve as a proper buffer when lenders misfire, will be one change facing banks when we emerge from this mess, Mr. Miller said. He thinks regulators will require banks to hold tangible common equity of 6 percent of assets. Now many institutions hold under 4 percent.

Such a requirement will cut into earnings, of course. Toning down the risk-taking will also reduce the profitability — or the appearance of it — at these institutions.

“This industry made a lot of money by taking a business line with 20 percent return on assets and levering it up 30 times,” Mr. Miller said. “But no more. Banks are going back to being the boring companies they should be, growing roughly in line with gross domestic product.”

Clearly this means that the rip-roaring performance of financial services companies and their stocks isn’t likely to return anytime soon. Because these companies’ earnings fed both the economy and the stock market in recent years, a more muted performance has considerable implications for investors, consumers and the economy.

FOR example, since 1995, according to Standard & Poor’s, earnings of financial concerns have accounted for 22 percent of profits, on average, among the S.& P. 500 companies. That performance is almost double that of the next largest contributor — the energy industry. In 2003, earnings among financial companies peaked at 30 percent of total profits generated by the S.& P. 500; back in 1995, financial company earnings accounted for 18.4 percent of the total.

Of course, many of these earnings were ephemeral and have since turned to losses. But while the companies were reporting the profits, their stocks roared.

Will valuations on financial services stocks bounce back soon? Not in Mr. Miller’s view. “They are going to look more like the insurance industry, trading at book value or 1.5 times book,” he said. “That is, if you are really good.”

For financial services workers, of course, the inevitable downsizing has already begun. But there will be more. “The industry was way too big; too many people were not producing anything,” Mr. Miller said. “Jobs will be lost and not replaced. And financial industry salaries won’t be anywhere close to where they have been.”

The bright side is that all those displaced financial services professionals can now set their sights on doing something, well, truly useful.

Still, this adjustment will be painful for all those who have to carve out new careers, as well as for New York and other places these companies call home.

Finally, what will a humbled financial services industry mean for consumers? Higher borrowing costs, Mr. Miller said.

“The leverage that these companies were using allowed them to lower their rates,” he said. “Rates have to go higher for the banks to operate in a safe and sound manner and make money.”

Credit is also likely to remain tight, in Mr. Miller’s opinion. A result is that consumer spending won’t recover to bubble levels.

“It is going to be difficult to get credit, and that is something the system has to adapt to,” Mr. Miller said. “That is where the government is going to have to step in and replace that debt growth to make sure there is a smooth transition.”

When a driving economic force takes a big dive, the ripples are far-reaching. Change is painful, there is no doubt. But American business can be awfully good at reinventing itself when it needs to.

And does it ever need to now.

Independent woman, anarchist, inflation and government=lover

A romantic story develops between Cat and Jerry; it is in its early stage.

       Cat relaxed a bit talking about the subject that was her familiar territory, then ploughed into his field. “With your highly refined economics wisdom, what would you suggest to correct Kalani’s problem? After all, it all starts with a purely economical issue: her boyfriend is not generating an income. Shall I phrase it as The Productivity Issue?” she added with unmistakable irony and leaned back, throwing her sun-bleached hair over her shoulders. Jerry got caught up in the argument. They used to have heated discussions on the economy and politics before, but those were friendly and witty. They both enjoyed them. This was different. She challenged him, but not for a playful sparring, she wanted twelve rounds of hard boxing, winner takes all. Jerry could see now that, apart from being a usually sweet and kind person, this Cat had a hard side to her persona and could spring sharp claws like a real feline. “From the economist’s point of view,” he carefully staked the argument, “the core problem is that the boyfriend is not working. A secondary problem is that Kalani has no money for college now.” She was listening intently. Her bright and alert eyes were glued to his, brow slightly furrowed with concentration. She was slightly nodding her head to acknowledge the points. Still, he had a feeling that she was just watching him walk into a trap, and would pounce the very moment the jaws shut. “The first problem could be addressed,” Jerry continued, “by retraining Abe to improve his chances of employment, possibly granting him a loan for a small business. I think you have mentioned some sort of enterprise.” Now he was sure that she was planning an ambush. She was smiling slightly, not with her usual warm smile, more like a fox’s mouth twitching before she jumps a chicken. Still, he couldn’t see the trap. “And Kalani, how could you help Kalani?” she asked sweetly. Jerry had a premonition that a club was being swung. “Well, Kalani could apply for a scholarship grant, get a government guaranteed loan. Since she is, probably, in a low income bracket, she might get free or discounted tuition….” He saw Cat was moving in for the kill. She leaned forward and put her hand on his. There was no warmth coming from her palm, rather the feeling of being held so that he could not escape at the last moment. “You are very kind, Jerry. Now, as an economist, tell me who should pay for all these things that you have just granted?” “There are funds for these expenditures set aside in federal as well as state budgets.” “And where do governments take the money from to pay for these programs, Jerry?” “From taxes, from people who have higher incomes, like you and me. Social solidarity, you know….” Every corporate citizen, all productive individuals, had a sacred duty, he was taught throughout his youth, to help alleviate poverty, level the playing field, and reduce social tensions. It never occurred to him to question this principle. Her hand tightened as if she were restraining her victim before the final blow. “But Jerry, you know very well that the tax revenue doesn’t cover the government’s budgets, by a long shot. So the money you have just distributed must be coming from other places.” The trap shut with a loud clank, Jerry’s foot firmly in the iron jaws. “Do you think it is possible that the government will just print new money for Abe and Kalani? Would you happen to know what the current M3 is?” Now she was just gloating and dancing on his grave. M3 is a statistical measure of money in circulation, and reflects the amount of new currency printed by the federal government. Obviously, she knew more about economics than Jerry suspected. The government stopped publishing this index in 2006, raising the suspicion that its true intention was to conceal the torrent of newly printed money flooding the country. Now, that was a debatable hypothesis, but before Jerry could start building any resistance, she pushed even harder. “Jerry, would you agree that printing money in excess of the economy’s growth causes inflation?” “Heck, this is a much more complicated issue than that! For God’s sake, my boss Schumacher spent his life trying to clarify this relationship!” “That’s where we disagree, Jerry. It is, actually, quite simple. You, the academics just make it look like it is complicated. Imagine that I have a chicken farm that produces two thousand eggs a day. You have a restaurant that needs one thousand.” Jerry had a fleeting thought that this might be a solution to the problem of consolidating their lives. Cat continued, “I charge you a dime for each egg, which is good enough to keep your restaurant profitable, and gives me sufficient revenue to buy chicken feed and keep some profit for myself. My other customers get an egg for a dime as well. We can go with this price forever, no inflation. Now, you’ve become really smart, smart like . . . government. You set up a printing shop in your basement and start printing money. Having extra cash you come to me and buy twelve hundred eggs, but my chickens still lay only two thousand eggs. The rest of my customers are two hundred eggs short. As you well know, demand will drive the price up. Now everybody gets stiffed with expensive eggs. That’s what we call inflation, my friend, and it’s caused by excessive creation of paper money, from thin air. Nothing particularly mysterious about it.” Now she was leaning back with her arms smugly crossed in front of her lovely breasts. No need to hold his hand any more; blood mixed with brain flowing from his cracked head. Jerry lost his temper. He did not have the bloodthirsty rage that was his hallmark reaction to frustration; he would never want to harm his blond opponent. A suffocating sensation of being tied up in face of the outrageous provocation had overcome the indignation of being railroaded into this very simplistic argument. A great body of knowledge, some very sophisticated computer modeling, the work of many bright people had been contradicted by this blundering amateur, a naïve computer geek, someone who just learned a few terms! He remained seated at the table in front of her, though pacing the room was what he would rather do. “Well, your one-dimensional example does reflect inflation but there is so much more to it.” “Thank you, Professor,” she interrupted rather rudely. “I am glad we can agree that printing money causes inflation, one way or another. Going back to our example, what would you care that eggs are twelve cents at present? You can always print more paper. On the other hand, Abe and Kalani have to earn their living. They will pay full price, and it will hurt them badly because they need every cent. Worse, even if they have managed to put a few bucks away, inflation will eat that, too. So that’s what you call assistance? Giving them free money by way of your programs, and then pulling cash discreetly from their pockets?” She was looking at him with cool satisfaction and an arrogance he never guessed she possessed. Jerry was sitting still, his eyes glaring; he could almost hear his teeth gnashing, unable to formulate a reasonable argument. Why is she blaming me? I am not the government. What does it have to do with me? Apparently, she was reading his thoughts because she added, “Of course, you are not to be blamed, Jerry. You just teach your numbskull students who later go on to work in the financial institutions that are robbing us all.” Fanatic! Nihilist! He had to have a piece of her or his brain would blow up. Jerry jumped to his feet, violently pushing his chair away from the table. “Oh, look who is talking! You mean you never benefited from the largesse of this corrupt government, Miss Righteous? Just a contributor and a benefactor?” “Damn right, Jerry!” Cat met him head on. “My parents were immigrants and didn’t have this notion that someone should pay for their way or their children’s education. I never got any grants and never applied for one. That is except for my family loan. You see, my old folks had this funny idea that since their parents educated them for free, they owed the same to their child, a kind of intergenerational loan. Now it’s my obligation to pay for my kids, if I ever have any. And you can be damn sure that I will pay every red cent, with interest.”

 

“One more thing, Jerry. I care very much for people like Kalani or even this bum Abraham, but not for your theoretical notion of the nation. What they need is the freedom to work and the security to keep the fruits of their work. They don’t need to have their money stolen—by inflation, taxation or anything else that your government is good at. And what they certainly do not need is the demoralization of being offered subsidies and free lunches. You know as well as I do that there is no such thing as a free lunch. So why don’t you teach that to your students?”

Fed of Richmond: 01-18-09 Jeffrey Lacker, Financial Conditions and the Economic Outlook

The beginning of a new calendar year is a popular occasion for discussing the outlook for future economic conditions. Recent trends to some extent have dampened enthusiasm for this annual exercise. On the other hand, uncertainty about the economic outlook looms particularly large now, and the economic policy challenges we face are particularly profound, so perhaps the returns to such a discussion are above average this year, even if our zeal for the topic is a bit below average.

The basis for dampened enthusiasm regarding this year’s economic outlook is fairly clear. The U.S. economy has been in a recession for a year now, and the pace of the contraction in economic activity appeared to increase markedly around the end of September. In my remarks today, I will discuss the factors I see affecting the outlook for the U.S. economy and monetary policy. As always, the views I express will be my own, and may not coincide exactly with the views of all of my Federal Reserve System colleagues.1 I will devote special attention to recent financial market conditions, because the financial market turbulence that has been so striking over the last year-and-a-half looms large in any discussion of the economy and economic policy these days.

THE WORLD today!

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1. Barack Obama wins Presidential Election and becomes the 44th President of the United States starting January 20 - Hope for a Change - Yes we can -

130 Million Americans, more than in any other election since 1960, voted for a change and choose Obama, obtaining a historic victory to become the first black President of the United States, congratulating and celebrating world leaders, expressing hope, expectations and confidence in a fresh approach to the world’s challenges. Obama won the popular vote with 52% to 46% of McCain and the decisive electoral vote with 365 to 173 of McCain, requiring the Presidential election 270 electoral votes and the Democratic Party is strengthening its majorities in both Houses of Congress, in the House reaching 257 seats/up 21 seats remaining 178 seats for the Republican Party and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota, falling disapointed Democrats short to obtain a 60-vote majority in the Senate. Obama has to confront as he starts Presidency, arriving in Washington for inauguration on January 20, inherited big problems and America and the world is awaiting his inaugural address, which will capture the special historic moment to unite, create hope and project confidence that the severe problems, like the struggling economy, climate change and foreign conflicts , finally caused through past mistakes, are not unsolvable. The President-elect has nominated Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team have cooperated with President Bush to inject confidence into the market, coordinating the rescue plans for Citigroup and Bank of America, urging Congress to release the second $350 Billion of the $700 Billion bailout fund and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats had shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1,186 Trillion or more, considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by President-elect Obama, who said his economic team is working on an ambitious and significant economic recovery plan, called ‘American Recovery and Reinvestment Bill of 2009′, including permanent middle-class tax cuts, tax cuts for individuals and businesses could reach with about $275  Billion an important proportion of the new stimulus package , and the creation and preservation of 3 Million and up to 4 Million jobs during the next two years through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, costing  up to $550 Billion, totalling tax breaks  and spending about $825 Billion, 5% to 6% of the US gross domestic product, to enter into effect as soon as possible after his inauguration on January 20, 2009.  To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department has asked Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position President Bush said he would be open to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance, pulling Kirk Kerkorian, the billionaire investor out of the company, selling his remaining shares. The President-elect is frustrated that the actual administration refused to discuss the urgently needed second economic stimulus package  and worried as Bush issued a record of so-called ‘midnight regulations’, last minute regulations designed to reward supporters, enraging opponents and undermining his new administration, like coal waste dumping into valleys and streams  and easing the building of coal-fired power stations nearer to national parks, having  his transition team already a list of controversial measures that will take months to undo. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a measured response from Obama and a forcefully demand from President Bush, requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, made it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. NATO foreign ministers urged President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops were withdrawing from Georgia, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict moved from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. The NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, and the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, declared to be prepared to resume a constructive dialogue with Russia, but would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia. Finally Russian troops retreated from Georgia to the two enclaves of Abkhazia and South Ossetia, having Moscow established diplomatic relations with both. US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama Administration to restore relationship. President Bush concentrating on the weakening US economy, addressed the nation to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act/EESA, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The Bush Administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks.  The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans, announcing  the Federal Reserve  it will take a stake of $5 Billion in GMAC  against preferred shares paying a dividend of 8%, lending another $1 Billion to GM to help GMAC to reorganize itself as bank holding company, enabling GMAC to improve its financing offers to vehicle buyers. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies. The Treasury Department disclosed guidelines for Systemically Significant Failing Institutions/SSFI program, it uses to justify emergency aid under the Emergency Economic Stabilization Act/EESA  out of the $700 Billion bailout fund, preventing disruption of financial markets to limit impact on the economy, protecting American jobs, savings and retirement security. The Senate approved release of the remaining $350 Billion of the $700 Billion bailout fund, while the House is expected to introduce with its vote stricter conditions on how to manage the package, considering also recommendations to create a Government owned ‘Bad Bank’ with the sole purpose to buy up the toxic assets from banks, as financial sector is reporting new huge losses requiring Government aid.

http://www.BarackObama.com/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Excessively indebted Government & Overindebted Households & Undercapitalized Banks & Oversized Financial Sector& Underregulated Markets & Speculations & Contracting Economy Wordwide in 2008 & Deepening Global Recession in 2009 - Market Adjustment - New Opportunities - Recovery -

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. President Bush has signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25% and lowering the federal discount rate to 0,5%,  coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, expecting the weakest Christmas shopping season in decades, dropping consumer confidence 23,4 points to an all time low of 38 the same month, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 5,7% in July, increasing to 6,1% in August, remaining steady at 6,1% in September, hitting  6,5% in October and 6,8% in November, climbing claims for unemployment benefits to the highest level in 26 years and jumping jobless rate to a record high of 7,2% in December with a total of 2,6 Million jobs lost in 2008. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Manufacturing activity suffers declines worldwide, dropping in the United States in December to its lowest level in 28 years. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US car sales of Ford, General Motors and Toyota fell more than 31% and of Chrysler 53% in December in comparision with one year earlier, increasing concerns about the prospects for survival of US automakers. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,96 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles. US retail-sales declined another 2,7% in December and dropped 10,8% compared with one year earlier, a record fall since 1992. US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and is expected to slow down even more in the fourth quarter of this year, expecting the IMF a weak 0,5% US gowth for 2008. US growth projections for 2009 have been adjusted to -2,2%, lasting recession at least until the second half of the year. The IMF  lowered its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand. The US one year inflation increased to 5,60% in July (including food and energy), but declined to 4,94% in September, 3,66% in October, 1,07% in November and 0,09% in December. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 16-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling from 2,1% in November to 1,6% in December, where it is expected to average 2,2% in 2009. The European Central Bank/ECB had raised its main interest rate from 4% to 4,25%, alarmed about inflation trends combined with lower growth increasing stagflation fears in the Eurozone, holding the rate steady at 4,25% in September as inflation risks have fallen but not disappeared, insisting that it is crucial to bring Eurozone inflation back within the target of an annual rate of 2%, but in a joint emergency decision with the world’s most important central banks lowered its key rate to 3,75%, also reducing direct lending rates. The financial crisis has changed economic outlook slowing growth worldwide, falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, lowering the European Central Bank its key rate by another half percentage point to 3,25% and with inflation falling and Europe already in recession decided new interest rate cuts to actually 2%. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! BRIC countries Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 5,2% and 7% respectively lower growth rates in 2008, while the somewhat frenetic growth in India and China, both commodity consumers, could slow down temporarely but will continue with estimated 7,5%and 9,9% respectively in 2008, projecting China a growth of probably 8% for 2009. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standards Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday, however deepening losses, declining confidence, additional capital needs, suffering more than other major banks from the financial crisis, force the financial giant to reshape its organization, considering to integrate its brokerage operation Smith Barney into a  joint venture with Morgan Stanley, receiving Citigroup about $2,5 Billion, leaving Morgan Stanley with a controlling 51% stake and the right to purchase all of the new unit over a period of up to 5 years. Citigroup reported for the fourth quarter a loss of $8,29 Billion, the fifth consecutive quarter loss, and for the full year 2008 a loss of 18,72 Billion, putting new pressure on the company to dismantle its money losing operations, isolating them into the new unit called Citi Holdings, keeping  its healthy key businesses in a unit called Citicorp. In a deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. It now appears that after Citigroup and Bank of America also Wells Fargo will need further Government help. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion and reported stronger than expected third quarter earnings of $1,64 Billion. Merrill Lynch revealed for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital, the company encouraged by the Federal Reserve, which officially approved its  merger with Bank of America, agreed to be bought in a rescue take over for about $50 Billion by the bank, making BofA the second largest financial institution in the world. BoFA said it made a fourth quarter loss of $1,79 Billion plus a $15,31 Billion loss at troubled Merrill Lynch, but is still showing a profit of about $4 Billion for 2008, receiving a fresh Government capital injection of $20 Billion, after having obtained already $25 Billion out of the bailout fund, making the Government with a 6% stake the bank’s largest shareholder, absorbing also against an additional $4 Billion stake in preferred stock with a yield of 8% up to $98,2 Billion in losses on illiquid assets of $118 Billion, 75% of those are from Merrill Lynch. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. JPMorgan Chase posted for the second quarter a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. JP Morgan Chase showed a modest profit for the fourth quarter of $702 Million and for the full year of 2008 a net income of $5,6 Billion, 64% lower than in 2007. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw about $150 Billion in December from hedge funds, which had borrowed also heavily money, and as hedge fund outflows increase they will have to sell assets, estimating analists that the hedge fund industry,

BIBLE PROPHECY UPDATE: Israel discovers

UK recession set to be confirmed

id="blog_description">How is the recession changing every day life

The UK’s slide into recession is due to be confirmed on Friday when output figures for the fourth quarter of 2008 are released.

The contraction in Britain’s economy for the final three months of the year follows a 0.6% decline in GDP for the third quarter - a ‘technical’ recession as defined by two successive quarters of negative output.

Experts, including the deputy Governor of the Bank of England Sir John Gieve, have warned that the contraction will be sharp.

Most economists are forecasting that the economy shrank at double the pace seen the previous quarter.

A 1.2% decline in GDP would be the worst performance since the third quarter of 1990, at the height of the last recession, when GDP also fell 1.2%.

However, some experts are warning that the decline could be as much as 1.3%, which would be the biggest fall in more than 28 years.

GDP would last have fallen by more in the second quarter of 1980, when it plunged by 1.8%. The annual rate of output in 2008 is also set to make for grim reading in what will be a far cry from the 3% seen in 2007.

It will also make the Treasury’s initial forecasts for growth of between 2% and 2.5% look woefully optimistic.

This year is predicted to be far worse, with the economy forecast by some to shrink by 2% or even closer to 3% in what could be the biggest decline since the Second World War.

In a week dominated by economic news, inflation figures are also due out on Tuesday and minutes of this month’s Bank of England interest rates meeting will follow on Wednesday.

The reduction in VAT together with the recession’s impact on demand and firms’ pricing power is set to have pulled inflation down again sharply, to 2.6% in December.

The predicted drop in the Consumer Prices Index (CPI) marks an exceptionally steep decline on the 4.1% seen in November and will likely lead to further fears over deflation.

article sourced from The Press Association

JASPER JOTTINGS Week 03 - 2009 Jan 18

JASPER JOTTINGS Week 03 - 2009 Jan 18

Jasper Jottings - The achievement journal of my fellow Jaspers, the alumni of the Manhattan College

http://www.jasperjottings.com/2009/jasperjottings2009W03.html

INDEX

* POSITRACTION: Oldest person dies; Not a Jasper

* JNews: Fluhr, George J. [MC????] 2009 chair of the Upper Delaware Council

* JUpdate: Schmidt, John (MC1972)

* JNews: Johnson, Sr. Elizabeth [MC1970] authors “Quest for the Living God: Mapping Frontiers in the Theology of God”

* JEmail: Email exchange about a 2007 Obit Burns, Lou [MC1938]

* JObit: Thompson, James Leo Sr. [MCatnd]

* JEmail: McEneney, Mike (MC1953) ids Yatto, Robert [MC1969]

* MFound: A yellow card at a Jasper basketball home game.

* JObit: Leone, Ron [1967 EE]

* JUpdate: Carpenito, Christopher (MC1996)

* MNews: MC is going GMAIL

* JObit: Brosnan, Frank C. [MC1951]

* JOY: Levendosky, John [MC????] becomes engaged

* MFound: “Herb Kopf” Wikipedia update

* MObit: Murtha, Sr. Catherine [MCxfac]

* JObit: Marren, John [MC1970]

* JNews: Meehan, Kathleen [MC1980] makes engineering news

* JFound: Guernsey, Nancy “Red” (MC1977 BEME) saves a life

* JObit: Hubbard, John H. (MC1941)

* MFound: MC students sighted doing good works; interesting characterization

* MFound: Riverdale Garden by MC has closed

* JUpdate: Siskowski, Frank (MC1969)

* Comment on JObit: Lou Burns, Class of 1938 by ulf lagerstrom

* ENDNOTE: Enright, Joe (MC1968) –The View From Argyle Heights blog —

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POSITRACTION: Oldest person dies; Not a Jasper

http://www.breitbart.com/article.php?id=D95F59B00&show_article=1

*** begin quote ***

LISBON, Portugal (AP) - A woman who lived to see five of her great-great grandchildren born and was believed to have been the world’s oldest person living, has died in northwest Portugal at the age of 115, officials said Friday.

*** end quote ***

[JR: We most certainly don't know His Plan for us. But one has to see that life spans are lengthening. I guess to give us time to accomplish what we are supposed to get done? For some reason, I find this inspiring. How a society treats the too old, too young, and too poor is it's measure?]

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* Posted on: Sun, Jan 11 2009 12:37 AM

* Updated: Tue, Jan 13 2009 8:20 PM

JNews: Fluhr, George J. [MC????] 2009 chair of the Upper Delaware Council

http://www.wayneindependent.com/news/x497785202/Upper-Delaware-Council-names-2009-officers

Wayne Independent

Sat Jan 10, 2009, 06:57 PM EST

*** begin quote ***

NARROWSBURG, NY - Shohola Township, PA Representative George J. Fluhr was sworn in as the 2009 chairperson of the Upper Delaware Council, Inc. at the UDC’s annual meeting held January 8 in Narrowsburg.

Justice Ronald J. Edwards, magistrate for PA District 22-3-04, administered the oath of office to Fluhr, who succeeds 2008 UDC Chairperson Alan Bowers of Westfall Township, PA.

{Extraneous Deleted}

Fluhr has served as an alternate or representative of Shohola Township on the UDC since the non-profit organization’s inception in 1988. He was the first recipient of the Council’s Distinguished Service Award in 1989, recognizing his role as a founder of the Conference of Upper Delaware Townships, a drafter of the “River Management Plan for the Upper Delaware Scenic and Recreational River”, and a strong advocate for local governments taking the lead in protecting both the river and private property rights.

A retired educator with degrees from Manhattan College and Columbia University, Fluhr was elected as a Shohola Township Supervisor for six consecutive, six-year terms from 1977 to 2008.

He has also served as the township’s official historian since 1972 and as Pike County Historian from 1977-87 and 1996 to the present. Fluhr is a current member of the Shohola-Lackawaxen Multi-municipal Comprehensive Plan Committee, a life member of Shohola Volunteer Fire & Rescue, a founding member of the Shohola Area Lions Club, and author of seven historical books, numerous articles and pamphlets.

Fluhr previously chaired the UDC in 1992 after two terms as vice-chairperson in 1991 and 1997. He is a member of all three of the UDC’s standing committees.

{Extraneous Deleted}

The Upper Delaware Council is a not-for-profit corporation which has operated since 1988 under a Cooperative Agreement partnership with the National Park Service to oversee the coordinated implementation of the River Management Plan for the Upper Delaware Scenic and Recreational River, a component since 1978 of the National Wild and Scenic Rivers System.

Council members are eight NY towns (Hancock, Fremont, Delaware, Cochecton, Tusten, Highland, Lumberland, and Deerpark) and five PA townships (Berlin, Damascus, Lackawaxen, Shohola, and Westfall) that border on the Upper Delaware River, as well as the State of New York and the Commonwealth of Pennsylvania. The Wayne County, PA townships of Buckingham and Manchester remain eligible to join to complete the full roster of municipalities. The Delaware River Basin Commission is a non-voting member. The National Park Service Upper Delaware Scenic and Recreational River is a partner.

{Extraneous Deleted}

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Fluhr, George J. [MC????]

# # # # #

* Posted on: Sun, Jan 11 2009 1:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JUpdate: Schmidt, John (MC1972)

Schmidt, John (MC1972)

Professional ExperienceDirector, QA/ OperationsNASDAQ1979 - 2006Managed QA and Operations -responsible for managing the testing of all software products and implementation of all systems changes in the Production environment; Managed customer testing group and conducted large scale industry tests and user tests.EducationPace University-New York Financial Management, MBA, 1978Manhattan College Electrical Engineering, BEE, 1972

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REPORTING LIVE FROM THE PLAXO NEWS DESK

IN THE VIRTUAL JASPER JOTTINGS NEWSROOM … 20090111

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* Posted on: Sun, Jan 11 2009 3:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JNews: Johnson, Sr. Elizabeth [MC1970] authors

“Quest for the Living God: Mapping Frontiers in the Theology of God”

http://www.dailyrecord.com/article/20090111/LIFE/901110368/1005/NEWS01

dailyrecord.com

January 11, 2009

Her search for God touches politics, ecology

By Ellen S. Wilkowe

Daily Record

*** begin quote ***

Historical and current events continue to stoke a renaissance in the understanding of God in different parts of the church and around the world.

The book “Quest for the Living God: Mapping Frontiers in the Theology of God” (Continuum International Publishing Group, $24.95) explores how people of faith have adapted and applied their relationships with God to such events.

“I teach courses on this, and it was too good to be kept a secret from the people at large,” author Elizabeth Ann Johnson said in a phone interview. “It nourishes the faith of people in the church.”

A distinguished professor of theology at Fordham University and current president of the American Theology Society — to name just a few credits in a long line — Johnson will share insights into her book Wednesday at 7:30 p.m. at Drew University’s Seminary Hall in Madison.

Presented by the Northern New Jersey chapter of Voice of the Faithful, Johnson’s appearance keeps with one of the group’s missions of promoting discussions about changes in the church. The 300-member group formed in 2002 as a result of the sex abuse scandal in the Boston Diocese.

{Extraneous Deleted}

Born and raised in Brooklyn, N.Y., Johnson, the eldest of seven siblings, joined the religious order of the Sisters of Saint Joseph, headquartered in Brentwood, N.Y.

“As a little girl I wanted to be a tugboat driver but was told girls can’t do that,” she said. “I joined the convent and became an elementary school teacher, which was the route of most sisters.”

Energized by the Second Vatican Council, she fell in love with theology and pursued a master’s degree in religion from Manhattan College and a Ph.D. in theology from Catholic University of America.

A former president of the Catholic Theological Society of America, Johnson’s main areas of teaching and writing focus on God, Jesus Christ, Mary and the saints, science and religion, the problem of suffering, ecological ethics, and issues related to justice for women.

Her decorated career includes Fordham University’s Teaching Award and the John Courtney Murray Award of the Catholic Theological Society of America.

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Johnson, Sr. Elizabeth [MC????]

# - # - #

Dear John,

I believe that Sister received her Masters in 1970.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

* Posted on: Sun, Jan 11 2009 5:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JEmail: Email exchange about a 2007 Obit Burns, Lou [MC1938]

*** begin quote ***

Author : ulf lagerstrom (IP: 201.53.106.191 , c9356abf.virtua.com.br)

I am a track writer and am writing a mini-bio on Lou Burns (as well as his team mate Howie Borck, both outstanding half milers).

Obviously Lou was a fine runner even as a teenager, at Bryant HS. Did he leave any clippings or notes from those days ?

Best regards

Ulf Lm

(ATFS/Brazil)

*** end quote ***

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To: Ulf

Sent: Sunday, January 11, 2009 1:08 PM

Subject: Thank you for your comment - re: Lou Burns

>Submitted on 2009/01/11 at 7:56am

>

>I am a track writer and am writing a mini-bio on Lou Burns

I’m unaware of Lou Burns’ running. But perhaps one of my fellow alums will know more.

Due to spam, I’m waiting for your response to this message before “approving” the comment. Have to have some evidence of identity. It’s amazing what spammers do to get the credibility of a blog. It enables them to “sneak in” elsewhere.

Thanks, sorry to be a hold up,

fjohn

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On Jan 11, 2009, at 11:11 AM, Ulf Lagerstrom wrote:

Your message rec´d ok.

Lou Burns was the intercollegiate (IC4A) champion at 880 yds in 1936. In 1937 he took the mile final in- and outdoors.

His Jasper team mate Howard Borck was also a standout in those years. However, none of them qualified for the 1936 Olympics.

Would it be possible for you to pass on my original message to his family ?

Regards

Ulf

# - # - #

From: “reinke, fjohn68″

Date: January 11, 2009 11:31:46 AM EST

To: Ulf Lagerstrom

Subject: Re: Thank you for your comment - re: Lou Burns

Ulf: I received that update via the College and don’t have the family’s address. That was back in 2007. I’ve bcced my contacts at the College for his son’s email address. Perhaps they would forward it along to the family and allow them to decide if they wish to participate in your article. (I would, but my family member hasn’t passed. They may prefer to NOT open old wounds.) All I can do is ask. I’ll also fjohn

Tom, Grace, and Mike: Ulf has a valid email address, and an apparently valid request. Can you pass this on to Jasper Lou’s family for their consideration? Thanks, fjohn68

# - # - #

From: “Ulf Lagerstrom”

Date: January 11, 2009 12:34:06 PM EST

To: “reinke, fjohn68″

Subject: Re: Thank you for your comment - re: Lou Burns

Thanks for your help.

Ulf

PS the coach at the time was Pete Waters. He took Manhattan to (collegiate) t & f leadership in the 1930´s.

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[JR: Hope this works out. Any good stories about our fellow Jaspers I find inspiring.]

# # # # #

* Posted on: Sun, Jan 11 2009 7:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JObit: Thompson, James Leo Sr. [MCatnd]

http://www.legacy.com/StarNewsOnline/Obituaries.asp?Page=LifeStory&PersonId=122750681

JAMES LEO THOMPSON, SR.

James Leo Thompson, Sr., 84, died Saturday, January 10, 2009, at his home in Wilmington, North Carolina.

Mr. Thompson was born and raised in Staten Island, New York. In his youth he trained and became a champion diver, performing at various pools in Staten Island. In addition he played baseball with the Travelers Team. After graduating from St. Peters High School, he Went To Manhattan College For One Year Before Enlisting In The Navy. He served until the end of WWII in the Seabees, his duty including both the European and Pacific arenas.

Jim worked for over 40 years in the petroleum industry, managing terminals for Hess Oil in New Jersey and as East Coast District Manager for Apex Oil Company in Baltimore, MD, until his retirement in 1989.

While living in Baltimore his great love was sailing his boat on the Chesapeake Bay.

After retiring to Wilmington, NC, Jim was able to pursue his interest in golf which he so enjoyed playing. Some of his best hours on the golf course were when he could play with his son Jim, his grandsons Nate, Zach and Chris, his grandson-in-law Jamie and Jim’s good friend Donald Shaw. He loved to spend time at “his” beach in Wrightsville, and he also enjoyed taking care of his lawn, reading, watching sports, and particularly breakfasting with his wife Vicki as they watched the birds from their sunroom.

Jim’s surviving family include his wife Vicki; his son Jim Thompson (Roxanne) of Wilmington, and his daughters Eileen Kuehn (Frank) of Easton, MD, Sally Fortman (Mark) of Crofton, MD, and Amy Lundberg (Dave) of Owings Mills, MD, and his former wife and their mother Marion Thompson of Annapolis; his stepdaughter Lisa Cuevas (Ray) of San Diego, CA. “Pop” will be lovingly remembered by his grandchildren: Erin, Nathan, Lauren and Zachary of Wilmington, Michael, Matt, Chris, Kyle, Mariah, Megan and Joshua of Maryland and his great-grandson Luke of Wilmington and Jordan, Victoria and Gregory of San Diego. In addition he is also survived by his sister Mary Romanelli (Charlie) of Staten Island, sister-in-law Shanda Mahurin (Randy) of Spring Hill and numerous cousins, nieces and nephews.

A time of visitation for family and friends will be from 6 to 8 pm Tuesday at Andrews Mortuary Valley Chapel, 4108 S. College Road, Wilmington.

Mass of Christian Burial will be 11 am Wednesday, January 14, 2009 at St. Therese Catholic Church, Wrightsville Beach.

Condolences may be sent to the family at www.andrewsmortuary.com

A Valley Chapel Service

Online condolences at StarNewsOnline.com

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Thompson, James Leo Sr. [MCatnd]

[JR: Attendees recognized on the theory "if it's important enough for someone to mention in an obit, then we can spare a few prayers".]

Guestbook: http://tinyurl.com/7l3lc8

# - # - #

From: Tom McGoey (MC1969)

Date: January 14, 2009 11:26:58 AM EST

To: reinkefj

Subject: Check out this page on SILive.com

Dear Jasper Jottings:

Tom McGoey thought you would be interested in this item from SILive.com

http://www.silive.com/obituaries/advance/index.ssf?/base/news/1231852511182390.xml&coll=1

Tom McGoey

Matriculation cut short by WW II.

[JR: Yes, I always try to report the "attendees", especially from the WW2 and Korean era. For two reasons. One, they may have gone into the service due to what they learned becomeing Jaspers. Two, if someone wrote the obit mentioning that MC time, then the deceased must have been proud of it. If they were, so am I of them. Third, (I lied) some of the attnedees have inspiring life histories with admirable accomplishments and long marriages. In short, I'm pretty flexible in these cases as to what is a "Jasper" and what we Jaspers should be reading for "inspiration". imho, open to feedback.]

# # # # #

* Posted on: Mon, Jan 12 2009 7:19 AM

* Updated: Wed, Jan 14 2009 2:20 PM

JEmail: McEneney, Mike (MC1953) ids Yatto, Robert [MC1969]

From: McEneney, Mike (MC1953)

Date: January 12, 2009 12:29:39 AM EST

To: “Jasperfjohn Reinke”

Subject: Robert P. Yatto, ‘69

>JFound: Yatto, Robert [MC1969] is a gastroenterologist on talk radio today

Dear John,

I believe that The Doctor is a member of the Class of 1969.

Mike

[JR: Thanks, Mike. Much appreciated. ]

# # # # #

* Posted on: Mon, Jan 12 2009 10:37 AM

* Updated: Tue, Jan 13 2009 8:20 PM

MFound: A yellow card at a Jasper basketball home game.

http://manhattancollegebasketball.yuku.com/topic/1172

* Manhattan College Basketball > General Discussion > Yellow Card

*** begin quote ***

How many people can say they got a yellow card at a Jasper basketball home game. Well I can clim 2 of them, one last year and one today, actually ckjasper also got a yellow card today as well. I can say that in close to 20 years of going to Jasper GAmes I have never received a yellow card not even a warning, the closest thing I ever got at a game to a yellow card was perhaps the famous look from Bro Scanlon. Until today I did not realize how sterile and bland things have gotten at Draddy, if you are not sitting with legs crossed as quiet as an alter boy at the game you are in violation!!! I am a little bit shocked and disappointed that this is what Draddy Gym has turned into.

*** and ***

i never have made a comment on this board but read it all the time. i know exactly what he is saying. i showed up to all the basketball games when at school and usually make a few loud comments usually during foul shots. i never curse but this year one of the first games of the year i showed up after class and yelled something out like morgan state thats a great academic school or something and brother scalan came up to me at half time and told me im pushing the limit and need to knock it off. like give me a break. in high school we had a cheering section and i went to a catholic school and we went nuts no one complained. this school its like we are 5 years old and will get detention for saying something to another team. in my opinion schools a joke. i play a sport here nd when i travel i hear some crazy things being said and not one word gets said to those players.

*** end quote ***

[JR: Interesting. Anyone have any details? Does Brother President actually have a yellow card? Fascinating!]

[JR: Upon reflection, can he revoke a diploma for bad conduct at a game? LOL]

# # # # #

* Posted on: Mon, Jan 12 2009 12:37 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JObit: Leone, Ron [1967 EE]

Dear John, FYI Mike

—– Original Message —–

From: “Grace Feeney”

To: “‘Mike McEneney’”

Sent: Monday, January 12, 2009 9:29 AM

Subject: FW: Ron Leone

—–Original Message—–

From: Jack Tuohy

Sent: Sunday, January 11, 2009 1:48 PM

To: grace feeney

Subject: Ron Leone

Grace

I received an error message on my first attempt to send this. I am resending just in case the first try did not go through.

Jack Tuohy

# - # - #

Grace

I spoke with you on Friday about Ron Leone (1967 EE). Ron was a volunteer at Manhattan and the way he lived his life is a credit to the education and principles that we learned at Manhattan. I was a classmate of Ron’s in High School as well as at Manhattan. You could not find a better man.

As I promised, I am forwarding information on the wake and funeral.

The link to the funeral home website is

http://martinfh.com/

Martin Funeral Home 1761 Rt. 31 Clinton, NJ 08809 908-735-7180

I cut and pasted some pertinent information from the site below.

Visiting Hours will be on Monday, January 12th from 2:00 to 4:00 & from 6:00 to 9:00 pm at the funeral home. At 8:00 pm there will be a “Time of Sharing”.

There will be a Funeral Mass on Tuesday, January 13th at 10:00 am at the Immaculate Conception RC Church, 316 Old Allerton Road, Annandale, NJ 08801 - #908-735-7180.

Note: Family and Friends are asked to meet directly at church Tuesday morning for the Funeral Mass.

Interment will follow at the Immaculate Conception Cemetery on the Church grounds.

In lieu of flowers, memorial donations may be in memory of Ronald A. Leone to:

Bergen Catholic High School, 1040 Oradell Ave, Oradell, NJ 07649 or to

Manhattan College, 4513 Manhattan College Parkway, Riverdale, NY 10471

# - # - #

[JR: On a personal note, Ron was Jasper Jottings subscriber from 2002. Makes me sad. I can't afford to lose any of my readers. Especially one who didn't complain. Good man; till we meet again. (I hope for my sake.)]

Leone, Ron [1967 EE]

# - # - #

* Posted on: Mon, Jan 12 2009 3:45 PM

* Updated: Tue, Jan 13 2009 8:20 PM

JUpdate: Carpenito, Christopher (MC1996)

Carpenito, Christopher (MC1996)

Hometown: South Brooklyn, NY

Relationship: Married

Activities: Wine Collecting, Target Shooting

Favorite Music: Various

Favorite TV Shows: Scrubs, 24, House M.d., The Simpsons

Favorite Movies: Saving Private Ryan, Juno, Gladiator, Any Abbott and Costello movie, any Marx Brothers Movie

College:

* Manhattan College ‘96

* Accounting, Computer Info Systems

High School:

* Franklin K.Lane High School ‘91

Employer:

Hunter Roberts Construction

Senior Vice President of Finance

April 2008 - Present

Manhattan, NY

Turner Construction

Vice President of Finance

January 2001 - March 2008

Manhattan, NY

Arthur Andersen

Manager

September 1996 - January 2001

Manhattan, NY

Construction And Real Estate Audit and Consulting

# # # # #

* Posted on: Mon, Jan 12 2009 4:42 PM

* Updated: Tue, Jan 13 2009 8:20 PM

MNews: MC is going GMAIL

https://blog.manhattan.edu/computerservices/2009/01/02/jaspernet-email-20powered-by-google/

JasperNet Email 2.0……..Powered by Google!

Financial Adviser

An issue that plagues many retirees is how to manage retirement income in the face of the increasing cost of living. Even with moderate inflation, costs of living tend to increase over time. This can reduce the retirement income retirees can obtain from fixed income investments, even while they must meet higher expenses. Where can you find a source of retirement income that can keep of with inflation, along with your expenses?

Our suggestion: consider putting some of your money into a portfolio of large capitalization dividend-paying stocks as an income generation alternative. This retirement investment could help to provide you with a retirement income that keeps pace with the rising costs of living. For the 30 years ending 12/31/04, the stream of dividends from an investment in a basket of stocks representing the S&P 500 index generated a growing stream of income. During that same period, interest rates from CDs fell 7.42% to 1.85% (the S&P 500 is an unmanaged group of securities considered to be representative of the stock market in general; it is not possible to invest directly in an index).

Data 1/1/75 through 12/31/04. Dividends based on a $10,000 investment 1/1/75 in a basket of stocks representing the S&P500 from American Funds Distributors. Interest rates from Federal Reserve year end rate on 6 month CDs. You cannot invest directly in an index. Past performance is not a guarantee of future results and an analysis of a different period may have revealed different results.

Although publicly traded stock can help you to manage inflationary risks, the dividends that these stocks pay out are highly dependant upon the overall profitability of the issuing company. Therefore, you will want to strongly consider the dividend payment history of the company prior to making such a retirement investment.

A few additional things should be considered about stocks and CDs. First publicly-traded stocks tend to be suited for investors that are seeking asset appreciation and are willing to take on the additional investment risk. On the other hand, CD’s are suited for investors that are concerned about preserving their principal investment and are adverse to market risk. With this in mind, it should be remembered that CDs are FDIC insured while publicly-traded stocks are not. The values of publicly-traded stocks fluctuate in value and may result in either a gain or loss upon sale.

The retirement income from these investments is also subject to differing income tax rules. Stock dividends are generally subject to federal income tax of 15%, while CD interest is taxed as ordinary federal income tax rates, which can range anywhere from 10-35%. CDs may have an early withdrawal penalty if money is taken prior to maturity. On the other hand, the stock of most largely capitalized companies can typically be purchased and sold at any time when the market is open.

By Bob I. Richards

Reasons to Avoid Mutual Funds

Things we know

Bill Gross the founder of PIMCO, the company that manages the largest bond fund in the world always says that there are things we know and things we don’t know.

By utilizing this approach we know these following things. We know that Obama is going to introduce a heavy infrastructure program. We know that Oil is going to rebound due to global demand when this global recession ends. It is at a 5 year low. We know that the financial banks are government backed and they have pledged to do everything in their power to uphold the financial system. We know that the huge flight to Treasuries has created a bubble to the lowest Treasury yields in over 50 years!

For the infrastructure - (UYM) basic materials double long ETF

For oil and the saudis - (DXO) oil index double long ETF

For the banks and Paulson - (XLF) or (UYG) or (FAS) depending your risk tolerance

For the massive treasuries bubble (TBT) preferably, or even (PST)

These kind of opportunities don’t come along that often. They have tremondous potential. Patience is a must and careful monitoring should be used.  When and if using leveraged ETFs limits or stop/loss or trailing stop/loss orders are essential.

Stocks open almost unchanged - Business World


A gene mutation that almost guarantees the development of heart disease is carried by 60m people, researchers say.Around 4% people from the Indian subcontinent have the mutation, which increases the risk of heart disease seven-fold, Nature Genetics reports.It is rare to find a gene which has such a big effect and is so common, the international team of scientists said.Experts said it could lead to a screening test but it was not yet clear if it would aid treatment decisions.Heart disease is a massive global killer, and it is predicted that by 2010 India’s population will suffer approximately 60% of the world’s heart disease."It provides good grounds for screening people of South Asian origin with unexplained heart failure and screening their families if positive"Professor Peter Weissberg, British Heart FoundationThe researchers first identified the mutation in the heart protein gene MYBPC3 five years ago in two Indian families with cardiomyopathy - a disease causing deterioration of the heart muscle.In the latest study they looked for the mutation in 800 people with heart disease and 700 controls.They found the mutation was common - carried by 1% of the world’s population.And the increased risk of heart disease - seven times that of people without the mutation - is so high is almost guarantees the development of heart problems.Abnormal proteinIn the test tube, cells with the mutation - where 25 letters of genetic code are missing - the MYBPC3 protein is abnormal and “messes up” the structure of the heart muscle.The researchers said in younger people the body seemed to have an effective mechanism for breaking down and removing the mutated protein.But with age the mechanism stops working efficiently which is why heart disease in people carrying the gene develops in middle age.Chris Tyler-Smith, a senior investigator at The Wellcome Trust Sanger Institute, Hinxton, UK, and one of the study authors said the mutation probably arose around 30,000 years ago and has been able to spread because its effects usually develop only after people have had their children.”What we expect to find are common mutations with very small effects or rare mutations with big effects.”The combination of big effects and high frequency is surprising.”He said “in principle” it would be extremely easy to test people at a young age for the gene but at the moment all that doctors could do would be to offer healthy lifestyle advice.”In the longer term I think trying to improve the efficiency of the protein degradation mechanism might be a novel approach for treatment - all you would have to do is postpone the effects for a few decades.”Professor Peter Weissberg, medical director at the British Heart Foundation, said the study underpins the strong genetic nature of heart disease.”It provides good grounds for screening people of South Asian origin with unexplained heart failure and screening their families if positive.”"However, there is no evidence yet that early detection will lead to improved outcome since we have no idea if the outlook for this group can be modified by conventional heart failure treatments.This article is from the BBC News website. © British Broadcasting Corporation
Source: news.bbc.co.uk

Shackleton descendants reach South Pole
Three descendants of Sir Ernest Shackleton and his team have completed a trek to the South Pole.Lt Col Henry Worsley, from Hereford, Will Gow, from Kent, and Henry Adams, from Suffolk, arrived on Sunday.They took 66 days to complete Shackleton’s route, 100 years after he had to abandon it.Speaking from Antarctica, Mr Gow said: “It’s been a very long journey, 66 days over 900 miles pulling our sledges… we’re absolutely ecstatic.”Shackleton set out on his Nimrod expedition in October 1908, hoping to become the first person to reach the South Pole.But icy blizzards and dwindling rations forced him to turn back 97 miles from his goal on 9 January 1909.’Explorer’s spirit’The trio of descendants celebrated Christmas Day as their forebears did 100 years before, with cigars and a spoonful of creme de mentheDuring their Matrix Shackleton Centenary Expedition, they hauled 300lb (136kg) sledges for up to 10 hours a day in temperatures that dropped as low as -52C.Lt Col Worsley, 47, is the expedition leader and a descendant of Shackleton’s skipper Frank Worsley.Mr Gow, 35, a City worker, from Ashford, is related to Shackleton by marriage.Mr Adams, 33, a shipping lawyer from Snape, near Woodbridge, is a great-grandson of Jameson Boyd-Adams, Shackleton’s number two on the unsuccessful expedition.Andrew Ledger, 23, from Derbyshire, Tim Fright, 24, from West Sussex and David Cornell, 38, from Hampshire, joined the expedition for the last 97 miles to the South Pole.The expedition was being used to launch a 10m Shackleton Foundation, which will fund projects that capture the “explorer’s spirit” and hunger for “calculated risk”This article is from the BBC News website. © British Broadcasting Corporation
Source: news.bbc.co.uk

Stem cell eye surgery to be tried
A new surgical treatment offering hope to patients with corneal blindness is to be trialled in Scotland. Doctors in Edinburgh and Glasgow will work together using an innovative technique involving adult stem cells.About 20 patients will take part in the initial tests, using cells cultivated before being transplanted onto the surface of the cornea.Millions of people worldwide suffer from corneal blindness, 80% of whom are elderly.Stem cells are a source of great scientific interest as a result of their ability to renew and multiply indefinitely, potentially regenerating entire organs from only a few cells."On a larger scale, it’s a significant problem"Prof Bal DhillonPrincess Alexandra Eye PavilionUnlike the more controversial embryonic stem cell research, the technique takes stem cells from dead adult donors.The trial is being led by Prof Bal Dhillon at the Princess Alexandra Eye Pavilion in Edinburgh, working with the Gartnavel General Hospital in Glasgow.Prof Dhillon said: “This study is the first of its kind anywhere in the world and it is exciting to be involved in such groundbreaking work.”I probably see two or three new cases of corneal disease every month. On a larger scale, it’s a significant problem.”The trial will hope to emulate the success of a similar study in the US in September last year. In trials at the University of Pennsylvania, subjects with inherited blindness experienced dramatic improvements in vision after a corrective gene was injected into the eyeThis article is from the BBC News website. © British Broadcasting Corporation
Source: news.bbc.co.uk


Share prices barely moved at Monday’s open. The benchmark Philippine Stock Exchange index was up marginally by 0.11% or 2.28 points to 1,952.41, while the all shares index added 0.03% or 0.49 points to 1,239.26. As of 9:46 a.m., turnover was only at
Source: www.bworld.com.ph

NSE laments undercapitalisation of stockbroking firms - Vanguard
The Nigerian Stock Exchange (NSE) has expressed concern over the preparedness of stockbroking firms in the nation s capital market to meet the demands of their clients in 2009 and beyond, declaring that only 49 stockbroking firms have capital base
Source: www.vanguardngr.com

End of post.

Advice for a small investor

Glossary asks:

With limited funds at ones disposal, say in the 10K to 40K range, what are the arguments for and against buying outright low price stocks to accumulate more shares than would be possible with higher priced stocks. Or, alternately, of using call or put options to purchase stocks of any share price?

To which the ‘common wisdom’ response was:

Whether you are a “big investor” or a “small investor” doesn’t matter as much as you think, IMHO. Nobody likes to lose their money. Everybody needs the same general principles when it comes to investing.

Figure out your risk tolerance. The market is volatile. If your investment drops 10% will you be up nights puking your guts out into the porcelin throne?

Never put all your eggs in one basket. This means only 2%-4% in any one investment AND make your individual investments in different types of investments such as large cap value and medium cap growth.

But, you know my take on this by now: if you diversify your investments, then expect to get ‘market returns’ or less …

LESS to the extent of fees and the losses that you can expect from mis-timing the market … which the Dalbar Study shows will be often and the cost of these mistakes will be very, very, expensive:

Fees: Of these, the fees are the reason why even the most disciplined investors (even 75% of Mutual Funds) perform worse than the market.

Market Timing: But, it is the second - the market timing risks - that mostly affect smaller/individual investors: it’s the reason why the Dalbar Study found that during a long period where the S&P 500 grew at an average rate of 11.9% ’smaller investors’ only managed a paltry 3.9% return … they would have been better off in CD’s!

So, here is my suggestion:

A. If you want ‘passive investments’ and are satisfied with market returns (circa 9% AFTER inflation … current market aside) then plonk your money in a low-cost S&P 500 Index Fund and let it sit until you retire … add to this investment as much and as often as you can.

OR

B. If you want (need?) ‘above average’ market returns - and, are prepared to ‘gamble while you learn’ (the price of an investment education) - then pick an investment that you can study up on and DO NOT diversify into that asset class; instead, put all of your eggs into no more than 4 or 5 baskets (i.e. stocks and/or real-estate holdings) … but, recognize that you ARE gambling-while-learning, so that you can get the higher returns that you crave.

OR

C. If B. is not for you - or it simply doesn’t work out for you when you are still only ‘gambling’ with small amounts, then it’s not for you at all! Quit while you are not too far behind and then refer to A.

good job, people at GIC

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Skip to search - Accesskey = s

Reuters - Tuesday, January 20 http://sg.news.yahoo.com/rtrs/20090119/tap-temasek-gic-c3bb44c.html

SINGAPORE, Jan 19 - Singapore’s sovereign wealth funds, the Government of Singapore Investment Corp and Temasek Holdings [TEM.UL], outperformed global equity markets in 2008, the city-state’s finance minister said on Monday

“Their overall value has fallen by less than the decline in global equity markets, as they maintain diversified portfolios and had taken precautionary actions early in the crisis to reduce their exposures to the equity markets,” Tharman Shanmugaratnam said in a reply to a parliamentary question, referring to a 42 percent fall in 2008 in the MSCI World equities index.

 

Nice to know this, even as we mull over spending our reserves (at last).

I’ll just like to commend the people working in these institutions. They did a great job ! I can imagine it’s tough in this sort of world today, and Singapore being a small ship in a vast ocean, but they did it. The pressure must be great, the hours i’m sure are punishing.

 To each one of you, especially the ones who do all the tedious leg work, making everything gets done, Thank you . We do appreciate you.

Radio commentary, December 11, 2008

Investing in Bear Markets

If you have been a prudent investor, If not more you’re your net worth has been downgraded by at least 25% over last one year. This bear rally has brought down most of the notional profits in your equity portfolio to a heart breaking level. If you have been investing over five years and have been recording your investments flows you would notice that markets have not deprived you. It only been that the cream of unreasonable un-booked profits whipped away in this bear run, bringing you back to fair return and valuations.

History has been proof that bear markets sustain for a period of one and half to two years. If history were to repeat itself, it would mean, we are at the slag end of the present bear run. Bear just don’t drop dead at one shot they hibernate. In bear phases markets do not drop at one go; instead you see a 10-20% decline followed by a strong short rally. Next few rallies might not be the start of bulls. There would still emotions and negative sentiments backing it. Here is where you can put your money in till the bull chases out the bear. This season, global recession has biggest worry. We might only get lower single digit growth rates next year. Markets would also reflect the same.

Last quarter we advised you on Bond funds, if you have followed our advice you would have ended up making about 12-13% on your investments by now. Now we advise you to stay invested in your existing bond funds for next three quarters and take no further exposure to it. Now is the time to fall back on equity funds. True to Equity investments it would not yield you returns in short term.

1. Dividend Yield Funds.

These schemes focus on high dividend yielding stocks. These companies are generally sound large business houses, having strong cash generating ability. These companies have already salvaged on their capital inputs or have cut down on their capital or expansion expenditures now, in view of the slow down. They have a record of rewarding shareholders with consistent dividend declarations. Stocks of such companies generally have low betas i.e. the stocks of this nature rise and fall less than the market. This fund should thus be less volatile.

3.  Arbitrage Funds.

These funds try to generate returns out of the arbitrage opportunities that arise out of pricing mismatch of stocks in the equity and derivative (Futures and Options) segment of the stock market. This can be safely termed as the income component of the equity markets. They are an ideal way to get a decent return with moderate amount of risk. You can enter these funds anytime and not worry where the market is headed.  The main advantage of these is the tax treatment. These funds get the same treatment as that of equity funds. They attract a lower short-term capital gain tax of 15 per cent ( FY 08-09) and become completely tax free if you hold them for a period exceeding one year.

GMR 2 Week

Vic Lespinasse Market Report - Closing Grain Commentary 1/9

Prices finished very strongly in all pits except corn, which ended higher but well off its best levels of the day. Watch the weekend weather in South America over the weekend, especially Argentina, trading Sunday night, which will reflect this weather, Monday morning’s forecast for South America, the direction of crude oil and the $ Monday am and, of course, the big USDA reports Monday am, all of which will combine to determine our opening course next week.

Vic Lespinasse Market Report - Closing Grain Commentary 1/8

The market retreated sharply from its highs late in the session to end mixed but on a relatively weak note in most pits. Corn and bean oil were the weakest pits, partly due to lower crude oil quotes.

Watch overnight trading, the direction of crude oil and the $ in the am as well as the latest South American weather outlook for opening ideas Friday. Expect a lot of evening up tomorrow ahead of the big USDA reports Monday am which could move prices sharply that day if there are any surprises.

Vic Lespinasse Market Report - Closing Grain Commentary 1/7

We sold off to new lows late in the session to end very poorly across the floor as more longs liquidated and new shorts came into the market. The ongoing collapse in crude oil encouraged aggressive spec selling in all the grains.

Watch overnight trading, the direction of crude oil and the $ in the am as well as the latest South American weather outlook for opening ideas Thursday. Weekly export sales will be out in the am with the trade looking for (000 omitted) 250-450 wheat, 325-500 corn, 375-550 beans, 40-100 meal and 0-10 oil.

Vic Lespinasse Market Report - Closing Grain Commentary 1/6

Radio commentary, November 13, 2008

Getting to Know King

But the truth is, I didn’t completely read any of these books. I read large chunks and portions, but I spent the most time reviewing the beginning and end of King’s life, flipping to the index even. Of course, the important stuff happened in the middle, and while we may think that we know those parts, these books are all filled with their share of surprising details obviously from a variety of perspectives.

Learning certain truths about the life King led only made me respect him more. Actually born January 15, 1929, as a National Holiday we celebrate his date of birth on the third Monday in January. In honor of this day, allow me to share a Snopes.com link that disputes “Four Things You Didn’t Know About Martin Luther King” (2003):

And do your own research from time to time. Happy reading, y’all!

4Q Earnings Could Indicate Economy

NEW YORK (AP) — As hundreds of fourth-quarter earnings reports stream in this week, Wall Street’s reaction will turn on companies’ answers to one question: When will the recession end?

According to the AP.

“Not soon” is what the market heard last week. Big banks posted ugly numbers and told investors they were still struggling with rickety balance sheets. That revived fears that the economic recovery that some analysts have forecast for the second half of the year won’t materialize.

The market has largely written off the first half of 2009. Now, stocks could take a beating if companies lead investors to believe a recovery will be pushed back to 2010.

Of the 42 companies in the Standard & Poor’s 500 index that have reported results for the October-December quarter, 25 have fallen short of Wall Street’s already reduced forecasts, according to S&P.

But some analysts believe that investors, who buy and sell based on how they think the economy will be faring six to nine months from now, will eventually stop reacting negatively to disappointing data.

“There will be more bad economic news. I don’t think we’re out of the woods on layoffs and earnings announcements but at some point it’s all factored in,” said John Dorfman, chairman of Thunderstorm Capital LLC in Boston.

He said the 50 percent drop in the S&P 500 index from its October 2007 high to an 11-year low on Nov. 20 gives him hope that the market will start to look past bad news and find early signs the economy is stabilizing.

“The sentiment is now so gloomy,” he said. “It’s the natural turning of the economic cycle. It’s mysterious when it’s going down. You think ‘How can it ever turn?’ But it always does.”

This week, the range of industries issuing reports and 2009 outlooks is broad, from technology companies to airlines to regional banks. Google Inc., United Airways parent UAL Corp. and US Bancorp all plan to release results. Big names including General Electric Co., Microsoft Corp. and Johnson & Johnson are also due and, more important, so are their comments about the state of their businesses.

It’s a shortened week with markets closed Monday for Martin Luther King Jr. Day. And Tuesday some of investors’ attention will be diverted to Washington with the inauguration of President-elect Barack Obama.

The new administration could give stocks a bounce, market watchers say, as Obama prepares to dispense the second half of the government’s $700 billion financial bailout fund and awaits passage of an $825 billion stimulus package that is fast making its way through Congress.

“I think the inauguration will give people a little more confidence,” said Harry Clark, president and chief executive at Clark Capital Management in Philadelphia.

Wall Street last week saw a continuation of the selling that began on Jan. 5, a pullback fed by investors’ renewed realization that the economy and corporate profits remain very weak. Despite an uptick Thursday and Friday, the S&P 500 index lost 4.5 percent over the week.

Investors could get a break this week from the drubbing because major financial companies like Citigroup Inc. and Bank of America Corp. have already delivered the bad news. Citigroup on Friday said it lost $8.29 billion in the fourth quarter — its fifth straight deficit — and that it was splitting the company in two to help restore profits.

And investors will look at overseas markets, which are open Monday. The British government said Sunday it was pumping another more money into its banking system to try to revive lending.

Clark thinks the news will continue to be grim but that a recovery will come sooner than most investors expect because the economy is already 13 months into a recession. Even the toughest recessions don’t usually last longer than 16 months.

Clark cautioned that there is still risk of a shock like the failure of another big financial firm, like the fall of Lehman Brothers Holdings Inc. in September. That could upend the relative orderliness seen in trading since late November.

But he also said earnings reports could offer a reminder that not all industries are suffering as much as banks and that a recovery is possible. Industries like health care and consumer staples are holding up well compared with banks.

With little in the way of economic data due during the week — a government report on housing construction is due Thursday — investors will focus on earnings.

“There will be some good nuggets,” Clark said, referring to earnings reports. “The market needs a catalyst.”

“We’re in the bottoming process,” he said, predicting the gyrations in stocks will continue as investors examine the economy.

January MRP Rural Roundup

Tomorrow we see democracy in action with the peaceful and celebratory changeover in power from the Bush administration to the Obama team. Whatever your political persuasion, we have shown the world once again that the citizens of the United States of America place their trust in one another, to create a government of, by and for the people.

As I write this on January 19, the day we honor the memory of the Rev. Dr. Martin Luther King, I am humbled by my own childhood memories, witnessing the civil rights struggles in the 1960s, especially those in Washington, D.C. as I grew up there when my parents came from Minnesota to Washington to serve in the Kennedy and Johnson administrations.

And here we are over 40 years later, celebrating the election of the 44th President of the United States, a talented person who among many other things is the first president who is a person of color. That Barack Obama’s inauguration also falls on the 200th anniversary year of the birth of President Abraham Lincoln and that his presidency will intersect with the 150th anniversary of the Civil War fills me with a profound and hopeful spirit. The sacrifices, prayers and dreams of so many people who came before us over many generations are beginning to be realized.

We will continue to honor their memory and meet the formidable obligations we have ahead through our service to one another and to our country, with our hearts, minds, and hands fully engaged.

FUNDING

–FUND FOR TEACHERS GRANT APPLICATIONS – 2009. The application process for grants from the Fund for Teachers is now open. Rural teachers who wish to receive support to study and/or travel are encouraged to apply. Application deadline is January 30, 2009. For more information, go to http://www.fundforteachers.org/.

–NEA Foundation Learning & Leadership Grants. The NEA Foundation supports a variety of efforts by teachers, education support professionals, and higher education faculty and staff to improve student learning in the nation’s public schools, colleges, and universities. All professional development projects must improve practice, curriculum, and student achievement. Grant funds may be used for fees, travel expenses, books, or other materials that enable applicants to learn subject matter, instructional approaches, and skills. Recipients are expected to exercise professional leadership by sharing their new learning with their colleagues. Learning & Leadership Grants provide opportunities for teachers, education support professionals, and higher education faculty and staff to engage in high-quality professional development and lead their colleagues in professional growth. The grant amount is $2,000 for individuals and $5,000 for groups engaged in collegial study. http://www.neafoundation.org/grants.htm. Deadline: February 1, 2009

–Norman Foundation: Economic Justice Grants. The Norman Foundation supports efforts that strengthen the ability of communities to determine their own economic, environmental, and social well-being, and that help people control those forces that affect their lives. The Foundation’s Economic Justice grants provide funding to social change organizations throughout the United States that promote economic development through community organizing. Priority is given to projects that arise from the hopes and efforts of those whose survival, well-being, and liberation are directly at stake. In addition, organizations with annual budgets of under $1 million are preferred. http://www.normanfdn.org Deadline: March 2, 2009

– USDA Distance Learning Telemedicine Grants. Primarily for user equipment that functions via telecommunications systems for the purposes of connecting students and teachers or medical professionals and patients at separate sites. Examples are video-conferencing or teleradiology equipment. The Grant Program funds equipment that operates over telecommunications systems, but does not fund the telecommunications links themselves. In addition, it funds such things as the acquisition of instructional programming and technical assistance and instruction for using eligible equipment. See the current Application Guide for more complete information, eligibility information and program contacts at http://www.usda.gov/rus/telecom/dlt/dlt.htm.  Minimum of 15% Matching Funds with grant minimum of $50,000 and maximum of $500,000. Deadline is March 24, 2009.

–USDA Rural Development offers Household Water Well Grants. Nonprofits must apply by May 31, 2009 for Household Water Well System Grants to establish lending programs. See Federal Register, 11/20/08, pp. 70315-21 or http://www.grants.gov.  

–The Electronic Health Record Loan Program provides no-interest six-year loans to help finance the installation or support of interoperable health record systems. Funding is available to community clinics, rural hospitals, physician clinics in towns under 50,000, nursing facilities, and other health care providers. Applications are online http://www.health.state.mn.us/divs/orhpc/funding/index.html#ehrloan or contact Anne Schloegel at (651) 201-3850 or anne.schloegel@state.mn.us.

MEETINGS /TRAININGS

–Explore Minnesota Tourism Conference will be held January 27-29, 2009 at the Northland Inn in Brooklyn Park. In this time of economic uncertainty we are all wondering about how our destinations and businesses will be affected. We’ve been able to gather some of the most knowledgeable speakers in tourism and economics to help us answer this question during this year’s Explore Minnesota Tourism Conference

Our keynote speaker Peter Yesawich is an expert in consumer buying and travel trends. Other presenters include: state experts in these fields of Minnesota’s economy, economic development and current demographic information; Executive Director of the Metropolitan Airports Commission Jeff Hamiel with cover air transportation to Minnesota. Registration is available online at: http://industry.exploreminnesota.com

You, your staff and board members will also hear from Gavin Clabaugh, vice president of information services at the Charles Stewart Mott Foundation, as he gives the keynote address on Nonprofits in the Connected Age. Fees are $149 for members/$199 for nonmembers through January 30. Be part of Minnesota’s premier nonprofit technology and communications gathering and register today at http://www.mncn.org/

–21st Annual Multicultural Forum on Workplace Diversity “Diversity’s Challenge: Achieving True Inclusion” will be held March 3 and 4, 2009 at the St. Paul RiverCentre. This event is designed for professionals who are responsible for diversity within organizations of all sizes. It is also recommended for anyone working in a multicultural climate and those dealing with a diverse clientele. Keynote Speakers http://www.stthomas.edu/mcf/program/keynotes.html

–The 7th Annual Symposium on Small Towns “Communities 2050: Building a Livable, Renewable and Responsible Future!” will be June 2-3 at the University of Minnesota in Morris. Please check the web site at www.centerforsmalltowns.org for periodic updates and on-line registration information or give Barb a call at 320-589-6451.

–SBA Online Courses. Free online courses to help prospective entrepreneurs better understand the basics about starting a small business. These self-paced courses take about 30 minutes to complete, and you can exit a course at any time. Most courses have audio components. Covered areas include: Starting a Business; Business Planning; Business Management; Financing & Accounting; Risk Management; E-Commerce; International Trade; Federal Tax Training; Marketing & Advertising; Government Contracting; and Small Business Retirement/Exit Planning. Free registration is required. Go to: http://www.sba.gov/services/training/onlinecourses/index.html

One of the most unique features of this website is the Self-Assessment Tool. The Self-Assessment Tool provides an extensive guide to help users learn more about personalized options for purchasing and/or refinancing their home. Users will be prompted to answer a few questions. Based on the answers given, the Self-Assessment Tool lists numerous links to visit on-line to learn more about the necessary and correct steps to own a home, refinance a home, enhance their financial skills, and much more.

OPPORTUNITIES

–Minnesota Campus Energy Challenge. In the past several Februaries, Minnesota elementary, middle, and high schools as well as colleges and universities have waged a youth-led campaign to address climate change. These “Campus Wars” or “energy challenges” engage Minnesota youth in a friendly competition where the winner is the campus that reduces its total February energy use the most, based on a percentage relative to previous Februaries for that school. http://www.teammn.org/mcec.html

–ORHPC is recruiting volunteers who have experience in health care and/or grant making to objectively review grants proposals. If you are interested, please contact Doug Benson at (651) 201-3842 or doug.benson@state.mn.us or Cindy LaMere at (651) 201-3852 or cindy.lamere@state.mn.us.

–Minnesota’s Future Doctors recruits and prepares highly qualified, minority, immigrant, rural, first-in-the-family to attend college, and economically disadvantaged college freshman and sophomores for medical school in Minnesota. The program includes three paid summer internships and is supported by the University of Minnesota Medical Schools and the Mayo Medical School. Applications are due February 1. Information is on the University of Minnesota site http://www.meded.umn.edu/futuredocs/overview.php and the unofficial student-managed site http://www.mnfuturedocs.com/index.html.

–The Summer Health Care Internship Program provided 84,425 hours of health care internship experience to 303 high school and post secondary students in hospitals, clinics and long term care facilities during the summer of 2008. The program is funded by a grant from the Minnesota Office of Rural Health and Primary Care and is administered by the Minnesota Hospital Association http://www.mnhospitals.org/index/Summer_Intern_Program/. For more information contact the Association or contact Lorry Colaizy at (651) 201-3851 or lawrence.colaizy@state.mn.us.

–Apply by April 1 for the Health Careers Foundation loans or scholarships, http://www.hcfinfo.org/services.html  which encourage education in the fields of dietetics, medical records, medical technology, nursing, occupational therapy, pharmacy, physical therapy, radiological sciences, respiratory therapy, speech pathology and transcription/coding.

–2009 Sister Pat Kowalski Leadership Award. Minnesota Campus Compact invites nominations for the 2009 Sister Pat Kowalski Leadership Award. Every two years this award is presented to individuals who demonstrate a commitment to high-quality service-learning and campus-community collaboration, success at building strategic, long-term partnerships with communities, and positive impact on both the community and the educational institution, including development of relevant policies and infrastructure. Nominations are due April 3, 2009. Any student, faculty member, administrator, or staff person at a Minnesota Campus Compact member college or university is eligible. See: www.mncampuscompact.org for details.

MISCELLANEOUS

–How rural America’s housing prices are faring in the midst of a national home price bust. The article investigates the reasons behind the better recent performance of rural home prices compared to urban areas and whether rural areas will ultimately follow metro areas with falling prices. Go to: http://www.KansasCityFed.org/RegionalAffairs/Mainstreet/MainStMain.htm?ealert=1231

–The National Federation of Community Development Credit Unions (Federation), a leader in the Community Development Financial Institutions (CDFI) movement, has just released its Outlook for Community Investing in 2009, highlighting the positive and negative trends facing CDFIs (which include credit unions, banks, loan funds, venture capital funds, and microenterprise funds focused on community development) in the coming year.

Among the positive trends are:

–The Lost Decade: Executive Summary In December, the Minnesota Budget Project released The Lost Decade: Taking a Closer Look at Minnesota’s Public Investments in the 2000s http://www.mncn.org/bp/lostdecade.htm,  which found that state investments in E-12 education, higher education, child care assistance and affordable housing will all be at lower levels by the end of this decade than in Fiscal Year 2003. As Minnesota policymakers will be taking action to address a large state budget deficit, these findings demonstrate that they will be making cuts from a budget that has already been eroded. The primary findings of The Lost Decade are available as a four-page Executive Summary. This is available online http://www.mncn.org/bp/lostdecade.htm, or you can request printed copies by emailing Katherine Blauvelt.

–Measuring Up 2008. Measuring Up is a series of biennial report cards that provide information to assess and improve higher education in each state.

Asian stocks up in anticipation of Obama inauguration

id="blog-title">FeudArt

id="tagline">Create first. Then compete. The art of competition is self-expression.

Should we help the banks

id="blog_description">How is the recession changing every day life

We I’m in two minds regarding this, I know that we really don’t have any choice but I think the banks the should not only loan to business but also loan to the their customers.

Why should we keep or money in banks, their have wasted / loss billions of pounds in bad deals and investments - so why are we having to help out these private companies.

I don’t fully understand but if we loss the banks to who economy would crash, but why use tax payers money. The issue I feel the most strongly about is what is the bank doing with this money, and who is it helping.  Is this securing peoples own investments, shares and pensions.

GLOBAL BANKING COLLAPSE GETS WORSE

The spiral of very bad news continues to flow in from all parts of the planet.  This doesn’t even slightly surprise me.  The US was allowed to run for 35 years with  growing trade and budget deficits which are utterly unsustainable.  The entire system depends on the US over-consuming and deindustrializing itself, fatally.  Finally, the end heaves into view.  Just like it did for the British Empire, 100 years ago.

 

 ”Batten the hatches. This is not just a recession. This is the sharpest deceleration Australia’s economy has ever seen,” the company’s quarterly report said.

Thanks to its strong export ties to China, Australia – once dubbed the “miracle economy” – managed to escape the downturn that hit the US and British economies last year.

However, with China’s growth now slowing and the mining boom effectively over, it is widely accepted that the country will join the long list of countries suffering from the global financial crisis.

Access Economics said the federal budget was “buggered” because of its heavy reliance on the price of commodities, which was now falling. It said the four year boom enjoyed by the country had disappeared in four months of “chaos”.

All bubbles pop much, much faster than they grow.  Even as everyone can see an obvious bubble, they are helpless when it happens.  Like the Romans at Nero’s feast, people get drunk and are unable to react.  Then, they see millions of rose pedals falling from above.  More and more pile up until they are smothered. 

The roses, in this case, are fiat dollars.  All the central banks of the world happily churned out loans and did many of these based on US trade dollar leverages.  The key nation doing this has been Japan.  This gave Japan tremendous trade leverage with the US, too.  Which is why they did it.  I often complained about the ridiculousness of having the world’s #1 and world’s #2 economies running up such huge debts and one of them being mired in a ‘depression.’  

 

I often said, the Japanese depression was increasingly fake as inflation moved along increasingly higher there and they had more and more GNP growth.  I said, the ZIRP business in an inflationary, growing economy, was nasty.  And it is!  The US now has a collapsing economy and this, in turn, is hammering Japan’s economy.

 

Japan not only started the ZIRP business, the zero interest game, they locked out much of the world’s economic activities due to constantly lowering wages and reducing consumer credit.  Now, everyone is being forced to lower wages and reduce consumer credit and interest rates across the planet are plunging to zero!  Japan’s monumental trade profits didn’t percolate downwards at all. 

 

Japan’s Service Demand Falls as Worsening Job Prospects Hinder Consumption

 

 

Due to peculiar social conditions in Japan, there were no worker’s riots, unionization or battles for power over all this.  Instead, the entire workforce simply gave up the ghost and accepted a perpetually declining condition.  Being the world’s #2 economy, Japan’s inability to soak up more consumerist commerce has been a huge hole in world trade.  

 

HSBC, Asian Banks Decline as RBS Loss Signals Deepening Financial Crisis

 

 

We are in a riddle here: who can we all borrow from if all the banks in the world are bankrupt?  The answer is, everyone borrows from their own governments.  But most governments are running deep in the red, already.  

Here is an old story I wrote in early 2005:

From the NYT:

t’s an addiction. Every day, the United States sucks in more and more of it from abroad, just to keep the nation going. We speak, of course, about foreign money.

At our current rate of trade and budget deficits, foreigners need to purchase $2 billion in dollar-denominated assets each day just to keep the dollar stable, said Axel Merk, who manages $60 million at Merk Investments and runs the Merk Hard Currency Fund.

Over half the national debt is now financed by foreigners, according to Roger Ibbotson, chairman of the financial consulting firm Ibbotson Associates in Chicago and a professor at Yale School of Management. That’s been true since 1980, but the difference now, he says, “is the scale of the game.”

“I guess everyone wants to keep this game going,” Ibbotson said. But if one of the countries we’re most dependent on drops out, it could be “like a bank run.”

When empires fall apart financially, the whole world trade systems collapse. It happened to the Spanish empire. It happened to the British Empire. It will happen to our empire. Anyone who knows anything about history minus the stupid propaganda points (like pretending we were fighting for democracy during WWII) knows that when an empire reaches its apex it nearly always goes into a financial frenzy, building palaces and stadiums, getting more and more reckless with their currency, wild military exploits that bring home no spoils, only corrupting the empire further. Diminishing returns on a shrinking market as the distant provinces demand support. All empires react by pulling back but only after they go bankrupt and it is pointless.

Why is the interest rate in Japan so pathetic? They have inflation. They import 100% of their oil, for example. Yet they are flourishing while our economy is on the ropes, kept alive only by history’s biggest spending spree. One last time, we rush to the stores to buy stuff we no longer make. Once more, we fall into the same, stupid trap. As the sun sets on our empire, we send our leader (snark) abroad to be insulted and laughed at, a caged bear with a begging bowl, covered with fleas. Even now, the lesser provinces like Israel and Poland, drags on our diplomacy, demand we pay them tribute, not the other way around.

The tidal forces at work back then are now flowing in the exact opposite direction.  Money is no longer flowing out of every pore of every bank across the planet.  All banks across the entire planet are seeing the opposite: FUTURE returns are vanishing forever.  People are defaulting on loans. 

 

If the problem was banks not lending, this is very easy to solve.  But when the problem is people not paying their loans and defaulting, then we get depressions.  Everyone is firing workers and closing down things and this leads to more bankruptcies and this process of everyone shutting down as fast as possible is guaranteeing more bankruptcies.  This is a vicious cycle, of course.  One that Japan was very familiar with.

 

The flood of easy lending ended the exact same month the Japanese carry trade stopped.  We can trace this reversal of money movement to exactly July, 2007.  The yen is still 90 to the dollar and this is very painful for Japanese export one-way trade.  But Japan should never had been allowed to be so aloof about equal trade deals in the first place.

 

The cartoon at the top of the page is one I drew back then.  The US is an easy credit addict.  We are now suffering from withdrawal pains.

September 27, 2007:  Money Matters: G7 Dwarf Nations Attack Chinese Dragon For Being Too Smart And Rich

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

That article was from 2 years ago. Let’s go to the CIA to see the numbers from 2007:

So world debt grew massively…except in Japan.  Always the exception to all the rules.  The chart, of course, is woefully out of date.  The US debt has climbed much more than a trillion in just six months!  And plans to climb several more trillion in the near future!  The number at the top, the total, is from 2004 and is really out of date.  It is about $66 trillion which happens to be the number of the Derivatives Beast!  HAHAHA.  Hell’s bells, isn’t that queerness?

 

Money is debt.  Dollars are IOUs.  Since the vast majority of global trade and banking is in dollars, this makes the fiat currency grossly over-grown in size.  Yet, we are in a severe deflationary spiral!  

 

I suggest, this is because vast oceans of paper money value is in paper products like mortgages, SIVs, CDOs, etc that are rapidly losing value.  So the ‘money’ vanishes since it is future money, not present money.  There is no way for the mass of systems mired in debt, to pay this off, in full.  The US could do this by making magic money.  But no one wants this.  Except for the damn bankers!

Market Skeptics: Hyperinflation will begin in China and it will destroy the dollar

The US’s trade deficit requires China to print money!

An interesting read.  Only it is all reversed: the US, due to our need for more debt money, has to get this from either Japan or China.  China is now spending more, not less money, while ONLY JAPAN is reducing debt spending.  So this means, the US has to get Japan, not China, to do this trick.  The world is NOT flooded with yuan.  It is flooded with DOLLARS.  And we plan to hyper-flood it with dollars in the near future.

 

California is cutting money to children and the disabled.  The sums needed are less than we spend in one year fighting barely armed peasants in Afghanistan.  All we have to do is, stop fighting and spend this money in California.  HAHAHA.  Will Obama figure this out?  NO.  He is surrounded by Zionists who desperately want us bogged down, fighting pesky Muslims.

 

More US debt.  Note that we top the CIA list.  I hope the CIA goes, in greatest alarm, to Obama and tells him about this.  And cows will jump over Gaza and not get shot.

 

PBOC’s 2009 Bill Issues Likely Down Over 70% - Clearing House

Since Japan is doing this, China must do this.  And we must do this.  We won’t do this.  So what does that make us?  We are opening the spigot.  They are both closing it.  The Asian people know how to batten down the hatches.  We leave all our windows and doors wide open.  Who is the deepest in debt?  The US, not China, not Japan.  Japan’s is 1/10th our debts.

 

Bloomberg.com: Invest

‘Time to Sell’ Treasuries, Biggest Korean Fund Says 

Asia is now in a new format: they are no longer trading with the US, they are in World Turtle mode. The world, you see, rides on the back of this Turtle. We are the turtle, of course.

 

S&P strips Spain of its AAA credit rating - Telegraph

The credit-rating agency’s downgrade comes at a delicate moment for Euroland’s weaker bloc. Several states already face difficulties raising money on the bond markets. The yield spreads on Spanish debt rose yesterday to a post-EMU high of 122 basis points above German Bunds, though still below levels for Italy, Ireland and Greece.

Explaining the downgrade, S&P cited the “structural weaknesses in the Spanish economy” and predicted a long recession that will raise public debt by 18pc of GDP and may entail a huge bank bail-out.

Brussels predicted that unemployment in Spain would reach 19pc by next year, pushing the jobless total to near 4.5m. Opposition leader Mariano Rajoy called on finance minister Pedro Solbes to step down as a “patriotic duty”. “This is a man who has thrown in the towel. He’s given up, he’s got no ideas left and no clue what to do next,” he said.

The Spanish housing market was very much like Florida.  Much of it was vacation houses for people living further to the North.  When the banking collapse began in the US and the northern European states, it quickly took over the southern vacation/retirement communities.  The same empty fun in the sun houses sit abandoned in the Mediterranean as in the Gulf of Mexico.

 

Bloomberg.com: Worldwide

RBS Plummets Amid Concern Bank May Be Nationalized 

First Iceland, then Ireland and now Scotland: like a tsunami, the wave of collapses are moving relentlessly southwards!  In Europe, it is moving from East to West.  Scotland can nationalize the bank.  But it does nothing about the collapse of the currency and trade.

 

RBS on the brink as shares plummet by 69% and City is warned: ‘You’re about to become Iceland-on-Thames’ | Mail Online

RBS, which owns NatWest, saw its value plunge by a massive 71 per cent at one point to a 23-year low after announcing it stands to lose up to £28billion for last year, almost double the previous record loss for a British company.

The bank’s new chief executive Stephen Hester said it was time to ‘fess up’ to the mistakes made during the boom years as he revealed it will lose £7 to £8billion on lending and another £15 to £20billion from taking on Dutch bank ABN Amro. 

Losing only $35 billion?  Well!  That is peanuts for our banks!  They lose $1150 billion without blinking an eye!  And get bailed out, too!  The glories of being the global trade currency…which is not for much longer.

 

Brown’s fury at Royal Bank of Scotland’s £2.5bn loan to Russian oligarch | Mail Online

The money was lent by the bank, which is now controlled by the Government, to Leonid Blavatnik, 51, a London-based billionaire who owns chemical giant LyondellBasell, which is on the verge of collapse.

Treasury officials examining RBS’s books were horrified to learn that they included the sum to Mr Blavatnik, which has now been written off.

A senior official said the loan was more evidence that the recklessness of banks was a major factor in the credit crunch.

‘These bankers doled out ridiculously large sums to foreign investors to finance deals which had nothing to do with Britain,’ said the official.

‘It is only now that we are going through the banks’ accounts that we can see the true scale of their irresponsibility. Some of it is every bit as crazy as the American sub-prime loans scandal.’

Competition forced bankers to offer loans to every con man on earth.  Now, we get to find out exactly how many.  I’d say, the majority of the people getting loans were cons.  They used offshore islands and the Japanese carry trade.  Now, these loans are collapsing. Duh.  

 

I bet the vast majority of the super-rich are both cons as well as DEBTORS.  I say, let’s restart debtor’s prisons only have them for people borrowing more than a million dollars.  And of course, the bankers who went bankrupt lending to Mafia bosses of various ethnic groups, should also be sent to these prisons.

 

Ireland to restrict accounts of big Anglo debtors | Reuters

Right now, since so many cons took up huge debts, we can’t trust most debtors to be honest.  And honest people in debt are being forced into bankruptcy due to the overall economic collapse due to all the cons who got immense, multi-billion dollar loans to buy up and destroy, many businesses.  Remember: the madcap buy-up/buy-out mania fueled by the bankers and the con men featured wage drops and layoffs.  And THESE are the reason the global economy is collapsing.

 

All those useless, stupid deals were very destructive.  We burned down our capitalist system in order to park immense and stupid loans on top of every possible equity platform.

 

* FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

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GLOBAL BANKING COLLAPSE GETS WORSE

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The spiral of very bad news continues to flow in from all parts of the planet.  This doesn’t even slightly surprise me.  The US was allowed to run for 35 years with  growing trade and budget deficits which are utterly unsustainable.  The entire system depends on the US over-consuming and deindustrializing itself, fatally.  Finally, the end heaves into view.  Just like it did for the British Empire, 100 years ago.

 

 ”Batten the hatches. This is not just a recession. This is the sharpest deceleration Australia’s economy has ever seen,” the company’s quarterly report said.

Thanks to its strong export ties to China, Australia – once dubbed the “miracle economy” – managed to escape the downturn that hit the US and British economies last year.

However, with China’s growth now slowing and the mining boom effectively over, it is widely accepted that the country will join the long list of countries suffering from the global financial crisis.

Access Economics said the federal budget was “buggered” because of its heavy reliance on the price of commodities, which was now falling. It said the four year boom enjoyed by the country had disappeared in four months of “chaos”.

All bubbles pop much, much faster than they grow.  Even as everyone can see an obvious bubble, they are helpless when it happens.  Like the Romans at Nero’s feast, people get drunk and are unable to react.  Then, they see millions of rose pedals falling from above.  More and more pile up until they are smothered. 

The roses, in this case, are fiat dollars.  All the central banks of the world happily churned out loans and did many of these based on US trade dollar leverages.  The key nation doing this has been Japan.  This gave Japan tremendous trade leverage with the US, too.  Which is why they did it.  I often complained about the ridiculousness of having the world’s #1 and world’s #2 economies running up such huge debts and one of them being mired in a ‘depression.’  

 

I often said, the Japanese depression was increasingly fake as inflation moved along increasingly higher there and they had more and more GNP growth.  I said, the ZIRP business in an inflationary, growing economy, was nasty.  And it is!  The US now has a collapsing economy and this, in turn, is hammering Japan’s economy.

 

Japan not only started the ZIRP business, the zero interest game, they locked out much of the world’s economic activities due to constantly lowering wages and reducing consumer credit.  Now, everyone is being forced to lower wages and reduce consumer credit and interest rates across the planet are plunging to zero!  Japan’s monumental trade profits didn’t percolate downwards at all. 

 

Japan’s Service Demand Falls as Worsening Job Prospects Hinder Consumption

 

Due to peculiar social conditions in Japan, there were no worker’s riots, unionization or battles for power over all this.  Instead, the entire workforce simply gave up the ghost and accepted a perpetually declining condition.  Being the world’s #2 economy, Japan’s inability to soak up more consumerist commerce has been a huge hole in world trade.  

 

HSBC, Asian Banks Decline as RBS Loss Signals Deepening Financial Crisis

 

We are in a riddle here: who can we all borrow from if all the banks in the world are bankrupt?  The answer is, everyone borrows from their own governments.  But most governments are running deep in the red, already.  

Here is an old story I wrote in early 2005:

From the NYT:

At our current rate of trade and budget deficits, foreigners need to purchase $2 billion in dollar-denominated assets each day just to keep the dollar stable, said Axel Merk, who manages $60 million at Merk Investments and runs the Merk Hard Currency Fund.

Over half the national debt is now financed by foreigners, according to Roger Ibbotson, chairman of the financial consulting firm Ibbotson Associates in Chicago and a professor at Yale School of Management. That’s been true since 1980, but the difference now, he says, “is the scale of the game.”

“I guess everyone wants to keep this game going,” Ibbotson said. But if one of the countries we’re most dependent on drops out, it could be “like a bank run.”

When empires fall apart financially, the whole world trade systems collapse. It happened to the Spanish empire. It happened to the British Empire. It will happen to our empire. Anyone who knows anything about history minus the stupid propaganda points (like pretending we were fighting for democracy during WWII) knows that when an empire reaches its apex it nearly always goes into a financial frenzy, building palaces and stadiums, getting more and more reckless with their currency, wild military exploits that bring home no spoils, only corrupting the empire further. Diminishing returns on a shrinking market as the distant provinces demand support. All empires react by pulling back but only after they go bankrupt and it is pointless.

The tidal forces at work back then are now flowing in the exact opposite direction.  Money is no longer flowing out of every pore of every bank across the planet.  All banks across the entire planet are seeing the opposite: FUTURE returns are vanishing forever.  People are defaulting on loans. 

 

If the problem was banks not lending, this is very easy to solve.  But when the problem is people not paying their loans and defaulting, then we get depressions.  Everyone is firing workers and closing down things and this leads to more bankruptcies and this process of everyone shutting down as fast as possible is guaranteeing more bankruptcies.  This is a vicious cycle, of course.  One that Japan was very familiar with.

 

The flood of easy lending ended the exact same month the Japanese carry trade stopped.  We can trace this reversal of money movement to exactly July, 2007.  The yen is still 90 to the dollar and this is very painful for Japanese export one-way trade.  But Japan should never had been allowed to be so aloof about equal trade deals in the first place.

 

The cartoon at the top of the page is one I drew back then.  The US is an easy credit addict.  We are now suffering from withdrawal pains.

September 27, 2007:  Money Matters: G7 Dwarf Nations Attack Chinese Dragon For Being Too Smart And Rich

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

That article was from 2 years ago. Let’s go to the CIA to see the numbers from 2007:

So world debt grew massively…except in Japan.  Always the exception to all the rules.  The chart, of course, is woefully out of date.  The US debt has climbed much more than a trillion in just six months!  And plans to climb several more trillion in the near future!  The number at the top, the total, is from 2004 and is really out of date.  It is about $66 trillion which happens to be the number of the Derivatives Beast!  HAHAHA.  Hell’s bells, isn’t that queerness?

 

Money is debt.  Dollars are IOUs.  Since the vast majority of global trade and banking is in dollars, this makes the fiat currency grossly over-grown in size.  Yet, we are in a severe deflationary spiral!  

 

I suggest, this is because vast oceans of paper money value is in paper products like mortgages, SIVs, CDOs, etc that are rapidly losing value.  So the ‘money’ vanishes since it is future money, not present money.  There is no way for the mass of systems mired in debt, to pay this off, in full.  The US could do this by making magic money.  But no one wants this.  Except for the damn bankers!

Market Skeptics: Hyperinflation will begin in China and it will destroy the dollar

The US’s trade deficit requires China to print money!

An interesting read.  Only it is all reversed: the US, due to our need for more debt money, has to get this from either Japan or China.  China is now spending more, not less money, while ONLY JAPAN is reducing debt spending.  So this means, the US has to get Japan, not China, to do this trick.  The world is NOT flooded with yuan.  It is flooded with DOLLARS.  And we plan to hyper-flood it with dollars in the near future.

 

California is cutting money to children and the disabled.  The sums needed are less than we spend in one year fighting barely armed peasants in Afghanistan.  All we have to do is, stop fighting and spend this money in California.  HAHAHA.  Will Obama figure this out?  NO.  He is surrounded by Zionists who desperately want us bogged down, fighting pesky Muslims.

 

More US debt.  Note that we top the CIA list.  I hope the CIA goes, in greatest alarm, to Obama and tells him about this.  And cows will jump over Gaza and not get shot.

 

PBOC’s 2009 Bill Issues Likely Down Over 70% - Clearing House

Since Japan is doing this, China must do this.  And we must do this.  We won’t do this.  So what does that make us?  We are opening the spigot.  They are both closing it.  The Asian people know how to batten down the hatches.  We leave all our windows and doors wide open.  Who is the deepest in debt?  The US, not China, not Japan.  Japan’s is 1/10th our debts.

 

Bloomberg.com: Invest

‘Time to Sell’ Treasuries, Biggest Korean Fund Says 

Asia is now in a new format: they are no longer trading with the US, they are in World Turtle mode. The world, you see, rides on the back of this Turtle. We are the turtle, of course.

 

Bloomberg.com: Worldwide

RBS Plummets Amid Concern Bank May Be Nationalized 

First Iceland, then Ireland and now Scotland: like a tsunami, the wave of collapses are moving relentlessly southwards!  In Europe, it is moving from East to West.  Scotland can nationalize the bank.  But it does nothing about the collapse of the currency and trade.

 

RBS on the brink as shares plummet by 69% and City is warned: ‘You’re about to become Iceland-on-Thames’ | Mail Online

RBS, which owns NatWest, saw its value plunge by a massive 71 per cent at one point to a 23-year low after announcing it stands to lose up to £28billion for last year, almost double the previous record loss for a British company.

The bank’s new chief executive Stephen Hester said it was time to ‘fess up’ to the mistakes made during the boom years as he revealed it will lose £7 to £8billion on lending and another £15 to £20billion from taking on Dutch bank ABN Amro. 

Losing only $35 billion?  Well!  That is peanuts for our banks!  They lose $1150 billion without blinking an eye!  And get bailed out, too!  The glories of being the global trade currency…which is not for much longer.

 

Brown’s fury at Royal Bank of Scotland’s £2.5bn loan to Russian oligarch | Mail Online

The money was lent by the bank, which is now controlled by the Government, to Leonid Blavatnik, 51, a London-based billionaire who owns chemical giant LyondellBasell, which is on the verge of collapse.

Treasury officials examining RBS’s books were horrified to learn that they included the sum to Mr Blavatnik, which has now been written off.

A senior official said the loan was more evidence that the recklessness of banks was a major factor in the credit crunch.

‘These bankers doled out ridiculously large sums to foreign investors to finance deals which had nothing to do with Britain,’ said the official.

‘It is only now that we are going through the banks’ accounts that we can see the true scale of their irresponsibility. Some of it is every bit as crazy as the American sub-prime loans scandal.’

Competition forced bankers to offer loans to every con man on earth.  Now, we get to find out exactly how many.  I’d say, the majority of the people getting loans were cons.  They used offshore islands and the Japanese carry trade.  Now, these loans are collapsing. Duh.  

 

I bet the vast majority of the super-rich are both cons as well as DEBTORS.  I say, let’s restart debtor’s prisons only have them for people borrowing more than a million dollars.  And of course, the bankers who went bankrupt lending to Mafia bosses of various ethnic groups, should also be sent to these prisons.

 

Ireland to restrict accounts of big Anglo debtors | Reuters

Right now, since so many cons took up huge debts, we can’t trust most debtors to be honest.  And honest people in debt are being forced into bankruptcy due to the overall economic collapse due to all the cons who got immense, multi-billion dollar loans to buy up and destroy, many businesses.  Remember: the madcap buy-up/buy-out mania fueled by the bankers and the con men featured wage drops and layoffs.  And THESE are the reason the global economy is collapsing.

 

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Access Trumps Bed Count

The Muhlenberg closing faced a chorus of organized protest but ultimately, like with any corporation, business parameters framed the restructuring. Solaris Health Systems closed a nonperforming asset. It followed State guidelines and filed for a ‘certificate of need’ closure approval. Had the State said no it might have affected Solaris as a whole, subjecting it to possible bankruptcy and thereby closing two hospitals.

Muhlenberg had started as a community hospital with 130 years of history so the closing was painful on many levels to the area population. In the end the DOH recognized the various concerns and directed a decision that acknowledged the challenges within the area. It directed the formation of a Community Advisory Group, “to provide on-going community input to Solaris on ways that it can most effectively and efficiently meet the … outpatient and inpatient needs of all residents in the Muhlenberg service area.”

The DOH required the establishment of a SED, a daily no charge loop shuttle between the SED and JFK Medical Center, and a no charge medical taxi service in the primary area to address scheduled non-emergent care services. It also required other medical outreach so as to provide the area a reasonable comprehensive access to healthcare services. (Click HERE to see the end result.)

The Pascack Valley Hospital did not belong to a hospital system. It too was developed as a community hospital to be local so that community acute healthcare needs could be met. The necessity for it to be replaced is disputed only with rhetoric.

That State’s report dealt with a variety of issues spanning over 16 chapters and 205 pages with a 95 page-supporting appendix. The conclusions attributed to the commissioned analysis were broad. They were an attempt to offer an organized view for guiding State policy toward increasing fiscal efficiency within New Jersey’s healthcare industry.

One of the tasks assigned for the study by the Governor’s Executive Order #39, was to “develop criteria for the identification of essential general acute care hospitals in New Jersey and use the criteria developed to determine whether a financially distressed hospital at risk of closing is essential to maintaining access to health care for the residents of New Jersey.” The resulting primary criteria included evaluating at risk population areas, assuring provisions for essential services and improving utilization values. Bed count was just one observation in trying to rationalize or evaluate healthcare delivery.

Another access element noted was a concern for excessive hospitals in relatively close geographic proximity but offered no specific criteria to define close. Valley and Englewood’s primary focus has been on a single assumption that an excess number of available beds exists in the northern New Jersey area. However those beds of concern were tallied amongst 15 hospitals at the time of the study, with varying proximity of concentration.

Excess beds do not necessarily mean too many hospitals. It can also suggest a hospital has too many beds based on their proximity to other hospitals. After all, access is as much a physical location consideration as it is an inventory of resources. All banks have money but it doesn’t mean a brick and mortar location doesn’t have value to distributing that resource equitably, and profitably.

The study’s excess bed analysis didn’t limit the possibilities of alternative opportunities. One suggestion was for hospitals struggling with low occupancy to reduce their staffed beds to an appropriate operating occupancy ratio. This would suggest that smaller hospitals properly located could protect a community’s emergent needs, developing symbiotic links to larger hospitals as needed without increasing bed counts.

Muhlenberg had a ‘Hospital Cost Index’ almost double to its peer group. It was a relatively large facility drowning with inefficiency, a declining patient base and an inability to adapt to the changing healthcare market. A prospect that guided the SHPB’s original recommendations.

No doubt many questions were asked and answered during the closure process. One can only wonder how the Solaris Health System might have restructured with the State’s transformation fund, reducing Muhlenberg size back to a community hospital? In this way the community’s needs would have been met and the excess bed counts allayed. JFK Medical Center is now reviewing with the State the possibility of increasing its available beds.

While rationalizing healthcare with a certificate of need may make sense from some perspectives; the idea of restricting a hospital to reopen based upon a bed count, absent prioritizing guidelines for the physical access aspect, is myopic. The time/ travel distance is an important consideration. Without a functional public transportation infrastructure within the Northern and Pascack Valley area any negative decision would by itself, place lives at risk.

#1 Investment Weekly - All talk about HSBC

It‘s almost as tedious as listening to the whining politicians and their henchmen in the press about how dire the economic situation has become, but I need to keep returning to the same subject matter. However, I have a flea to scratch and it’s irritating if I don’t deal with.

I have analyzed the just-published report on HSBC written by Morgan Stanley’s bank analyst and I have the following comments: On earnings: 1) MS assumes the US$ will continue to strengthen, thus lowering HSBC’s non-US dollar bloc earnings (mostly UK/Europe/South America). This will hamper HSBC’s ability to pay its US$10 billion in cash dividends (which is paid in US$). 2) MS assumes global yield curves will flatten, hurting HSBC’s earnings ability. Comment: Both these factors will hurt all international banks. These are not specific issues to HSBC. My view is that yield curves will remain steep as central banks help to rebuild bank net interest margins. Note that US money supply (M2 +5.9% in December) has accelerated in recent months as the Fed has effectively used its balance sheet (see later). However, rising money supply will lead to inflation, and the long end of the yield curve will react to this by lifting yields. The short end will stay low as the Fed will keep liquidity in the system.

On HSBC’s low relative capital position: 1) MS points out that HSBC has reserves of US$15 billion that are counted in its equity, which are allowed by HSBC’s UK regulator, but are not allowed other European banks. 2) MS points out that HSBC has insurance capital of US$5 billion that will be cut in half in 2012 when accounting changes take effect 3) MS states the obvious that Hang Seng’s capital is “stranded” as it can’t be used by the holding company 4) MS repeats what everyone knows, that HSBC has been injecting capital into its US/Euro subsidiaries, and thus its holding company’s capital surplus has diminished (to an estimated US$2.5 billion at end 2008 compared with US$4.5 billion in 2005). 5) MS believes HSBC Hong Kong should have the same CAR as local banks such as Bank of East Asia (I’m sure the HKMA will be interested to hear that). MS points out that DBS raised capital to bring its CAR to 9%, and this should be HSBC’s benchmark. 6) MS disputes the fact that HSBC counts its preference shares as core capital. Comment: The accounting rules are what they are. As for the surplus, during downturns, banks should be allowed to hold less capital than average, while they should be forced to raise surplus capital during good times. This will reduce cyclicality in earnings. This subject is currently being debated at BIS etc. The local CAR suggestion (which is ridiculous in my opinion) accounts for US$5.8 billion of the US$27 billion capital requirement calculation.

Why HSBC has to do a rights issue, according to MS, rather than some other means of raising capital, is not made clear. Comment: Bank officials reported last week that the bank is not preparing to do a rights issue at this time. With the share price at a 10 year low, it is unlikely there will be a rights or placement. However, the bank could take advantage of relatively cheaper funding channels.

MS points out, sheepishly, that HSBC’s share price has outperformed its peers and the FTSE by a considerable margin during the current bear market, despite MS’s underperform rating of the past 12 months. Comment: The note, in my opinion, is an attempt by the analyst to justify his underperformance rating. Conveniently, the report does not include the usual chart showing the analysts’ recommendations and target prices compared with the actual stock price performance.

The pressure of foreign banks using Hong Kong as their personal ATM and negative analyst reports on HSBC has cranked up the volatility specific to Hong Kong. This has come against a background of increased global financial market volatility in recent days turning the good technical picture for Hong Kong equities into mush (the third fan has been broken). Overseas, the Ted spread fell below 1% last week, and should return to its “normal” level of 0.5% soon. Good news. But the surge two year Treasury swap spreads and CDS spreads for large US banks ahead of their result announcements has take the gloss off the fall in Libor and the Fed’s efforts. Short term, the outlook for Hong Kong equities has turned murky, with more downside to come. With the Chinese New Year holiday starting next week, the index will remain volatile in thinning trade.

May I wish everyone Kung Hei Fat Choi and a prosperous Year of the Bull, and may the stock market live up to the name. Unfortunately, the last three Bull years give no indication as how 2009 will shape up as they were: 1997 (all-time high followed by a crash and a loss of 14%), 1985 (+24% as part of long bull-run that culminated in the 1987 crash), and 1973 (when the index was cut in half by the global oil crisis and attacks on the HK$ - which was eventually forced to float in 1974). I’m hoping this bull will mirror the 1985 version in celebration of my second complete cycle watching the wild gyrations of Hong Kong’s equity markets.

China commodities index launched by Jim Rogers, Macquarie

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Macquarie Funds Group and Jim Rogers have joined together to create an agricultural commodities index that reflects changes in food consumption patterns in China.

The Macquarie and Rogers China Agriculture Index is an investable index that tracks changes in the price of a basket of agricultural commodities most commonly consumed in China. Having posted a return of more than 11% for the month of December, the index outperformed most regional equity markets and other agricultural indices. Macquarie Funds, the asset management arm of Australia’s Macquarie Group, is launching the index now that it has a track record of two months since its creation in November.

The index is made of exchange-traded futures contracts on physical commodities that aim to capture the price impact of current and potential changes in China’s food consumption patterns. The index allows investors to keep a daily track on the price changes of the agricultural commodities basket. It also allows fund managers and other providers to issue financial products which are linked to an innovative and topical theme.

“Apart from being the world’s most populous nation, China is one of its fastest growing and as such, Chinese dietary patterns should play an influential role in determining the prices at which agricultural produce is exchanged.’’ says Harry Krkalo, Singapore-based head of retail funds sales for Macquarie Funds in Asia. “Developing an investable index which effectively tracks the price changes of commodities with reference to the quantities of each agricultural product consumed in China is an innovative and exciting way to invest in the sector.”

The index is the first one manufactured in Asia by Macquarie Funds, which is in the process of building its business in the region. As of end-September, the fund house had assets under management of $53 billion worldwide, including $1.5 billion sourced from investors in Asia.

“Macquarie is a leader in trading commodities futures. Jim Rogers has worked with other groups before but nothing specifically with China,” says Krkalo. “So when we put those bullet points down, a Chinese consumption-base product made sense and it is an interesting first index for us to roll out.”

In December last year, most major Asian equity indices including Nikkei 225, Hang Seng, MSCI Singapore, Kospi 200 and MSCI Taiwan posted positive returns, the largest of which was the Kospi 200 with a performance of around 6.2%. Commodities indices outperformed equity markets last month, however, with the Dow Jones-AIG Agriculture Total Return Index and the Macquarie and Rogers China Agriculture Index posting returns of approximately 9.8% and 11.6% respectively.

Macquarie Funds plans to launch, in the near future, a series of funds linked to the Macquarie and Rogers China Agriculture Index in the Asian region in addition to issuance in Switzerland.

“The investing public is still worried about where to put their money so any product launch for the next six months is going to be a carefully thought-out launch,” Krkalo says. “But this commodities index is interesting for both short-term and long-term reasons.”

Agriculture commodities have been sold off too heavily considering the demand for these goods, Krkalo says. The short-term opportunity stems from attractive valuations and, in the long-term, this asset class is expected to add value to investors’ portfolios, he adds.

Commodity tracking indices have generally been calculated based on supply side factors and commodity weightings are based on the global production. The Macquarie and Rogers China Agriculture Index is unique in the sense that component weightings are determined using actual and forecast data on consumption in China.

“Macquarie is one of the largest traders of agricultural commodities globally and Jim Rogers is one of the world’s leading commodity investors so it’s a great partnership,” says Matthew Long, Sydney-based executive director of Macquarie Funds.

Indeed, Rogers – who founded Quantum Fund with George Soros in 1970 and is now an independent investor – is best known these days for being a long time bull on China and commodities.

“I bought more (commodities) recently. I know that one of the few bull markets that I can see going up in the next five to 10 years is in agriculture,” says Singapore-based Rogers. “You may not have bull markets in cars or financial institutions or lots of other things but I know the world is not going to stop eating.”

After watching commodities markets suffer broad-based and drastic selling for most of the second half of 2008, a committee made up of Rogers and the treasury and commodities team in Macquarie Funds created the index, which went live in November.

“The index methodology is a refreshing way to approach investing in commodities and over time we believe that consumption patterns, particularly those of China, will increasingly influence agricultural prices. We expect the index to perform quite differently from existing agricultural indices,” Long adds.

The top three commodities in the index in terms of weightings are wheat, corn and soybean. The rest are coffee, cocoa, sugar, rice, palm oil, rubber, orange juice, soybean meal, soybean oil, cotton, canola and milk.

The Index incorporates the spot return of the underlying commodity contracts plus the discount or premium obtained by rolling over the contracts as they approach delivery. It is calculated on both an excess return and total return basis. Index constituents and weightings are potentially re-assigned annually and intra-annually in exceptional circumstances to account for current and potential future changes in China’s consumption patterns.

[...] Business News wrote an interesting post today onHere’s a quick excerpt The index tracks changes in the price of a basket of agricultural commodities most commonly consumed in China. [...]

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Can Barrack Hussein Obama fulfil the expectations of his crafted and strategized ideals and promises

Old Blog Deleted, so heres all that i could retrieve from there.. since july 2007, posts older than that- lost

http://www.vidyapatha.com/student_proj/mechnical.php#desi

A crow was sitting on a tree, doing nothing all day.

The crow answered: “Sure, why not.”

Management Lesson for Managers:

============ ========= ========= ========= ========= ========

Parable Number 2:

A turkey was chatting with a bull.

“They’re packed with nutrients.”

Management Lesson for Managers:

============ ========= ========= ========= ========= =======

Parable Number 3:

A little bird was flying south for the winter.

While it was lying there, a cow came by and dropped some dung on it.

He lay there all warm and happy, and soon began to sing for joy.

A passing cat heard the bird singing and came to investigate.

Management Lesson for Managers:

1) Not everyone who drops sh*t on you is your enemy.

2) Not everyone who gets you out of sh*t is your friend.

3) And when you’re in deep sh*t, keep your mouth shut!

Farm suicides worse after 2001 — study

P. Sainath

While the number of farm suicides kept increasing, the number of farmers has fallen since 2001, with countless thousands abandoning agriculture in distress.

My PI was more or less Generic and profile based…

interviews are cordial they just ask why irma in one way or other and mind you they will repeat atleast 3 times….just give some charity and high funda….

“if farmers constitute 80 % of population.there shoud b 80% reservations for them in assembly”

GD TOPICS

1.

Should b school be given full autonomy (regarding curriculum, fees)

2.

Role played in youth in nation’s dev

3.

EFFECT OF LAW ENFORCING AGENCIES ON THE SOCIETY

4.

“Election processes/campaign in India are becoming a farce

5.

The terrorism in Indian context….

6.

Election process has become a farce…we choose the party and they choose the leader. Something to that effect

7.

Should there be a proper reservation for persons representing industry and agriculture in state and national assembly

8.

Which one should be given importance-poverty or education?

9.

Public transport….and its impacts…

10.

subsidies are good or bad, should we do away with it

11.

should subsidy be given to farmers

12.

are elections a political drama

13.

BPOs… good or bad

14.

Does BPO divert youngsters from higher studies?

15.

Whether we should allow Govt. run vehicles to reduce vehicular traffic in India like it has been done in Singapore.

16.

How can we attain a growth rate of 8% p.a

17.

Should management of Indian railways be given in pvt hands, keeping in mind the interests of poor

18.

Health facilities in village/reservation policies in entrance exams

19.

About democracy and literacy

20.

Does this easily available call centre jobs lure away our youngsters from pursuing higher education?

21.

Is credit card good or bad

22.

“Has police been successful in maintaining law and order in big cities?”

23.

Whether terrorism should be curbed by peaceful means or hard measures should be taken…..

24.

Should there be representation from the industrial sectors in the parliament

25.

Has Indian youth lost its patriotic feel

26.

Group Task - Prioritizing some ten plans to achieve complete literacy.

27.

Should academics be the only criteria while selecting students into a B-School?

one result after the other…all going the same way!

cat result isnt officially announced yet, and i havent seen the doom spelt out for me, but i know it, seeing the trends, i know which way its gonna go!!

http://www.efunda.com/home.cfm

http://nptel.iitm.ac.in/

http://www.advancedge.com/hot_links/gd_issue/gd_issue.htm

http://iiminterviews2004.rediffblogs.com/2004_11_04_iiminterviews2004_archive.html

http://www.ptindia.com/gdpi/index.htm

http://www.pagalguy.com/forum/cat-and-related-discussion/720-links-for-gd-pi-experiences.html

Lest we forget, 2008 also saw the renewal of sectarian protests based on identities other than religion. The MPs of the Telangana Rashtra Samiti resigned their posts; the cadres of the United Liberation Front of Asom set off a series of bombs. The activities of ULFA and the TRS pale into insignificance in comparison to the activities, also in 2008, of that other parochial body, the Maharashtra Navnirman Samiti. For the Mumbai that the terrorists attacked in November was also the Mumbai which Raj Thackeray and his goons had sought, just a few weeks previously, to purge of ‘outsiders’ to the city.

Move now from the domains of society and religion to the material bases of human existence. The ground here, seemingly sure and solid, was disturbed this past year by the meltdown in the global economy. The collapse of banks on Wall Street had its ripple effect in India too, with the Planning Commission revising its growth estimates downwards, auto companies asking workers to stay at home three days a week, and BPO firms laying off thousands of employees. Indian companies that had ventured into acquisitions abroad saw the prestige of those purchases being undermined by falling prices and profits. Meanwhile, at home, the aam admi was hit by inflation, whose rate had now reached double digits for the first time in more than a decade.

2008 was also the year that Mother Nature played havoc with her Indian children. In the last week of November, many parts of the great city of Chennai found themselves knee-deep in water. Earlier, in August, the same fate had been handed out to many districts of the great state of Bihar. The Kosi river changed course for the first time in more than a century, the overflow covering huge swathes of land with a fast-moving sheet of water, with humans and cattle fleeing in its wake. More than three million people were affected by the floods.

For the citizens of India, the calendar year 2008 was marked and scarred by the malign activities of Islamic fanatics, Hindu bigots and linguistic chauvinists; by the arresting of the onward march of the Indian economy; and by cyclones and floods. This listing probably overlooks some other nasty things that took place this past twelvemonth. But even the incomplete evidence offered above begs the question-was this the worst year experienced by India (and Indians) since the country was founded?

Speaking as an Indian who has just turned fifty, I can immediately offer one other candidate for that (very dubious) honour-1984, a year that was a nightmare for India at any rate, if not (as George Orwell had once predicted) for the whole world. On January 1, 1984, the Congress government led by Prime Minister Indira Gandhi was on the verge of completing four years in office. It was somewhat less than secure, for there was an insurgency on in the Punjab, and a major oppositional movement afoot in Assam. To these angry complaints of peripheral regions were added tensions of caste and class, and a vulnerable economy.

On or shortly after New Year’s Day the Congress began planning its strategy for re-election. Its best chances, it thought, lay in a departure from its previously non-sectarian politics in favour of a more overtly ‘Hindu’ image. The prime minister began visiting temples across the country. Then, as the Khalistan movement gathered momentum, troops were sent into the Golden Temple. Two days of bloody battle-fortunately, not covered by live television-led to many hundreds of deaths and the near-destruction of the Akal Takht.

Never before had an elected government attacked a place of worship, still less a shrine as holy, and as beautiful, as this one. That was bad enough, but worse was to follow. Four months later, the prime minister was gunned down by her Sikh bodyguards. This act of revenge was immediately followed by another, as mobs led by Congress politicians roamed the streets of Delhi in search of Sikhs to kill. The rioting spread to other cities of northern India. In the end, more than three thousand Sikhs died, all of them innocent of crimes of any kind.

As it limped into its last month, the calendar year 1984 had already witnessed three dramatic, dreadful events-the attack on the Golden Temple, the assassination of a serving prime minister, the killings of innocent Sikhs. I remember all three well, and also the fourth that was to follow. On the morning of the December 2, I got married in Bangalore. As my wife and I proceeded to Goa on our honeymoon, news reached us of the gas leak in Bhopal, revealed in time to be the most serious industrial accident of the twentieth century, worse even than Chernobyl, killing more than two thousand Indians and maiming many thousand others.

Indira Gandhi’s last year in office was tragic for her, and for her country. As it happens, Mrs Gandhi’s first twelvemonth as prime minister must also be a front-runner in the race to be considered the ‘most horrible of all’. The year 1966 began with the death, through a heart attack suffered in Tashkent, of the prime minister, Lal Bahadur Shastri. In his short time in office, the short-statured Shastri had grown in assurance and credibility. He had led India commandingly in a war provoked by Pakistan, he had laid the seeds of the Green Revolution, and he had taken steps to liberalise the economy.

When Shastri died in January, Indira Gandhi was chosen by the Congress bosses to replace him. She did not at first inspire confidence. Although immaculately groomed, she had little previous experience in government.She had a fine command of English as well as Hindi, but was little inclined (at least in public) to exercise it, so much so that the combination of her silence and her (sartorial) elegance led the socialist politician Ram Manohar Lohia to dub her a goongi gudiya (dumb doll). But then no doll, dumb or otherwise, has had to face as stern a test as Mrs Gandhi did in her first months in office. A check-list of select events in 1966 follows:

February: The Mizo National Front launches an armed uprising against Indian rule. Banks are looted, offices burnt, roads blocked. One town is captured and another threatened. The army is called in, followed by the air force; thus, for the first time since Independence, the Indian state uses air power against its own people.

March: A tribal rebellion in Bastar is quelled by the use of force-forty adivasis die in police firing, among them their venerated former maharaja, Pravir Chandra Bhanj Deo.

March, again: Successive failures of the monsoon lead to starvation deaths in the countryside. There are food riots in India’s most populous city, Calcutta. In desperation, the prime minister goes to Washington to ask for aid in the form of wheat. The mission is captured in one American newspaper headline: ‘New Indian Leader Comes Begging’. Meanwhile, the sorrow and the succour are captured at home in the only joke ever known to have been made by an Indian economist, which is that the country was now leading ‘a ship-to-mouth existence’.

April: The peace talks between Naga rebels and the Indian government break down. The insurgents return to the jungle, only to re-emerge to blast trains and assassinate officials.

June: The foreign exchange reserves are so seriously depleted that the government is forced to devalue the rupee, an act considered by its critics to be an admission of national failure, since the devaluation came close on the heels of the begging for food, and since it was undertaken on the advice-or the orders-of the International Monetary Fund.

November: Angry sadhus calling for a ban on cow slaughter hold a massive meeting on the Boat Club lawns in New Delhi. One swami, even angrier than the rest, calls for the crowd to storm Parliament. The holy men make for the gates, but are stopped by the police. They then turn their wrath on passers-by and on property. Some 500 vehicles go up in flames, also the house of the Congress president and the guard room of All India Radio. For the first time since 1947, the army is called out to restore order in the capital.

Mrs Gandhi’s first year in office was marked by a series of unfortunate events, and so also the first full calendar year that her father, Jawaharlal Nehru, served as prime minister. The year 1948 began with attacks by Hindu extremists on Muslims in Delhi and the Punjab, in revenge for attacks on minorities in what was now Pakistan. The Father of the Nation, Mahatma Gandhi, went on fast to help restore communal amity. For this noble and heroic act, he was murdered by a former member of the Rashtriya Swayamsevak Sangh. The nation was stunned and the fanatics shamed, for they now retreated into the margins. Their place was taken by the extremists on the other side. In the first week of March 1948, and acting on the orders of their Soviet masters, the Communist Party of India launched an armed insurrection against the Indian state.

I was not alive in 1948, but reading the newspapers of the time I sense that this must have been a very dark year indeed. This young and vulnerable nation was challenged by radicals of the left and right. There was a war on in Kashmir. Then a fourth obstacle presented itself. This was the princely state of Hyderabad which, unlike five hundred others of its ilk, was refusing to join the Indian Union.Now that would have been the end of the idea of India-for the territory of Hyderabad extended across the heart of the subcontinent, separating north India from the south.

To judge how bad 1948 must have been, consider this excerpt from a letter written in that year by the last British commander-in-chief of the Indian army, General Claude Auchinleck: ‘The Sikhs may try to set up a separate regime. I think they probably will and that will be only a start of a general decentralisation and break-up of the idea that India is a country, whereas it is a subcontinent as varied as Europe. The Punjabi is as different from a Madrassi as a Scot is from an Italian. The British tried to consolidate it but achieved nothing permanent. No one can make a nation out of a continent of many nations.’

To the very many Indians reeling under the impact of the tragic events of 2008, let me offer this consolation-that there have been some other very bad years, too. 1984 and 1966 and 1948 were likewise peppered with violence and murder, and by riots and rebellions. Then we must also consider those years where a single event may have been momentous enough to undermine one’s faith in the ideals of the Republic. I think here of 1962, an otherwise placid year marred by the humiliating defeat in the border war with China; of 1975, a year when India, for the first and hopefully the last time, was brought under the authoritarian rule of a single party run by a single family; of 1992, when the destruction of a medieval mosque and the riots that followed called into question the secular and plural ideals of the Indian Constitution; and of 2002, when a pogrom against Muslims was conducted by the Gujarat administration with the complicity of the central government, the event and its aftermath shaming India in the eyes of the world.

Here, then, is a listing of the bad and the very bad years experienced by India in the sixty years since independence: 1948, 1962, 1966, 1975, 1984, 1992, 2002, 2008. Which of these was the very worst? It is hard to give an unambiguous answer, for three reasons. The first is the imperfect state of our knowledge, the flawed powers of recall of the historian as much as of the citizen. Had Outlook given me 30,000 words instead of 3,000, this essay might have made for more mournful reading still-with many more unfortunate and tragic events described, with yet other calendar years being offered as likely candidates for the title of the ‘worst ever’.

A second reason why I prefer not to pick one year above (or below) the rest is that, in such a choice, bias and prejudice must always play some part. The Indian for whom secularism is the most important binding value of the Republic will tend to think of 1992 and 2002 as being the worst of all years. The Indian motivated by a dislike of the Nehru-Gandhis might instead choose 1962 or 1975. The admirer of Mahatma Gandhi might cast his vote for the year in which the greatest of all Indians was murdered. Indian citizens of the Sikh faith may have the darkest memories of 1984.

The third reason why any singular choice must be contentious lies in the method being followed here. Because the media-and the electronic media even more so-tends to privilege spectacular, dramatic events, the citizen chooses to do so too. However, behind and beyond the killings and the bomb blasts lie very many less visible sufferings and tragedies. To speak only of this past year, 2008, even if the fidayeen had not targeted Mumbai, the MNS not targeted Biharis, and the VHP not targeted Christians, there would still have been millions of Indians without access to safe drinking water, decent schools and hospitals, and a fair living wage.Had these dramas not been played out in front of television screens, in homes and localities across the land there would still have been women abused and violated, Dalits and tribals harassed and victimised, slum-dwellers evicted, and beggars turned away. Had no gunmen entered the Taj on the night of 26th November, farmers plagued by debt and crop failure would still be killing themselves in the villages of Maharashtra.

This, indeed, may be the most significant reason why one must refuse to single out one particular year as more dreadful than the rest. For, in constructing an index of ‘Gross National Unhappiness’, the trials of daily life must necessarily count as much as the dislocations and deaths caused by extraordinary happenings such as terrorist strikes. However, given the variability of these different events and processes, and the impossibility of measuring them in quantitative terms, our index must remain hypothetical. I suspect that even the combined talents of Albert Einstein and Srinivasa Ramanujam would have found it impossible to accurately compute a Gross National Unhappiness index for a single year, let alone so many.

Who is to say which of the sixty years since India became independent has been the worst of all? Not this historian, at any rate. You may call this cowardice; I prefer to think of it as prudence. Suffice it to say that in our short career as a nation we have had quite some bad years and a few disastrous ones too. By my reckoning, we have had at least eight years that live on in public memory for the wrong reasons, for having been witness to crimes against individuals and communities of a scale that deserve that telling epithet, ‘inhuman’.

Reflecting on that very troubled decade, the 1980s, a decade marked by caste wars and communal conflicts and many other nasty things besides, the sociologist Ashis Nandy remarked that ‘In India the choice could never be between chaos and stability, but between manageable and unmanageable chaos, between humane and inhuman anarchy, and between tolerable and intolerable disorder’. I disagree with Nandy about many things, but think he has it exactly right here. For, as I have argued elsewhere, India is both an unnatural nation as well as an unlikely democracy. Never before has a single political unit been constructed from such disparate and diverse parts. Never before was a largely illiterate population given the right to choose its own rulers.

For India to be both united and untroubled would be a miracle. For it to be both democratic and free of conflict would be doubly so. Thus, in the 1940s, we overcame the crisis of Partition by forging a democratic and federal Constitution. No sooner had the nation observed its first Republic Day than it was confronted by oppositional movements based on language. When we contained and tamed these-by creating linguistic states-our unity was freshly imperilled by the Naga insurgency. Then, in the 1960s, anti-Hindi protests in Tamil Nadu and the rise of Naxalism in West Bengal and Andhra Pradesh posed fresh questions to the idea of India. In the 1970s we were subjected to the Emergency; and, when we came out of that, to separatist movements in Assam and the Punjab. The 1990s saw the sharpening of caste and religious identities, a process that unleashed conflicts and animosities that, when I last looked, had scarcely abated. And through these six decades there has remained the problem of the Kashmir Valley-was it, could it, must it be properly part of the Republic of India?

The history of independent India is one of fires being lit, doused, and then lit again. Seduced by the surge in some sectors of the economy, sections of the Indian elite (the media elite included) have taken our unity and our democracy for granted, and made a claim to be heard on the high tables of the world.In their eagerness to be seen as the spokespersons of a coming superpower, they have neglected the fissures and tensions within their own society.

If sections of the (so to say) thinking classes have been guilty of a premature internationalism, sections of our political elite have lapsed, meanwhile, into a malevolent parochialism. The parish is constituted variously: for the bjp it is the upper-caste Hindu; for the Congress it is the interests of the dynasty; for the lesser parties it is Indians of a particular caste or language group. Even at a time of national calamity these groups have not found it possible to suppress their sectarian affiliations (or personal ambitions) in favour of the public good. In the aftermath of the attack on Mumbai, Priyanka Gandhi was silly to claim that what the nation needed to combat terror was the spirit of that experienced instigator and provoker of extremism, Indira Gandhi. And it was despicable of Narendra Modi to attempt to bribe the widow of a police officer he had, just the past week, so unfairly abused.

As an unnatural nation and an unlikely democracy, India was never destined for a smooth ride. It is not, and can never be, Sweden or Norway- that is to say, a small, mostly homogeneous country with little crime, less violence, and very few poor people.

That said, 2008 was, even by our standards, a truly horrible year for Indians. The task before us now is not to put this past twelvemonth behind us, but rather to learn, from what happened then, to more sensitively manage the tensions and conflicts within. The premature internationalists must set aside their concern-perhaps one should say ‘obsession’-with the number of Indian billionaires in the Forbes list, the number of nuclear weapons we own, and the memberships of international bodies we covet. The parochialists, for their part, might think of working to moderate conflicts of language, caste and religion, rather than-as is their wont-seeking to intensify them. Were this to happen, we may yet succeed in making 2009 a year in which the Indian chaos shall be manageable, the Indian anarchy, humane, and the Indian disorder, tolerable.

almost everyone - atleast in north india- has been to simla, its one of the most popular destinations among travelers of all age groups. so the permissions were asked for from the respective parents, and at got the task of getting the tickets booked. the day of deprture was the 26th of january, (i remember it very well because i got my bike the day before, on the 25th).

on the dday, sp, me and vb went to the station together, where the other three, sg, mg and at were already waiting. the train was on time, and it being a night journey, was really enjoyed by all. we did what everyone does on trains- played cards, and read books, and reached kalka early in the morning.

day1:

early morning on tthe day1, i.e. on the morning on the 27th we reached kalka, from where we took a toy train to simla. the journey on the tpu train was enjoyable at first, with all the great views on the way, but hte enjoyment faded away after sopme time as boredom satrted creeping in, the toy train was way too slow toi be called a train, and it took more than 6 hours to travel a small distance from kalka to simla. anyhow we reached simla finally, and there, thanks to at, we had a government jeep waiting for us at the station, which dropped us to the army guest house, located right at the top of the mall road in simla. so we had free of cost accomodation, and saved a lot from our traveing expenses. we stayed at the room for a couple of hours and in the evening, went over to the mall road. just soaked in the air of simla, walked around for a while and then were back at the hotel after some nice chinese dinner. all were tired that day so we sleptwithout doing much.

day2:

anoher result will be coming out within this week…and i have my sessonals starting the 17th…os will be busy fo some time now.

yea theres another thing to keep me busy, thats the football practice… if they do call me again!!

Escalation Clause Tools - Part I

Whenever I am set to source a category, I analyze to see if it’s really worth sourcingor if the contract should be renegotiated. This is obviously a supplier’s dream come true. However, in many cases it’s better for you as well.

The time it takes to run a six or seven step strategic sourcing effort can be fairly significant. However the time required to renegotiate an existing or expiring contract tends to be much shorter. Not to mention, your supplier may be happy not face outside competition and they may negotiate a very favorable contract with you.

Now that you are considering renegotiating the contract, what are some tools you can use in order to develop that favorable contract. One very good tool is the PPI Index.

For those who don’t know much about the PPI, here is the BLS definition of the PPI.

“The Producer Price Index is a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser’s perspective. Sellers’ and purchasers’ prices may differ due to government subsidies, sales and excise taxes, and distribution costs.”

The CPI measures price changes from the consumer’s perspective, whereas the PPI measures it from the seller’s / manufacturer’s perspective.

Both of these indicies tend track very similarly, however there are anomalies. These discrepancies often occur when the price of raw materials increases faster than speed in which a supplier can pass the costs onto you. Once the price increases occur the supplier usually comes back to the table and tries to renegotiate the contract upwards. However, when prices fall, the same supplier usually takes a very long time to reduce the cost of the very same item (if at all).

As an example, let’s pick something we use on a daily basis, gasoline. The price of crude hit an all time high of $147.55 in mid July 2008, since then we’ve seen the price of crude drop to $35 a barrel. This represents a 76% drop in the price of crude. However, it’s safe to say that we haven’t see a 76% drop at the pumps nor did we see the price of gas hit $7.05.  Regular 87 octane gas sold for slightly under $4 at it’s peak while crude was hitting all time highs. A 76% drop would mean that a gallon of gas should have cost us $0.94. The closest we’ve come is around $1.50 per gallon. The bottom line is that suppliers can’t raise prices fast enough nor will they be willing to drop it quickly either. Although they tend to raise is faster than they drop it.

Now some of you may have noticed a certain hidden danger in pegging prices to an index.  If we aren’t careful, we would absorb every penny of a speculation fueled run up in a commodity.  Keep in mind, due to the massive influx of pension and retirement funds investing in commodities during the past five years and the devaluation of the dollar, the prices of virtually every commodity ran up 100 - 300%.  Similarly, the fund redemption by those very same institutions and the slight strengthening of the dollar, has caused the prices of all those commodities to drop by well over 45%.

Since most of the goods and services we buy for our institutions are tied to one or more indicies, it is in our best interest to keep a close eye on the trends of the PPI, CRB and USD. All these indicies are highly correlated and may help you figure areas of value where you and your supplier can lock in prices, save money on indirect goods or increase profit margins on products dervived from raw materials.

29 Steps I Took to Leave the Workforce at Age 29

Today is my last day at work! No more corporate rat race for me. I’ve been planning an early retirement for as long as I can remember. Those close to me have been hearing about it for years.

At age 29 I left the corporate world behind and I’m embarking on a new chapter in my life: spending more time with my kids (ages 1 and 2), following my passion (teaching others about personal finance), and an overall life of freedom not tied to a JOB! Here’s how I did it (and how you can too!)

Rajat123456

http://www.vidyapatha.com/student_proj/mechnical.php#desi

A crow was sitting on a tree, doing nothing all day.

The crow answered: “Sure, why not.”

Management Lesson for Managers:

============ ========= ========= ========= ========= ========

Parable Number 2:

A turkey was chatting with a bull.

“They’re packed with nutrients.”

Management Lesson for Managers:

============ ========= ========= ========= ========= =======

Parable Number 3:

A little bird was flying south for the winter.

While it was lying there, a cow came by and dropped some dung on it.

He lay there all warm and happy, and soon began to sing for joy.

A passing cat heard the bird singing and came to investigate.

Management Lesson for Managers:

1) Not everyone who drops sh*t on you is your enemy.

2) Not everyone who gets you out of sh*t is your friend.

3) And when you’re in deep sh*t, keep your mouth shut!

Farm suicides worse after 2001 — study

P. Sainath

While the number of farm suicides kept increasing, the number of farmers has fallen since 2001, with countless thousands abandoning agriculture in distress.

My PI was more or less Generic and profile based…

interviews are cordial they just ask why irma in one way or other and mind you they will repeat atleast 3 times….just give some charity and high funda….

“if farmers constitute 80 % of population.there shoud b 80% reservations for them in assembly”

GD TOPICS

1.

Should b school be given full autonomy (regarding curriculum, fees)

2.

Role played in youth in nation’s dev

3.

EFFECT OF LAW ENFORCING AGENCIES ON THE SOCIETY

4.

“Election processes/campaign in India are becoming a farce

5.

The terrorism in Indian context….

6.

Election process has become a farce…we choose the party and they choose the leader. Something to that effect

7.

Should there be a proper reservation for persons representing industry and agriculture in state and national assembly

8.

Which one should be given importance-poverty or education?

9.

Public transport….and its impacts…

10.

subsidies are good or bad, should we do away with it

11.

should subsidy be given to farmers

12.

are elections a political drama

13.

BPOs… good or bad

14.

Does BPO divert youngsters from higher studies?

15.

Whether we should allow Govt. run vehicles to reduce vehicular traffic in India like it has been done in Singapore.

16.

How can we attain a growth rate of 8% p.a

17.

Should management of Indian railways be given in pvt hands, keeping in mind the interests of poor

18.

Health facilities in village/reservation policies in entrance exams

19.

About democracy and literacy

20.

Does this easily available call centre jobs lure away our youngsters from pursuing higher education?

21.

Is credit card good or bad

22.

“Has police been successful in maintaining law and order in big cities?”

23.

Whether terrorism should be curbed by peaceful means or hard measures should be taken…..

24.

Should there be representation from the industrial sectors in the parliament

25.

Has Indian youth lost its patriotic feel

26.

Group Task - Prioritizing some ten plans to achieve complete literacy.

27.

Should academics be the only criteria while selecting students into a B-School?

one result after the other…all going the same way!

cat result isnt officially announced yet, and i havent seen the doom spelt out for me, but i know it, seeing the trends, i know which way its gonna go!!

http://www.efunda.com/home.cfm

http://nptel.iitm.ac.in/

http://www.advancedge.com/hot_links/gd_issue/gd_issue.htm

http://iiminterviews2004.rediffblogs.com/2004_11_04_iiminterviews2004_archive.html

http://www.ptindia.com/gdpi/index.htm

http://www.pagalguy.com/forum/cat-and-related-discussion/720-links-for-gd-pi-experiences.html

Lest we forget, 2008 also saw the renewal of sectarian protests based on identities other than religion. The MPs of the Telangana Rashtra Samiti resigned their posts; the cadres of the United Liberation Front of Asom set off a series of bombs. The activities of ULFA and the TRS pale into insignificance in comparison to the activities, also in 2008, of that other parochial body, the Maharashtra Navnirman Samiti. For the Mumbai that the terrorists attacked in November was also the Mumbai which Raj Thackeray and his goons had sought, just a few weeks previously, to purge of ‘outsiders’ to the city.

Move now from the domains of society and religion to the material bases of human existence. The ground here, seemingly sure and solid, was disturbed this past year by the meltdown in the global economy. The collapse of banks on Wall Street had its ripple effect in India too, with the Planning Commission revising its growth estimates downwards, auto companies asking workers to stay at home three days a week, and BPO firms laying off thousands of employees. Indian companies that had ventured into acquisitions abroad saw the prestige of those purchases being undermined by falling prices and profits. Meanwhile, at home, the aam admi was hit by inflation, whose rate had now reached double digits for the first time in more than a decade.

2008 was also the year that Mother Nature played havoc with her Indian children. In the last week of November, many parts of the great city of Chennai found themselves knee-deep in water. Earlier, in August, the same fate had been handed out to many districts of the great state of Bihar. The Kosi river changed course for the first time in more than a century, the overflow covering huge swathes of land with a fast-moving sheet of water, with humans and cattle fleeing in its wake. More than three million people were affected by the floods.

For the citizens of India, the calendar year 2008 was marked and scarred by the malign activities of Islamic fanatics, Hindu bigots and linguistic chauvinists; by the arresting of the onward march of the Indian economy; and by cyclones and floods. This listing probably overlooks some other nasty things that took place this past twelvemonth. But even the incomplete evidence offered above begs the question-was this the worst year experienced by India (and Indians) since the country was founded?

Speaking as an Indian who has just turned fifty, I can immediately offer one other candidate for that (very dubious) honour-1984, a year that was a nightmare for India at any rate, if not (as George Orwell had once predicted) for the whole world. On January 1, 1984, the Congress government led by Prime Minister Indira Gandhi was on the verge of completing four years in office. It was somewhat less than secure, for there was an insurgency on in the Punjab, and a major oppositional movement afoot in Assam. To these angry complaints of peripheral regions were added tensions of caste and class, and a vulnerable economy.

On or shortly after New Year’s Day the Congress began planning its strategy for re-election. Its best chances, it thought, lay in a departure from its previously non-sectarian politics in favour of a more overtly ‘Hindu’ image. The prime minister began visiting temples across the country. Then, as the Khalistan movement gathered momentum, troops were sent into the Golden Temple. Two days of bloody battle-fortunately, not covered by live television-led to many hundreds of deaths and the near-destruction of the Akal Takht.

Never before had an elected government attacked a place of worship, still less a shrine as holy, and as beautiful, as this one. That was bad enough, but worse was to follow. Four months later, the prime minister was gunned down by her Sikh bodyguards. This act of revenge was immediately followed by another, as mobs led by Congress politicians roamed the streets of Delhi in search of Sikhs to kill. The rioting spread to other cities of northern India. In the end, more than three thousand Sikhs died, all of them innocent of crimes of any kind.

As it limped into its last month, the calendar year 1984 had already witnessed three dramatic, dreadful events-the attack on the Golden Temple, the assassination of a serving prime minister, the killings of innocent Sikhs. I remember all three well, and also the fourth that was to follow. On the morning of the December 2, I got married in Bangalore. As my wife and I proceeded to Goa on our honeymoon, news reached us of the gas leak in Bhopal, revealed in time to be the most serious industrial accident of the twentieth century, worse even than Chernobyl, killing more than two thousand Indians and maiming many thousand others.

Indira Gandhi’s last year in office was tragic for her, and for her country. As it happens, Mrs Gandhi’s first twelvemonth as prime minister must also be a front-runner in the race to be considered the ‘most horrible of all’. The year 1966 began with the death, through a heart attack suffered in Tashkent, of the prime minister, Lal Bahadur Shastri. In his short time in office, the short-statured Shastri had grown in assurance and credibility. He had led India commandingly in a war provoked by Pakistan, he had laid the seeds of the Green Revolution, and he had taken steps to liberalise the economy.

When Shastri died in January, Indira Gandhi was chosen by the Congress bosses to replace him. She did not at first inspire confidence. Although immaculately groomed, she had little previous experience in government.She had a fine command of English as well as Hindi, but was little inclined (at least in public) to exercise it, so much so that the combination of her silence and her (sartorial) elegance led the socialist politician Ram Manohar Lohia to dub her a goongi gudiya (dumb doll). But then no doll, dumb or otherwise, has had to face as stern a test as Mrs Gandhi did in her first months in office. A check-list of select events in 1966 follows:

February: The Mizo National Front launches an armed uprising against Indian rule. Banks are looted, offices burnt, roads blocked. One town is captured and another threatened. The army is called in, followed by the air force; thus, for the first time since Independence, the Indian state uses air power against its own people.

March: A tribal rebellion in Bastar is quelled by the use of force-forty adivasis die in police firing, among them their venerated former maharaja, Pravir Chandra Bhanj Deo.

March, again: Successive failures of the monsoon lead to starvation deaths in the countryside. There are food riots in India’s most populous city, Calcutta. In desperation, the prime minister goes to Washington to ask for aid in the form of wheat. The mission is captured in one American newspaper headline: ‘New Indian Leader Comes Begging’. Meanwhile, the sorrow and the succour are captured at home in the only joke ever known to have been made by an Indian economist, which is that the country was now leading ‘a ship-to-mouth existence’.

April: The peace talks between Naga rebels and the Indian government break down. The insurgents return to the jungle, only to re-emerge to blast trains and assassinate officials.

June: The foreign exchange reserves are so seriously depleted that the government is forced to devalue the rupee, an act considered by its critics to be an admission of national failure, since the devaluation came close on the heels of the begging for food, and since it was undertaken on the advice-or the orders-of the International Monetary Fund.

November: Angry sadhus calling for a ban on cow slaughter hold a massive meeting on the Boat Club lawns in New Delhi. One swami, even angrier than the rest, calls for the crowd to storm Parliament. The holy men make for the gates, but are stopped by the police. They then turn their wrath on passers-by and on property. Some 500 vehicles go up in flames, also the house of the Congress president and the guard room of All India Radio. For the first time since 1947, the army is called out to restore order in the capital.

Mrs Gandhi’s first year in office was marked by a series of unfortunate events, and so also the first full calendar year that her father, Jawaharlal Nehru, served as prime minister. The year 1948 began with attacks by Hindu extremists on Muslims in Delhi and the Punjab, in revenge for attacks on minorities in what was now Pakistan. The Father of the Nation, Mahatma Gandhi, went on fast to help restore communal amity. For this noble and heroic act, he was murdered by a former member of the Rashtriya Swayamsevak Sangh. The nation was stunned and the fanatics shamed, for they now retreated into the margins. Their place was taken by the extremists on the other side. In the first week of March 1948, and acting on the orders of their Soviet masters, the Communist Party of India launched an armed insurrection against the Indian state.

I was not alive in 1948, but reading the newspapers of the time I sense that this must have been a very dark year indeed. This young and vulnerable nation was challenged by radicals of the left and right. There was a war on in Kashmir. Then a fourth obstacle presented itself. This was the princely state of Hyderabad which, unlike five hundred others of its ilk, was refusing to join the Indian Union.Now that would have been the end of the idea of India-for the territory of Hyderabad extended across the heart of the subcontinent, separating north India from the south.

To judge how bad 1948 must have been, consider this excerpt from a letter written in that year by the last British commander-in-chief of the Indian army, General Claude Auchinleck: ‘The Sikhs may try to set up a separate regime. I think they probably will and that will be only a start of a general decentralisation and break-up of the idea that India is a country, whereas it is a subcontinent as varied as Europe. The Punjabi is as different from a Madrassi as a Scot is from an Italian. The British tried to consolidate it but achieved nothing permanent. No one can make a nation out of a continent of many nations.’

To the very many Indians reeling under the impact of the tragic events of 2008, let me offer this consolation-that there have been some other very bad years, too. 1984 and 1966 and 1948 were likewise peppered with violence and murder, and by riots and rebellions. Then we must also consider those years where a single event may have been momentous enough to undermine one’s faith in the ideals of the Republic. I think here of 1962, an otherwise placid year marred by the humiliating defeat in the border war with China; of 1975, a year when India, for the first and hopefully the last time, was brought under the authoritarian rule of a single party run by a single family; of 1992, when the destruction of a medieval mosque and the riots that followed called into question the secular and plural ideals of the Indian Constitution; and of 2002, when a pogrom against Muslims was conducted by the Gujarat administration with the complicity of the central government, the event and its aftermath shaming India in the eyes of the world.

Here, then, is a listing of the bad and the very bad years experienced by India in the sixty years since independence: 1948, 1962, 1966, 1975, 1984, 1992, 2002, 2008. Which of these was the very worst? It is hard to give an unambiguous answer, for three reasons. The first is the imperfect state of our knowledge, the flawed powers of recall of the historian as much as of the citizen. Had Outlook given me 30,000 words instead of 3,000, this essay might have made for more mournful reading still-with many more unfortunate and tragic events described, with yet other calendar years being offered as likely candidates for the title of the ‘worst ever’.

A second reason why I prefer not to pick one year above (or below) the rest is that, in such a choice, bias and prejudice must always play some part. The Indian for whom secularism is the most important binding value of the Republic will tend to think of 1992 and 2002 as being the worst of all years. The Indian motivated by a dislike of the Nehru-Gandhis might instead choose 1962 or 1975. The admirer of Mahatma Gandhi might cast his vote for the year in which the greatest of all Indians was murdered. Indian citizens of the Sikh faith may have the darkest memories of 1984.

The third reason why any singular choice must be contentious lies in the method being followed here. Because the media-and the electronic media even more so-tends to privilege spectacular, dramatic events, the citizen chooses to do so too. However, behind and beyond the killings and the bomb blasts lie very many less visible sufferings and tragedies. To speak only of this past year, 2008, even if the fidayeen had not targeted Mumbai, the MNS not targeted Biharis, and the VHP not targeted Christians, there would still have been millions of Indians without access to safe drinking water, decent schools and hospitals, and a fair living wage.Had these dramas not been played out in front of television screens, in homes and localities across the land there would still have been women abused and violated, Dalits and tribals harassed and victimised, slum-dwellers evicted, and beggars turned away. Had no gunmen entered the Taj on the night of 26th November, farmers plagued by debt and crop failure would still be killing themselves in the villages of Maharashtra.

This, indeed, may be the most significant reason why one must refuse to single out one particular year as more dreadful than the rest. For, in constructing an index of ‘Gross National Unhappiness’, the trials of daily life must necessarily count as much as the dislocations and deaths caused by extraordinary happenings such as terrorist strikes. However, given the variability of these different events and processes, and the impossibility of measuring them in quantitative terms, our index must remain hypothetical. I suspect that even the combined talents of Albert Einstein and Srinivasa Ramanujam would have found it impossible to accurately compute a Gross National Unhappiness index for a single year, let alone so many.

Who is to say which of the sixty years since India became independent has been the worst of all? Not this historian, at any rate. You may call this cowardice; I prefer to think of it as prudence. Suffice it to say that in our short career as a nation we have had quite some bad years and a few disastrous ones too. By my reckoning, we have had at least eight years that live on in public memory for the wrong reasons, for having been witness to crimes against individuals and communities of a scale that deserve that telling epithet, ‘inhuman’.

Reflecting on that very troubled decade, the 1980s, a decade marked by caste wars and communal conflicts and many other nasty things besides, the sociologist Ashis Nandy remarked that ‘In India the choice could never be between chaos and stability, but between manageable and unmanageable chaos, between humane and inhuman anarchy, and between tolerable and intolerable disorder’. I disagree with Nandy about many things, but think he has it exactly right here. For, as I have argued elsewhere, India is both an unnatural nation as well as an unlikely democracy. Never before has a single political unit been constructed from such disparate and diverse parts. Never before was a largely illiterate population given the right to choose its own rulers.

For India to be both united and untroubled would be a miracle. For it to be both democratic and free of conflict would be doubly so. Thus, in the 1940s, we overcame the crisis of Partition by forging a democratic and federal Constitution. No sooner had the nation observed its first Republic Day than it was confronted by oppositional movements based on language. When we contained and tamed these-by creating linguistic states-our unity was freshly imperilled by the Naga insurgency. Then, in the 1960s, anti-Hindi protests in Tamil Nadu and the rise of Naxalism in West Bengal and Andhra Pradesh posed fresh questions to the idea of India. In the 1970s we were subjected to the Emergency; and, when we came out of that, to separatist movements in Assam and the Punjab. The 1990s saw the sharpening of caste and religious identities, a process that unleashed conflicts and animosities that, when I last looked, had scarcely abated. And through these six decades there has remained the problem of the Kashmir Valley-was it, could it, must it be properly part of the Republic of India?

The history of independent India is one of fires being lit, doused, and then lit again. Seduced by the surge in some sectors of the economy, sections of the Indian elite (the media elite included) have taken our unity and our democracy for granted, and made a claim to be heard on the high tables of the world.In their eagerness to be seen as the spokespersons of a coming superpower, they have neglected the fissures and tensions within their own society.

If sections of the (so to say) thinking classes have been guilty of a premature internationalism, sections of our political elite have lapsed, meanwhile, into a malevolent parochialism. The parish is constituted variously: for the bjp it is the upper-caste Hindu; for the Congress it is the interests of the dynasty; for the lesser parties it is Indians of a particular caste or language group. Even at a time of national calamity these groups have not found it possible to suppress their sectarian affiliations (or personal ambitions) in favour of the public good. In the aftermath of the attack on Mumbai, Priyanka Gandhi was silly to claim that what the nation needed to combat terror was the spirit of that experienced instigator and provoker of extremism, Indira Gandhi. And it was despicable of Narendra Modi to attempt to bribe the widow of a police officer he had, just the past week, so unfairly abused.

As an unnatural nation and an unlikely democracy, India was never destined for a smooth ride. It is not, and can never be, Sweden or Norway- that is to say, a small, mostly homogeneous country with little crime, less violence, and very few poor people.

That said, 2008 was, even by our standards, a truly horrible year for Indians. The task before us now is not to put this past twelvemonth behind us, but rather to learn, from what happened then, to more sensitively manage the tensions and conflicts within. The premature internationalists must set aside their concern-perhaps one should say ‘obsession’-with the number of Indian billionaires in the Forbes list, the number of nuclear weapons we own, and the memberships of international bodies we covet. The parochialists, for their part, might think of working to moderate conflicts of language, caste and religion, rather than-as is their wont-seeking to intensify them. Were this to happen, we may yet succeed in making 2009 a year in which the Indian chaos shall be manageable, the Indian anarchy, humane, and the Indian disorder, tolerable.

almost everyone - atleast in north india- has been to simla, its one of the most popular destinations among travelers of all age groups. so the permissions were asked for from the respective parents, and at got the task of getting the tickets booked. the day of deprture was the 26th of january, (i remember it very well because i got my bike the day before, on the 25th).

on the dday, sp, me and vb went to the station together, where the other three, sg, mg and at were already waiting. the train was on time, and it being a night journey, was really enjoyed by all. we did what everyone does on trains- played cards, and read books, and reached kalka early in the morning.

day1:

early morning on tthe day1, i.e. on the morning on the 27th we reached kalka, from where we took a toy train to simla. the journey on the tpu train was enjoyable at first, with all the great views on the way, but hte enjoyment faded away after sopme time as boredom satrted creeping in, the toy train was way too slow toi be called a train, and it took more than 6 hours to travel a small distance from kalka to simla. anyhow we reached simla finally, and there, thanks to at, we had a government jeep waiting for us at the station, which dropped us to the army guest house, located right at the top of the mall road in simla. so we had free of cost accomodation, and saved a lot from our traveing expenses. we stayed at the room for a couple of hours and in the evening, went over to the mall road. just soaked in the air of simla, walked around for a while and then were back at the hotel after some nice chinese dinner. all were tired that day so we sleptwithout doing much.

day2:

anoher result will be coming out within this week…and i have my sessonals starting the 17th…os will be busy fo some time now.

yea theres another thing to keep me busy, thats the football practice… if they do call me again!!

BANKS SINK WALL ST ON INAUGURATION DAY

Catch you tomorrow.

Economics of bubbles

Stephen Cecchetti has written a wonderful paper explaining the financial bubbles. He has written the paper from a central banker’s perspective and adds the challenges it poses to the central banks.

He begins by suggesting the theory behind bubbles:

(1) is made famous by Bernanke. (2) by Alan Greenspan (which is favored by Mishkin and Bernanke as well). Cecchetti favors 3rd view. For (4), he computes inflation including housing prices in UK and finds inflation to be much higher which would in turn have require a much tighter policy. For (5) he says:

 

Excellent read.

 

Krasnodar hotels

According the data of MACON Realty Group, currently the hotels services market in Krasnodar is represented by 60 hotels, total amount of rooms in that fund is about 2000. 9 hotels have four stars category (about 300 rooms), 15 hotels have three stars category (about 450 rooms). Hotels fund in Krasnodar averages - 2.6 rooms per one thousand of citizens, in Moscow the same index is 6.3, in Europe - 25. Currently 4 hotels are being constructed - Ibis, Mariott, Pangra, Katerina-City, total quantity of rooms in these hotels will be 680. In the next 3-4 years demand on three-four stars hotels will be very high and the new constructed objects will not cover it.           Source: newspaper “Va-bank in Krasnodar”.

Who couldn

Earlier this month, the NASDAQ created an index fund made up of companies who’ve received bailout money.

Press Release

Needless to say, it’s already down 42% on the year.

Yahoo! Finance quote

Dell and the Complexity of Sustainability

I take the size of this list as an indicator of the nascent state of the ecosystem of information, advisory and advocacy entities, even though a number of organizations Dell lists have been around for years. This, together with some slight controversy over Dell’s carbon neutrality claims, suggests to me that corporations are lacking standard sustainability metrics and a streamlined set of authoritative voices to guide them in their initiatives. But I think the progress shown by Dell and other companies is impressive.

What do you think?

20090121

Warsaw Stock Exchange

2010 may be Year of Affordable Housing

NEW DELHI, January 21, 2009: The year 2010 may be declared as the year for ‘affordable housing’.

A recommendation to this effect has been made at the National Conference of Ministers of Housing, Urban Development and Municipal Administration held in New Delhi yesterday.

The other recommendations of the conference are :-

1.State specific policy focusing on Affordable Housing with supporting action plans for augmenting supply of land at affordable prices should be developed.

2.States to draw up the road map and a vision for ‘Slum Free City’.

3.Banks to make reservation of at least 1% of their priority sector lending funds for EWS housing

4.Review of existing legal and regulatory framework for acquiring/bringing-in additional lands into the market.  Secure land tenure may be extended to families living in slums. Further, Vertical/multi-storeyed construction for in-situ slum re-developments be adopted by persuading the community to avoid long distance relocation

5.Modify state enactments and city level master plans for upward revision of FAR/FSI to accommodate land allocation for EWS and LIG. The investment in infrastructure should be commensurate with the revision of FAR and FSI.

6.Land at institutional rates to be made available for low income housing to cooperative housing societies and employee Welfare organizations to those with a good track record.

7.Private developers ready to undertake construction of affordable housing in partnership or in a JV with the state may be involved.

8.Institutional mechanisms to compile regularly data on housing starts and completions be established.

9.Steps may be taken to create a healthy rental market

10.Easy availability of housing finance at concessional rates

11.Strengthen and enlarge Housing Micro-finance.

The Conference was inaugurated and chaired by Kumari Selja, Minister of State (Independent Charge) for Housing & Urban Poverty Alleviation. In her address the Minister highlighted that growth of large cities is accompanied by an upsurge in urban poverty where in absence of basic services, secure tenure and formal employment opportunities, settlements of the poor become slums with health & environmental concerns.

She mentioned that the Jawaharlal Nehru Urban Renewal Mission (JNNURM) is addressing the issue of facilitation of basic services for such settlement along with housing and the other scheme of Ministry, Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) is likely to address the issue of availability of institutional finance to these people, who are generally not considered credit worthy by the Banks and Housing Finance Companies.

She requested the State Governments supplement the efforts of Union Government in creation of additional housing stock by increasing supply of serviced land and new houses by direct intervention through State Housing Boards, Development Authorities, Cooperative Sector etc. and also providing one time incentive in the form of relaxation of Floor Area Ratio (FAR) /Floor Space Index (FSI) norms through appropriate spatial (regulatory) incentives. This is also likely to lead to softening of land prices and induce downward trend in house prices.

The social housing programme carries a double benefit. Not only does it enable us to significantly improve the quality of life of the slum dwellers and the poor, housing construction provides an impetus to the economy by its tremendous multiplier effect.

An increase in housing construction activity stimulates demand in about 20 related sectors of the manufacturing industry, and creates employment in the total economy that is almost eight times the direct employment generated in housing construction.

The National Urban Housing & Habitat Policy, 2007 (NUHHP) adopts the goal of Affordable Housing for All, and seeks to promote multiple schemes and private-public partnerships in order to achieve it. Between the JNNURM effort and state sector schemes in some states, it is estimated that about two million houses may be constructed for the economically weaker sections of the populace by the end of the 11th Plan. Given the housing shortage in the country, 98% of which is in the EWS & LIG segment, it is estimated that 26.53 million houses would be required by the end of the 11th Plan. It is thus clear that much greater effort and a much larger programme for housing construction is required.

Retirement Planning: Old Thinking Was Not the Problem

Every move you made was suddenly suspect, open to the rigorous criticism often reserved for the Monday morning quarterback. What you saw as tried and true in your investments suddenly seemed old and tired, a falsehood perpetrated at the expense of your hard-earned money. It was. But the thinking was solid even if you chose not to listen.

There will be a good deal of hand wringing well into 2009 and with it, some suggestions on how you can do better in the future. Was what you did, the investments you chose (that tanked), the 401(k) plans you funded, sometimes even maxing-out (that lost boatloads of retirement dollars), necessarily the wrong thing to do? Some folks think so.

Mr. Middelton, who refers to 401(k) plans as a company friendly and nothing more than a low cost imitation of what pension funds do so successfully bemoans the fact that many of do not have access to exchange traded funds in those accounts, that we are unable to short sell stocks and that frequent trading, while sometimes allowed in some plans often discourages it with high fees.

The suggestion that we drop the buy-and-hold approach in favor of backing new ideas hinges on our ability to develop new ideas, embrace the risk associated with them and be prepared financially to pay the consequence (or reap the benefit of) our actions.

If there were not so many uninvested and under-invested participants in their retirement futures, we would have no need for “some consultant’s broad matrix of investments”. But there are and we just have to realize that there will always be those who want to be part of the idea but do not want to spend their entire lives juggling new tidbits of information, parsing strategies, and focusing too much time on these decisions. It’s wrong but it is what it is and new investors, as Mr. Middleton’s column is called, should take advantage of these broad investments.

He then goes on to suggest diversification with other retirement accounts. This is good idea but not one a newbie should undertake. Many folks have access to either one or the other, a 401(k) employer sponsored plan or an Individual Retirement Account (traditional or Roth). You may use your 401(k) at work but he criticizes the limited access to other products that could help you suggesting that if you do open an account such as this (IRA or Roth IRA), you do it at a brokerage.

That access will come with a cost and Mr. Middleton seems to gloss right over that fact. Yes, your employer sponsored plan might be limited, but it is, in almost every case, a cost-effective way of funding a retirement account. He even mentions annuities as a form of investment for those who make well into the six figure income range and a Roth, because of its advantages in growing after-tax investments (the growth is taxed but the principle is not), although the later is faced with income limitations.

Some other suggestions he offers include trading stocks in a taxable account. I still believe that trading stocks is the last funded account you should have, an account that Benjamin Graham called a Mad Money account (funded once, traded at will but never re-funded - once its gone, the lesson should be learned). Although I believe that you should keep index funds in a taxable account outside of your retirement account. The lack of trading lowers the tax implications of such an account and with capital gains still low, paying for the growth of these funds now might see you in a much better position later.

Bonds took a hit in this latest cycle of financial misery but were not hit as hard as stocks. But this is not the way it is supposed to be. When stocks get hit, bonds are the investment of choice. Still, the idea of a conservative approach in your 401(k) has its proponents. And they are pushing target-dated or life-cycle funds. If you should be lured into this type of investment, pick a target date twenty years beyond where you would like to retire. This keeps the bond portion of the investment lower longer. (There is still no solid evidence that these work with any success. Just keep that in mind as allocate your retirement investments.)

His last suggestion is to be flexible. Better yet, be realistic. While buy and hold may not always be the right choice - things do change from markets to investor attitudes, long-term is still the way to go when planning for your retirement.

Your 401(k) is not in a crisis, the markets are. I still believe that if you made decisions you were comfortable with 15 months ago, they might still be okay choices. Everyone lost. Don’t make choices for your future based on short-term recovery options. Not just yet.

No comments yet — be the first.

I am the managing editor of BlueCollarDollar.com, a financial education site that offers a common sense approach to money, investing, and retirement planning.

I am the author of four books:
"Building Wealth in a Paycheck-to-Paycheck World" (McGraw-Hill 2004),
"Investing for the Utterly Confused" (McGraw-Hill 2007)and the recently published, "Retirement Planning for the Utterly Confused" (McGraw-Hill 2008)

This blog will offer you insights on this book, including unedited passages. It will also include some additional source information and articles of interest.

My fourth book "Mutual Funds for the Utterly Confused" (December 2008) was just published.

Sensex tumbles below 9K on global selloff

Broad-based selling led by metal, banking, oil & gas, technology, realty and capital goods pulled the markets down. The BSE metal index plunged 4 per cent and the biggest losers in the pack were Sterlite and SAIL, each down more than 6.5 per cent. The BSE banking index lost 3.9 per cent and the oil & gas index fell 3.8 per cent. The realty index on the BSE also slid 3.6 per cent.

Among the Sensex scrips, Sterlite, HDFC, Tata Power and ICICI Bank were the top losers, shedding more than 7 per cent each. In the Sensex pack ITC and HUL bucked the trend to end in the green turf.

HDFC ended 7.5 per cent lower after the company reported 15.73% decline in net profit to Rs 546.83 crore in Q3 December 2008 over Q3 December 2007.

E-learning solutions provider Educomp Solutions plunged more than 22 per cent amid speculation that the company fudged its accounts.

Among other stock indicators, the BSE small cap index fell 1.9 per cent and the CNX mid cap index ended 1.3 per cent lower.

Biblical Proportions

The market cap of the ISEQ is €31 billion today. The market cap of the Irish Banks is €1.6 billion.

The entire banking sector now makes up only 5% of the ISEQ index.

In Feb 2007 the banks were 47% of the index when the ISEQ was worth €127 billion.

The ISEQ index has lost 76% of it’s value in two years, the banks are down over 97%. Investors pension funds etc have collectively lost €96 billion.

It is a crash of biblical proportions.

Are We Getting Ripped Off? Latest Bailout and Gold News

Are We Getting Ripped Off? Read Today’s Post dealing with the Bailout, Gold Price Manipulation and more. I’m back, we have a new President, what does this mean for your investments… Read On and Good Investing! - jschulmansr

Preventing The Greates Heist In History- Seeking Alpha

By: Whitney Tilson of Value Investing

 

 

De-Leveraging Is Not Deflation-Seeking Alpha

By: Paco Ahigren of Ahigren Multiverse

“Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation’ to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages.”

– Ludwig von Mises

It’s true that just about every asset class is coming down in price right now. This, however, is not deflation — as I have said so many times recently, much to many readers’ unqualified chagrin. To the contrary, these declines are the products of de-leveraging — not deflation — and the distinction is nearly incalculably important, although the subtlety seems to elude even the most astute these days.

If the previous premise is true (which it is), any removal of money from the economy would eventually result in an increase in the value of our currency, relative to everything else. And that, in turn, would eventually translate into lower prices in dollars. But that’s clearly not what is happening. No, the Fed is printing money, sending the amount in the economy higher than ever seen in U.S. history. That’s not deflationary. That’s inflationary.

Look, the thing we should be worried about is relative value, not “inflation,” per se. It’s not about the growth of M0, or M1, or M2 (or even M3, if you keep up with shadowstats.com), so much as it is about what the money supply is doing relative to everything else that is happening. I know assets are falling in price — believe me, I get no shortage of reminders every single day. But the amount of money in the system — not just M0 — is increasing at a tremendous rate. I won’t argue that the relative value of things like real estate and equities are going to continue to drop — maybe even dramatically, and for a long time — in terms of demand (or lack thereof). No, what I’m most concerned about is that demand will stay extremely low, and yet prices will rise anyway because of the increase in the amount of money in the system.

But it’s not just money; it’s also Treasuries. The Fed has specifically stated that its objective is to stimulate “inflation” (by its definition). It wants prices to rise, and it’s going to do everything it can to find success. But the amount of money in the system is unprecedented. When the Treasury bubble starts to collapse, yields are going to explode. Yes, the Fed will probably print more money to buy down the long-end of the curve, but how long will that work? Some people say years, but how? Do you really think the Chinese and the Japanese are going to keep funding that sort of behavior? Or even more importantly, do you think they’re just going to sit on their current holdings? Probably not, and if they start dumping Treasuries, yields are going much higher.

It’s not a matter of if this is going to happen. Yields can’t stay where they are for any sustained amount of time, and once they start rising, so will prices. But will demand for, say, houses have increased? No. Cars? No. Boats? Televisions? No. Why? The American consumer is tapped out.

Credit card companies are tightening limits prodigiously. Teaser rates are all but gone. Home equity has dried up. The consumer has driven two-thirds of our economy for at least the last few decades, and now the consumer is dead. There’s another aspect to this that I won’t go too deep into: the American consumer protects his or her credit score for one reason — to obtain future credit. But the consumer also knows that loans have dried up — not just today, but for the very distant future as well. You know these consumers have to be thinking about defaulting; if they can’t get loans anyway, why would they not default on thousands of dollars in unsecured credit card debt? I plan on writing more about this in future articles, but suffice it to say, I think credit card companies are going to give us the next blow to our collective stomach, and it’s going to hurt.

So here we have a situation in which demand is gone, and yet prices and rates are rising — because of inflation (printing money) and the Treasury collapse. And that’s the point: it’s not going to come from just one source. It’s not just going to be inflation (printing money). It’s not just going to be the collapse in Treasuries. It’s not just going to be the nearly unfathomable costs of the stimulus packages that are coming online in the next two years. It’s going to be the confluence of all of it. And if I’m right about the continued deterioration in credit markets, things will be even worse.

You think it’s not different this time? Add it all up, in real dollars — the staggering amount of debt, the parabolic rise of currency in the system, the annihilation of real-estate investment, and the demise of the consumer. $8.5 trillion committed to bailouts and stimulus packages. Oh, yes it is different this time. It’s very different.

Credit cards didn’t even exist in 1930, and the dollar was backed by gold. Credit cards barely existed in 1973. Nixon had just taken us off the gold standard, and look what happened? Volcker was immensely lucky to have stopped hyperinflation, and look at the extreme measures he had to employ to do it.

Of course, every time I bring all of this up — which is a lot lately — somebody starts talking about the velocity of money. And pretty soon after that, somebody starts talking about the multiplier effect.

Yes, the U.S. employs a fractional reserve system, and while that system certainly lends to rising prices and yields, the amplifier effect is not inflation. Like the printing of money, the fractional reserve system is only one ingredient in the poison that lends to the ultimate catastrophe inspired by central banks: rising prices and increased costs of borrowing.

And then there’s velocity…

While I am eternally grateful to my critics for forcing me to defend the theories I hold dear, I sometimes fatigue of the incessant snapping at my heels by people who want me to know that the velocity of money has slowed down. I know the velocity of money has slowed. It doesn’t matter. It’s not going to stay this low for long, and when it starts speeding up, it’s not going to be a “good thing.” Treasuries are going to break, rates and prices are going to rise, and all that money pressing against the dam is going to find a crack. Why? It has to. People will flee from dollars that are losing value. They will extract all the dollars sloshing around the system, and they will buy commodities and durables in order to preserve the value of their wealth.

Remember, just because the dollar is losing value does not mean that the concomitant subsequent rise in certain asset classes necessarily means that demand for all assets has increased dramatically — as it did during previous eras of easy money. Demand for assets economy-wide can continue to wane even as people spend dollars as fast as they can get them in the midst of rising prices. And this is a very important distinction: prices can rise because of demand, but prices can also rise because of excessive increases in the amount of money in the system. If prices are rising without a simultaneous increase in demand, well, I can’t think of a more dangerous economic environment to be in.

You don’t believe it can happen? You think there’s a huge demand for houses, cars, and boats in Zimbabwe? Prices there are rising exponentially, but there is very little demand for assets — other than staples, of course. What do you think their velocity of money is?

The other day I wrote that Treasuries and the dollar are not safer” than gold, and for my efforts I was heckled by several readers. Ultimately, however, flight-to-quality will seek the true risk-free rate of return, and this is yet another factor that will contribute to the imminent ferocity of the move that’s coming. Once Treasuries unwind, people and institutions will scramble to find a place to put the money they had once placed in the “safety” of U.S. government debt. And unless you know of a medium whose historical consistency and safety surpasses gold’s, that will be the place investors find haven.

Just for future reference: when I say the dollar’s going to fail (which it is), and you’re hovering over your keyboard, poised like some bird-of-prey, ready to strike me with all the ire of God-upon-Sodom, will you try to remember that I acknowledge velocity is, at least for the time-being, near zero. Will you also try to remember that I don’t believe the massive increase in currency alone will not be responsible for imminent rising rates and prices? In fact, I think Treasuries are going to play a greater role in the beginning.

Also, I agree with many of you that my timing may be a bit premature, and I exited my TBT after the last run-up. Unfortunately, today the stock market and Treasuries are getting crushed as gold rallies. I wouldn’t want to declare myself “right” based just on the behavior of these markets in recent days. That would be stupid. And yet I sit here and watch TBT move higher, wondering if getting out was even more stupid.

To add to my trepidation, some sort of manager in the South Korean finance ministry came out over the weekend and announced that the time has come to sell U.S. Treasuries. How do you think that made my stomach feel? Of course, Bernanke keeps promising to do battle with the long end of the curve, so maybe he’ll make good on his threat and I can find a point to get back in comfortably.

Of course, if I miss the move because I listened to some of you cynics. Well, at least I still own gold.

Copyright 2009, Paco Ahlgren. All Rights Reserved.

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On Gold Price and Market Manipulation 

Questions Begging Answers- GoldSeek.Com

By: Rob Kirby of Kirby Analytics

 

 

 

 

 

 

 

 

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Gata’s Tenth Anniversary: Gold Manipulation Evidence Mounts-Gold Seek.Com

By: Bill Murphy of LeMetropole Cafe 

“Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.” … John Kenneth Galbraith

 

 

 

 

 

 

Why its Great to be Canadian

With all of the headlines of doom and gloom, it is important to remember how great it is to be Canadian!

Even though Canada’s economy is linked to the U.S  it certainly doesn’t mean that we are on the same path, especially when it comes to real estate. Yes there has been a slow down. That is good considering where housing prices vs. affordability was heading. Compared to 2007 which was the Tiger Woods year in real estate, anything comparable could look like a downturn. Canadians should feel secure about our housing market long term.

CMHC (Canadian Mortgage and Housing Corporation) has been a force of stability in providing home insurance, and our banking system resisted handing out mortgages to anyone with a pulse over the last years, unlike in the U.S.

There are many variables to what has occurred in the U.S and global markets over the last year. However here are some Canadian facts to consider; The International Monetary Fund recently ranked the Canadian Banking System as the most stable and secure in the world. The U.K and the U.S ranked 40th and 44th respectively.

Housing Affordability typically should not be more than 32% of a borrower’s gross annual income. If we look at a standard condo in Alberta for example, the affordability index was 28.2% in quarter 3 of 2008, and 30.9% in Ontario in that same quarter. (Source: Statistic Canada, Royal Lepage, RBC Economic research) So homes are still affordable. From 2007 to 2008 when looking at average housing price decrease it has been a minimal $10,000. Not too bad when you are looking at longterm holds anyway. There are many areas in Ontario that are still getting big business investment dollars and new inovative projects on the go. The techtriangle being one of them. Darlington Nuclear Plant is looking to fill 1,300 jobs. Our national average for sales on the MLS (multiple listing service) only fell 4.7% per cent last month. Compare this to the 33% in Phoenix, or 32% in Las Vegas and comparably we are doing well. In Canada ”At the end of the day we will have outperformed much of the rest of the world, certainly the rest of the G7″  BMO Sheery Cooper said Jan 7,2009.

Benjamin Tal, leading economist said “Is this a crisis? No. Is it pretty? Still no, and you will lose 2 years of price appreciation. But this is part of the economic cycle. Canada never had a subprime problem in the league of the U.S, which means a market correction here will be more moderate.”

For investing in real estate, long term hold is what we are looking for and areas with a future.  Real estate is still one of the safest long-term investments a family can make. 2009 may very well be a slower year than our booming 2006-2007 however NOW is the time to buy when certain stronger markets are low, and knowing that the strength of Canada as a whole. Understanding you have to buy in specific markets in specific towns. Know what to look for in terms of the fundamentals of real estate and markets, political climate, job growth, transportation etc. Or work with a team who assesses all angles and has an exit strategy, and knows what your money can do for you.

website going live very soon!

Very exciting times here at Sell Your Own Home headquarters as our long awaited website is going live very soon! With all the information and tools you need to sell your own home it’s your one stop shop for all things property.

In the meantime we’re still scouring the net to bring you the very latest from the property world and we’re always happy to hear your own views and opinions. We’re also looking for you to send in your own property or DIY tips to share with your fellow readers, so if you have any good advice, send it our way!

Here is some interesting mortgage news from About Property:

The federation says the key to the success of the measures will be the bank'sreaction and the extent to which they take up the facility. 

If implemented successfully and combined with a wider package of measures, HBFbelieves the announcement could finally start to reverse the downturn in thehousing market. 

HBF also welcomed the commitment by the Governmentwith regard to changes in NorthernRock’s lending policy, and hoped that the influence the Government now haswith the other major mortgage lenders will result in similar commitments. 

John Stewart, Director of Economic Affairs at the HBF, said, ‘This is a positive move by Government to address the key issue affecting the housing market, namely the lack of mortgage finance. The Government must now work withlenders to ensure banks use the facility to assist beleaguered home buyers. 

‘Restoring sensible levels of mortgage lending is absolutely critical to any recovery, and if combined with further measures to assist first-time buyers,and steps to get new home building sites started, should make a real differenceto the housing market and thus the wider economy.’

Some encouragement for sellers from The Property Wire:

Failed States Index for 2008

The Fund for Peace releases a lovely map of their Failed States Index for 2008

12 indicators were used to create this lovely animated map of failed states in 2008, including some of HFP’s favourite research subjects. These include:

They also published an excellent article discussing these trends in Foreign Policy, which can be found here.  Click the map below for a link to the Fund for Peace’s website on this project.

 

Bank of Japan Preview And Japanese Lessons for Other Governments

A rate cut by the Bank of Japan on Thursday would be a huge surprise, since the benchmark overnight money target and Lombard rate are at at 0.1% and 0.3%, leaving no cushion short of a restoration of zero rates and adoption of quantitative easing.  These are options that BoJ officials continue to resist.  There have been two cuts of 20 basis points each, first at end-October and then after the last meeting on December 19th.  On the second occasion, the central bank also lifted its monthly program of outright JGB buying to Y 1.4 trillion from Y 1.2 trillion, widened the range of bonds that it will accept, agreed to purchases of commercial paper and introduce special fund-injecting mechanisms to ease corporate financing stress, and announced plans to develop other schemes to alleviate the corporate credit crunch. Officials will now follow up on that promise with liquidity-injecting operations including the buying of corporate bonds.

December’s 7-1 vote to cut rates had one dissenter, Tadao Noda.

Japan’s economic and financial circumstances have deteriorated substantially since the meeting on December 19th.  An 8% decline of the Nikkei has squeezed bank capital further.  The Nikkei is now 56.7% below its 2007 peak, which in turn was 53.1% below the 1989 all-time high.  Although the yen has not risen further against the dollar, it did advance another 8.5% against the euro and by even more against sterling.  Construction orders fell 12.5% in the year to November. The Economy Watchers’ index slumped to 15.9 in December from 21.0, and the Shoko Chukin index, another gauge of small service sector conditions dropped to 29.4 from 35.1.  Industrial production plunged 8.5% in November, and the ratio of inventories to slumping sales soared 12.9% that month.  The Tertiary index of service-sector activity fell 0.9% in November, twice as much as forecast.  Consumer confidence dropped to 26.2 in December from 28.4 in November, and department store sales posted a 9.4% on-year decline in December, the biggest 12-month drop since March 1998.  Core domestic orders for machinery fell 16.2%, and foreign demand for machinery tumbled almost as much (14.4%).  The PMI, a gauge of manufacturing, plunged to 30.8 in November from 36.7 in October.

Customs export volumes sank 21.9% in the year to November, and settlements-basis export values dropped 17.4% against the prior month.  Retail sales dipped 0.1% m/m and by 0.9% from November 2007.  In the labor market, new job offers were 23.7% lower than in November 2007, and their ratio to job applicants sank to a 57-month low.  On the price front, corporate goods price inflation of 1.1% in December is down from 7.4% in August, and corporate service price inflation is already back in the red at -1.9%.  Core CPI was halved to 1.0% in November from 1.9% in October and is clearly headed for sub-zero territory.  Wages fell 1.9% in the year to November, and the jobless rate moved up by two-tenths of a percentage point.  What looks like a rare bright spot, a much higher 3.7% on-year increase in bank lending, is in fact a sign of a completely frozen commercial paper market and cash hoarding by desperate firms.  The Ministry of Finance’s quarterly business survey revealed sharply revised investment plans, amounting to a 9.8% drop this fiscal year compared to a 2.4% drop predicted three months ago.  Japanese real GDP in calendar 2009 will probably drop at least 1.5% and maybe more than 2%.

Japan’s experience is an investor’s worst nightmare.  Japan’s banking system crisis happened in isolation.  Today’s crisis is affecting every country to some extent.  Japan was slow to react initially cut interest rates, and officials there were chronically behind the eight-ball in that regard.  Mistakes like a sales tax hike in 1997 and undue delay in getting toxic loans off banks’ books were made, but plenty of mistakes of omission and commission are being made by many governments now as well.  Once addicted, Japan never got off the wagon of extremely low interest rates, never recaptured its old trend growth potential, and has a stock price index of 7902 compared to 38916 at the end of 1989 some 19 years ago.  Public finances remain a complete mess.  Markets have shown great impatience with the incoming Obama administration for not unveiling a detailed and legislated agenda on Day 1.  The presumption is that if politicians make the hard decisions, allowing prices to adjust properly, a foundation for eventual recovery in economic activity and financial market functionality will be laid.  But what if no solution exists, or if no feasible solution can be imposed by a government where sovereignty resides with the people?   In the sea of uncertainty that has gripped economies since August 2007, the only consistent thread is that every policy and private-sector attempt to fix the mess has failed, if not immediately then after a while.  The consensus that many economies will begin to recover in the second half of this year or certainly sometime in 2010 remains faith-based.

Snowballing your investments

Active investment management is often ridiculed for poor returns compared to passive indexing (not often enough judging by its continued popularity). The few funds that do consistently outperform the closest index are difficult to find before enough investors flood in to drag down their returns. Based on this knowledge, I concluded a while ago that it would be very difficult to get investment returns significantly higher than the long-run average real return of stable stock markets such as those in the US, Canada, and western Europe.

This can certainly form the basis of a good investment plan and there’s nothing wrong with “only” getting the market average. However, reading The Snowball gave me another perspective on this. While choosing someone else to actively manage your money often comes at a high cost, there are a lot of potential investments that can have higher rates of return but require your direct involvement. The book includes many stories about how Warren Buffet used his money early on to start small (and often temporary) businesses that grew his capital significantly.

This definitely wouldn’t be the right thing for everyone to do. If you don’t want to spend a lot of time managing an investment or apply specialized knowledge that you already have, the easiest thing to do is still to buy index funds. Since I don’t have a job and I’m free to allocate my time any way I see fit this idea is particularly interesting. By setting aside some money for investments that I’m directly involved in I may be able to get higher rates of return than I would by investing in public companies. I’m interested in business in general, so having to spend time managing an investment wouldn’t feel like a waste of time. It might even help me learn more by exposing me to new challenges.

One simple example of a direct investment is real estate. If you find a property that has positive cashflow from the start the combination of those profits, the mortgage principal payments included in the rent, and the property value appreciation may give you a rate of return well above the average expected from stocks. Another example might be buying a small business that’s currently profitable.

Doing this successfully will require a big change in my perspective. So far I’ve pretty much always done things myself except for the cheapest services that would never be worth my time. Getting things done by investing money instead of time requires a different approach, but it seems to have a lot more potential.

A danger in this type of investment is that the time required actually makes the rate of return much worse. If you don’t account for this your time input may add hidden costs that turn it into a bad investment. If the income generated doesn’t depend directly on the time you put in there’s the potential for good returns including the cost of your time; there may be periods where you have to put in time that would earn you more money at your current hourly rate, and other times when you just have to check in now and then to see that everything is ok.

Another type of active investment is what Buffet later turned to: detailed analysis of the stock markets to find undervalued stocks and buy them. While this can also have higher returns if you put in the time to get a better understanding of the market than most investors it’s not something that interests me much. It’s also likely to be much harder now in developed markets than it was in the 40s, 50s, and 60s (although there are still times when the market presents obvious opportunities to those who can see them).

I’ve just recently started to think this way, so it will take a while to adjust fully and see the opportunities to increase my rate of return. Meanwhile I plan to continue investing in stocks, and start building up an account that can be used to fund active investments.

Do you look for ways to get a higher return than index funds? What’s your preferred method?

Catalyst wanted: MEMSIC INC (NASDAQ:MEMS)

MEMSIC INC (NASDAQ:MEMS) is a deeply undervalued net net stock and the second installment in our Catalyst Wanted series. At its $1.64 close yesterday, MEMS has a market capitalization of $39M. We estimate its liquidating value to be around 86% higher at $72M or $3.05 per share. Its liquidating value is predominantly cash, so much so that MEMS has net cash of around $62M or $2.60 per share, which is around 60% higher than its stock price.

About MEMS

MEMS provides semiconductor sensors based on micro electro-mechanical systems. Its accelerometers are used to measure tilt, shock, vibration and acceleration in a range of mobile phones, automotive safety systems and video projectors. The company’s investor relations website can be found here.

The value proposition

Like TRID yesterday, MEMS has an veritable treasure trove on its balance sheet (the “Book Value” column shows the assets as they are carried in the financial statements, and the “Liquidating Value” column shows our estimate of the value of the assets in a liquidation):

According to its most recent 10Q, MEMS’ cash and equivalents are invested in money market funds and auction rate securities. As of September 30, 2008, MEMS’ investments included $5.8 million of auction rate securities. Auction rate securities are generally long-term fixed income instruments that provide liquidity through a Dutch auction process that resets the applicable interest rate at pre-determined calendar intervals, typically every 7, 28, 35 or 49 days. These investments have high credit quality ratings of at least AAA/Aaa. Due to recent liquidity issues, certain of the auction rate securities MEMS holds have failed at auction, meaning that the amount of securities submitted for sale at auction exceeded the amount of purchase orders. If an auction fails, the issuer becomes obligated to pay interest at penalty rates, and all of the auction rate securities MEMS holds continue to pay interest in accordance with their stated terms. However, the failed auctions create uncertainty as to the liquidity in the near term of these securities. As a result, MEMS has classified the $5.8 million of auction rate securities it held at September 30, 2008 as long-term investments. We have applied an 80% discount to those securities.

MEMS not have any off-balance sheet financing arrangements other than property and equipment operating leases, the value of which is not disclosed in the financial statements. It does not have any transactions, arrangements or other relationships with any special purpose entities established for its benefit.

The catalyst?

None. MEMS is using the cash on its balance sheet to construction a facility in Wuxi China. The company expects to complerte the first phase in the first quarter of 2009 at a total cost of $6M. The company expects to complete the second phase within three years at a total cost of $30M. Other significant cash outlays primarily consist of salaries, wages and commissions.

The construction of the Wuxi facility, and in particular the second phase of the Wuxi facility, seems to us to be an investment that carries significant risk in the present environment. We’d suggest that a better use for the cash at this time would be to buy back the company’s stock given the huge discount to its cash backing. If the company was to redirect the $30M to stock repurchases at the present stock price, we estimate that the company’s value would increase more than 150%. It might not be realistic to complete the buy-back at this level. If we were to assume a more realistic number, say $2.50, which is 50% higher than the current stock price but still at a discount to its per share cash backing, the balance sheet looks like this:

If the $30M buy-back is completed at $2.50, the liquidating value of the company increases around 20% from $3.05 to $3.60. If we assume that the stock price trades up to the new liquidating value as a result of the company’s new shareholder-oriented management, investors buying in at the present $1.64 stock price see the stock appreciate 120%.

Conclusion

Without a positive catalyst, MEMS will probably remain as a net cash stock for a long time. Despite its deep discount to its cash backing, MEMS is no real bargain without more shareholder-oriented management. This is another stock we’ll keep on our watchlist and let you know if anyone takes it on.

MEMS closed yesterday at $1.64.

The S&P500 Index closed yesterday at 840.24.

[Full Disclosure:  We do not have a holding in MEMS. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]

Dollar God

It’s all the more apparent to me that our true religion is money.  What we are selling here at the church isn’t being bought as much because more and more people worship money.

I guess I thought maybe there would be a realization after the investment crash that worshipping money isn’t ‘all that.’  I guess I would think that when people started to see there investment house of cards start to fall that maybe it would get them to consider investing on a more lasting and even eternal basis.  I think we are going the opposite direction quickly.  We are all spending more time worshipping money to rebuild the house.

They take people’s money and tell them they have the knowledge and information to outperform the market (they don’t tell people to buy a risk appropriate collection of index funds do they?).  The real irritating thing about these priests and profits of the real religion in America is that there’s at least five different layers and none of them is adding any value as far as I can tell. 

You got your local investment advisor guy who gets his investment recommendations from some local/regional/section manager who gets his advise from some national guy who recommends products who are management by investment strategists overseen by corporate investment managers and they are all getting a little slice of the pie under the premise they are going to do better than the index funds. 

Is your collection of known and unknown advisors treating you well?  With all those layers of people making their livelihoods off the premise that they know where, when and how to invest you sure would have to believe that someone along the line would maybe have a sense for when the market might be overvalued.  What value do they add if they can’t predict on 12 month basis the probability that the market is under or over valued?  Anyone get the advice to move money to cash?  “Buy and hold quality investments, invest in the long-term, you’ll lose if you try to time the market, blah, blah, blah.”

The good news for all you, my many readers, is that you will probably get to enjoy this blog until 2038 when I can finally afford to retire although given the growth of money worship, I bet if I set up shop as money priest, maybe it would be sooner.

 

22 January 2009 Newz Bits

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Welcome to SOUGHT CONTENT’s Blog. This is the place where I shares my knowledges, interests, and anything that I would like to share.

Malaysia gets set for borrowing spree, draws fire for slowness and financial indiscipline ~ Malaysiakini

Malaysia’s move to cut interest rates and flush the market with funds signals its readiness to embark on a borrowing spree to finance the budget deficit.

DPM and Finance Minister Najib Razak also drew fire for his slowness to react, with analysts saying he should not try to hide behind political events, as he had highly-paid staff to do the execution. That they didn’t only reflected on his leadership.

To-date, not a single prescription in the RM7 billion stimulus package unveiled last October has been implemented. The delay will make it tougher to stave off the economic turmoil …

Malaysia has slashed interest rates and pumped up liquidity ahead of a borrowing spree to fund its ballooning budget deficit - drawing fire from experts for both its financial indiscipline and slowness to react.

The central Bank Negara yesterday cut the overnight policy rate by a more-than-expected 75 basis points to 2.5 percent, a move that indicates the economy was worse off than deputy premier and finance minister Najib Abdul Razak has cared to admit.

“We are in uncharted territory and until the global situation stabilises, the local economy will remain at risk. It is presumptuous to predict the bottom, and what Najib must do now is to act quickly and decisively,” said Azrul Azwa, senior economist at Bank Islam.

Just two days ago, the finance minister dropped a bombshell. Najib admitted to reporters that none of the prescriptions in a RM7 billion economic stimulus package (ESP) unveiled in October had been carried out yet.

“This is unacceptable. If they started the ball rolling, say three or four weeks after announcing the package at the latest, it could have neutralised a lot of the nasty effects, such as the sharper than expected retrenchment levels that we are already starting to see,” said Azrul.

A vicious cycle, and one ESP at a time please

Najib also said a second ESP was on the cards, this time targeted at groups vulnerable to the global economic slowdown, and included assistance for retrenched workers. He declined to provide details as “a lot of things are still being looked into”.

“We are waiting for the right time to launch the second package. We want to ensure the focus of the second package is different from the first,” Najib said.

Nevertheless, financial practitioners were unimpressed. There has been talk the second package could amount to RM10 billion, which would jack up the 2009 budget deficit from the forecast  4.8 percent of GDP to perhaps 5.5 percent of GDP.

“Let’s get the first one off the ground before we even talk about the second one. I mean, this is nonsense. The government’s slowness is shocking and inexcusable,” said a head of research at a large brokerage who requested anonymity.

“They should know the longer they delay the implementation, the longer it takes for the knock-on effect to filter through, and wake up the economy.”

“Najib must stop blaming other people. This is not the Kuala Terengganu by-election. The RM7 billion package was finalised and announced by him. He had highly-paid staff to do the execution. If they didn’t, it reflects on him and shows a lack of leadership.”

Despite government assurances, analysts expect Malaysia to register never-before-seen unemployment, hit by job-losses from both within the country and in neighbouring Singapore, where there are at least 300,000 Malaysians working.

Just yesterday, Malaysia’s human resources ministry said 45,000 workers in the electronics sector would be laid off later this month due to production cutbacks by factories. This number compares against the 33,451 workers retrenched for the whole of 2008.

Bank Negara also reduced the statutory reserve requirement by 150 basis points to 2.0 percent, a move that will increase the pool of funds available for borrowing.

This measure, taken together with the sharp cut in interest rates, sparked talk that it would soon embark on a borrowing spree to fund the government’s growing budget deficit.

Money market analysts expect the government’s net issuance of debt securities to shoot past the RM60 billion mark and hit a fresh record high in 2009.

For comparison, in 1997 net debt issuance was just RM 3.8 billion, pushed up to RM17.7 billion in 1998 by the Asian financial crisis.

But despite the government’s promise to balance the budget, it has steadily ballooned from then on, crossing the RM50 billion ringgit mark for the first time in 2007.

“It’s just like using a credit card. If you don’t have much outstanding, then go ahead. Why suffer so much, borrow a bit to tide through,” an economist at a foreign bank had previously warned.

So far, the ringgit has borne the brunt of the government’s indecisiveness and lack of financial discipline. It fell to 3.6160/6210 against the US dollar  from yesterday’s closing of 3.6080/6130.

The share market too has been lacklustre, failing to mount any sustainable rebound other than brief technical rallies. The Kuala Lumpur Composite Index touched a four-week low to close at 873.41 points on Wednesday, down by 0.79 percent.

Dealers are predicting further falls and expect the KLCI to breach the 800-points psychological mark in the first quarter, without any meaningful recovery until the second half of the year.

Earlier this week, Khazanah Malaysia , which oversees a chunk of the country’s wealth for the government, admitted the net value of assets under its management fell 37 percent in just eight months. Net asset value was RM33.7 billion at end-Dec 2008, versus RM53.1 billion in May.

Najib, who slashed the 2009 economic growth forecast to 3.5 percent from 5.5 percent in October is expected to further reduce the prediction to between 1.0 and 2.0 percent.

“It would need nothing short of a miracle to get 3.5 percent. Again, the keyword here is speed. Our leaders must be realistic and not try to give a false impression to the people,” said Azrul.

“Compare against Singapore. The government there has just pushed down their GDP forecast to between negative 2 and negative 5 percent. Just about a month or so ago, it had predicted between positive 1 and negative 2 percent. This is not being alarmist, it is being responsible.”

UK Health News 01/22/2009

While some patients receive appropriate care from specialists, others are given little or no support, it said.

The study was produced by the King’s Fund and commissioned by the Rheumatology Futures Project Group, which includes charities, professional groups and the Royal College of Nursing. The group receives funding from pharmaceutical companies that make arthritis therapies.

The case linking exposure to radiation during the tests, carried out between 1952 and 1958 in the South Pacific and Australia, and subsequent illnesses including cancer, was now conclusive, and the government should provide compensation, said Ben Browne QC, representing 998 ex-servicemen present at the tests.

The House of Lords outlawed a procedure that allows ministers to put staff on a provisional employment blacklist without investigating the strength of allegations made against them or listening to their side of the case.

The document, which cost £1 million to produce, sets out the rights and responsibilities of patients and those who treat them, including private hospitals and charities. Patients are told that they have the right to choose a GP practice and be accepted by it “unless there are reasonable grounds to refuse”.

The drug, called alli, prevents the body from absorbing fat in food and helped slimmers lose an average of 10lb over six months in trials.

It has been given the seal of approval by Europe’s medicines watchdog and is expected to be available in pharmacies before the summer.

The findings will help up to one third of the 31,000 men diagnosed with prostate cancer each year where the disease has spread outside the prostate gland.

It claims the postcode lottery is being made worse by Government targets that are causing delays in appointments to see specialists and receive treatment.

Patients already diagnosed with the disease are having to wait longer to be seen – or the NHS ends up paying more than double to treat them as a ‘new’ patient, says the report from the independent King’s Fund think-tank.

Abortion charities say the policy change, heralded last year, will make it easier and more convenient for women who are under nine weeks pregnant to terminate their babies.

But critics said it would lead to a rise in the number of abortions. Already they are pushing 200,000 a year in England and Wales. The abortion rate is second only in the western world to the U.S.

Youngsters who took the tablets needed a third less medication as they saw symptoms of both conditions drop dramatically.

Researchers have found a fake treatment is as good as the real thing at relieving the pain of headaches.

However, the gap between supply and demand for organs is still growing and 1,000 people are expected to die this year while waiting for a transplant.

The pill, which works by blocking the absorption of fat in the body, will be available at a lower dose than doctors generally prescribe.

It is aimed at adults with a Body Mass Index (BMI) of 28 or more.

The Institute of Child Health team says diagnosed children have severe versions of character traits probably shared by millions of others.

Often it goes unnoticed and unreported and so a helpline has been set up for residents or their relatives, to report cases of neglect.

The cross-party inquiry into painkiller dependency said drugs such as Nurofen Plus and Solpadeine Plus should come with a warning about addiction risks.

Huge strides have been made in pushing annual cases of the crippling disease down to 1,618 worldwide.

“We have a 36-year-old man with a suspected heart attack coming in by ambulance and he should arrive in 20 minutes,” the medical director told me.

After a few refreshing ales, the populace of this fair isle like to repair to the nearest purveyor of Mediterranean cuisine and partake of a traditional favourite - the doner kebab.

The Cochrane Review reviewed 33 separate trials into acupuncture and its so-called “sham” counterpart.

The latter also involves the insertion of needles - but not into traditional “energy points”.

Macmillan Cancer support says Asian women are less likely than any other community to look out for early signs of the disease.

The House of Lords ruled that, because care workers were put on a provisional blacklist before any investigation, they were denied a fair hearing.

Benjamin Browne QC, representing 1,000 ex-servicemen, said science has made a link between health and their role in the 1950s tests in the South Pacific.

In a Guardian interview, he said patients will gain a new legal right to information about the options available for free treatment on the NHS in England.

Health minister Lord Darzi got early career advancement when he was made a consultant at CMH in 1993 and contributed to the first stages of its radical reforms. With him now at the NHS top table are Mark Britnell, director general for commissioning, who was CMH’s executive director from 1992 to 1995, and Sally Davies, a CMH consultant who became the Department of Health’s director general of research.

The stunt, organised by the Time to Change programme of projects, led by mental health charities Mental Health Media, Mind and Rethink, is part of a new £18m advertising campaign that shows how being told to “pull yourself together” or being treated as “a problem” can lead people with mental health problems to despair.

Figures show that nearly a quarter fewer smokers gave up the habit between April and September last year compared to 2007 - the year the ban on smoking in public places was brought in.

They said more than 30,000 people may depend on drugs containing codeine, with middle-aged women at most risk.

Some were approved by ministers or senior officials to continue working with children despite evidence they had committed sex offences.

A small number were free to seek work in schools three years after a teacher scandal highlighted the loopholes that can allow paedophiles to gain positions of trust.

Extra national insurance contributions were the most popular method suggested to raise the tax, according to the survey of 55 to 75-year-olds by Age Concern.

Laws restricting use of the money would prevent ministers diverting funds elsewhere.

Members of Gymbox in Bank, London, can choose one of five people ranging from two midgets to a 155kg man.

The gym already runs a ‘chav fighting’ self-defence class and ‘WAG workouts’ to make women more attractive to footballers.

It will set out patients’ rights to care and their responsibilities, such as keeping appointments.

Nearly half of the 730 respondents to the King’s College, London, study reported negative treatment by relatives and friends after diagnosis.

Researchers found that staff at the Flexsys plant who had come into contact with MBT were twice as likely to die of large intestine and bladder cancers.

A desperate Mary Green (not her real name) pleaded, begged and then shouted at her only child, James: “Please eat something for mummy”.

One of the “oldest identifiable diseases known to man”, according to the World Health Organization (WHO), plague tends to be associated in the developed world with the Middle Ages.

But in this week’s Scrubbing Up health column, John Black, president of the Royal College of Surgeons, says the doctor-patient relationship has been damaged and argues that a single consultant should once again oversee a patient’s care.

Miniaturisation of motors has not kept pace with that of electronics, leaving such tiny robots with no means to get around in the body.

Now, research reported in the Journal of Micromechanics and Microengineering has demonstrated a motor about twice the size of a human hair.

Around 2,000 seven to 13-year-olds will get advice and there will be help for parents on shopping on a budget.

The £1.4m Welsh Assembly Government programme will last three years.

Posted from Diigo. The rest of my favorite links are here.

FREE DOWNLOAD INTERNET RESOURCES OF NUTRITION CLINIC IN CHILDREN

LINKAGES created tools to aid in policy dialogue and decision making. These tools include a model to raise awareness among policy makers of the potential benefits of improved infant and young child feeding and a model to help policy makers identify the infant feeding strategy most likely to maximize HIV-free survival under different conditions.

Includes a number of country case studies of food and nutrition interventions, lectures on nutrition and nutrition policy, information on nutrition and HIV/AIDS, and publications.

The Financial Crisis and the Future of Globalisation

TEAM EMPOWERMENT MORTGAGE CHATTER: Jan 22: a look at our friend the bank, almost as good at keeping money as a mattress

~ Elizabeth Alexander, 2009 Inaugural Poem

OIL vs S

We’re back with one of our ‘Interesting Charts’ posts! Has anyone looked at Oil performance against the S&P500 lately?

As usual, we have used the iPath Crude Oil ETF( OIL) as a proxy- for those of you that are not familiar with it:

Here is the first chart that shows the 1 year performance:

No surprise here but it is still interesting too see how OIL moved to +60% and then dropped like a rock to -60%… talk about wealth creationg and destruction!

However, the 2 year performance shows a very different picture, with both Oil and the S&P ending up together:

Remember that time horizons are of critical importance when constructing your investment strategy and projecting expected returns… a lot of things can happen in the short term but if you are a long-term investor, you should try and tune out all the noise.

Jan 15th, 2009

id="desc">Just another drop of water in the ocean of tales

Bad news are coming from the global market. Deutsche Bank said it had an est. loss of USD 6.4 bln, in 4Q08. And it does not help that a news about Bank of America also said that it is in talks for more bailout funds from the US government. A speculation is connecting the talks to the larger than expected Merryl Lynch 4Q08 loss, which the Bank is acquiring. Stock market is getting anxious, thinking financial sector might get worse, factoring in more losses could come in the near future, as possibly right now we are not at the bottom of the losses yet. It is still has to be seen what could this bring to the credit market. Would it bring another round of confidence crisis between financial institutions? Let’s hope not.

Another not so good news is the US retail sales, which dropped sharply in the month of Dec’08, despite the holiday season. It dropped -9.8% YoY, said to be a postwar record.

And like it is not enough, grim news came from UK and the Euro zone. British Chamber of Commerce survey reveals the much lower confidence in sales, employment and profitability, both for manufacturing and services. And the Euro area manufacturing Industrial Production index, fell sharply on 4Q08.

This round of not so good news, pointing out that the worse, is might not over yet. The impact of last year’s financial turmoil to the real economy is only just begun. The sectoral and geographical spread of the global recession had increased in an alarming rate. Defensive plays might not out of date, yet.

Discovery Of 3 Genes That Increase Risk Of Severe Obesity In Kids And Adults

[Via http://www.medicalnewstoday.com]

Top 10 ETF

With over 400 Exchange Traded Funds (ETFs) on the market right now and new ones being issued each week, we may be reaching the point of ETF overload.  Below are some ETFs that have not yet been created:

 

 

 

10. Van Eck Doomsayer Gold Worship ETF - seeks to quantify and benefit from the amount of market participants who have become overnight experts in gold, fiat currencies, and Federal Reserve conspiracies.  Co-lead managers Peter Schiff and Ron Paul.

8. PowerShares Dynamic “Mustard Seeds” ETF - seeks to benchmark against the amount of times Larry Kudlow uses the term “Mustard Seeds” in reference to the possibility that one day, the economy won’t suck.

7. Vanguard Distressed Bank Index - seeks to approximate the performance of only the banks that are insolvent; current holdings are identical to the actual bank index.

6. Claymore Unnecessary Asset Class Fund - seeks to provide investors with exposure to niche asset classes like maple syrup futures, baseball cards and locks of celebrities’ hair.

5. iShares Private Equity Vomit Bucket ETF - seeks to invest in regurgitated IPOs that are dumped back onto the market once LBO firms are through levering up the companies and issuing themselves “special” cash dividends.

4. Proshares Ultra Short Hedge Fund Assets Under Management - seeks to provide the inverse of the growth of hedge funds.  Trades 10% higher with every 5% redeemed from the HF industry.

3. Wisdom Tree Footwear Fad ETF - seeks to invest for the long-term in any footwear trend, no matter how faddish it may be.  Holdings include Heelys, Crocs, and UGG Boots (which seem to be getting bigger and hairier every day).

2. Rydex Obese American Index - seeks to invest in companies that profit from the upward revision in weight estimates for US citizens.  Holdings include YUM Brands, Krispy Kreme, and Rochester Big & Tall Stores.

1. Direxion Triple Wrong Pundit Tracker ETF - seeks to provide 3x the inverse return of recently defeated “experts” in sectors like energy (T. Boone Pickens), Newspaper Publishing (Sam Zell), Autos (Kirk Kerkorian), Gaming and Lodging (Sheldon Adelson) and Value Stock Picking (Bill Miller, Richard Pzena, Marty Whitman).

Hi-Yield Bond Follow-Through Strategy (in Need of Some TLC)

This is a third contribution from Andrey S. of Russia (also responsible for the trading nuggets here and here). Needless to say, Andrey is this short-on-time blogger’s best friend at the moment.

Here Andrey shows that some hi-yield bond funds exhibit strong weekly follow-through. By “follow-through” I mean up weeks tend to be followed by up weeks and down weeks by down weeks.

This strategy needs a little TLC because it can’t be traded in its original form. Andrey ran his test on Vanguard’s mutual fund VWEHX (because more historical data is available), but Vanguard penalizes active trading. So in the second half of this post, I’ll show results applied to something a bit more trader friendly, the ETF HYG.

The graph above shows the result of Andrey’s strategy trading Vanguard’s VWEHX (red) vs buy and hold (blue) since inception in 08/1989. These results are frictionless (do not account for transaction costs), but like most of my tests of longer-term strategies, I’ve assumed a return on cash of half the nearest 3-month Treasury.

Strategy Rules: Go long at the close of the last trading day of the week if HY bonds close equal to or higher than the previous week. Close the position and move to cash if they close lower. This strategy is long-only.

And for the number-lovers:

Naturally, because VWEHX was on one long positive run over most of the test, a trend-following strategy is probably going to do pretty well, but note that it was able to outpace buy and hold with about a fourth less exposure to the market, perform significantly better on a risk-adjusted basis, and weather all major downturns well.

A Little TLC

As previously mentioned, VWEHX is not appropriate for active trading; however, the ETF HYG is.

Looking at the performance of HYG (red) since inception (04/11/2007) versus VWEHX (blue) in the graph below, we see that VWEHX has acted almost like a smoothed moving average of the ETF.

In the next graph I’ve applied Andrey’s strategy to the ETF (green) over this short period of time and compared it to both the original VWEHX results (red) and buy and hold (blue).

Clearly, in this very narrow window, the strategy has more or less worked as well on VWEHX as HYG (albeit with a lot more day-to-day volatility).

As I wrote about recently, we have to be very careful assuming something works as well on an intraday product like an ETF as on an index or EOD product like a mutual fund. But in this case, because of the longer-term nature of the strategy (i.e. it’s not exploiting some very short-term, super-sensitive opportunity), I think it might fly.

To keep the effusive praise rolling, another giant THANK YOU to Andrey for his idea. I hope you’ll be hearing more from him on this blog in the future.

P.S. Most of the studies that I perform could be reproduced with leveraged mutual funds from Rydex, Profunds, or Direxion, so generally I exclude transaction costs and slippage. This one in particular could not, so a trader’s specific trading frictions would need to be considered.

P.S.S. I specifically chose HYG here because it has tracked VWEHX so well, but a number of other products have not. Don’t assume these results apply to all hi-yield mutual funds and ETFs.

 

World stock markets move up - CNEWS


HONG KONG - Asian stock markets rose Thursday, with Tokyo’s index up nearly two per cent, as gains on Wall Street offset alarming new signs the region’s economies were slowing faster than expected amid plummeting demand for their goods. European
Source: cnews.canoe.ca

Stock & fund quotes - ninemsn
* Companies sign option deal * Rio Tinto unit to earn 51 pct by funding $7.0 mln * Uranium shares rise as much as 58.5 pct (Adds details) Jan 22 (Reuters) - Uranium Resources Plc said on Thursday a unit of Rio Tinto Plc would have the right
Source: money.ninemsn.com.au

Shareholders: Chicago Stock Exchange’s days numbered - Chicago Tribune
Below-break-even trading volumes have left the Chicago Stock Exchange searching for ways to further slash costs. A dissident shareholder group claims the 126-year-old institution has only enough money to operate for six months. Chief Executive David
Source: www.chicagotribune.com

Wall Street surges on financial, tech stocks - Courier-Post
NEW YORK Investors acted Wednesday like they had overdone it a day earlier. Wall Street snapped back from a steep sell-off with a rebound in the same financial stocks that were pummeled Tuesday. Upbeat comments from banks, stronger-than-expected
Source: www.courierpostonline.com


ESA provides broad and targeted economic data, analyses and forecasts for use by Government agencies, businesses and others, as well as develops domestic and international economic
Source: www.economicindicators.gov

economic - Definition of economic at Your Dictionary
adjective. of or having to do with the management of the income, expenditures, etc. of a household, business, community, or government; of or having to do with the production
Source: www.yourdictionary.com

Economic development and business resources on the California Central
Economic development & site location service on the California Central Coast. We offer economic development through our site location service for commercial properties on the
Source: www.sloevc.org

Economic Engine
Economic Engine is a powerful e-commerce toolbox, bringing the power of the Internet to small and mid-sized companies, by matching them with government opportunities, corporate
Source: www.economicengine.com

State of Oregon: Oregon Economic & Community Development Department
State of Oregon: Oregon Economic and Community Development Department Oregon is filled with diverse industries powered by like-minded companies that want to lead the way, and
Source: econ.oregon.gov

End of post.

OREO For 01 22 09

OREO For 01 22 09

HOW USING SMS SHORT CODES CAN HAVE AN IMMEDIATE IMPACT ON BRAND AWARENESS IN 2009

KKRap SHEET: INVESTMENT FUND RUNS AMOK

KKR: Company: History

 

 

 

Here is some more bull from these creepy people:

 

The death of this giant Moby Dick Disaster Machine is almost on par with the death of its feeder systems and buddies like Lehman Brothers.  Everyone ate off of the same dish here.  They all created the Derivatives Beast and fed it our industries, our housing, our government finances, our entire economic system was fed to the Beast because this way, they could all make money via leveraging as well as placing bets while not holding much of anything except  for these goofy CDO and OTC papers.

 

They even have the audacity to call this debt-dumping operation ‘our achievements’!  It isn’t hard, getting a bunch of loans together and then buying up stocks and then taking over the business and wrecking it.  Ask any child: wrecking things is far more fun than building things.  Or as Rhett Butler told the grasping Miz Scarlett O’Hara in ‘Gone With the Wind,’ ‘Great fortunes can be made building civilizations but even faster fortunes can be made, destroying civilizations.’

 

These pirates also feed off of pension funds.  They even have the audacity, after the stocks lost 90% of their value, to write, ‘The key beneficiaries of our investments are…pension funds, endowments and foundations—which provide the majority of the CAPITAL for our funds.’

 

What does this mean?  Well, the pirates cannot borrow from gnomes unless they have CAPITAL.  This is very important.  So, to lure in capital, they have to promise big, fat returns.  Once they get their claws on this capital, they GO INTO DEBT BY 90%.  If the debt is screwed up, the gnomes get all the capital.  I hope retirees figure this out.  You not only don’t make a profit, you lose EVERYTHING.  

 

Note that the victims of the KKR scamsters are the exact same people Madoff ripped off.  Let’s look more into this criminal operation.

May, 2006:  Commentary: KKR: Barbarians At Your Gate

Private equity firms buy struggling companies, fix them up, and sell them off, generating huge returns for their stakeholders. They do it away from public scrutiny. As private entities, they needn’t bother with irksome tasks such as complying with Sarbanes-Oxley or kowtowing to analysts. But just as a shark never stops swimming, buyout firms never tire of raising money to finance more deals. The boom in private equity funding in recent years has raised the stakes for everyone. Institutions and wealthy individual investors dumped a record $134 billion into private equity coffers last year — more than twice 2004’s take.

When the pirates row away from their ship, you can bet, there is a hole in the hull.  This was like buying stocks in White Star Lines while these stocks were being sold on the Titanic between dinner courses on a cold winter night.   Indeed, after the ship sinks, the sharks, who are the same dealmakers, attack!  Notice that the money flowing into the pirate chests doubled in less than 2 years!  2 years!!!  All of that money is gone, of course. All of it.

 

Here is a story from one year later:

 

August, 2007:  http://www.bloomberg.com/news/marketsmag/kkr.pdf

The rich people they make richer are pirates, not investors.  This is hard for people to understand: investors are SHEEP to be sheared.  The money makers are the paper shufflers who know where they can get cheap leverage.  Note that by August, 2007, leveraging was impossible.  We recall, that month, ‘liqudity froze up.’  HAHAHA.  No one dared to say, ‘The yen is getting stronger, oh hell.’

 

The debt these monsters dump on businesses have to be paid up by CUSTOMERS.  Hard to do this if the customers have no money or don’t want to buy whatever is being sold including KKR stocks.  Prices drop.  Eventually, not to far in the process, the value of the paper stocks, etc, are lower than the loans!  This means, KKR has to crap up some money or die.  So they kill off employees of captive corporations.  Below is a chart showing their victims they hold hostage to their debt-addled greed:

 

The value of this empire is no longer $107 billion, it is about around $35 billion and dropping like a rock.  The KKR Kreeps Kreated this Krappy Mess.  Thank you.  Arrest them and charge them with piracy on the high seas!

 

November, 2008:  KKR: Kohlberg Kravis Roberts & Co

All the pirates shuffled money between each other to keep each other afloat.  This failed, of course. Note that they are using Citigroup, a gang that fell so in love with the Derivatives Beast, they have been nearly totally devoured by it.  Citigroup has to do to the US Treasury to keep itself from declaring obvious bankruptcy.  All these clowns are going bankrupt because they can’t ROLL OVER past loans they are stuck with because they can’t sell off their acquisitions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

by Thanksgiving, the jig was finally up. KKR was worth penny stock in value.  And falling.  All the many rescue schemes of our stupid fools in the government is to prevent the destruction of the pirates because THEY hold ALMOST ALL of the retirees, foundations and charities tied to the mast of their sinking ships!  Gads.  How disgusting is this?

KFN: KKR FINANCIAL HLDGS LLC Average Monthly Returns

 

 

 

 

And this is today’s stock quote for the Pirate LLP KKRap Financial Rip-offs: down 5% and in penny stock territory.  Kiss this gang goodbye.  Alas, all the poor, innocent CAPITAL providers, our retirees and charities get to hit the ocean bottom with these craven criminal pirates. 

 

* FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

KKRap SHEET: INVESTMENT FUND RUNS AMOK

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KKR: Company: History

 

 

 

Here is some more bull from these creepy people:

 

The death of this giant Moby Dick Disaster Machine is almost on par with the death of its feeder systems and buddies like Lehman Brothers.  Everyone ate off of the same dish here.  They all created the Derivatives Beast and fed it our industries, our housing, our government finances, our entire economic system was fed to the Beast because this way, they could all make money via leveraging as well as placing bets while not holding much of anything except  for these goofy CDO and OTC papers.

 

They even have the audacity to call this debt-dumping operation ‘our achievements’!  It isn’t hard, getting a bunch of loans together and then buying up stocks and then taking over the business and wrecking it.  Ask any child: wrecking things is far more fun than building things.  Or as Rhett Butler told the grasping Miz Scarlett O’Hara in ‘Gone With the Wind,’ ‘Great fortunes can be made building civilizations but even faster fortunes can be made, destroying civilizations.’

 

These pirates also feed off of pension funds.  They even have the audacity, after the stocks lost 90% of their value, to write, ‘The key beneficiaries of our investments are…pension funds, endowments and foundations—which provide the majority of the CAPITAL for our funds.’

 

What does this mean?  Well, the pirates cannot borrow from gnomes unless they have CAPITAL.  This is very important.  So, to lure in capital, they have to promise big, fat returns.  Once they get their claws on this capital, they GO INTO DEBT BY 90%.  If the debt is screwed up, the gnomes get all the capital.  I hope retirees figure this out.  You not only don’t make a profit, you lose EVERYTHING.  

 

Note that the victims of the KKR scamsters are the exact same people Madoff ripped off.  Let’s look more into this criminal operation.

May, 2006:  Commentary: KKR: Barbarians At Your Gate

Private equity firms buy struggling companies, fix them up, and sell them off, generating huge returns for their stakeholders. They do it away from public scrutiny. As private entities, they needn’t bother with irksome tasks such as complying with Sarbanes-Oxley or kowtowing to analysts. But just as a shark never stops swimming, buyout firms never tire of raising money to finance more deals. The boom in private equity funding in recent years has raised the stakes for everyone. Institutions and wealthy individual investors dumped a record $134 billion into private equity coffers last year — more than twice 2004’s take.

When the pirates row away from their ship, you can bet, there is a hole in the hull.  This was like buying stocks in White Star Lines while these stocks were being sold on the Titanic between dinner courses on a cold winter night.   Indeed, after the ship sinks, the sharks, who are the same dealmakers, attack!  Notice that the money flowing into the pirate chests doubled in less than 2 years!  2 years!!!  All of that money is gone, of course. All of it.

 

Here is a story from one year later:

 

August, 2007:  http://www.bloomberg.com/news/marketsmag/kkr.pdf

The rich people they make richer are pirates, not investors.  This is hard for people to understand: investors are SHEEP to be sheared.  The money makers are the paper shufflers who know where they can get cheap leverage.  Note that by August, 2007, leveraging was impossible.  We recall, that month, ‘liqudity froze up.’  HAHAHA.  No one dared to say, ‘The yen is getting stronger, oh hell.’

 

The debt these monsters dump on businesses have to be paid up by CUSTOMERS.  Hard to do this if the customers have no money or don’t want to buy whatever is being sold including KKR stocks.  Prices drop.  Eventually, not to far in the process, the value of the paper stocks, etc, are lower than the loans!  This means, KKR has to crap up some money or die.  So they kill off employees of captive corporations.  Below is a chart showing their victims they hold hostage to their debt-addled greed:

 

The value of this empire is no longer $107 billion, it is about around $35 billion and dropping like a rock.  The KKR Kreeps Kreated this Krappy Mess.  Thank you.  Arrest them and charge them with piracy on the high seas!

 

November, 2008:  KKR: Kohlberg Kravis Roberts & Co

All the pirates shuffled money between each other to keep each other afloat.  This failed, of course. Note that they are using Citigroup, a gang that fell so in love with the Derivatives Beast, they have been nearly totally devoured by it.  Citigroup has to do to the US Treasury to keep itself from declaring obvious bankruptcy.  All these clowns are going bankrupt because they can’t ROLL OVER past loans they are stuck with because they can’t sell off their acquisitions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

by Thanksgiving, the jig was finally up. KKR was worth penny stock in value.  And falling.  All the many rescue schemes of our stupid fools in the government is to prevent the destruction of the pirates because THEY hold ALMOST ALL of the retirees, foundations and charities tied to the mast of their sinking ships!  Gads.  How disgusting is this?

KFN: KKR FINANCIAL HLDGS LLC Average Monthly Returns

 

 

 

 

And this is today’s stock quote for the Pirate LLP KKRap Financial Rip-offs: down 5% and in penny stock territory.  Kiss this gang goodbye.  Alas, all the poor, innocent CAPITAL providers, our retirees and charities get to hit the ocean bottom with these craven criminal pirates. 

 

FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

Pathetic PLIGHT!

Chandra Bhan Prasad is widely regarded as the most important Dalit thinker and political commentator in India today, advocating on behalf of the more than 16 percent of India’s population who have historically been regarded as untouchable by orthodox Hinduism. He was the first Dalit to gain a regular column in a national English-language Indian newspaper, more than 50 years after India’s independence. His weekly Dalit Diary has been a regular feature of The Pioneer since 1999, and is routinely translated into other major Indian languages.

Prasad is also the author of the book Dalit Phobia: Why Do They Hate Us (Vitasta, New Delhi, 2006); his writings are used by South Asia faculty globally to question assumptions about caste and Indian society. Prasad studied at Jawaharlal Nehru University in Delhi, where he completed his M.A. and M.Phil. in international affairs.  

It is no exaggeration to say that Chandra Bhan Prasad has single-handedly reshaped the agendas now being advocated by Dalit groups across India. His political commentaries have been among the most astute readings of the new directions in which Indian democratic processes have been moving. Most recently, in the May 2007 Assembly elections in the north Indian state of Uttar Pradesh, he alone predicted and was able to explain the unprecedented alliance between Dalits and upper caste groups that led to the first ever outright victory of a Dalit political party in India, the Bahujan Samaj Party.

Co-sponsored by  The Department of South Asia Studies

As sodas popped and the whisky poured (aptly called, Teacher’s Scotch) Prasad led his guests - a motley mix of Dalit poets, singers, academia, a sprinkling of the international media, social scientists Ashish Nandy, Gail Omvedt - to the centrepiece of the party’s action. The unveiling of a portrait, English, the Mother Goddess, painted by Dalit artist Shant Swaroop Baudh.

Said Bhan, “Today, English-speaking Dalits and Adivasis are less disrespected, therefore, empowered by Goddess English, Dalits can take their place in the new globalised world.’’ Bhan has three reasons for revering Macaulay - his insistence to teach the “natives” English broke the stranglehold of Sanskrit, Persian and Arabic teaching, a privilege of only the elite castes and, he argued,for the European kind of modern education, with focus on modern sciences. “Imagine, if we had only followed indigenous study,’’ said Bhan, “we would be like Afghanistan or Nepal today.’’ “I certainly do not agree with some of Bhan’s thesis,’’ said an aghast Nandy, “but I certainly support every oppressed community or individual’s right to pick up any weapon, be it political, academic or intellectual incorrectness, to fight the establishment. It’s the sheer audacity of it that makes it so forceful.’’

Dalit poet Parak sang a couplet to the portrait - a refashioned Statue of Liberty, wearing a hippie hat, holding a massive pink pen, standing on a computer, with a blazing map of India in the background - Oh, Devi Ma/ Please Let us Learn English/ Even the dogs understand English, to cheers and laughter, even as Lord Macaulay’s portrait, looking the perfect English buccaneer, gazed below. Bhan then declared his new intention - the painting will be printed on calendars and distributed at all Dalit conclaves and community meetings. “Hereafter, the first sounds all newborn Dalit and Adivasi babies will hear from their parents is - abcd. Immediately after birth, parents or a nearest relative will walk up to the child and whisper in the ear - abcd,’’ he said mirthfully.

“I welcome the fact that English gives access to the world,’’ said Omvedt, “but remember, some of the best English has come from oppressed quarters, like the Blacks in America. Their language, known as rap, their music, poetry, literature, has a dynamism. It’s important to reclaim your regional languages from Brahminism and Sanskritisation,’’ she says. It set the theme for other speakers, and as heaving plates of chicken drumsticks and gobi pakoras were passed around.

“Dalits must no longer see themselves as oppressed and repressed,’’ said Nandy, waving his glass of whisky, “they have their own traditions and knowledge systems which must be preserved. There’s a very powerful tradition of history, music, life, which the younger generation must be proud of.’’ Bhan nodded agreeably - he had certainly hosted an evening of Dalit empowerment and pride. There was no hard luck story here.

 

Indian Education System comprises stages called Nursery, Primary, Secondary, Higher Secondary, Graduation and Post Graduation. Some students go in a different stream after Secondary for 3 years technical education called Polytechnics

There are broadly four stages of school education in India - Primary, Upper Primary, Secondary and Senior Secondary.

Schooling lasts 12 years, following the “10+2 pattern”. However, there are considerable differences between the various states in terms of the organizational patterns years of schooling, mainly due to the existence of State Education Boards.

In India, the main types of schools are those controlled by:

According to a Government Survey undertaken by NUEPA (DISE, 2005-6), there are 1,124,033 schools in India.

In the absence of significant government provisions, the private sector is reaching to the richer sections of society and has opened a large number of schools throughout the country. Provisions in these kindergartens are divided into two stages - lower kindergarten (LKG) and upper kindergarten (UKG). Typically, an LKG class would comprise children 3 to 4 years of age, and the UKG class would comprise children 4 to 5 years of age. After finishing upper kindergarten, a child enters Class 1 of primary school. Often kindergartens are considered an integral part of regular schools.

Though there is a trend towards exclusive prep schools. A special Toddler/Nursery group at the age of 2–2½ is also part of the pre-primary education. It is run as part of the kindergarten. However, creches and other early care facilities for the underprivileged sections of society are extremely limited in number. Overall, the percentage pf enrollment of pre-primary classes to total enrollment (primary) is 11.22% (DISE, 2005-06).

Some children have access to computers, although many schools across India do not have even electricity.

The strategies adopted by the Government to check the notorious drop-out rates are:

While the availability of primary and upper primary schools has been increased to a considerable extent, access to higher education remains a major issue in rural areas (especially for girls). Government high schools are usually taught in the regional language, however urban and suburban schools usually teach in English. These institutions are heavily subsidised. Study materials (such as textbooks, notebooks and stationary) are sometime but not always subsidised. Government schools follow the state curriculum.

There are also a number of private schools providing secondary education. These schools usually either follow the State or national curriculum. Some top schools provide international qualifications and offer an alternative international qualification, such as the IB program or A Levels.

In the past decades, there has also been an effort to increase attendance in vocational high schools and raise standards at the nation’s ITIs - Industrial Training Institutes. In 2008, it is estimated that over a million completed vocational training through the Craft Training and Apprentice Training Schemes. Annual enrolment for high school level vocational programs (at vocational high schools, ITIs and private vocational institutes) is now approaching 3 million.

Technical education has grown rapidly in recent years. With recent capacity additions, it now appears that the nation has the capability to graduate over 500,000 engineers (with 4-yr undergraduate degrees) annually, and there is also a corresponding increase in the graduation of computer scientists (roughly 50,000 with post-graduate degree). In addition, the nation graduates over 1.2 million scientists. Furthermore, each year, the nation is enrolling at least 350,000 in its engineering diploma programs (with plans to increase this by about 50,000). Thus, India’s annual enrollment of scientists, engineers and technicians now exceeds 2 million.

Expenditure on education is also an issue. According to the Kothari commission led by Dr Vijay Kothari in 1966, expenditure on education has to be minimum 6% of the GDP, whereas in 2004 expenditure on education stood at 3.52% of the GDP and in the eleventh plan it is estimated to be around 4%. The “sarva shikshan abhyan” has to receive sufficient funds from the central government to impart quality education.

The 86th Amendment of the Indian constitution makes education a fundamental right for all children aged 6-14 years. The access to preschool education for children under 6 years of age was excluded from the provisions, and the supporting legislation has not yet been passed.

However organization in these departments is often poor and participation very voluntary. Not much importance is given to outdoor education, as a nationwide trend.

India has a large number of Distance education programmes in Undergraduate and Post-Graduate levels. The trend was started by private institutions that offered distance education at certificate and diploma level. By 1985 many of the larger universities recognized the need for distance education in a populous country like India and launched degree level programs through distance education. Today many Indian universities offer distance programs. Indira Gandhi National Open University, one of the largest in student enrollment, has only distance programs with numerous local centers that offer supplementary contact classes.

In engineering, medical and other colleges, 30% of the seats have been reserved for women.

SAVING BANKS MEANS BANKING SAVINGS

The Chinese plan to execute the executives who screwed up baby formulas.  The main reason for this sentence is the bribery of officials part of the inditement.  The Chinese people applaud this.  We are not nearly so serious about punishing corruption of officials. If we shot everyone who accepted bribes via ‘election committees’ and then did work for the bribers such as passing laws or going to war because of the bribery, DC would be a very empty city.  The economic collapse is taking down both the sad remains of the British Empire as well as the US empire.  This is the real story, not ‘can we fix the banks?’  It is, ‘Can we fix the empires?’

 

Northern Trust Interest Rate Outlook.pdf

No, our title does not refer to our 43rd president. Rather, it refers to the shape of an economic scenario that is beginning to look to us as the most probable going forward. The current economic environment is indeed bleak and there are precious few signs of a recovery. But we believe that if the massive fiscal stimulus package being worked up in Congress is financed largely by the banking system and the Federal Reserve, there is a good chance the economy will begin to grow by the fourth quarter of this year and continue to do so throughout 2010.

And if we are correct on this, we also believe there is a good chance that the consumer price index will be advancing at a fast enough pace by the second half of 2010 to induce the Federal Reserve to become more aggressive in draining credit from the financial system. This could set the stage for another recession commencing in 2012, or perhaps some time in 2011. So, the shape of the path of economic activity we see over the next few years is not a “V”, a “U”, or an “L”, but a “W” – down, up, down, up, all within four or five years.

 

I always like to add important events to graphs.  This shows more clearly, what is going on.  I forgot to add the ‘Bretton Woods II dollar devaluation’ arrow which is right where the downslope ending at the ‘y’ in ‘Hyperinflation’.  Starting at the end of hyperinflation and the beginning of wild Federal spending, we see the graph going up and up and up.  But this was due 100% to hyper-spending by the government coupled with the trade deficit taking off like a rocket.  

This graph clearly shows what I keep talking about: the Japanese ZIRP carry trade business was at the root of the expansion of credit which was global, not local.  The US Treasury and Federal Reserve lost control of credit long ago as the top chart shows.  Only after the Japanese carry trade suddenly ended when the yen began it long rise, did credit vanish.  The suddenness of this vanishing credit is clearly shown on this graph.  The Reserve Bank’s credit had to rise tremendously to make up the difference between the Japanese lending, which vanished, and the US banks need for borrowing, since US savings is nil.

Chart 5 shows that in the third quarter of last year, credit creation by the Federal Reserve, the commercial banking system and the savings and loan system totaled $2.5 trillion at an annual pace. Total borrowing by the U.S. nonfinancial sector – federal and state/local governments, households and nonfinancial businesses – totaled $2.3 trillion. So, in essence, the Fed and the banking system monetized the entire increase in debt by the nonfinancial sector and then some. Chart 6 shows that it was the Federal Reserve doing the bulk of the “heavy lifting” with respect to this credit creation. The Fed created $2.4 trillion of the total $2.5 trillion credit created by the Fed, the banks and the S&Ls. If the stories are true about the Obama administration’s plan to speed-up the government recapitalization of the banking system, then the Fed will be able to throttle back in its credit creation as the banks increase their share.

The whole problem is, the banks cannot ‘increase their share’ unless they first get some capital.  The Treasuries being handed out like candy to over-stuffed little Trick or Treaters will only make them sicker.  Why is that?  

 

CounterPunch: Tells the Facts, Names the Names

Paul Craig Roberts isn’t on Obama’s Dream Team.  I suppose, he paid all his taxes.  Automatic disqualification.  

 

Well!  All his suggestions are OK except for one teeny, weeny, little problem: we owe most of our money to foreign powers who can squeeze our nuts if we even suggest, we won’t pay them off.  And what, pray tell, is the pay off for China and Japan, both of whom hold between themselves, over $1.5 trillion in US government debts?

 

Take a wild guess.  If we retreat on allowing a flood of imports into the US, they will hammer us, good.  Our government will  have to declare bankruptcy or pay its own way like most governments.  This means, we must see taxes rise sufficiently to pay off the trillions [China and Japan are the tip of the iceberg, here] we owe foreigners.  This is over $10 trillion and rising, fast.  Then, hyperinflation will hammer us.

 

Mark to market can’t be suspended, either.  This is because our creditors demanded this.  They want to know what things are worth.  Our worthless banks do NOT want to know how much their paper products are worth!  They want to assign an artificial worth to them so they can pretend to be capitalized.

 

I sigh with despair as I see one easy solution after another offered.  There is no easy solution.  None at all.  The solution is painfully obvious: we have to end corruption in DC.  Note the Chinese methodology here.  We must recapitalize our banks via DOMESTIC savings.  We can’t borrow any more.  We now have to pay as we go until the banks are recapitalized, properly.  We also have to bring our government into fiscal sanity.  No more imperial wars.  No more aid to nations that have a higher living standard than the US [Israel comes instantly to mind, here].  END THE WAR ON DRUGS.  This is tremendously expensive.  CUT CIA/DARPA SPENDING.  

 

News today is, the damn CIA, military and Homeland Security were spying on EVERYONE.  These idiots have no Constitutional right to do this.  Our Founding Fathers were very firm about spying on Americans.  This is utterly illegal and very expensive and should be terminated along with the fools who did this, being arrested and I do mean Cheney.

 

I do very much agree with Paul Craig Robert’s suggestion of taxing imports.  100%.  

 

http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0901/document/us0109.pdf

Yes, the report is correct.  I recall, when hyperinflation began, the US media ignored the story.  Even now, it gets very little coverage.  This is because our entire economic system depends on inflation.  Now, let’s go off to London where all the bridges are falling down like dominoes.

 

Turner attacks growth of financial innovation - Business News, Business - The Independent

Lord Turner said that much of the growth in financial services in the last decade was of little economic use and had increased risks. He added that the FSA and the Bank of England had failed to spot the systemic risk created by the combination of various economic and financial developments.

Lord Turner is correct only this is global.  The growth in ALL ‘financial services’ wasn’t just of no economic use, it was TOXIC AS HELL.  All it did was take debts from the Bank of Japan and dump it all over the planet on every possible business, property, person or commodity.  The Derivatives Beast betting game went from $1 trillion in 2001 to $66 trillion.  This is utter insanity.  

 

Sharks, pirates, hell hounds and gnomes went totally nuts and seized a good percentage of all the Japanese carry trade loot they were handling and stuffed their pockets with it.  This was all 100% funny money that created a massive burst of inflation.  Which popped the bubble.  We are now seeing this deflate. Our leaders are trying to start a new global bubble.  They are desperate so they are creating massive amounts of government debt to do this foolish thing.  No one respects the concept of ‘capital’ anymore except, perhaps, the Chinese commies.

 

British government mounts new bank bailout amid warnings of economic collapse

When a deep in debt government bails out banks by going deeper into debt, this is pure insanity, it leads to BOTH going bankrupt.  How stupid is this?  Britain still has a navy.  I suggest Parliament take their tubs and invade the islands swearing fealty to Queen Elizabeth II and raid them.  Close down the faux banks and investment houses that have PO boxes there.  Then, tax the hell out of the corporations locating their faux headquarters there.

 

To do this, we have to first arrest and punish all politicians taking money from these pirates.  HAHAHA.  Like I said, if we do that, Parliament would be an echo chamber, just like DC would be a ghost town.

 

Gordon Brown brings Britain to the edge of bankruptcy - Telegraph

Like so many analysts, Martin doesn’t bother to track down, where this funny money came from.  If anyone thinks that the Tories would have done better, are fooling themselves.  ALL governments across the planet, were sucked into the Japanese ZIRP carry trade business.  China, at least, could see it and took steps to stop the flood of this money pouring into China from Japan.  The first measures were taken in late February, 2007.  Global markets took a brief nosedive.  

 

This is why voting in opposition parties will fail in ALL nations unless they first figure out what the Chinese figured out last year!  Instead, the G7 want the Japanese carry trade to start again!  They said so in their last three meetings!  China won’t let them.  China will have hyper inflation if they allow this.

 

Sterling plunges on public debt concerns - Times Online

Sterling today fell below $1.40 to its lowest point in seven and a half years because of concerns about the depth of Britain’s banking crisis and the Government’s rising debt levels as it seeks to bail out the struggling sector.

The pound, which declined by 2.67 cents to $1.4529 yesterday, fell further to $1.396 this morning over fears that the Government’s borrowing levels may exceed £118 billion, equal to 8 per cent of national income, for the next financial year.

The British don’t have much time left to figure out this riddle.  If they do, they will see how they were colonized by Asia.  This is revenge for 250 years of British colonization of Asia.  Payback will be a bitch.  The sins of the Empire will be taken off the hide of the present occupants of Britain.  There is more to come, trust me on this.  The Middle East still has to get its piece of flesh.

 

Dollar worries a theme in Geithner hearing - Capitol Hill- msnbc.com

And as the British domino falls, the US domino will begin to teeter and fall.  We are not at the bottom, we are still very high up this cliff face.  We have a long ways to fall.  We can’t ‘resuscitate’ ourselves if we don’t figure out how to save our industrial base and our work force.

 

Report: BofA to cut 4,000 from capital markets unit - Silicon Valley / San Jose Business Journal:

And the job cuts in finance continue.  Hundreds of thousands of money making jobs are down the drain.  Saving the banks can’t work if we have no savings.  End of story.  ZIRP means, no savings.

 

* FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

WALL STREET DROPS ON MICROSOFT, DATA; GOOGLE UP LATE

ETF/CEF High Volatility:

ETF/CEF Discussion: The last sentence for Reuters tells it all. The market is not faring well at all, and RSI is picking up on this problem. All the picks today, that are not short funds, are in the falling knife category. Treat these with care. There are some interesting picks in this mix. International income, buyback, and real estate have been out of favor sectors and RSI expects a turnaround. We shall see.

SAVING BANKS MEANS BANKING SAVINGS

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Northern Trust Interest Rate Outlook.pdf

No, our title does not refer to our 43rd president. Rather, it refers to the shape of an economic scenario that is beginning to look to us as the most probable going forward. The current economic environment is indeed bleak and there are precious few signs of a recovery. But we believe that if the massive fiscal stimulus package being worked up in Congress is financed largely by the banking system and the Federal Reserve, there is a good chance the economy will begin to grow by the fourth quarter of this year and continue to do so throughout 2010.

And if we are correct on this, we also believe there is a good chance that the consumer price index will be advancing at a fast enough pace by the second half of 2010 to induce the Federal Reserve to become more aggressive in draining credit from the financial system. This could set the stage for another recession commencing in 2012, or perhaps some time in 2011. So, the shape of the path of economic activity we see over the next few years is not a “V”, a “U”, or an “L”, but a “W” – down, up, down, up, all within four or five years.

 

I always like to add important events to graphs.  This shows more clearly, what is going on.  I forgot to add the ‘Bretton Woods II dollar devaluation’ arrow which is right where the downslope ending at the ‘y’ in ‘Hyperinflation’.  Starting at the end of hyperinflation and the beginning of wild Federal spending, we see the graph going up and up and up.  But this was due 100% to hyper-spending by the government coupled with the trade deficit taking off like a rocket.  

This graph clearly shows what I keep talking about: the Japanese ZIRP carry trade business was at the root of the expansion of credit which was global, not local.  The US Treasury and Federal Reserve lost control of credit long ago as the top chart shows.  Only after the Japanese carry trade suddenly ended when the yen began it long rise, did credit vanish.  The suddenness of this vanishing credit is clearly shown on this graph.  The Reserve Bank’s credit had to rise tremendously to make up the difference between the Japanese lending, which vanished, and the US banks need for borrowing, since US savings is nil.

Chart 5 shows that in the third quarter of last year, credit creation by the Federal Reserve, the commercial banking system and the savings and loan system totaled $2.5 trillion at an annual pace. Total borrowing by the U.S. nonfinancial sector – federal and state/local governments, households and nonfinancial businesses – totaled $2.3 trillion. So, in essence, the Fed and the banking system monetized the entire increase in debt by the nonfinancial sector and then some. Chart 6 shows that it was the Federal Reserve doing the bulk of the “heavy lifting” with respect to this credit creation. The Fed created $2.4 trillion of the total $2.5 trillion credit created by the Fed, the banks and the S&Ls. If the stories are true about the Obama administration’s plan to speed-up the government recapitalization of the banking system, then the Fed will be able to throttle back in its credit creation as the banks increase their share.

The whole problem is, the banks cannot ‘increase their share’ unless they first get some capital.  The Treasuries being handed out like candy to over-stuffed little Trick or Treaters will only make them sicker.  Why is that?  

 

CounterPunch: Tells the Facts, Names the Names

 

Paul Craig Roberts isn’t on Obama’s Dream Team.  I suppose, he paid all his taxes.  Automatic disqualification.  

 

Well!  All his suggestions are OK except for one teeny, weeny, little problem: we owe most of our money to foreign powers who can squeeze our nuts if we even suggest, we won’t pay them off.  And what, pray tell, is the pay off for China and Japan, both of whom hold between themselves, over $1.5 trillion in US government debts?

 

Take a wild guess.  If we retreat on allowing a flood of imports into the US, they will hammer us, good.  Our government will  have to declare bankruptcy or pay its own way like most governments.  This means, we must see taxes rise sufficiently to pay off the trillions [China and Japan are the tip of the iceberg, here] we owe foreigners.  This is over $10 trillion and rising, fast.  Then, hyperinflation will hammer us.

 

Mark to market can’t be suspended, either.  This is because our creditors demanded this.  They want to know what things are worth.  Our worthless banks do NOT want to know how much their paper products are worth!  They want to assign an artificial worth to them so they can pretend to be capitalized.

 

I sigh with despair as I see one easy solution after another offered.  There is no easy solution.  None at all.  The solution is painfully obvious: we have to end corruption in DC.  Note the Chinese methodology here.  We must recapitalize our banks via DOMESTIC savings.  We can’t borrow any more.  We now have to pay as we go until the banks are recapitalized, properly.  We also have to bring our government into fiscal sanity.  No more imperial wars.  No more aid to nations that have a higher living standard than the US [Israel comes instantly to mind, here].  END THE WAR ON DRUGS.  This is tremendously expensive.  CUT CIA/DARPA SPENDING.  

 

News today is, the damn CIA, military and Homeland Security were spying on EVERYONE.  These idiots have no Constitutional right to do this.  Our Founding Fathers were very firm about spying on Americans.  This is utterly illegal and very expensive and should be terminated along with the fools who did this, being arrested and I do mean Cheney.

 

I do very much agree with Paul Craig Robert’s suggestion of taxing imports.  100%.  

 

http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0901/document/us0109.pdf

Yes, the report is correct.  I recall, when hyperinflation began, the US media ignored the story.  Even now, it gets very little coverage.  This is because our entire economic system depends on inflation.  Now, let’s go off to London where all the bridges are falling down like dominoes.

 

Turner attacks growth of financial innovation - Business News, Business - The Independent

Lord Turner said that much of the growth in financial services in the last decade was of little economic use and had increased risks. He added that the FSA and the Bank of England had failed to spot the systemic risk created by the combination of various economic and financial developments.

Lord Turner is correct only this is global.  The growth in ALL ‘financial services’ wasn’t just of no economic use, it was TOXIC AS HELL.  All it did was take debts from the Bank of Japan and dump it all over the planet on every possible business, property, person or commodity.  The Derivatives Beast betting game went from $1 trillion in 2001 to $66 trillion.  This is utter insanity.  

 

Sharks, pirates, hell hounds and gnomes went totally nuts and seized a good percentage of all the Japanese carry trade loot they were handling and stuffed their pockets with it.  This was all 100% funny money that created a massive burst of inflation.  Which popped the bubble.  We are now seeing this deflate. Our leaders are trying to start a new global bubble.  They are desperate so they are creating massive amounts of government debt to do this foolish thing.  No one respects the concept of ‘capital’ anymore except, perhaps, the Chinese commies.

 

British government mounts new bank bailout amid warnings of economic collapse

When a deep in debt government bails out banks by going deeper into debt, this is pure insanity, it leads to BOTH going bankrupt.  How stupid is this?  Britain still has a navy.  I suggest Parliament take their tubs and invade the islands swearing fealty to Queen Elizabeth II and raid them.  Close down the faux banks and investment houses that have PO boxes there.  Then, tax the hell out of the corporations locating their faux headquarters there.

 

To do this, we have to first arrest and punish all politicians taking money from these pirates.  HAHAHA.  Like I said, if we do that, Parliament would be an echo chamber, just like DC would be a ghost town.

 

Gordon Brown brings Britain to the edge of bankruptcy - Telegraph

Like so many analysts, Martin doesn’t bother to track down, where this funny money came from.  If anyone thinks that the Tories would have done better, are fooling themselves.  ALL governments across the planet, were sucked into the Japanese ZIRP carry trade business.  China, at least, could see it and took steps to stop the flood of this money pouring into China from Japan.  The first measures were taken in late February, 2007.  Global markets took a brief nosedive.  

 

This is why voting in opposition parties will fail in ALL nations unless they first figure out what the Chinese figured out last year!  Instead, the G7 want the Japanese carry trade to start again!  They said so in their last three meetings!  China won’t let them.  China will have hyper inflation if they allow this.

 

Sterling plunges on public debt concerns - Times Online

Sterling today fell below $1.40 to its lowest point in seven and a half years because of concerns about the depth of Britain’s banking crisis and the Government’s rising debt levels as it seeks to bail out the struggling sector.

The pound, which declined by 2.67 cents to $1.4529 yesterday, fell further to $1.396 this morning over fears that the Government’s borrowing levels may exceed £118 billion, equal to 8 per cent of national income, for the next financial year.

The British don’t have much time left to figure out this riddle.  If they do, they will see how they were colonized by Asia.  This is revenge for 250 years of British colonization of Asia.  Payback will be a bitch.  The sins of the Empire will be taken off the hide of the present occupants of Britain.  There is more to come, trust me on this.  The Middle East still has to get its piece of flesh.

 

Dollar worries a theme in Geithner hearing - Capitol Hill- msnbc.com

And as the British domino falls, the US domino will begin to teeter and fall.  We are not at the bottom, we are still very high up this cliff face.  We have a long ways to fall.  We can’t ‘resuscitate’ ourselves if we don’t figure out how to save our industrial base and our work force.

 

Report: BofA to cut 4,000 from capital markets unit - Silicon Valley / San Jose Business Journal:

And the job cuts in finance continue.  Hundreds of thousands of money making jobs are down the drain.  Saving the banks can’t work if we have no savings.  End of story.  ZIRP means, no savings.

 

FEEL FREE TO EMAIL ME AT emeinel@fairpoint.net

CLICK HERE TO DONATE TO THIS WEBSITE

A Message for Nonprofits from President Barack Obama

In his inaugural address this week, President Barack Obama included a message that should induce hope in the hearts of nonprofit leaders.  He stated, “What is required of us now is a new era of responsibility—a recognition on the part of every American that we have duties to ourselves, our nation, and the world.”  To paraphrase, Americans must dig deep to share the responsibility for the situation we find ourselves as a nation and we must, in a dutiful way, support the causes that are near and dear to our heart as a testimony to the world.

This message will likely produce conflicting feelings of hope and despair for nonprofit leaders.  The hope is that Americans step up to the plate for their favorite causes and lend their support.  The despair is bound up in the uncertainty of the economy and whether Americans will respond to the message of hope they hear from our leader as 2009 progresses.

In his commentary in today’s issue of The Wall Street Journal, Arthur Brooks, president of the American Enterprise Institute, points to the Philanthropic Giving Index (PGI) perhaps as an indicator of where we may be heading in 2009 in the bigger scheme.  This index published by the Indiana University’s Center on Philanthropy shows that the PGI over the past six months dropped from 83 to 65 on a scale of 0-100. PGI is determined by nonprofit leaders and is similar to the Consumer Confidence Index.  As a tool, the PGI is useful but does not indicate where the pain may be or by how much donors may lower their giving.

Ministries and religious nonprofits should take heart, however, according to further research by Mr. Brooks.  The logic goes like this:  conservatives give more than liberals because conservatives are more religious.  Extracting this from its political implications, folks who attend church services and who consider themselves religious tend to out-give those who are not by more than $1,100 per year.  Mr. Brooks further shows that these same people decrease their giving less during economic downturns.

I am not sure of the age demographic for all of this information.  I suspect that the younger generation that responded favorably to the fund-raising appeal of the Obama campaign heard the words “hope” and “change.”  They thought electing a new president would result in the change.  Now the task is to get this next generation to step up and become responsible supporters of the causes they hold dear.  For next generation believers, it is time to consider what stewardship really means and which ministries merit their support.  This is the mandate for us all.

All Pensions At Risk Of Evaporating!!!

Could the continued collapse of the stock market wipe out your entire retirement account? In 2008, trillions have already gone up in smoke!!! Are you willing to risk it all  by leaving your retirement money in the stock market hoping for the best?

Shoring up the plans could cause further pain for workers, businesses and the struggling economy at a time when they can least afford it, pension specialists said.

“The chaos that has been observed in the world’s financial markets over the last 12 months has had a major adverse impact on pension plan funding and will negatively impact corporate earnings,” the Mercer consulting firm reported yesterday. “Moreover, the trend in recent months has been one of alarming deterioration,” Mercer said.

As Mercer and other pension specialists described it, the pension problem illustrates how the recession and the meltdown in the financial markets can become self-reinforcing.

Ballooning pension deficits will leave some companies with diminished profits, weaker credit ratings and higher borrowing costs, which can translate into lower stock prices, said Mercer principal Adrian Hartshorn. The need to cover pension shortfalls could prompt businesses to reduce spending on items as varied as equipment that boosts productivity and dividends that deliver income for shareholders.

Though shoring up pension funds is supposed to increase employees’ financial security, it could involve such tradeoffs as reductions in wages, benefits and jobs, said Mark J. Warshawsky, director of retirement research at consulting firm Watson Wyatt Worldwide.

In a further irony, it could also prompt companies to freeze the amount of pension benefits employees can accrue, Warshawsky said.

But the overall economic effects may be more complicated, pension specialists said. Filling the gaps will force companies to boost their pension investments, contributing to demand for stocks and bonds.

Mercer’s monthly snapshot of corporate pension plans focuses on those offered by employers in the Standard and Poor’s index of 1500 big corporations, and it uses the accounting methods that companies must follow when they prepare their financial statements. Mercer estimated that the S&P 1500 pension plans held enough assets overall to cover only 75 percent of their obligations, down from 104 percent at the end of 2007. Precise figures won’t be available until companies issue their annual reports for 2008 in the coming months.

Pension deficits are far from unprecedented. As recently as March 2003, the funding level for plans in Mercer’s study was 73.2 percent.

When pension plans are underfunded, companies are required to plow enough additional money into the funds each year to correct the imbalance, a process than can take several years. This year, Mercer estimates that the companies in its study will end up reporting about $70 billion of pension expenses, up from about $10 billion in 2008. That would equate to an 8 percent reduction in annual profits compared with 2007, the most recent year for which companies have reported full annual results, Mercer said.

Watson Wyatt looked at the issue from a different angle but found a similar trend. It tried to assess in aggregate the condition of all pension plans sponsored by individual corporations in the United States, and it used a different set of measures — the rules that govern the actual amount of cash companies must put into their pension funds.

Watson Wyatt estimates that corporate pension plans began 2009 with $1.63 trillion in assets and $2.12 trillion in liabilities, Warshawsky said. The firm estimates that companies will have to more than double their contributions to pension plans this year, to $111.2 billion from $50.5 billion in 2008, he said.

Both Mercer and Watson Wyatt advise companies on employee benefits.

Some business groups have been calling for relief from the federal law that would force them to boost pension fund contributions in the short run, and the government has already eased some requirements. Relaxing the requirements could entail another compromise — the health of the pension plans.

Even before the current recession, traditional pension plans that promise fixed retirement benefits were an endangered species for workers in the private sector. “As U.S. manufacturing and the U.S. organized labor footprint have contracted, the defined benefit plan has contracted,” said the Brookings Institution’s J. Mark Iwry, a former pension system regulator.

Pensions have largely been supplanted by 401(k) plans, which offer no guaranteed payouts.

Like pension funds, Americans’ 401(k) accounts have generally plummeted over the past year, and some companies have added to the strain by cutting matching contributions.

Whether the responsibility rests with corporate pension fund managers or individual employees managing their accounts, the nation’s ability to convert relatively low savings rates into comfortable retirements depends on investments not merely outstripping inflation but delivering strong and stable returns over the long run. That proposition has been sorely tested of late.

Keith Ambachtsheer, an adviser to pension funds, says the nation may be in store for “a radical rethinking of how we deliver pensions to private-sector workers.”

Increasingly, the burden may fall to taxpayers, as it has with other aspects of the nation’s financial troubles, said Kent Smetters, an associate professor at the University of Pennsylvania’s Wharton School.

When companies go bankrupt and are unable to shoulder their pension obligations, the federally chartered Pension Benefit Guaranty Corp. steps in and covers the shortfall, subject to legal limits that would leave many higher-paid workers with smaller pensions than they had been promised.

The PBGC is funded through insurance premiums paid by employer-sponsored pension funds, but Smetters predicted that the PBGC eventually will need a federal bailout.

As of Sept. 30, when its last fiscal year ended, the PBGC reported a deficit of $11.15 billion.

Washington Post Staff Writer

Home

Should you put your RESP money in the market this year?

My father-in-law has a good line about parenting: “Love your children before they are born — and start saving for their education soon after that.” With that in mind, my wife and I started Eric’s RESP last July, just a couple of months after his birth. Which, as it turned out, was just about the peak of the stock market:

As a result, the $2,500 we invested in an index fund is now worth only about $1,500 — a loss of nearly 40% in just a few months. With January upon us again — and the opportunity to put yet another $2,500 towards our son’s education — we, like many parents I imagine, are asking ourselves: Do we put even more money into this crazy stock market? The answer I’ve come up with is: Yes. And here’s why.

It’s impossible for anyone to peer into the future and know what the market is going to do over the coming few weeks, much less the coming decades. Those who say the market will go down even further could be right. Those that say this is a great time for bargains and the bounce is just around the corner could be right, too. Who knows.

But if you decided awhile back — as we did — that the stock market is a good place to invest for your child’s education, the principles behind that decision still exist. I’m no financial wizard, but my understanding is that the stock market usually outperforms other investments (like GICs or bonds) over the long term but that, as we’re seeing right now, it can do much worse in the short term. There’s some debate about how long you have to wait to be confident in the stock market being your best bet — some say five years, some 10. But if you’ve got a young child, you’re not going to need this money for at least a decade, maybe two. So you’ve got a lot of time to ride out the rough bits.

I also know that an investment strategy that avoided the stock market after a crash, and only invested during a boom, would be a very bad strategy indeed — essentially the exact opposite of “Buy Low, Sell High”. I’m not saying you should be rushing to invest all your life savings into the stock market. But if you always had a slow-and-steady plan to invest your RESP funds in the market, I don’t see why you’d change that strategy now.

As for exactly what to invest in, that’s the topic of my next post.

(And be sure to check out my earlier post on whether RESPs or TFSAs are the best way to invest for your child’s education.)

Through the Looking Glass

Okay, everyone. This is my first ever post in this blog. Since I’m (so far) completely unknown in the investment scene, I figure I may as well give a little bit of background. It helps to know where someone is coming from, I suppose. In a nutshell, it’s called The Confused Investor for a reason—that is, I’m still not entirely sure what I’m doing.

“Whoa, whoa, whoa,” I hear you mumbling in the back. “Why would I want to read about investment from a complete newbie?” It’s not as if I am planning on giving advice on your portfolio here. You know, the standard disclaimer you find everywhere that says that if you need financial advice, you could consult an accountant, a tax attorney, or a financial advisor. Hey, I’m none of those things, but that won’t stop me from writing about my own experiences in the world of finance.

I’m not entering this pool without a swimsuit, after all. I actually got my start by investing in my IRA in a so-called “fund of funds”, designed to help people invest toward their retirement goals. Since I still have nearly forty years until the “standard” retirement age of 65, I consider myself, if not actually ahead of the game, at least on par. But enough of my life’s history, there’s investin’ to be had.

For the moment, I’m going to be tracking five different potential portfolios, and actually investing in one: a “Magic Formula” portfolio, as recommended by Joel Greenblatt’s book, The Little Book That Beats the Market. Reading the entire blog over at the MFI Diary has shown me that while the market has been doing somewhat poorly over the past couple of years, the MFI method hasn’t been doing all that well either. Here’s hoping 2009 is the year it finally breaks out of the slump.

In any case, I felt it would be best to compare my performance with a few other potential portfolios, to see how I’m performing compared to other investment options I could have taken (and may yet still take). Those other four choices are:

Finally, my hope is post an updated graph each week that shows my progress as of closing on Friday. I also hope to post some analysis on the Magic Formula stocks I buy, as well as more general analysis if I can figure out how to do it without sounding like too much of a buffoon. Also, for the moment, I’m assuming that I’m investing approximately $150 a month in each virtual portfolio. (The actual amount will change from month-to-month, however.) This, however, will establish a baseline for people comparing at home. Investing such a small amount is probably not the best idea due to comissions, but using a low-cast broker such as FOLIOfn or Zecco can help to mitigate this somewhat.

Anyway, that’s enough for an introduction. Let the comparison begin. I’ll hopefully be able to post the first graph this weekend, though it’ll only show a few days of data. (Last week’s data, when all portfolios had $150 of cash, and this week’s, which are post-investment.) I hope to see you back!

Republican Study Committee Stimulus Proposal

The Republican Study group has put together a more sensible (and smaller) stimulus plan centered around tax cuts- financed with a 1% REDUCTION in federal spending almost across the board (like a 100 billion dollars when you cut out the expect growth for next year).

While I would prefer to see deeper spending cuts, I think this is a signficantly better plan and deserves more airplay:

“Financial markets are tumbling worldwide. The unemployment rate is climbing. It is clear that more Americans are struggling to make ends meet and that the economy needs a boost. The question is: from where should that boost come, Washington or the private sector? Conservatives believe the answer is the private sector. History shows that the best way to encourage an economic turnaround, help preserve jobs, and spur widespread economic growth is to ensure that job-creators face a lower tax burden.

That’s why the Republican Study Committee (RSC) is introducing the Economic Recovery and Middle-Class Relief Act of 2009—to provide some much-needed, incentive-based relief to job-creators and to reduce the cost that government imposes on middle-class families.

The RSC’s Economic Recovery and Middle-Class Relief Act is designed to provide broad, growth-oriented, permanent incentives for economic activity across all sectors and industries, with immediate application and sustained, long-term implications. This will ensure that Washington takes a back seat to Main Street and job creators are empowered to do what they do best—create jobs.

Highlights: The RSC’s Economic Recovery and Middle-Class Relief Act is based on three main themes: 1) Support Families through Tax Relief; 2) Economic Relief for American Businesses and Entreprenuers; and 3) Save Future Generations from a Crushing Debt Burden.

Supporting Families through Tax Relief

1) Five Percent Across the Board Income Tax Cut. This provision would reduce the six federal income tax rates by 5% beginning with 2008, and make the new rates permanent. Under current law, by contrast, income tax rates will increase in 2011.

2) Increase the Child Tax Credit from $1,000 to $5,000. Under current law, families are eligible for a $1,000 tax credit for each child under the age of 17. This provision would increase, and make permanent, an increase in the child tax credit to $5,000 beginning in 2008. This will provide a substantial, immediate tax cut for middle-class families. The increased credit would not be refundable.

3) Make the Lower 15% Rate on Capital Gains and Dividends Permanent. The Jobs and Growth Tax Relief Reconciliation Act of 2003 lowered the top tax rates on capital gains and dividends to 15%. Under current law the lower rates currently in effect expire at the end of 2010, which means that the top capital gains rate will go back to 20% and the top tax rate for dividends will be 39.6%. The last time the capital gains tax rate increased (1987), capital gains tax collections fell by 54% over the first five year and then took a full decade to recover. This provision makes the 15% rate permanent.

4) Repeal the Alternative Minimum Tax on Individuals. The AMT was created in 1969 to prevent 155 wealthy taxpayers from using loopholes in the tax code to avoid paying taxes altogether. Under current law, the tax will hit more than 30 million people in 2009. There is a broad consensus that this is both an unintended result and an unfair one, which is why Congress has repeatedly passed an “AMT patch” to limit the scope of the tax. The legislation would permanently repeal the AMT.

5) Permanently Repeal Required Distributions on Retirement Accounts. Under current law, senior citizens, beginning at the age of 70-and-a-half, are required to make mandatory withdrawals from their IRAs and 401(k)s. Though temporarily suspended for 2009, this provision in the tax code is scheduled to go back into effect in 2010 and for every year thereafter. Mandatory withdrawals needlessly complicate financial planning for retirees, restrict the freedom of seniors to make their own decisions on when to make withdrawals, and in the short-term will force many seniors to sell a portion of their assets at a loss. The bill permanently repeals this provision.

6) Make All Withdrawals from IRAs Tax- and Penalty-Free During 2009. As a general matter, the purpose of 401(k)s and IRAs is to incentivize retirement savings. However, individuals who are facing foreclosure or some other financial emergency during the current recession should have penalty-free access to all of their savings. Especially since, without any other alternative, some families facing hardship will have no choice but to take the penalty. The bill would, for 2009, make all withdrawals from IRAs penalty- and tax-free.

7) Increase by 50% the Tax Deduction on Student Loans and the Tax Deduction on Qualified Higher Education Expenses. Under current law, the tax code provides a tax deduction of $2,500 for interest on student loans and a tax deduction of $4,000 for higher education expenses. This provision would increase the value of both by 50% (to $3,750 and $6,000 respectively), and apply both provisions to a larger number of middle-class families by allowing any individual earning up to $75,000, or any family earning up to $150,000, to claim the full deduction.

Economic Relief for American Businesses and Entrepreneurs

1) Full, Immediate Expensing. The bill would allow all businesses to immediately expense—or fully deduct on their tax returns—the costs of assets (including buildings) they purchase for their business in the year that they buy such assets (“Section 179” expensing). Under current law, businesses can only take limited deductions in pieces, over several years. By uncapping and accelerating the expensing, this provision would encourage the purchase of assets with which to grow a business.

2) Significant Reduction in the Top Corporate Income Tax Rate. The bill would immediately cut the top corporate income tax rate from 35% to 25%, aligning it with the average rate in the European Union. By allowing businesses to keep more of the money they earn, this provision would encourage the expansion of businesses, the hiring of more workers, and an acceleration of investment, while making American companies more competitive internationally.

3) End the Capital Gains Tax on Inflation. The bill would index for inflation the cost basis used when calculating the capital gains tax on assets acquired before the end of 2009. Under current law, the capital gains tax is based on the difference in the original purchase price of the asset and the sale price of the asset. However, some of this difference, or “gain,” can be attributed to inflation. By effectively reducing the amount of a gain that is taxable, this provision would encourage the movement of capital in 2009 and spur voluminous economic investment.

4) Simplify the Capital Gains Rate Structure. The bill would allow corporations to benefit from the 15% capital gains rate. Under current law, individuals pay a top capital gains rate of 15%, but corporations are subject to a 35% top rate. By encouraging corporations to sell unwanted assets, this provision would unleash funds and materials with which to create jobs and grow the economy.

5) Make the R and D Tax Credit Permanent. The Research and Development tax credit is currently due to expire at the end of 2009. Originally enacted as party of President Reagan’s Economic Recovery Tax Act of 1981, it has since been extended on 13 separate occasions without being made permanent. The purpose of this tax provision is to spur research and development in the private sector.

6) Extend the Carryback Period for Net Operating Losses to Seven Years. A business incurs a net operating loss when its tax liability is negative in a given year. Under current law, there is a two-year carryback period for businesses to receive refunds on previously paid taxes. In other words, a business may receive a refund equal to their negative tax liability up to the amount of taxes paid over the previous two years. This legislation would extend this period from two years to seven years, which will smooth out changes in business income, and incentivize private sector investment and job creation.

Saving Future Generations from a Crushing Debt Burden

1) NO Trillion Dollar Spending Spree. Even before Congress enacts one penny of spending from a “stimulus” bill currently being put together by Speaker Nancy Pelosi and Senator Harry Reid, this year’s deficit is projected to be, by far, the highest peacetime deficit in the history of the country—8.3% of GDP. And this is because federal spending is projected to be 24.9% of GDP (also the highest figure in American history, excepting World War II). This legislation does not contain one penny of new spending, and rejects the idea that massive new government spending will lead to an economic recovery. Borrowing from one part of the economy and redistributing it to others will not grow the economy.

2) A Down-Payment on Spending Restraint. The bill includes a one-percent reduction to FY 2009 discretionary spending, excepting the Defense and Military Construction-Veterans appropriations bills. This is a modest limit on the extent to which spending will otherwise increase compared to FY 2008, and is a first step toward a commitment of spending restraint.

For more information or to co-sponsor, please contact Brad Watson with the RSC at brad.watson@mail.house.gov.”

Mortgage Rates End Friday Slightly Lower (FNMA 30-yr 4.5 at 101.12); Fed Meeting Next Week; Dow Down 50

Mortgage Rates End Friday Slightly Lower (FNMA 30-yr 4.5 at 101.12)

MBS prices reached a low of -6/32 before moving higher again.

No economic data came out today.

The Dow fell 50 points.

For the week, MBS prices fell -8/32.

The highlight next week will be Wednesday’s Fed meeting. With the fed funds rate close to zero, rate cuts may no longer be an option. The Fed has many other tools at its disposal, though, and the accompanying statement will be highly anticipated.

A wide range of economic data will come out next week as well.

Gross Domestic Product (GDP) for the fourth quarter will be released on Friday. GDP is the broadest measure of economic activity.

Durable Orders, another important indicator of economic activity, is scheduled for Thursday.

The Chicago PMI national manufacturing index will come out on Friday.

Housing market activity will be revealed in the Existing Home Sales and New Home Sales reports.

Consumer Confidence and Consumer Sentiment will round out a busy week.

Pfizer in Talks to Buy Wyeth for $60 B

 

nts.

 

Robert Shiller: 01-23-09 Financial Markets, ECON 252

Description:

Financial institutions are a pillar of civilized society, supporting people in their productive ventures and managing the economic risks they take on. The workings of these institutions are important to comprehend if we are to predict their actions today and their evolution in the coming information age. The course strives to offer understanding of the theory of finance and its relation to the history, strengths and imperfections of such institutions as banking, insurance, securities, futures, and other derivatives markets, and the future of these institutions over the next century.

Professor Shiller provides a description of the course, Financial Markets, including administrative details and the topics to be discussed in each lecture. He briefly discusses the importance of studying finance and each key topic. Lecture topics will include: behavioral finance, financial technology, financial instruments, commercial banking, investment banking, financial markets and institutions, real estate, regulation, monetary policy, and democratization of finance.

Technology and innovation underlie finance. In order to manage risks successfully, particularly long-term, we must pool large amounts of risk among many, diverse people and overcome barriers such as moral hazard and erroneous framing. Inventions such as insurance contracts and social security, and information technology all the way from such simple things as paper, and the postal service to modern computers have helped to manage risks and to encourage financial systems to address issues pertaining to risk. The tax and welfare system is one of the most important risk management systems.

Portfolio diversification is the most fundamental concept of risk management. The allocation of financial resources in stocks, bonds, riskless, assets, oil and other assets determine the expected return and risk of a portfolio. Taking account of covariances and expected returns, investors can create a diversified portfolio that maximizes expected return for a given level of risk. An important mission of financial institutions is to provide portfolio-diversification services.

Insurance provides significant risk management to a broad public, and is an essential tool for promoting human welfare. By pooling large numbers of independent or low-correlated risks, insurance providers can minimize overall risk. The risk management is tailored to individual circumstances and reflects centuries of insurance industry experience with real risks and with moral hazard and selection bias issues. Probability theory and statistical tools help to explain how insurance companies use risk pooling to minimize overall risk. Innovation and government regulation have played important roles in the formation and oversight of insurance institutions.

Several theories in finance relate to stock price analysis and prediction. The efficient markets hypothesis states that stock prices for publicly-traded companies reflect all available information. Prices adjust to new information instantaneously, so it is impossible to “beat the market.” Furthermore, the random walk theory asserts that changes in stock prices arise only from unanticipated new information, and so it is impossible to predict the direction of stock prices. Using statistical tools, we can attempt to test the hypotheses and to predict future stock prices. These tests show that efficient markets theory is a half-truth: it is difficult but not impossible for some people to beat the market.

Behavioral Finance is a relatively recent revolution in finance that applies insights from all of the social sciences to finance. New decision-making models incorporate psychology and sociology, among other disciplines, to explain economic and financial phenomenon, such as erratic stock price variations. Psychological patterns such as overconfidence and perceived kinks in the value function seem to impact financial decision-making, but are not included in classical theories such as the Expected Utility Theory. Kahneman and Tversky’s Prospect Theory addresses such issues and sheds light on irrational deviations from traditional decision-making models.

Regulation of financial and securities markets is intended to protect investors while still enabling them to make personal investment decisions. Psychological phenomena, such as magical thinking, overconfidence, and representativeness heuristic can cause deviations from rational behavior and distort financial decision-making. However, regulation and regulatory bodies, such as the SEC, FDIC, and SIPC, most of which were created just after the Great Depression, are intended to help prevent the manipulation of investors’ psychological foibles and maintain trust in the markets so that a broad spectrum of investors will continue to participate.

David Swensen, Yale’s Chief Investment Officer and manager of the University’s endowment, discusses the tactics and tools that Yale and other endowments use to create long-term, positive investment returns. He emphasizes the importance of asset allocation and diversification and the limited effects of market timing and security selection. Also, the extraordinary returns of hedge funds, one of the more recent phenomena of portfolio management, should be looked at closely, with an eye for survivorship and back-fill biases.

The markets for debt, both public and private far exceed the entire stock market in value and importance. The U.S. Treasury issues debt of various maturities through auctions, which are open only to authorized buyers. Corporations issue debt with investment banks as intermediaries. The interest rates are not set by the Treasury, the corporations or the investment bankers, but are determined by the market, reflecting economic forces about which there are a number of theories. The real and nominal rates and the coupons of a bond determine its price in the market. The term structure, which is the plot of yield-to-maturity against time-to-maturity indicates the value of time for points in the future. Forward rates are the future spot rates that can be calculated using today’s bond prices. Finally, indexed bonds, which are indexed to inflation, offer the safest asset of all and their price reveals a fundamental economic indicator, the real interest rate.

Futures markets were started in Osaka, Japan in the 1600s to create an authoritative and meaningful market price for agricultural products, using standardized contracts. Since then, futures markets have been copied around the world to allow the hedging various future risks, financial and other. In the United States, the Chicago Mercantile Exchange and the Chicago Board of Trade have been the most popular futures trading markets. Although futures markets are changing and becoming more electronic, they are still important risk management tools for farmers and present financial opportunities for all manner of hedgers and arbitrageurs.

Futures markets have expanded far beyond their initial application to farmer’s planting and harvest cycles. These markets now allow investors and traders to set prices for a broad spectrum of assets and for a whole term structure stretching into the distant future. Some of these markets are often priced according to simple fair-value formulae, others are not. Futures markets can be in backwardation, where the future price is lower than the present, spot price. They can also be in contango, where the price rises with maturity and is higher in the future than it is today. The S&P/Case-Shiller Home Price Index is a recent invention that has transferred the mechanics of futures markets to the prices of single-family homes in ten real estate markets, in an effort to create a national market for residential real estate.

Options introduce an essential nonlineary into portfolio management. They are contracts between buyers and writers, who agree on exercise prices and dates at which the buyer can buy or sell the underlying (such as a stock). Options are priced based on the price and volatility of the underlying asset as well as the duration of the option contract. The Black-Scholes options pricing model is one of the most famous equations in finance and offers a useful first approximation for prices for option contracts. Options exchanges and futures exchanges both are involved in creating a liquid and transparent market for options. Options are not just for stocks; they are also important for other asset classes, such as real estate.

Professor Shiller, in his final lecture, reviews some of the most important tools for individual risk management. Significant inequality in domestic and international communities has created a need for social insurance programs, such as those created in Germany in the late 1800s. The tax system, bankruptcy laws, and government insurance programs are used to manage risk of personal wealth. However, each of these inventions must take account of psychological factors, such as moral hazard, in order to be effective without eliminating incentives to participate in the workforce, or other negative side effects. With regard to careers, including those in finance, young people should frame decisions with morality and purpose in mind, and with a broad perspective of both.

Professor Summers, former U. S. Treasury Secretary and former President of Harvard University, in this the first of two lectures in honor of former Yale Professor and Council of Economic Advisors chairman Arthur Okun, offers thoughts on the role of monetary policy in economic fluctuations, past and present. In the “Okun period,” ending about when Okun died in 1980, the monetary authorities were very much involved in actually creating economic contractions. Inflation would repeatedly get out of control, the Fed would hit the brakes, and the economy would slow. But, that is not the story of the economic cycles of the last two decades. Recent economic cycles appear to be connected with factors endogenous to the financial system, such as bubbles or cycles of complacency among lending institutions. Summers argues that to understand the financial markets and the economy, we must consider models of multiple equilibria, such as bank run models, where a change in confidence may shift the economy drastically without any change in fundamentals.

In the second of his two lectures in honor of Arthur Okun, Professor Summers points out that real interest rates have been very low in the current subprime crisis. This indicates that the shock to the economy was more a financial breakdown shock than a disinflation shock. But financial breakdown shocks are not necessarily very harmful to the economy, so long as financial intermediation capital is not destroyed. In a financial crisis like the present one, financial firms are likely to take the step of decreasing their leverage, often by contracting loans, which creates its own risks for the economy. Regulators should place pressure on financial institutions to raise their capital and should intervene in near foreclosure situations, but should not attempt to support housing prices.

Child Protective Services Really Loves Kids

http://fightcps.com/site-map-for-fightcps/

BGI Launches International Bond Funds; RevenueShares Tries Navellier Strategy

Three new ETFs launched on Friday, two international bond ETFs from Barclays Global Investors (BGI) and an RevenueShares fund based on a strategy from mutual fund maven Louis Navellier.

RevenueShares Investor Services launched the RevenueShares Navellier Overall A-100 Fund (RWV) on the New York Stock Exchange ARCA. Less than a year old, RevenueShares is the most recent entrant in the ETF space for Fundamental Indexing. Proponents of the concept of fundamental indexing believe indexes based on fundamental metrics produce better returns than indexes based on market capitalization, such as the S&P 500. In a dig at WisdomTree, the fundamental house that builds indexes based on dividends, Sean O’Hara, president of RevenueShares, tells ETF Trends, while dividends can be adjusted, revenues are the one variable that can’t be fudged. Well, they can’t be fudged unless the company decides to do a little technique called stuffing the channel. In channel stuffing a company books sales from the future in the current quarter. But, that’s highly frowned upon, so it doesn’t happen much, so I won’t dwell on it.

Anyway, they take that revenues-based index and mix it with a quantitative methodology from Navellier’s firm Navellier & Associates. The strategy seeks to beat the benchmark indexes with what they call alpha generating growth strategies. Alpha is that bit of return that a manager’s skill adds to the fund’s returns. ETF Trends says “The fund is constructed using an 8-factor model to give stocks a letter grade. From there, the top 100 A-rated stocks are included and ranked by revenue annually on Sept. 1, and rebalanced on the first day of each calendar quarter.”

Also on Friday, BGI launched two new ETFs on the Nasdaq Stock Market.

They both charge and expense ratio of 0.35%. These are the first two iShares ETFs to list on NASDAQ in 2009, compared to eight listings in 2008 and five in 2007. Nasdaq says it’s the most liquid U.S. market for ETFs, capturing 34.8% of all U.S. ETF volume in December.

ETFguide says with only four broadly diversified international bond ETFs (including these two) and one emerging markets bond ETF these are the least populated areas in the U.S. ETF market. With 8.22 years as the average weighted maturity for the bonds, IGOV is the long-term option. ETFguide breaks down IGOV three largest country allocations: Japan (24.95%), Germany (9.28%), and Italy (8.74%). The bonds in the short-term ISHG have an average weighted maturity of 1.87 years and with the largest country allocations in Japan (24.95%), Germany (10.95%), and Italy (7.99%).

WALL STREET OFF EARLIER LOWS ON TECH, FINANCIALS

Have a great and thoughtful weekend.

Canadians using 3x our share of global resources

World Wildlife Fund-Canada, a very well-respected organization has just released its Living Planet Report for 2008.  It introduces some new measures of our impact on Earth including a new Living Planet Index, and new measures for global, national and individual water footprints.  For example, a cotton T-shirt requires 2,900 litres of water in its production!

Earth Rhythms is trying, in small ways, to take some steps as a tourism business to operate sustainably.  Our home office is located in an R-2000 home that we designed and built.  We recycled an old house (flooring, doors, stairs, banisters, railing, doors, trim) into the new house.  We ask our partners who provide food services to use local ingredients, to try to focus on a Manitoba food miles radius; we are using fuel efficient vehicles for our travel, and we purchase carbon offsets for air travel.  We focus on self-propelled activities for our clients - walking, snowshoeing, hiking, bicycling.  And, we constantly look for new ways to reduce our ecological, water, and carbon footprint.  We’ll keep sharing what we are learning and point the way to new resources for all of us to reduce our collective water and carbon footprints.

Is this Change? Economics in the Obama Agenda

Every day, I will take a look at another part of the agenda on President Barack Obama’s new whitehouse.gov website. Today’s issue: How does the agenda address economics, business, and financial policy?

Let us just start by examining the kind of reasoning at the foundation of Obama’s economic thought process, as revealed by the commentary under “American Recovery and Reinvestment” in the Economy section of the whitehouse.gov Agenda:

Now, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness.

The “very fact that this crisis is largely of our own making” absolutely does not mean “that it is not beyond our ability to solve.”   This is a ridiculous claim.  I am not saying that America cannot fix the current problem, but that this reasoning is completely irrational.  There are plenty of ways to get oneself into a crisis that would be beyond one’s ability to solve: just ask any smoker who is dying of lung cancer. 

And, addressing the second line of this mind-bendingly senseless couplet: how could our problems possibly be rooted in our capacity for future greatness?  Of course our problems are rooted in past mistakes!  Is Obama really asserting here that time moves from past to present, rather than from future to present, and that problems come from bad stuff rather than good stuff?  Maybe he would like to teach us something about the color of the sky, as well.

Past mistakes may be the root of our economic crisis, but those past mistakes are themselves rooted in our leaders’ inability to think about and discuss economic issues clearly.  Obama’s almost Carroll-esque nonsense rhetoric might be a step better than the brazen economic frauds of the Republicans, but sincere and well-meaning silliness is still silliness.

We need clear thinking, and this is not it.

The fact that the Economy section of the Agenda is 90 percent speech and only 10 percent substance (according to the word count, precisely 90.37 percent speech) popped the first red flag for me.  The second red flag was popped after I read through the short bullet list that precedes the text of the speech.

It contains nothing about economics.

Now, sure, every one of the items in the list will affect the economy, and in positive ways.  But, none of them are themselves economic in nature.  There is nothing about competitive parity, nothing about making sure people have access to accurate information about their economic options, nothing about eliminating the low-grade fraud that clogs our market interactions like arterial plaque, nothing about facing down corporate dominance that makes sustainable prosperity so elusive, nothing about meritocratic reforms in human resources practices.

Instead, we have alternative energy and energy efficiency measures.  We have upgrades to educational facilities, but nothing at all about creating parity in education access for all Americans.  We have investments in science, but nothing about removing corrupting influences that distort science to plutocratic ends.  And, we have the bizarre promises to expand broadband — something that is already taking care of itself — and to computerize medical records.

It is almost as if the Obama team was scouring through index cards from other subject areas and tossing in the ones that “kinda sorta” had something to do with economics.  And then, cut-and-pasted the text of a speech to fill up all the blank space.

The Fiscal section of the online Agenda is so tiny that you almost do not need to use the scroll bar to read the entire thing.  It contains such vague and obvious ideas as “End Wasteful Government Spending” which, the text tells us, means “stop funding wasteful, obsolete federal government programs that make no financial sense.” 

Well, that’s hard to argue with, isn’t it?  Returning to the “X as opposed to not X” formula from the previous blog on the Agenda, we could ask: “As opposed to continuing to fund wasteful, obsolete programs that make no sense?”

The specific measures mentioned — ending subsidies to the profit-soaked oil industry and crooked student loan sharks — are laudable, but those two obvious solutions are where the specifics end.  It leaves me wondering, “What president would not do this who wasn’t beholden to the oil or credit lobbies?”  Way to aim for adequate.

And, they take credit for cracking down on the oil industry again in the Corporate Loopholes item.  Hey now, how many times are you going to toot this horn?

For me, however, the Fiscal item on pork barrel spending is the winner of the Most Uninspired Solution award.  It provides no mechanism for eliminating pork other than transparency.  However, pork already survives in bills that are completely open to public scrutiny.  Lawmakers can simply brush off a colleague’s pork as a necessary concession to get an otherwise good bill passed, and the pork-pushing legislators themselves are insulated by constituent self-interest: the same people who might vote them out are the ones benefitting from the pork.

The only real solution that provides a natural and democratic mechanism for disincentivizing pork in Congress, as I have said before, is the line-item voting option.  Transparency is a half-measure that would not expose pork to individual accountability, Representative by Representative and Senator by Senator.  Only the line-item option would remove the insulation pork enjoys when lumped in with other, beneficial items.

Obama’s tax policy is certainly wiser than Bush’s, but that is like saying that using iridium spark plugs is better than jamming plastic army men into the cylinder heads of your car’s engine.  In other words, the Obama tax policy consists largely of no-brainers that pass as wisdom because we have had morons and crooks running the country for eight years.

But, the Obama plan is revealed as a half-measure in that it only backs up our plutocrat-favoring tax policy lunacy past the Bush era: “no family will pay higher tax rates than they would have paid in the 1990s.”

The fiscal problems facing our Republic and the economy in general, resulting from upending the progressive tax system that gave us such prosperity following World War II, did not start in the 1990s. 

And what is all this talk about families making money?  “Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s.”  Families do not make money, individuals do.  Individuals can pool their income as families, but technically so can any collection of individuals.  All this family talk is nothing but pandering to cultural sentiments; it is not competent and honest economics.

And monetary familialism, as it lends itself to all sorts of competition-crushing archaisms in the marketplace, is one of the primary causes of economic sloth.  Let’s address economic realities and stop indulging this condescending, pandering, campaign season political talk.

A 1953 FEDERAL RESERVE SPEECH

I like to dig around in the archives of the Federal Reserve.  There are many golden nuggets stored there. Anyone who wishes to see how the thinking about the Federal Reserve, the Treasury and the private banking system evolved, this is the place to go.  Today, we go back even earlier than the infamous 1961 gold market manipulation memo I dug up last week.  Back to 1953, Eisenhower had just become President, the Cold War just began and the Korean War was winding down to its present stalemate.

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It produced the paradox that we seemed to be practicing the very thing we were fighting against. The Federal Reserve System was caught in this paradox under the wartime decisions. It undertook to stabilize the price of Government securities in relation to a fixed pattern of yields, and in so doing found itself feeding the forces that make for inflation. It continued to stabilize these prices, with minor modifications, after the war, in fact up to March 1951. These are facts.

If anyone wishes to see where the ‘free trade’ business began, they can best do this by reading and understanding this seemingly boring speech.  This speech, ironically, was delivered in the absolute ground zero of the destruction of the US industrial base due to the free trade theology.  Notice that the head of the Federal Reserve is worried about inflation.  Why is that?

 

Time Magazine, April 13, 1953:  End of Inflation? - TIME

But any sudden, unexpected news almost always upsets a free market. The Chinese overtures caused many stocks to drop as much as two points, a few (notably the peace-vulnerable aircrafts) as much as three points. This week the drop continued; in one day the Dow-Jones industnal index fell 5.93 points to 274.10. The heaviest selling began in commodities, not only on US. markets, but on Europe’s bourses In the U.S., futures contracts in wool, rubber, sugar, soybean oil and grains went tumbling. In one day, the Dow-Jones index of commodity futures fell 2.69 points, biggest drop in two years.

The shake-out underlined the slide in commodity prices which has been going on since early 1951 (see chart). For businessmen, the long decline in commodity prices was more significant than the ups & downs of the stock market, since it is the prices of raw materials that, in the long run determine many retail prices. And even hough some retail prices are still rising the worldwide price trend, forecast by commodities is downward. Many of the commodities, like wool and rubber, which had the biggest rise right after the Korean war, have had the sharpest fall since. The Government’s index of all commodities (2,000 separate items) is not far above its pre-Korea level, but some key commodities (e.g., fats, oils and fibers) are below the June 1950 level.

I am not surprised that markets were roiling due to the sudden Chinese peace overtures.  People often misunderstand the nature of the Chinese.  They really prefer ‘peace’.  They fell, quite rightfully, that they can win, over time, in the economic arena.  The Communists had barely taken over China when they wanted peace, not eternal war. 

 

If there is any nation that does tend to want eternal war, this is the US.  The sudden end to the first post-war of the very beginning of the Cold War took US industries by surprise. The side effect of being the ’supplier of all armies and all navies’ was, the US was fit ONLY to do this.  Despite claims of being the world’s most powerful civilian economy, the US was actually now terminally militarized.  

 

At the beating heart of our system was the need to make and then use [via fighting] the most military equipment on earth.  1953 was the year the US tested its first hydrogen bomb.  And then, so did the Soviet Union.  Stalin, not too long after this speech, had a stroke and soon was going to join Hitler in hell.  

 

Another amusing side story here is how Time magazine makes fun of the ‘Communist Daily Worker.’  Then turns around and AGREES with the editorial of the Daily Worker!  Namely, the peace overtures were not a cause of rejoicing but of annoyance on Wall Street and in DC!  On the other hand, Eisenhower was elected so he could defend America and as usual with the Republican party, he is able to kiss up to Communists because he has no one on the left who will attack him .  Whereas, if any Democrat tries this, they are savaged on the right.

 

Now, back to the Martin Jr. speech in Detroit:

 

I am not passing judgment on what was done. Last month marked the second anniversary of the so-called Treasury-Federal Reserve accord. It may be worth while to recall the wording of the joint statement: ”The Treasury and the Federal Reserve System”, said the announcement, “have reached full accord with respect to debt management and monetary policies to be pursued in furthering their common purpose to assure the successful financing of the Government’s requirements and, at the same time, to minimize monetization of the public debt.” In monetary history the accord was a landmark. In withdrawing from supporting fixed prices in the Government bond market, the Federal Reserve System regained its influence over the volume of money.  

We are witnessing the biggest ‘monetization of public debt’ in history of humanity.   The geniuses who drove us into this disaster preen themselves with pretending to be worried about ‘monetizing’ our debts.  To save the corrupt, bankrupt bankers, we are ‘monetizing’ not only public debts but ALL debts!  

 

The Bloomberg pie charts below show clearly how much capital value banks have lost since the Japanese carry trade ended in July, 2007:

 

Royal Bank of Scotland plummeted from $120 billion to $4.6 billion capitalization.  But it is far form the worst.

The miserable jerks running Citigroup fell from $258 billion to only $19 billion.  The Royal Bank of Scotland basically threw in the towel this week.  Citigroup is being kept alive via TARP.  Which is a gigantic ‘monetization’ scheme if I ever saw one.

JP Morgan and HSBC are both less than half their original size.  So they get to limp along.  JP Morgan is one of the originators of the Federal Reserve.  These are OLD pirates.  They get to have a big, big voice in what the Federal Reserve does.  And they are quite adamant, they need to be recapitalized and the process is to monetarize them via taxpayer obligations in the future.  

 

So, in 1953, the Fed chief is worried about excess obligations on the taxpayers who were, after all, paying for WWII as well as swallowing all the losses from bankruptcies from WWI.  Americans were most certainly NOT clamoring for ‘free trade’ or wild excesses.  They wanted, above all, stability.  This included, no inflation eating wages.  The Communists were waiting in the wings, if the government sought to pay for WWI losses as well as WWII debts via inflation.

 

The Fed Detroit speech of 1953:

It ceased to be the residual buyer who, by its purchases of Government securities, however reluctantly made,[ELAINE: War Bonds and Treasuries] furnished bank reserves indiscriminately and thus abetted inflationary overexpansion of the money supply. During its 40 years of existence, the Federal Reserve System has frequently tried to formulate or define its purposes in the light of the responsibility for monetary management which Congress placed upon it.

First, note that the ’system’ is supposed to be subject to the ‘will of Congress’.  The unions of America used to have two tools: donations to politicians and the use of hundreds of thousands of eager and anxious union members, willing to press hard for their political objectives.  The fact that they were so successful was due to fears in the ruling elites that the communists would take up the banners and the pitchforks and storm Washington, DC.

 

Back then, the Fed was very anxious, after the TOTAL and UTTER disaster of the Great Depression which saw the Fed being utterly cruel and totally useless, Martin Jr. wanted everyone to view the Fed as a circus elephant, subject to the will of the circus trainers and it could balance on a ball without falling.  Of course, the problem here was the illusion of who held power over whom. 

Schönberg Verklärte Nacht part 2

Please understand the ruling elites: they love to be in EACH OTHER’S spot lights but NOT in the PUBLIC EYE.  They like to hobnob and appear at cultural elitist sites like opera houses, exclusive ski resorts, at yacht races, etc. But not in popular public places.  They love to have the sense of total power but don’t want anyone seeing them pulling strings.

 

Olmert is not an elite. He is crude.  He actually boasted, in public, about his ability to commit crimes against humanity and then pull US Presidential strings and make the US President dance like a puppet.  Clever ruling elites always assure their puppets that the puppets control the play they are in.   The Federal Reserve was quite scared in 1953 and Martin Jr was their bland face who was out to reassure that a bunch of nasty jerks didn’t control our banking systems but rather, rational people who wanted stability, were in control.  Of course, this was all a false front.

 

The 1953 Detroit speech:

Note the use of ‘free’ in this speech.  The marketplace, not society, would dictate what we have for an economy.  And what does that work with?  The profit motive!  Sounds real simple.  Except these concepts ended up, in the hands of the richest Americans, the banks they used as tools of domination and the corrupted politicians who set the rules, it all ended up in a total, complete and comprehensive collapse of…SOCIETY itself.  And in turn, in the end, our entire nation, too.

 

Why do we let in a flood of imports while exporting most of our industrial as well as office jobs?  Because the market dictates this!  It is PROFITABLE!  Got that?  This placing of profits above all has led to a situation where global profits are now VANISHING.  Into thin air.  This is because the only way this wretched system could run was to run up massive debts.

 

Detroit, 1953:

The credit of the United States has been destroyed by ‘free trade’ and the ‘monetization of debt.’  This has finally caused a ‘panic and disaster’.  The ‘credit of the United States’ is ‘being destroyed.’  The Chinese communists…of all people… are snarling at us to watch our step.  There is a big move afoot to have a ‘Jubilee’ whereby the US and UK tell the creditor nations, Japan and China, to eat shit and die.  If we think skipping out of our debts will PREVENT a Great Depression, we are nuts.

 

And this is stupidly deliberate.  We ought to teach in schools, using a baseball bat, if necessary, that the bankruptcy of England, Germany and France and Russia reneging on debts to the US caused the Great Depression, not Americans buying Fords and tractors for their farms.  There was real estate speculation due to money pouring in from Europe as the Europeans struggled to pay WWI debts and bonds.  But this petered out and as it collapsed, Europe tried to pay for all this by flooding the US with trade goods.  The US had to fend this off!

 

The promise Mr. Martin Jr was making was simple: he was going backwards to the pre-WWI free trade business and he was trying to tell everyone, it wouldn’t bankrupt America.  Except he was wrong.  Totally and utterly wrong.  History is crystal clear here: free trade is a total DISASTER for the US.  There is no way around this fact.  Even in Martin’s lifetime, it was a disaster.  Harnessed to the global imperial military state, we saw the currency in steep decline a mere 12 years after this speech.

 

Fort Knox was rapidly being drained of gold.  Silver coinage was being rapidly debased.  The US was beginning to see the first waves of massive inflation coupled with floods of foreign goods pouring in.  Nothing was fixed since then.  The free trade circus continued, the elephant fell off of its ball over and over again, everything in this three ring circus was wrecked and now, the tent is on fire.

 

Extremists Need Not Apply - TIME 1953

Dwight Eisenhower did not miss the innuendo. He stiffened, his eyes sparked and, in a voice that needed no electronic amplification, he barked his answer: I do. Before he appoints anybody to an important post, he said, he calls him in and asks about his philosophy, whether he is biased or distinctly in favor of some doctrinal idea. He always tries to get a man logically devoted to the service, who generally conforms to what the President calls the middle-of-the-road philosophy. He doesn’t like extremists, Eisenhower added—particularly those who make up their minds before they know the facts….

Eisenhower wanted to pay down for WWII and not get involved in WWIII .  Almost immediately, on the right, he was under attack by McCarthy.  Back to the 1953 Detroit speech:

I always like to see the words, ‘work in the reverse.’  The system has, as part of its innermost soul, this sharp tendency to suddenly move in reverse.  This is the ‘widdershins’ stuff I keep talking about.  This is the fundamental basis for how things operate in the Cave of Wealth and Death.  This place is as ancient as humanity.  It goes back to the Ice Ages when humans crawled into deep caves to paint pictures of animals cavorting on the plains above, in the sun.  In the dark, illuminated with little light from fat-burning lamps, they did rituals to call for spring to return.  Meanwhile, the winter winds howled outside.  

 

Winter always ends swiftly.  The cold ceases and the snow usually melts very rapidly, sometimes, in less than two days!  Back to the speech here:  Dealers and brokers cared about only one thing: what would the bankers running the Fed do next?  Of course, they had to!  Anyone who had an idea was at an advantage.  This is why all the biggest banking houses that founded the Fed created the Fed in the first place!  THEY knew ALL THE TIIME, what the Fed was going to do.  Needless to say, the Fed officials socialized with these same gangsters.

 

Back to the speech:

Since the unpegging, we have endeavored to confine open market transactions to the effectuation of credit policy, that is, to maintain a volume of member bank reserves consistent with the needs of a growing and stable economy, We have tried to confine our operations to short-term securities, in practice largely Treasury bills. Prices of these issues, which are the closest substitutes for cash, are least affected by Reserve System sales or purchases. Gradually investors in Government securities have, I believe, come to expect and understand this phase of System activity in the market.

Even back then, the Fed liked to talk about psychology.  If they were so damn worried about people’s sanity, why didn’t they hand the Fed over to psychiatrists?  Seriously!  Someone has to have some idea, what is ’sane’!  The Fed chief also admits, people were apprehensive about the Fed.  DUH.

 

And these apprehensive people who need psychiatric care also fear the Fed might be…hold on here…UNPREDICTABLE!  Capricious!  My, who would have thought?  HAHAHA.  All right, all together now: HAHAHA.  The Fed was going to fix this by…having contacts [ie: golf and drinking buddies] in the market, demonstrating confidence in these interventions that are so capricious and unpredictable.  Yeah, like JP Morgan guys.  Just for example.  Or maybe, Rothshild guys.  Everyday people you meet on the subway.

 

The speech:

Sigh.  How obvious is this?  Of course, everyone will stand aside when the circus elephant, the Fed, tries to intervene with its ball balancing acts.  Note also the remark about ‘virtually unlimited resources.’  Yes, this is ‘unlimited’ but it causes this other ‘unlimited’ thing: hyperinflation.  And the Time Magazine article above, is all about inflationary fears, as we can see.  Back to the speech, again:

Open market operations and the discount rate are again being used for this purpose as twin reserve banking measures, each complementing the other in affecting the availability, volume, and cost of credit.  Primary reliance is once more placed upon the discount mechanism as a means for supplying the variable short-term needs of individual banks for reserves

I was rather unnerved by the fact that I couldn’t click and drag the two parts I capitalized.  Why was that?  It was weird that both sentences talked bout INTERVENTIONS.  I am particularly ticked off that one of these queer sentences talks about how unlikely it is to have a disorderly situation like the one we are in, today.  The elephant wants not only to balance on a ball but to juggle balls at the same time.  This is obviously a total failure.  

 

The injections like we are seeing today which dwarf all previous injections of the last 100 years, is just amazing.  And how, pray tell, can the Fed extract itself from this?  It obviously cannot.    Back to this depressing speech:

Experience has demonstrated that when member banks are heavily in debt to the Federal Reserve Banks, the tone of the money market is tight. Marginal loans are more likely to be deferred and some credit risks may have to shop around for accommodation. Conversely, when member bank borrowing is low, the tone of the money market tends to be easy and credit accommodation is less discriminating. The Federal Reserve borrowing privilege and the discount rate, after years of disuse, have come to play once more their intended role as flexible, impersonal instruments of monetary management.

.

Open market operations can be employed when needed to condition the current tone in credit markets and the general availability of credit. By these operations the Federal Reserve can tighten or ease the pressure on member bank reserve positions and thus cause banks to borrow or enable them to reduce borrowings at the Reserve Banks. Subsequently, this tightness or ease is transmitted and magnified in money and credit markets.

.

What has the elephant crushed when it fell off the ball?  Pensions, savings and life insurance.  Please note that these, NOT BUSINESS PROFITS, are the CAPITAL that supports all private enterprise banking!  PERIOD.  ZIRP, of course, wipes out ALL of these.  Totally!  ZIRP is a disaster just like hyperinflation!  Far from balancing anything, the Fed has flubbed absolutely everything.  I am just furious about this.  First, savings collapsed during the 1% years while debts ballooned.  then, pensions vanished as the stock market and investment markets collapsed after a sudden and vicious spurt of commodity inflation. 

 

We are in grave danger now.  And the speeches being made today are twice as stupid as the ones in the past.  Not even pretending to be intelligent, nay, even sentient, they mouth platitudes and outright lies while still clinging to the free trade fictions and the balancing act business.  Time to fold this circus tent and drive it out of town for good.

 

 

A 1953 FEDERAL RESERVE SPEECH

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I like to dig around in the archives of the Federal Reserve.  There are many golden nuggets stored there. Anyone who wishes to see how the thinking about the Federal Reserve, the Treasury and the private banking system evolved, this is the place to go.  Today, we go back even earlier than the infamous 1961 gold market manipulation memo I dug up last week.  Back to 1953, Eisenhower had just become President, the Cold War just began and the Korean War was winding down to its present stalemate.

.

It produced the paradox that we seemed to be practicing the very thing we were fighting against. The Federal Reserve System was caught in this paradox under the wartime decisions. It undertook to stabilize the price of Government securities in relation to a fixed pattern of yields, and in so doing found itself feeding the forces that make for inflation. It continued to stabilize these prices, with minor modifications, after the war, in fact up to March 1951. These are facts.

If anyone wishes to see where the ‘free trade’ business began, they can best do this by reading and understanding this seemingly boring speech.  This speech, ironically, was delivered in the absolute ground zero of the destruction of the US industrial base due to the free trade theology.  Notice that the head of the Federal Reserve is worried about inflation.  Why is that?

 

Time Magazine, April 13, 1953:  End of Inflation? - TIME

But any sudden, unexpected news almost always upsets a free market. The Chinese overtures caused many stocks to drop as much as two points, a few (notably the peace-vulnerable aircrafts) as much as three points. This week the drop continued; in one day the Dow-Jones industnal index fell 5.93 points to 274.10. The heaviest selling began in commodities, not only on US. markets, but on Europe’s bourses In the U.S., futures contracts in wool, rubber, sugar, soybean oil and grains went tumbling. In one day, the Dow-Jones index of commodity futures fell 2.69 points, biggest drop in two years.

The shake-out underlined the slide in commodity prices which has been going on since early 1951 (see chart). For businessmen, the long decline in commodity prices was more significant than the ups & downs of the stock market, since it is the prices of raw materials that, in the long run determine many retail prices. And even hough some retail prices are still rising the worldwide price trend, forecast by commodities is downward. Many of the commodities, like wool and rubber, which had the biggest rise right after the Korean war, have had the sharpest fall since. The Government’s index of all commodities (2,000 separate items) is not far above its pre-Korea level, but some key commodities (e.g., fats, oils and fibers) are below the June 1950 level.

I am not surprised that markets were roiling due to the sudden Chinese peace overtures.  People often misunderstand the nature of the Chinese.  They really prefer ‘peace’.  They fell, quite rightfully, that they can win, over time, in the economic arena.  The Communists had barely taken over China when they wanted peace, not eternal war. 

 

If there is any nation that does tend to want eternal war, this is the US.  The sudden end to the first post-war of the very beginning of the Cold War took US industries by surprise. The side effect of being the ’supplier of all armies and all navies’ was, the US was fit ONLY to do this.  Despite claims of being the world’s most powerful civilian economy, the US was actually now terminally militarized.  

 

At the beating heart of our system was the need to make and then use [via fighting] the most military equipment on earth.  1953 was the year the US tested its first hydrogen bomb.  And then, so did the Soviet Union.  Stalin, not too long after this speech, had a stroke and soon was going to join Hitler in hell.  

 

Another amusing side story here is how Time magazine makes fun of the ‘Communist Daily Worker.’  Then turns around and AGREES with the editorial of the Daily Worker!  Namely, the peace overtures were not a cause of rejoicing but of annoyance on Wall Street and in DC!  On the other hand, Eisenhower was elected so he could defend America and as usual with the Republican party, he is able to kiss up to Communists because he has no one on the left who will attack him .  Whereas, if any Democrat tries this, they are savaged on the right.

 

Now, back to the Martin Jr. speech in Detroit:

 

I am not passing judgment on what was done. Last month marked the second anniversary of the so-called Treasury-Federal Reserve accord. It may be worth while to recall the wording of the joint statement: ”The Treasury and the Federal Reserve System”, said the announcement, “have reached full accord with respect to debt management and monetary policies to be pursued in furthering their common purpose to assure the successful financing of the Government’s requirements and, at the same time, to minimize monetization of the public debt.” In monetary history the accord was a landmark. In withdrawing from supporting fixed prices in the Government bond market, the Federal Reserve System regained its influence over the volume of money.  

We are witnessing the biggest ‘monetization of public debt’ in history of humanity.   The geniuses who drove us into this disaster preen themselves with pretending to be worried about ‘monetizing’ our debts.  To save the corrupt, bankrupt bankers, we are ‘monetizing’ not only public debts but ALL debts!  

 

The Bloomberg pie charts below show clearly how much capital value banks have lost since the Japanese carry trade ended in July, 2007:

 

Royal Bank of Scotland plummeted from $120 billion to $4.6 billion capitalization.  But it is far form the worst.

The miserable jerks running Citigroup fell from $258 billion to only $19 billion.  The Royal Bank of Scotland basically threw in the towel this week.  Citigroup is being kept alive via TARP.  Which is a gigantic ‘monetization’ scheme if I ever saw one.

JP Morgan and HSBC are both less than half their original size.  So they get to limp along.  JP Morgan is one of the originators of the Federal Reserve.  These are OLD pirates.  They get to have a big, big voice in what the Federal Reserve does.  And they are quite adamant, they need to be recapitalized and the process is to monetarize them via taxpayer obligations in the future.  

 

So, in 1953, the Fed chief is worried about excess obligations on the taxpayers who were, after all, paying for WWII as well as swallowing all the losses from bankruptcies from WWI.  Americans were most certainly NOT clamoring for ‘free trade’ or wild excesses.  They wanted, above all, stability.  This included, no inflation eating wages.  The Communists were waiting in the wings, if the government sought to pay for WWI losses as well as WWII debts via inflation.

 

The Fed Detroit speech of 1953:

It ceased to be the residual buyer who, by its purchases of Government securities,however reluctantly made,[ELAINE: War Bonds and Treasuries] furnished bank reserves indiscriminately and thus abetted inflationary overexpansion of the money supply. During its 40 years of existence, the Federal Reserve System has frequently tried to formulate or define its purposes in the light of the responsibility for monetary management which Congress placed upon it.

First, note that the ’system’ is supposed to be subject to the ‘will of Congress’.  The unions of America used to have two tools: donations to politicians and the use of hundreds of thousands of eager and anxious union members, willing to press hard for their political objectives.  The fact that they were so successful was due to fears in the ruling elites that the communists would take up the banners and the pitchforks and storm Washington, DC.

 

Back then, the Fed was very anxious, after the TOTAL and UTTER disaster of the Great Depression which saw the Fed being utterly cruel and totally useless, Martin Jr. wanted everyone to view the Fed as a circus elephant, subject to the will of the circus trainers and it could balance on a ball without falling.  Of course, the problem here was the illusion of who held power over whom. 

Schönberg Verklärte Nacht part 2

Please understand the ruling elites: they love to be in EACH OTHER’S spot lights but NOT in the PUBLIC EYE.  They like to hobnob and appear at cultural elitist sites like opera houses, exclusive ski resorts, at yacht races, etc. But not in popular public places.  They love to have the sense of total power but don’t want anyone seeing them pulling strings.

 

Olmert is not an elite. He is crude.  He actually boasted, in public, about his ability to commit crimes against humanity and then pull US Presidential strings and make the US President dance like a puppet.  Clever ruling elites always assure their puppets that the puppets control the play they are in.   The Federal Reserve was quite scared in 1953 and Martin Jr was their bland face who was out to reassure that a bunch of nasty jerks didn’t control our banking systems but rather, rational people who wanted stability, were in control.  Of course, this was all a false front.

 

The 1953 Detroit speech:

Note the use of ‘free’ in this speech.  The marketplace, not society, would dictate what we have for an economy.  And what does that work with?  The profit motive!  Sounds real simple.  Except these concepts ended up, in the hands of the richest Americans, the banks they used as tools of domination and the corrupted politicians who set the rules, it all ended up in a total, complete and comprehensive collapse of…SOCIETY itself.  And in turn, in the end, our entire nation, too.

 

Why do we let in a flood of imports while exporting most of our industrial as well as office jobs?  Because the market dictates this!  It is PROFITABLE!  Got that?  This placing of profits above all has led to a situation where global profits are now VANISHING.  Into thin air.  This is because the only way this wretched system could run was to run up massive debts.

 

Detroit, 1953:

The credit of the United States has been destroyed by ‘free trade’ and the ‘monetization of debt.’  This has finally caused a ‘panic and disaster’.  The ‘credit of the United States’ is ‘being destroyed.’  The Chinese communists…of all people… are snarling at us to watch our step.  There is a big move afoot to have a ‘Jubilee’ whereby the US and UK tell the creditor nations, Japan and China, to eat shit and die.  If we think skipping out of our debts will PREVENT a Great Depression, we are nuts.

 

And this is stupidly deliberate.  We ought to teach in schools, using a baseball bat, if necessary, that the bankruptcy of England, Germany and France and Russia reneging on debts to the US caused the Great Depression, not Americans buying Fords and tractors for their farms.  There was real estate speculation due to money pouring in from Europe as the Europeans struggled to pay WWI debts and bonds.  But this petered out and as it collapsed, Europe tried to pay for all this by flooding the US with trade goods.  The US had to fend this off!

 

The promise Mr. Martin Jr was making was simple: he was going backwards to the pre-WWI free trade business and he was trying to tell everyone, it wouldn’t bankrupt America.  Except he was wrong.  Totally and utterly wrong.  History is crystal clear here: free trade is a total DISASTER for the US.  There is no way around this fact.  Even in Martin’s lifetime, it was a disaster.  Harnessed to the global imperial military state, we saw the currency in steep decline a mere 12 years after this speech.

 

Fort Knox was rapidly being drained of gold.  Silver coinage was being rapidly debased.  The US was beginning to see the first waves of massive inflation coupled with floods of foreign goods pouring in.  Nothing was fixed since then.  The free trade circus continued, the elephant fell off of its ball over and over again, everything in this three ring circus was wrecked and now, the tent is on fire.

 

Extremists Need Not Apply - TIME 1953

Dwight Eisenhower did not miss the innuendo. He stiffened, his eyes sparked and, in a voice that needed no electronic amplification, he barked his answer: I do. Before he appoints anybody to an important post, he said, he calls him in and asks about his philosophy, whether he is biased or distinctly in favor of some doctrinal idea. He always tries to get a man logically devoted to the service, who generally conforms to what the President calls the middle-of-the-road philosophy. He doesn’t like extremists, Eisenhower added—particularly those who make up their minds before they know the facts….

Eisenhower wanted to pay down for WWII and not get involved in WWIII .  Almost immediately, on the right, he was under attack by McCarthy.  Back to the 1953 Detroit speech:

I always like to see the words, ‘work in the reverse.’  The system has, as part of its innermost soul, this sharp tendency to suddenly move in reverse.  This is the ‘widdershins’ stuff I keep talking about.  This is the fundamental basis for how things operate in the Cave of Wealth and Death.  This place is as ancient as humanity.  It goes back to the Ice Ages when humans crawled into deep caves to paint pictures of animals cavorting on the plains above, in the sun.  In the dark, illuminated with little light from fat-burning lamps, they did rituals to call for spring to return.  Meanwhile, the winter winds howled outside.  

 

Winter always ends swiftly.  The cold ceases and the snow usually melts very rapidly, sometimes, in less than two days!  Back to the speech here:  Dealers and brokers cared about only one thing: what would the bankers running the Fed do next?  Of course, they had to!  Anyone who had an idea was at an advantage.  This is why all the biggest banking houses that founded the Fed created the Fed in the first place!  THEY knew ALL THE TIIME, what the Fed was going to do.  Needless to say, the Fed officials socialized with these same gangsters.

 

Back to the speech:

Since the unpegging, we have endeavored to confine open market transactions to the effectuation of credit policy, that is, to maintain a volume of member bank reserves consistent with the needs of a growing and stable economy, We have tried to confine our operations to short-term securities, in practice largely Treasury bills. Prices of these issues, which are the closest substitutes for cash, are least affected by Reserve System sales or purchases. Gradually investors in Government securities have, I believe, come to expect and understand this phase of System activity in the market.

Even back then, the Fed liked to talk about psychology.  If they were so damn worried about people’s sanity, why didn’t they hand the Fed over to psychiatrists?  Seriously!  Someone has to have some idea, what is ’sane’!  The Fed chief also admits, people were apprehensive about the Fed.  DUH.

 

And these apprehensive people who need psychiatric care also fear the Fed might be…hold on here…UNPREDICTABLE!  Capricious!  My, who would have thought?  HAHAHA.  All right, all together now: HAHAHA.  The Fed was going to fix this by…having contacts [ie: golf and drinking buddies] in the market, demonstrating confidence in these interventions that are so capricious and unpredictable.  Yeah, like JP Morgan guys.  Just for example.  Or maybe, Rothshild guys.  Everyday people you meet on the subway.

 

The speech:

Sigh.  How obvious is this?  Of course, everyone will stand aside when the circus elephant, the Fed, tries to intervene with its ball balancing acts.  Note also the remark about ‘virtually unlimited resources.’  Yes, this is ‘unlimited’ but it causes this other ‘unlimited’ thing: hyperinflation.  And the Time Magazine article above, is all about inflationary fears, as we can see.  Back to the speech, again:

Open market operations and the discount rate are again being used for this purpose as twin reserve banking measures, each complementing the other in affecting the availability, volume, and cost of credit.  Primary reliance is once more placed upon the discount mechanism as a means for supplying the variable short-term needs of individual banks for reserves

I was rather unnerved by the fact that I couldn’t click and drag the two parts I capitalized.  Why was that?  It was weird that both sentences talked bout INTERVENTIONS.  I am particularly ticked off that one of these queer sentences talks about how unlikely it is to have a disorderly situation like the one we are in, today.  The elephant wants not only to balance on a ball but to juggle balls at the same time.  This is obviously a total failure.  

 

The injections like we are seeing today which dwarf all previous injections of the last 100 years, is just amazing.  And how, pray tell, can the Fed extract itself from this?  It obviously cannot.    Back to this depressing speech:

Experience has demonstrated that when member banks are heavily in debt to the Federal Reserve Banks, the tone of the money market is tight. Marginal loans are more likely to be deferred and some credit risks may have to shop around for accommodation. Conversely, when member bank borrowing is low, the tone of the money market tends to be easy and credit accommodation is less discriminating. The Federal Reserve borrowing privilege and the discount rate, after years of disuse, have come to play once more their intended role as flexible, impersonal instruments of monetary management.

.

Open market operations can be employed when needed to condition the current tone in credit markets and the general availability of credit. By these operations the Federal Reserve can tighten or ease the pressure on member bank reserve positions and thus cause banks to borrow or enable them to reduce borrowings at the Reserve Banks. Subsequently, this tightness or ease is transmitted and magnified in money and credit markets.

.

What has the elephant crushed when it fell off the ball?  Pensions, savings and life insurance.  Please note that these, NOT BUSINESS PROFITS, are the CAPITAL that supports all private enterprise banking!  PERIOD.  ZIRP, of course, wipes out ALL of these.  Totally!  ZIRP is a disaster just like hyperinflation!  Far from balancing anything, the Fed has flubbed absolutely everything.  I am just furious about this.  First, savings collapsed during the 1% years while debts ballooned.  then, pensions vanished as the stock market and investment markets collapsed after a sudden and vicious spurt of commodity inflation. 

 

We are in grave danger now.  And the speeches being made today are twice as stupid as the ones in the past.  Not even pretending to be intelligent, nay, even sentient, they mouth platitudes and outright lies while still clinging to the free trade fictions and the balancing act business.  Time to fold this circus tent and drive it out of town for good.

 

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Hello world! We are being Screwed Economically, so Be Scared - Be Very Scared!

Welcome to my new WordPress.com blog entitled Great Depression 2.0 …

Let Kondratieff have his longwave curve …

Dear BG George — you can’t say I didn’t tell you (at least 7 years ago) …

Ha ha ha ha ha !!!

YouTube Video Info-Summary

In the 1920s Nikolai Kondratieff reported a cycle in prices that averaged 54 years. There are depressions and booms in this cycle which is also connected to wars and the birth rate. Ray Tomes proposes an explanation for the cause of this cycle also sometimes called the K-wave or long wave cycle.

The darn phone rang before I finished … such is life.

For more information see http://www.cyclesresearchinstitute.org/kondratieffcause.html

There is an interdisciplinary cycles discussion forum open to all people to search and read, and people can join to participate, at http://tech.groups.yahoo.com/group/cyclesi/

‘Nuff said!

P.S.

Here is a collection of snippets-excerpts — including YouTube video clips — about the tragic and pathetic situation …

… Colliers International director for research and advisory Tay Huey Ying … notes that the main reason for the sluggish property market is the financial crisis. Coupled with “astronomical” prices in the high-end and luxury segments, she says, “a correction such as the one we are witnessing now cannot be avoided.”

YouTube Video Info-Summary

The economy was overheated prior to the crisis, meaning Singapore entered it with a high cost structure that will require substantial restructuring measures to correct.

[...]

According to UBS, 30,000 jobs here will be cut this year [2009]. This, Mr Tay [executive director of product and services consulting at UBS Wealth Management] said, is more severe than it would have been if the economy had not been overheated going into the crisis.

[...]

At the global level, [UBS's] Mr Tay said that averting deflation will be an important challenge this year. Both he and Mr Bhaskaran also expressed certainty that a decline in the US dollar is only a matter of time as fiscal stimulus grows.

Head, Asset Allocation

BT 31 Dec 08

The financial turmoil in perspective

“We believe economic and corporate news will be very depressing into 2009 and that severe recessionary pressure will remain evident for several quarters.

[...]

“We see economic activity bottoming out in mid-2009 but believe any recovery is likely to be very subdued into 2010.

[...]

… financial conditions remain extremely difficult — recession, declining corporate profits, a financial system still under extreme pressure, ongoing forced selling of assets, and a level of volatility not seen for many decades.

[...]

… HDB property values are holding well. Socially, this is a most vital marker as personal wealth held in state housing is the only cushion for eight in 10 Singaporeans. News about prime-district apartments dropping a tenth to two-tenths of their value in nine months is wounding to the richer classes, but these people do not get crushed in a recession.

[...]

The unknown unknown is that this recession, being a Wall Street-induced phenomenon, is only starting to infect wider Asia. As bad as 2008 was for Americans and a good many Europeans, the speculation is that Asians will start to feel the worst of the flow-on effects in 2009 when the United States and Europe are expected to fare even worse than the year past [2008]. Singapore’s listed businesses have suffered badly in diminution of value and earnings potential. The fate of unlisted SME’s facing credit tightening is causing concern. They employ six in 10 workers, according to estimates. If they keel over, 2009 could be a year of calamity.

– Editorial in The Straits Times (ST), 31 December 2008

How to play our cards in 2009

By Simon Tay

Companies worldwide are cutting jobs. Asia is not immune. Chinese exports have fallen more sharply than expected. Not only are the big three American car-makers in trouble, but Toyota, the world’s leading automobile company, has announced its first loss in 68 years. …

[...]

… as markets shift and deleverage after years of easy credit and rapid growth … The possibility of “black swans” appearing - Nassim Nicholas Taleb’s symbol for the improbable and potentially catastrophic event - cannot be ruled out.

[...]

… Survival is basic, with a policy based only on that instinct risks becoming prone to short term-ism and dog-eat-dog competition. Cutting jobs and costs may be the simplest survival tactics. But they can result in the loss of talent and morale, which can cost much more in the medium to longer term.

[...]

… Profligacy, greed and unsustainable practices were among the root causes of the current crisis.

The Straits Times (ST), 31 December 2008

The Straits Times (ST), 31 December 2008

Keep your wealth for next round

Tagline: “A tough 2009 … but a speedy recovery is possible once Americans start spending again, says Oei Hong Leong”

… Mr. Oei … in an interview yesterday [30 December 2008] …”This is a financial tsunami. One can lose an arm, a leg but don’t lose one’s head.” He added: “For the new year, I would advise people to be positive and look after one’s health. Spend more time with your family.”

He believes this crisis is “10 times” worse than the Asian financial crisis in 1997 - when only Asia was hit - and even worse than the 1974 oil crisis, which did not involve a financial crisis or credit crunch. OCBC shares fell from $50 to around $4 then, he recalls.

“We have to be ready for our coldest winter yet,” he said. “If people do not have money, because their jobs are in jeopardy and they cannot service their mortgages, they will not have any confidence to spend.”

Mr. Oei is clearly shocked by recent events. He noted that in the past three months, the Wall Street model of investment banking has disappeared with Merrill Lynch being bought out. The last two to go were Goldman Sachs and Morgan Stanley. Insurance giant American International Group (AIG) obtained a massive bailout, as did mortgage giants Fannie Mae and fr Freddie Mac.

Citigroup has billions of dollars in off-balance sheet toxic assets. “What” about Bank of America or JP Morgan?” he asked.

So far, most of the impact has been on financial institutions, with the real economy expected to be hit badly next year [2009].

Mr. Oei pointed out that AIG had yet to sell its assets, as planned, to raise cash to repay a huge government loan. Hedge funds too, have to sell off their assets to meet redemption calls.

De-leveraging - banks and investors having to unload their vast portfolios to raise money - can only drive prices down further, he noted.

[...]

Even though 2009 will be tough, Mr. Oei is confident that when the US recovers, it will be a speedy recovery.

Consumption is the mainstay of the US economy and since most Americans are poor savers, they will eventually consume, which will propel the economy.

If US stimulus measures can create jobs, then that will help consumption as people will consume once they have jobs and can service their loans. The downside is that there may be rapid inflation.

[...]

As fortunes come crashing down around everyone’s ears, he cited an old Buddhist saying. He held out a cup of green tea. “How long can you hold it? A few minutes, an hour, a few days ?” he asked. “Soon you’ll have to put it down.”

The secret to a good night’s rest, he said, is to embrace one’s problems. “Face it, accept it, resolve it and put it down.”

Easier said than done, but Mr. Oei said that it reminds people not to be too caught up with one’s problems.

Business Times (BT)

31 December 2008

Asia should prepare now for prospect of new crises

And now for the next crisis … or crises. It might seem that we have already run the gamut of emergencies with the sub-prime crisis being followed by the collapse of financial institutions, the credit crunch and the crisis of bank lending, leading on to the collapse of economic growth. But that would be wishful thinking and the New Year [2009] will bring fresh trials.

In particular, we are likely to see a new currency crisis in Asia and elsewhere, as well as a crisis of unemployment and perhaps social unrest. These are not exactly palatable prospects, but they are dangers that have to be faced as a result of past excesses and imbalances.

Harder for trade sectors to get loans

Bank lending to crucial trade-related sectors such as transport, logistics and general commerce plunged last month, a stark pointer to the global slowdown.

Firms in these and other sectors routinely tap banks for cash for operational expenses, so the sharp contraction indicates that many are seeing economic activity go into reverse.

There are also signs that loans for consumers - whether mortgages or cash for cars - will be harder to come by.

The Straits Times (ST), 31 December 2008

Market capitalisation of equities “shed 50.3 per cent of its value from $790.34 billion at end-2007 to $393.04 billion yesterday [at end-2008] as jittery investors pared down their stakes and new listings waned. The current market cap is even below that of 2005.”

[Tagline: "Market cap shrinks more than 50% with several sectors in turmoil; wait for recovery begins"]

Singapore’s 2008 GDP growth, which was cut to an estimated 2.5 per cent in November, is now expected to come in lower, Minister of State for Trade and Industry S. lswaran said yesterday [Dec 30, 2008].

Speaking on the sidelines of a dialogue session with representatives of Enterprise Development Centres and the Singapore Business Federation, Mr Iswaran said: “Given the way the trends have been in terms of manufacturing output, and if you look at the index of industrial production and trade data, I think we can expect the outcome will be lower than we here forecast.”

The official 2008 growth estimate was revised dovnwards on Nov 21 from 3 per cent to 2.5 per cent. The economy is already in a technical recession, having contracted for two consecutive quarters - by 5.3 per cent in Q2 and 6.8 per cent in Q3.

GDP growth plunged to just 1.5 per cent in 2008 — down from 2007’s 7.7 per cent pace and a full point below the November estimate of 2.5 for cent. It’s also below what seemed to be the more bearish forecasts - of around 1.7 per cent.

[...]

Economists expect at least two more negative quarters through the first half of 2009.

[Tagline: "Prepare for tough year ahead with no quick turnaround in sight: PM Lee"]

Ponzi Scheme: 01-24-09 Joseph Forte Charged for Investment Fraud

PHILADELPHIA - Acting United States Attorney Laurie Magid today announced the filing of a criminal complaint¹ against Joseph Forte, charging Forte with mail fraud. According to the affidavit, Forte was the sole general partner of an investment fund, which he used as a pyramid or “Ponzi” scheme to defraud investors of tens of millions of dollars between 1996 and 2008.

According to the affidavit, Forte has admitted to raising at least $50 million in investment capital from roughly 80 investors, including a charity, a church, and a private school. Forte told investors that he was profitably trading in S&P 500 stock index futures contracts. In quarterly “investment reports” mailed to investors, Forte consistently claimed that his trades were profitable, reporting investment returns between 18% and 38%. In fact, according to the affidavit, Forte consistently lost money on his trades and he fabricated the numbers in the investment reports to mislead his investors. In the last 10 years, Forte’s trading account suffered aggregate trading losses of $3.3 million.

The affidavit alleges that Forte only deposited about half of the investors’ money in his trading account. Forte paid himself millions of dollars in salaries and fees, and used over $15 million of investor funds to pay other investors who made redemption requests. Despite the trading account’s actual losses, Forte was able to continue raising money from new investors by falsely reporting high return rates.

“Ponzi schemes such as this exploit the trust and hopes of investors, including friends and charitable institutions,” Magid said. “In these troubled economic times the devastation caused to the victims cannot be overstated. Our office will continue to aggressively prosecute those who use the financial markets to deceive and defraud the public.”

According to the affidavit, Forte used the system of mailing quarterly investment reports as the primary method for misrepresenting his trade performance to individual investors. Via the most recent quarterly report mailed to investors on or about September 30, 2008, Forte reported that his fund had a value of $154,700,189, when in reality the value of the account was less than $150,000. The complaint alleges that on or about September 30, 2008, in order to execute his scheme, Forte caused to be mailed statements which falsely represented his trading activities, as well as the status of investments of individual investors.

“The US Postal Inspection Service is committed to protecting the public’s full confidence in the mail. Postal Inspectors are intent on preserving the integrity of the US mail through vigorous law enforcement, public education, and crime prevention efforts,” said United States Postal Inspector-in-Charge Teresa Thome, of the Philadelphia office.

“The FBI views these types of financial investment frauds as significant problems, because of the devastating effect they have not only on the individual victims who are preyed upon but also the effect they have on the overall economy,” said Special Agent-in-Charge of the Philadelphia Division of the FBI, Janice K. Fedarcyk.

If convicted, Forte faces a maximum possible sentence of 20 years imprisonment, a $250,000 fine, and the U.S. Attorney’s Office will seek full restitution for his victims, including forfeiture of any proceeds traceable to the commission of the offenses.

The case was investigated by the United States Postal Inspection Service and the Federal Bureau of Investigation, in cooperation with the Securities and Exchange Commission, the Commodities Futures Trading Commission, and the Delaware County District Attorney’s Office. It is being prosecuted by Assistant United States Attorney Joseph Khan. An complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

¹An complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Robert Barro: 01-24-09 Economist of the Day

We choose Robert Barro as Economist of the Day. Robert J. Barro is Paul M. Warburg Professor of Economics at Harvard University, a senior fellow of the Hoover Institution of Stanford University, and a research associate of the National Bureau of Economic Research.

Contact Information

Short Biography

Robert J. Barro has a Ph.D. in economics from Harvard University and a B.S. in physics from Caltech. Barro is co-editor of Harvard’s Quarterly Journal of Economics and was recently President of the Western Economic Association and Vice President of the American Economic Association. He is honorary dean of the China Economics & Management Academy, Central University of Beijing. He was a viewpoint columnist for Business Week from 1998 to 2006 and a contributing editor of The Wall Street Journal from 1991 to 1998. He has written extensively on macroeconomics and economic growth. Noteworthy research includes empirical determinants of economic growth, economic effects of public debt and budget deficits, and the formation of monetary policy. Recent books include Macroeconomics: A Modern Approach from Thompson/Southwestern, Economic Growth (2nd edition, written with Xavier Sala-i-Martin), Nothing Is Sacred: Economic Ideas for the New Millennium, Determinants of Economic Growth, and Getting It Right: Markets and Choices in a Free Society, all from MIT Press. Current research focuses on two very different topics: the interplay between religion and political economy and the impact of rare disasters on asset markets.

Courses

Ec 1430 - Macroeconomics and Politics (Spring)

Ec 2010d - Economic Theory (Spring)

Ec 3410hf - Research in Macroeconomics

Working Papers

“On the Welfare Costs of Consumption Uncertainty” Barro, Robert J., January 2007.

“Rare Events and the Equity Premium” Barro, Robert J., December 2005.

“Which Countries Have State Religions?” Barro, Robert J., McCleary, Rachel M., February 2005.

“International Determinants of Religiosity” Barro, Robert J., McCleary, Rachel M., November 2003.

“Religion and Economic Growth” Barro, Robert J., McCleary, Rachel M., April 2003.

“IMF Programs: Who Is Chosen and What Are the Effects?” Barro, Robert J., Lee, Jong-Wha, April 2003.

“Optimal Currency Areas” Alesina, Alberto, Barro, Robert J., Tenreyro, Silvana, March 2002; Revised June 2002.

“Religion and Political Economy in an International Panel” Barro, Robert J., McCleary, Rachel M., May 2002.

“International Data on Educational Attainment Updates and Implications” Barro, Robert J., Lee, Jong-Wha , August 2000.

“Ramsey Meets Laibson in the Neoclassical Growth Model” Barro, Robert J. September 1999.

“Inequality and Growth in a Panel of Countries” Barro, Robert J.,” June 1999.

“Notes on Optimal Debt Management” Barro, Robert J., May 1999.

“Notes on Growth Accounting” Barro, Robert J., December 17, 1998.

Data sets:

Cross-Country Panel data: Barro-Lee Data Set for a Panel of 138 Countries is available by contacting Trina Ott.

Educational Attainment data: Please contact Trina Ott for further information on  International Measures of Schooling Years and Schooling Quality.

Human Capital Data Updates (April 2000): is available from the Center for International Development, Harvard University website Center for International Development.

IMF Programs Data (2005): is available in Excel format. The name of variables is in text format.

“Macroeconomic Crises since 1870″, BPEA, 2008: Online Appendix data is available in Excel format.

Religion Adherence Data: available in Excel format by clicking this link.

McCleary data on Private Voluntary Organizations (PVOs): codebook is available in Excel and the data file in STATA .

Summers-Heston data (1995) is now available through the National Bureau of Economic Research, 617-868-3900, Ext. 343, for a $5.00 fee.

Books

Macroeconomics: A Modern Approach, Thomson/Southwestern, 2008.

Economic Growth, 1st ed., McGraw-Hill, 1995; 2nd ed., MIT Press, 2004 (with X. Sala-i-Martin). Translations in Chinese, French, German, Italian, Japanese, Russian, and Spanish.

Nothing Is Sacred: Economic Ideas for the New Millennium, MIT Press, 2002. Translations in Chinese, French, Japanese, Korean, and Polish.

Currency Unions, Hoover Institution Press, 2001 (edited with A. Alesina).

Determinants of Economic Growth: A Cross-Country Empirical Study, MIT Press, 1997. Translations in Arabic, Chinese, French, Hungarian, and Japanese.

Getting It Right: Markets and Choices in a Free Society, MIT Press, 1996. Translations in Arabic, Chinese, French, Italian, Japanese, Korean, Polish, and Spanish.

Macroeconomic Policy, Harvard University Press, 1990.

Modern Business Cycle Theory (editor), Harvard University Press and Basil Blackwell, 1989. Translation in Chinese.

Macroeconomics, Wiley, 1984; 2nd edition, 1987; 3rd edition, 1990; 4th edition, 1993; 5th edition, MIT Press, 1998. Translations in Chinese, French, German, Japanese, Italian, Polish, and Spanish.

European Macroeconomics, Macmillan (with V. Grilli), 1994. Translations in German and Spanish.

Canadian Macroeconomics, Richard D. Irwin (with R.F. Lucas), 1994.

Money, Expectations, and Business Cycles, Academic Press, New York, 1981.

The Impact of Social Security on Private Savings—Evidence from the U.S. Time Series, American Enterprise Institute, Washington, D.C., 1978.

Journal Articles

“Rare Disasters, Asset Prices, and Welfare Costs,” American Economic Review, forthcoming, March 2009.

“Macroeconomic Crises since 1870,” Brookings Papers on Economic Activity, 2008 (with J.F. Ursua).

“Private Voluntary Organizations Engaged in International Assistance, 1939-2004,” Nonprofit and Voluntary Sector Quarterly, September 2008 (with R.M. McCleary).

“Consumption Disasters in the 20th Century,” American Economic Review, Papers & Proceedings, May 2008 (with J.F. Ursua).

“Milton Friedman: Perspectives, Particularly on Monetary Policy,” CATO Journal, 2007.

“Economic Effects of Currency Unions,” Economic Inquiry, January 2007 (with S. Tenreyro).

“Rare Disasters and Asset Markets in the Twentieth Century,” Quarterly Journal of Economics, August 2006.

“Religion and Political Economy in an International Panel,” Journal for the Scientific Study of Religion, June 2006 (with R.M. McCleary).

“Religion and Economy,” Journal of Economic Perspectives, Spring 2006 (with R.M. McCleary).

“Closed and Open Economy Models of Business Cycles with Marked Up and Sticky Prices,” Economic Journal, April 2006 (with S. Tenreyro).

“Which Countries Have State Religions?” Quarterly Journal of Economics, November 2005 (with R.M. McCleary).

“IMF Programs: Who Is Chosen and What Are the Effects?” Journal of Monetary Economics, October 2005 (with J.W. Lee).

“Growth and Investment in East Asia,” Seoul Journal of Economics, 2004 (with J.W. Lee).

“Spirit of Capitalism—Religion and Economic Development,” Harvard International Review, Winter 2004.

“Determinants of Economic Growth in a Panel of Countries,” Annals of Economics and Finance, November 2003.

“Religion and Economic Growth,” American Sociological Review, October 2003.

“Optimal Management of Indexed and Nominal Debt,” Annals of Economics and Finance, May 2003.

“Optimal Currency Areas,” NBER Macroeconomics Annual, 2002 (with A. Alesina and S. Tenreyro).

“Currency Unions,” Quarterly Journal of Economics, May 2002 (with A. Alesina).

“Schooling Quality in a Cross-Section of Countries,” Economica, November 2001 (with J.W. Lee).

“International Data on Educational Attainment: Updates and Implications,” Oxford Economic Papers, July 2001 (with J.W. Lee).

“Dollarization,” American Economic Review, May 2001 (with A. Alesina).

“Human Capital and Growth,” American Economic Review, May 2001.

“Economics of Golf Balls,” Journal of Sports Economics, February 2000 (and “Reply,” August 2000).

“Inequality and Growth in a Panel of Countries,” Journal of Economic Growth, March 2000.

“Determinants of Democracy,” Journal of Political Economy, December 1999.

“Ramsey Meets Laibson in the Neoclassical Growth Model,” Quarterly Journal of Economics, November 1999.

“Notes on Optimal Debt Management,” Journal of Applied Economics, November 1999.

“Human Capital and Growth in Cross-Country Regressions,” Swedish Economic Policy Review, Autumn 1999.

“Notes on Growth Accounting,” Journal of Economic Growth, June 1999.

“Determinants of Economic Growth: Implications of the Global Evidence for Chile,” Cuadernos de Economia, Latin American Journal of Economics, April 1999.

“Economic Growth and the Asian Financial Crisis,” Malaysian Journal of Economics, June/December 1998.

“Central Bank Preferences and Macroeconomic Equilibrium,” Journal of Monetary Economics, June 1997 (with B. Broadbent).

“Technological Diffusion, Convergence, and Growth,” Journal of Economic Growth, March 1997 (with X. Sala-i-Martin).

“Institutions and Growth, an Introductory Essay,” Journal of Economic Growth, June 1996.

“Inflation and Growth,” Review, Federal Reserve Bank of St. Louis, May/June 1996.

“International Measures of Schooling Years and Schooling Quality,” American Economic Review, May 1996 (with J.W. Lee).

“Democracy and Growth,” Journal of Economic Growth, March 1996.

“Inflation and Economic Growth,” Bank of England Quarterly Bulletin, May 1995.

“Capital Mobility in Neoclassical Models of Growth,” American Economic Review, March 1995 (with N.G. Mankiw and X. Sala-i-Martin).

“Sources of Economic Growth,” Carnegie-Rochester Conference Series on Public Policy, 1994 (with J.W. Lee).

“The Aggregate-Supply/Aggregate-Demand Model,” Eastern Economic Journal, 1994.

“International Comparisons of Educational Attainment,” Journal of Monetary Economics, December 1993 (with J.W. Lee).

“Regional Growth and Migration: a Japan-U.S. Comparison,” Japan and the World Economy, 1992 (with X. Sala-i-Martin).

“Public Finance in Models of Economic Growth,” Review of Economic Studies, 1992 (with X. Sala-i-Martin).

“World Interest Rates and Investment,” Scandinavian Journal of Economics, 1992.

“Convergence,” Journal of Political Economy, April 1992 (with X. Sala-i-Martin).

“Convergence across States and Regions,” Brookings Papers on Economic Activity, no. 1, 1991 (with X. Sala-i-Martin).

“Economic Growth in a Cross Section of Countries,” Quarterly Journal of Economics, May 1991.

“World Real Interest Rates,” NBER Macroeconomics Annual, 1990 (with X. Sala-i-Martin).

“Pay, Performance, and Turnover of Bank CEOs,” Journal of Labor Economics, October 1990 (with J.R. Barro).

“Government Spending in a Simple Model of Endogenous Growth,” Journal of Political Economy, October 1990.

“The Stock Market and Investment,” The Review of Financial Studies, 1990.

“New Classicals and Keynesians, or the Good Guys and the Bad Guys,” Schweizerische Zeitschrift fur Volkswirtschaft und Statistik, 1990.

“An Efficiency-Wage Theory of the Weather,” Journal of Political Economy, August 1989.

“The Ricardian Approach to Budget Deficits,” Journal of Economic Perspectives, Spring 1989.

“Fertility Choice in a Model of Economic Growth,” Econometrica, March 1989 (with G.S. Becker).

“Interest-Rate Targeting,” Journal of Monetary Economics, January 1989.

“The Persistence of Unemployment,” American Economic Review, Proceedings, May 1988.

“A Reformulation of the Economic Theory of Fertility,” Quarterly Journal of Economics, February 1988 (with G. Becker).

“Ski-Lift Pricing, with Applications to Labor and Other Markets,” American Economic Review, December 1987 (with P. Romer).

“Government Spending, Interest Rates, Prices, and Budget Deficits in the United Kingdom, 1701-1918,” Journal of Monetary Economics, September 1987.

“The Economic Effects of Budget Deficits and Government Spending, Introduction,” Journal of Monetary Economics, September 1987.

“Average Marginal Tax Rates from Social Security and the Individual Income Tax,” Journal of Business, October 1986 (with C. Sahasakul).

“U.S. Deficits since World War I,” Scandinavian Journal of Economics, 1986 (also published in Growth and Distribution, Basil-Blackwell Publishers, 1986).

“Futures Markets and the Fluctuations in Inflation, Monetary Growth and Asset Returns,” Journal of Business, April 1986.

“Reputation in a Model of Monetary Policy with Incomplete Information,” Journal of Monetary Economics, January 1986.

“Recent Developments in the Theory of Rules versus Discretion,” Economic Journal, Supplement, 1986.

“Time-Separable Preferences and Intertemporal-Substitution Models of Business Cycles,” Quarterly Journal of Economics, November 1984 (with R. King).

“Rational Expectations and Macroeconomics in 1984,” American Economic Review, Proceedings, May 1984.

“Measuring the Average Marginal Tax Rate from the Individual Income Tax,” Journal of Business, October 1983 (with C. Sahasakul).

“Alternative Monetary Standards,” Journal of Monetary Economics, July 1983 (with C. Plosser).

“A Positive Theory of Monetary Policy in a Natural-Rate Model,” Journal of Political Economy, August 1983 (with D. B. Gordon) (also published in Cuadernos de Económia, Chile).

“Rules, Discretion and Reputation in a Model of Monetary Policy,” Journal of Monetary Economics, July 1983 (with D. B. Gordon).

“Inflationary Finance under Discretion and Rules,” Canadian Journal of Economics, February 1983.

“Measuring the Fed’s Revenue from Money Creation,” Economics Letters, 1982.

“Output Effects of Government Purchases,” Journal of Political Economy, December 1981.

“Intertemporal Substitution and the Business Cycle,” Carnegie-Rochester Conference Series on Public Policy, 1981.

“Federal Deficit Policy and the Effects of Public Debt Shocks,” Journal of Money, Credit and Banking, November 1980.

“A Capital Market in an Equilibrium Business Cycle Model,” Econometrica, September 1980.

“Money Stock Revisions and Unanticipated Money Growth,” Journal of Monetary Economics, April 1980 (with Z. Hercowitz).

“Unanticipated Money Growth and Unemployment in the United States: Reply,” American Economic Review, December 1979.

“On the Determination of the Public Debt,” Journal of Political Economy, October 1979.

“Social Security and Consumer Spending in an International Cross Section,” Journal of Public Economics, 1979 (with G. MacDonald).

“Second Thoughts on Keynesian Economics,” American Economic Review, Proceedings, May 1979.

“Comments on Social Security and Saving,” Social Security Bulletin, May 1979.

“Money and the Price Level under the Gold Standard,” Economic Journal, March 1979.

“Unanticipated Money, Output, and the Price Level in the United States,” Journal of Political Economy, August 1978 (reprinted in R. Lucas and T. Sargent, Rational Expectations and Econometric Practice, University of Minnesota Press, 1981).

“Comment from an Unreconstructed Ricardian,” Journal of Monetary Economics, August 1978.

“A Stochastic Equilibrium Model of an Open Economy under Flexible Exchange Rates,” Quarterly Journal of Economics, February 1978.

“On Uncertain Lifetimes,” Journal of Political Economy, August 1977 (with J. Friedman).

“Long-Term Contracting, Sticky Prices, and Monetary Policy,” Journal of Monetary Economics, July 1977.

“Unanticipated Money Growth and Unemployment in the United States,” American Economic Review, March 1977 (reprinted in K. Brunner and M. Neumann, eds., Inflation, Unemployment and Monetary Control, a supplement to Kredit and Kapital, 1979; and in R. Lucas and T. Sargent, Rational Expectations and Econometric Practice).

“The Loan Market, Collateral, and Rates of Interest,” Journal of Money, Credit and Banking, November, 1976.

“Indexation in a Rational Expectations Model,” Journal of Economic Theory, October 1976.

“Output and Employment in a Macro Model with Discrete Transaction Costs,” Journal of Monetary Economics, July 1976 (with A. Santomero).

“Recent Developments in Monetary Theory,” Journal of Monetary Economics, April 1976 (with S. Fischer) (also published in Banco de Mexico, Cincuenta Años de Banca Central, 1976).

“Reply to Feldstein and Buchanan,” Journal of Political Economy, April 1976 (reprinted in La Deuda Pública, Madrid, 1982).

“Integral Constraints and Aggregation in an Inventory Model of Money Demand,” Journal of Finance, March 1976.

“Rational Expectations and the Role of Monetary Policy,” Journal of Monetary Economics, January 1976 (reprinted in R. Lucas and T. Sargent, Rational Expectations and Econometric Practice).

“Monetary Correction, Capital Markets and Open-Market Operations in Colombia,” Journal of Economic Studies, May 1975.

“Are Government Bonds Net Wealth?,” Journal of Political Economy, November/December 1974 (reprinted in La Deuda Pública).

“A General Equilibrium Approach to Money Supply and Monetary Policy,” Economic Inquiry, September 1974.

“Suppressed Inflation and the Supply Multiplier,” Review of Economic Studies, January 1974 (with H. Grossman).

“The Control of Politicians: An Economic Model,” Public Choice, Spring 1973.

“Money and the Monetary Base in Colombia, 1967-72,” Revista de Planeación, Colombia, April-June 1973.

“Inflationary Finance and the Welfare Cost of Inflation,” Journal of Political Economy, September/October 1972.

“Monopoly and Contrived Depreciation,” Journal of Political Economy, May-June 1972.

“Household Money Holdings and the Demand Deposit Rate,” Journal of Money, Credit and Banking, May 1972 (with A. Santomero).

“A Theory of Monopolistic Price Adjustment,” Review of Economic Studies, January 1972.

“Officer Supply, the Impact of Pay, the Draft, and the Vietnam War,” American Economic Review, September 1971 (with S. Altman).

“Open-Market Operations and the Medium of Exchange,” Journal of Money, Credit and Banking, May 1971 (with H. Grossman).

“A General Disequilibrium Model of Income and Employment,” American Economic Review, March 1971 (with H. Grossman). (Reprinted in P. Korliras and R. Thorn, eds., Modern Macroeconomics, Harper and Row. Also reprinted in volumes in Brazil, Japan and Spain.)

“Inflation, the Payments Period, and the Demand for Money,” Journal of Political Economy, November/December 1970.

“The Crystal Structure of a Dimeric Cobalt Compound Containing a Chloro Bridge,” Inorganic Chemistry, September 1970 (with R. Marsh and W. Schaefer).

Comments, Articles in Volumes, Other Publications

“How the Fed Works Today,” in The Role of Markets and Governments in Pursuing the Common Good, Hillsdale College, forthcoming 2007.

“Milton Friedman: General Perspectives and Personal Reminiscences,” in Champions of Freedom Series, Hillsdale College, forthcoming 2007.

“Political Economy and Religion in the Spirit of Max Weber,” in V. Nee and R. Swedberg, eds., On Capitalism, Stanford University Press, 2007 (with R.M. McCleary).

“Economic Growth across Countries,” in M. Miles, ed., The Road to Prosperity, Heritage Books, 2005.

“Religion and Economic Growth,” Milken Institute Review, April 2004 (with R.M. McCleary).

“Economic Growth across Countries,” Crecimiento y Convergencia, no. 2, 2003.

“Currency Unions for the World,” in Asian Development Bank, Monetary and Financial Integration in East Asia, v. 2, 2003.

“Quantity and Quality of Economic Growth,” in N. Loayza and R. Soto, eds., The Challenges of Economic Growth, Central Bank of Chile, 2003.

“Economic Growth in East Asia Before and After the Financial Crisis,” in D.T. Coe and S.J. Kim, eds., Korean Crisis and Recovery, International Monetary Fund, 2002.

“Education as a Determinant of Economic Growth,” in E.P. Lazear, ed., Education in the Twenty-First Century, Hoover Institution Press, 2002.

“Research on Economic Growth,” Essential Science Indicators (ESI), www.in-cites.com, August 2001.

“One Country, One Currency?,” in A. Alesina and R. Barro, eds., Currency Unions, Hoover Institution Press, 2001.

“Inequality, Growth, and Investment,” in K.A. Hassett and R.G. Hubbard, eds., Inequality and Tax Policy, AEI Press, 2001.

“Education and Economic Growth,” in J.F. Helliwell, ed., The Contribution of Human and Social Capital to Sustained Economic Growth and Well-Being, OECD, 2001.

“Recent Developments in Endogenous Growth Theory,” in M. Oosterbahn and T. van Steveninck, eds., The Determinants of Economic Growth, Kluwer, 2000.

“Democracy and the Rule of Law,” in B. Bueno de Mesquita and H. Root, eds., Governing for Prosperity, Yale University Press, 2000.

“Ideas and Intellectual Property Rights in the Determination of Economic Growth,” in N. Imparato, ed., Capital for Our Time, Hoover Press, 1999.

“Supply-Side Policies for Boosting Growth,” in J. Jasinowski, ed., The Rising Tide, Wiley, 1998.

“Reflections on Ricardian Equivalence,” in J. Maloney, ed., Debt and Deficits: An Historical Perspective, Edward Elgar, 1998.

“Optimal Funding Policy,” in M. King and G. Calvo, eds., The Debt Burden and its Consequences for Monetary Policy, London, Macmillan, 1997.

“The Race the Tigers Will Win,” Parliamentary Briefs, July 1996.

“Optimal Funding and Indexed Bonds,” in P. Chilcott, ed., Index-Linked Debt, London, Bank of England, 1996.

“Democracy: a Recipe for Growth?,” in M.G. Quibria and J.M. Dowling, eds., Current Issues in Economic Development: An Asian Perspective, Oxford, Oxford University Press, 1996.

“Mr. Clinton’s First-Year Economic Report Card,” The Senior Economist, 1994. Economic Growth and Convergence, Institute for Contemporary Studies, San Francisco, 1994.

“Losers and Winners in Economic Growth,” in Proceedings of the World Bank Annual Conference on Development Economics, 1993 (with J.W. Lee).

“Human Capital and Economic Growth,” in Federal Reserve Bank of Kansas City, Policies for Long-Run Economic Growth, 1992.

“How Important are Budget Deficits?” in Credit Suisse, The Global Asset Manager, Autumn 1992.

“This Week’s Citation Classic: ‘Are Government Bonds Net Wealth?’,” Current Contents, Arts & Humanities, January 20, 1992, and Current Contents, Social and Behavioral Sciences, January 13, 1992.

“This Week’s Citation Classic: ‘Rational Expectations and the Role of Monetary Policy,’Current Contents, Arts & Humanities and Social Sciences, July 1, 1991.

Discussion of W. Easterly, “Endogenous Growth in Developing Countries with Government-Induced Distortions,” the World Bank, 1991.

“A Cross-Country Study of Growth, Saving, and Government,” in J.D. Bernheim and J. Shoven, eds., National Saving and Economic Performance, University of Chicago Press, 1991.

“Politics and Budget Deficits,” in A. Alesina and G. Carliner, eds., Politics and Economics in the 1980s, University of Chicago Press, 1991.

Discussion of R. Dornbusch, F. Sturzenegger, and H. Wolf, “Extreme Inflation: Dynamics and Stabilization,” Brookings Papers on Economic Activity, no. 2, 1990.

“The Ricardian Model of Budget Deficits,” in J. Rock, ed., The Debt and the Twin Deficits Debate, Bristlecone Books, 1990.

“On the Predictability of Tax-Rate Changes,” in R. Barro, Macroeconomic Policy, Harvard University Press, 1990.

Comment on P. Romer, “Human Capital and Growth: Theory and Evidence,” Carnegie-Rochester Conference Series on Public Policy, 1990.

“The Neoclassical Approach to Fiscal Policy,” in R. Barro, ed., Modern Business Cycle Theory, Harvard University Press and Basil Blackwell Publishers, 1989.

“The Stock Market and the Macroeconomy, Implications of the October 1987 Crash,” in R. Kamphuis, et.al., eds., Black Monday and the Future of Financial Markets, Dow Jones/Irwin, Homewood IL, 1988.

“Monetary Policy under Interest-Rate Targeting and Other Arrangements,” in Bank of Japan, Toward a World of Economic Stability, University of Tokyo Press, 1988.

“This Week’s Citation Classic: ‘A General Disequilibrium Model of Income and Employment,’ and Money, Employment and Inflation,” Current Contents, Arts & Humanities and Social Sciences, March 28, 1988.

“A Program of Fiscal Policy,” Papeles de Económia Española, no. 33, 1987.

“Altruism and the Economic Theory of Fertility,” Population and Development Review, Supplement, 1986 (with G. Becker).

Discussion of M. Eichenbaum and K. Singleton, “Do Equilibrium Real Business Cycle Theories Explain Postwar U.S. Business Cycles?” National Bureau of Economic Research, Macroeconomics Annual, 1986.

“Do We Really Need a Balanced Budget?,” University of Rochester, Research Review, Spring 1986. Discussion of P. Diamond and J. Mirrlees, “Payroll-Tax Financed Social Insurance with Variable Retirement,” Scandinavian Journal of Economics, 1986 (also published in Growth and Distribution, Basil-Blackwell, Oxford, 1986).

“The Behavior of U.S. Deficits,” in R.J. Gordon, ed., The American Business Cycle: Continuity and Change, University of Chicago Press, 1986.

“Rules Versus Discretion,” in C. Campbell and W. Dougan, eds., Alternative Monetary Regimes, Johns Hopkins University Press, 1986.

Comment on G. Dwyer, “Federal Deficits, Interest Rates, and Monetary Policy,” Journal of Money, Credit, and Banking, November 1985, part 2.

Comment on B. McCallum, “Bank Deregulation, Accounting Systems of Exchange, and the United Account: a Critical Review,” Carnegie-Rochester Conference Series on Public Policy, Fall 1985.

“What is a Proper Deficit?,” Midland Corporate Finance Journal, Spring 1985.

Discussion of papers by T. Sargent and G. Perry, American Economic Review, Proceedings, May 1984.

Discussion of H. Rockoff, “Some Evidence on the Real Price of Gold, its Costs of Production and Commodity Prices,” in M. Bordo and A. Schwartz, eds., A Retrospective on the Classical Gold Standard, University of Chicago Press, 1984.

Discussion of the Proceedings, in R. Dornbusch and M. Simonsen, eds., Inflation, Debt, and Indexation, M.I.T. Press, 1983.

“U.S. Inflation and the Choice of Monetary Standard,” in R. Hall, ed., Inflation, University of Chicago Press, 1982.

“The Equilibrium Approach to Business Cycles,” in Money, Expectations and Business Cycles, 1981.

“Unexpected Money Growth and Economic Activity in the United States,” in Money, Expectations and Business Cycles, 1981.

Discussion of R. Hall, “Labor Supply and Aggregate Fluctuations,” Carnegie-Rochester Conference Series on Public Policy, Spring 1980.

Discussion of J. Muellbauer and D. Winter, “Unemployment and Exports in British Manufacturing: a Non-Clearing Markets Approach,” European Economic Review, May 1980.

“Unanticipated Money and Economic Activity,” in S. Fischer, ed., Rational Expectations and Economic Policy, University of Chicago Press, 1980 (with M. Rush).

“Public Debt and Taxes,” in M. Boskin, ed., Federal Tax Reform, Institute for Contemporary Studies, San Francisco, 1978 (reprinted in J. Flanders and A. Razin, eds., Inflation and Economic Development, Academic Press, 1981; and La Deuda Pública).

“Money and Output in Mexico, Colombia, and Brazil,” in J. Behrman and J. Hanson, eds., Short-run Macroeconomic Policy in Latin America, Ballinger, 1978.

“Consumption, Income and Liquidity,” in G. Schwödiauer, ed., Equilibrium and Disequilibrium in Economic Theory, Reidel, 1977 (with H. Grossman).

“Transaction Costs, Payment Periods, and Employment,” in H. Johnson and A.R. Nobay, eds., Issues in Monetary Economics, Oxford University Press, 1974 (with A. Santomero).

“Derivation of a Nursing Labor Supply Function,” in S. Altman, Present and Future Supply of Registered Nurses, 1971 pp. 117-40.

“Officer Procurement and Retention,” Ch. 6 of The Report of the President’s Commission on an All-Volunteer Armed Force, 1970 (with S. Altman).

Popular Articles

Birth Date: September 28, 1944

Education

Job Experience

Paul M. Warburg Professor of Economics, Harvard University, 2004- ; Robert C. Waggoner Professor, 1995-2004; Professor, 1987-95; Visiting Professor, 1986.

Senior Fellow, Hoover Institution, Stanford University, 1995- ; Fellow, 1993-94, 1989-90, 1977-78.

Research Associate, National Bureau of Economic Research, 1978- , Programs in Economic Fluctuations and Growth, Public Economics, and Monetary Economics.

Visiting Professor, MIT, fall 2000.

Distinguished Professor of Arts and Sciences, University of Rochester, 1984-87; John Munro Professor of Economics, 1978-1982;

Professor, 1975-78; Professor of Finance (courtesy), Graduate School of Management, 1984-87. Visiting Professor, UCLA, 1986.

Professor of Economics, University of Chicago, 1982-84; Associate Professor, 1973-75; Visiting Associate Professor, 1972-73.

Associate Professor of Economics, Brown University, 1972-73; Assistant Professor, 1968-72.

Other Professional Positions

Honors and Awards

Ph.D. Dissertation

“Inflation, the Payments Period, and the Demand for Money,” 1970.

Santander’s Madoff Sales Mean ‘Catastrophe’ for Teacher, Vendor

En Bloomberg

Banco Santander SA sold Bernard Madoff investments to a teacher and a street vendor, not just to wealthy private banking clients in Spain and Latin America.

Branch managers channeled customers with money from property sales or inheritances to private banking salespeople, lawyers for the investors said. A retired school teacher put 300,000 euros ($388,000), half her savings, in a structured product linked to Madoff, said Jordi Ruiz de Villa, an attorney at the Barcelona law firm Jausas. The vendor invested 325,000 euros of lottery winnings in a similar product and may have to return to street sales, according to lawyers at Cremades & Calvo-Sotelo in Madrid.

“The fact that someone has a sum of money in the bank doesn’t make him a suitable customer for this type of product,” said Ruiz de Villa, who’s representing about 30 account-holders with potential claims of 10 million euros, including the teacher. “Some retail clients have suffered true personal catastrophes because of this.” He wouldn’t provide the teacher’s name.

Santander, Spain’s biggest lender, may lose customers at the domestic branch network that accounts for a third of profit if it is found to have misled people who trusted their neighborhood bankers, said Peter Hahn, a fellow at Cass Business School in London. The bank, led by Chairman Emilio Botin, has said clients have 2.33 billion euros invested with Madoff, including 320 million euros from private banking customers in Spain.

“The model in Spain where customers just left it to Big Daddy Botin to take care of things has been broken,” said Fernando Zunzunegui, a Madrid-based lawyer. He said he is taking on Madoff-related claims valued at 8.2 million euros from 20 clients who are “clearly retail.” He declined to provide detailed information about his firm’s clients.

‘Qualifying Investors’

Ruiz de Villa and Zunzunegui said they are signing up clients and reviewing the cases in preparation for filing possible lawsuits against Santander. Javier Cremades, chairman of Cremades & Calvo-Sotelo, said he’ll push for a settlement first.

New York-based Bernard L. Madoff Investment Securities LLC collapsed last month after Madoff told his sons it was a $50 billion Ponzi scheme, according to a complaint filed by the U.S. Federal Bureau of Investigation. Worldwide, the victims include banks, charities and investors such as Madrid-based billionaire Alicia Koplowitz and film director Steven Spielberg.

Santander, based in the Spanish city of the same name, on Dec. 14 said international private banking clients and institutional investors had 2.01 billion euros of potential losses in Madoff-related funds. The rest of the money is in investments sold to “qualifying investors” in Spain.

Legal Protections

Branch customers were sold products linked to Madoff through Santander’s Geneva-based Optimal Investment Services hedge-fund arm, said the three lawyers representing the bank’s customers. Investors were asked to sign statements that they understood what they were purchasing and met the criteria for investing.

The bank has said it won’t compensate clients who invested with Madoff because the losses involve fraud. A spokeswoman for Santander said the bank had no further comment on the matter.

Selling structured products to wealthy clients has been a popular strategy in Spain and wasn’t in itself wrong, because Santander believed it would yield safe and stable returns, said Fernando Luque, an analyst at Morningstar Inc. in Madrid.

“Many of these institutions like Santander are going to be protected by the documentation, but the question is how great is the business damage from all this,” Hahn of Cass Business School said.

Lottery Winner

Spanish securities law requires anyone offering investment services to “suitably evaluate” a customer’s experience and market knowledge and ensure that he or she understands the risks.

The criteria for being a potential private banking customer are lower in Spain than other countries, said Manuel Romera, head of financial industry studies at Instituto de Empresa, a business school in Madrid.

A 2006 study by the school showed that Spanish banks tend to start targeting clients with 500,000 euros in assets, compared with 1.5 million euros for international banks.

The lottery winner invested in a Santander structured finance product, according to Cremades & Calvo-Sotelo. The firm is representing some 80 individuals in Spain and Latin America, mostly Santander customers, who have about 35 million euros of claims. Cremades declined to provide the investor’s name.

‘Stable’ Fund

The teacher put half the proceeds from an apartment sale in a “multi-strategy” structured product, 35 percent of which was in Optimal Strategic U.S. Equity, an Irish-registered fund whose trades were executed by Madoff, according to Santander’s description of the investment, which was shown to Bloomberg by Ruiz de Villa.

The document describes the investment as “conservative” and “probably the most stable” of all funds run by Optimal. Structured products have a defined maturity date and include a mix of assets to meet investor needs in areas such as risk hedging and diversification.

‘Pending Valuation’

A retired electronics executive said his private banking account manager told him losses on a 400,000-euro investment he made three years ago could be 80 percent. His bank statement now lists the product as “pending valuation,” the executive said in an interview. He asked not to be identified because he may have to return to work.

Spain’s anti-corruption prosecutor last week said it had opened an investigation into Madoff’s alleged fraud.

M&B Capital Advisers, a brokerage founded by Botin’s son Javier and Guillermo Morenes, husband of his daughter Ana Patricia Botin, has said its investors put 152 million euros in funds linked to Madoff.

Santander shares have fallen 18 percent since the bank released details of potential Madoff-related losses. The Bloomberg Europe Banks and Financial Services Index dropped 27 percent in the same period.

In a speech at the Euromoney magazine awards last July in London, Botin urged bankers not to buy products they don’t understand.

‘Incalculable’ Damage

“The damage to reputation from all this to the Santander name is incredible, incalculable, the kind that takes years to repair,” said Bernhard Bauhofer, founder of Wollerau, Switzerland-based Sparring Partners GmbH, a consulting firm that specializes in corporate image management.

A Tale of Two Africas

id="authorIntro">A Journal on Terrorism and Genocide

While the trajectory of democratization and state stability in Africa are controversial, experts agree that other African states are surely watching events in Ghana and Guinea closely. There is historical evidence that political events in small countries on the continent ultimately influence larger political trends. As such, the nature of each country’s political evolution bears examination. At independence, Ghana and Guinea were quite similar. The small, resource-rich countries “virtually started on the same path,” writes journalist Kofi Akosah-Sarpong in modernghana.com. But “while Ghana is progressively learning from its years of misgovernment, Guinea appears held back,” he argues. Ghana emerged from military rule into multiparty democracy. Meanwhile, Guinea’s natural resources enriched its leaders, not the population. However, both countries rank near the bottom of the UN’s Human Development Index; Ghana stands at 142, and Guinea is 167 of 179 countries included.

A recent large oil discovery in Ghana has the potential to consolidate the country’s governance gains and improve the well-being of its population, but it could also breed corruption (Oxfam). “Geology is not destiny,” concludes a December 2008 working paper from the Brookings Institution on the challenge of diversifying African resource-rich economies. It argues that though such economies are at a disadvantage, smart public policy decisions will enable African governments to avoid the natural resource curse. According to the International Monetary Fund, Ghana is actively pursuing policies that encourage sound fiscal management. The new military ruler of Guinea has pledged his intolerance for corruption. “I want to warn anyone who thinks they can try to corrupt me. … Money is of no interest to us,” he told the Associated Press.

African leaders have long been loath to criticize one another’s democratic credentials. But following the coup in Guinea, the continent quickly moved to condemn the military takeover. The African Union suspended Guinea’s participation on December 29, and ECOWAS, the West African regional bloc, followed suit (IRIN) on January 12. There was an exception: Senegal’s president skipped the ECOWAS meeting and threw his support (VOA) to the military junta. The bloc’s current head, Nigerian President Umaru Yar’Adua, was himself brought to power in a 2007 election widely criticized as marred by corruption and fraud.

The United States, meanwhile, was quick to condemn the coup in Guinea and suspend foreign aid. Under President George W. Bush, foreign aid to Africa has been linked to governance benchmarks through the Millennium Challenge Corporation. Despite high expectations, U.S. policy toward Africa is not expected to shift dramatically under incoming President Barack Obama. In her confirmation hearing on January 13, Secretary of State-designate Hillary Clinton said she planned to “sound the alarm” (BBC) on the crisis in the Darfur region of Sudan, though it’s unclear how much leverage the United States has there. The Sudanese government has thus far remained largely immune to U.S. pressure, but some analysts believe that African leaders might be more susceptible to criticism from Obama because he is African-American.

Beginner

id="blog-title">Broken Brain - Brilliant Mind

id="tagline">Days in the life of a long-term mild traumatic brain injury (mTBI) survivor

Pagan Leaders and Community

There’s a lot of talk going around about how the Pagan community is failing their leaders and Elders. I’ve read the articles by Isaac Bonewits and Michael Gorman, and read the various rants and screeds in on line communities, often by people who perceive themselves to be leaders and/or Elders. They all seem to have a lot of bitterness when they speak about how their communities aren’t supporting them. Their words are accusatory and angry, filled with frustration.

And I have to wonder: what is the dynamic that led to this situation?

There seem to be two types of people who make these complaints the most vocally: meta-Pagans - people who operate on regional, national, or international levels and solo Pagans.

The Meta-Pagans may have a home circle or grove or coven, but their focus is on their broader efforts. They are the equivalent of Christian Missionaries - out in the wilds of America, bringing Paganism to the masses. They’ve written books, gone on extensive book tours, taught seminars and workshops at Pagan Gatherings all across the country, and devoted hours upon hours writing rituals and ceremonies and spells. What they’ve taught is that people can be solitary pagans, are their own priest/esses, and don’t need to listen to any religious authority. What they haven’t taught is the power and importance of community. Is it any wonder, then, that the very Pagans they expect to be their community don’t reciprocate the feeling?

This is an opportunity for the Pagan leaders to reflect upon what they’ve wrought over the last 40 to 50 years of Paganism.

As for the solo Pagans, well it stands to reason that if they are isolated from other Pagans, whether by choice or by geography, they have no community. They will either have to accept that and work with it, or work towards creating a community.

Personally, I don’t think the situation is as bad as a few people claim. Let me explain.

There are instances of Pagan community, good solid ones that have existed for years, some for decades. They work because they’ve learned that community starts small and builds up. It can’t be imposed from above or outside. These communities have rules, and goals, and commitments that the membership and adherents support. That support comes in a variety of forms from everyone participating within it. The key here is participation.

That’s where meta-Paganism loses out - there is no genuine community there, only the illusion of it. The meta-Pagan comes in, meets some people for a couple of hours or perhaps a weekend, gives them a seminar or a workshop, maybe sings a few songs around a bonfire, or dispenses some personal advice, and believes they’ve built some community there. When they reach a point where they can’t keep doing the tours and the seminars, they expect those people to rally around and support them, send them money, provide them with housing, bring them meals. That’s not going to happen because that sort of community isn’t real. Their community consists of other meta-Pagans, and to be honest, those other meta-Pagans have stretched themselves so thin they can’t help one another. Because they haven’t contributed significantly to their local community, aren’t well-known among the Pagans who live closest to them, they are bereft of community when they most need it.

There is real community out there. The members of those groups know what community is and they work at it on a daily basis. They know community doesn’t just happen, and that it’s not composed of a series of brief encounters. Community is a long term commitment. There are Pagans that recognize that and work for it. We have Pagan charities, 501(c)3 or not, that are doing good things in their communities, both within their religion, within the broader Pagan community, and within their local geographic community. Some of the best and most helpful Pagan charities don’t have 501(c)3 incorporation and won’t seek it because doing so adds a burden of rules and regulations they aren’t yet capable of complying with, yet they still do an amazing amount of good work. If you don’t recognize these names of these Pagan charities, it’s because you’re not paying attention: Lady Liberty League, Crescent Moon Service Corps, Officers of Avalon, Spiral Steps, SpiralScouts, Pagan Aid Alliance, Pagan Alliance of Nurses.

We have Pagans who are so committed they’ve bought land to build places where we can meet for our rites of passage celebrations, conventions, retreats, gatherings, and have our sacred places. There’s Lothlorien. I’ve been there, it’s an amazing place. There’s Ozark Avalon and All World Acres and Our Haven Nature Sanctuary. There’s more, but these are the ones I know about and have visited. I’ve met the communities that support these places - and they are communities in the fullest sense of the word. Yes, they operate for profit - maintaining property and paying taxes on it isn’t cheap. Yet, in spite of the expense, they exist and are thriving. They thrive because they have a dedicated community supporting them as well as the random visiting Pagans who pay to come to their gatherings and events but can’t make it for the work weekends.

We bandy the word “community” about as if it were magical. If we invoke the word “community” other Pagans are supposed to feel remorse and immediately leap in to provide whatever it is that the invoker says is lacking. Let’s look at this a little closer.

If you don’t buy from a Pagan merchant, you’re “not supporting the community”. I have several questions about this frequently heard complaint. Since when does Paganism revolve around consumerism? And since when is community composed of the merchants? Perhaps the reason Pagan merchants go out of business is because they are bad businesspeople, regardless of how outstanding they may otherwise be as Pagans. Their business sense (or lack of it) is not a reflection upon either their own Pagan attributes or the other Pagans in the geographical area. Perhaps those Pagan merchants who fail should look to those who are successful to find out why one succeeds and the other doesn’t instead of complaining that “the community” isn’t supporting them.

I can name a variety of Pagan merchants I would gladly support. How about a Pagan thrift shop, where Pagans can recycle their possessions - books, statues, Pagan toys, clothes, and furniture among them? I know I’ve been guilty of buying a copy of a book I already own. Wouldn’t it be grand to have a place where I could pass that book on to someone else and help provide a living for the middleman who stocks it on their shelves? I have quite nice clothes I’ve stopped being fond of or outgrown, and where better to see they get new homes? I’m sure many Pagans have things they’ve outgrown, lost interest in, or no longer have space for that they’d cheerfully sell or give it to a Pagan re-seller. What about Pagans who set up housekeeping together and want to get rid of duplicates? And there’s always the consideration of what to do with the estate of a loved one who died.

How about a Pagan-run pet shop, with treats and toys for our beloved companion animals as well as their wild cousins? They could carry holistic pet foods (like Artemis and Wysong) and hold special classes for teaching the Pagan pet along with regular obedience classes. Maybe even attract a veterinarian to set up practice who will understand how important these pets are to us - to anyone who’s deeply attached to their pet or service animal, and will put up with our hovering and concern over the animal rather than laughing at us? I would be lost without my hearing partner, and he does have a special vet who treats him with extra consideration because he’s valuable, but wouldn’t it be nice if all pets were treated that well by a vet?

How about a Pagan-run and Pagan-friendly coffee shop that doesn’t scare off other types of customers? I honestly believe that many of the failed Pagan merchants would be successful if they opened a coffee shop instead. If they have good coffee and good baked items and offered sandwiches and soups and WiFi, they’d have what they wanted - a place for Pagans to gather and socialize and still make a profit. It could be the start of the Pagan community people complain we don’t have. I know when I visit a coffee shop, the longer I’m there, the more I spend - coffee, that yummy piece of cake, now I want real food, so a bowl of soup, maybe a salad, and now I’m thirsty again, how about an Italian soda? And all the while, I’m cruising on-line and chatting with friends who come and go. And the coffee shop owner makes money off me and those friends. We already do that at some of the local coffee shops, so it wouldn’t be hard to start patronizing one owned and operated by a Pagan. They don’t even have to bring in musicians, but how cool would it be to form and have a Pagan “choir” or band perform there for special occasions?

I can think of a lot of other Pagan merchant type shops that I would gleefully support if any were in my area. I’d even volunteer time working in them, playing barista, baking goodies to sell, cleaning up recycled items for resale, sweeping floors, washing windows, teaching pet classes, making pet clothes to sell in the pet shop (you should my hearing partner’s wardrobe!). A good, well-run Pagan shop could be the start of the Pagan community so many people long to have.

Most definitions of community involve such words as “interacting”, “common interests”, and “in a common location”. I think these words are crucial when talking about community. Look at the descriptions of the types of Pagan merchants I just described and you’ll see that these three attributes are present in all of them. If I met someone at the coffee shop or the pet shop, got to know them, and learned they were in difficulties, it would be natural to want to offer help and where better to list the information needed to provide help than in such a shop? If I’m looking for a plumber, where better to find a Pagan plumber than at such a shop? A community bulletin board would add to the charm and decor. A table with scrapbooks and the monthly newsletter doesn’t take up a lot of space.

If someone I’ve never met asks me to support them and treat them as if we’ve been in close contact all our lives, sharing a common history, or harangues me for “not supporting the community”, I’m likely to shrug them off. It’s not that I’m “not supporting the community”, it’s that I’m not supporting that one person who’s making the demands. We may share common interests, but common interests do not a community make. When a Pagan leader demands support in Oregon, and I live in Oklahoma, how are we sharing community? We don’t interact, we aren’t in a common location, we don’t even know one another’s names or passions, and we certainly don’t know what the other looks like. Give me some compelling reason to get involved. Don’t insult me, or call me names, or whine at me.

The first thing my religion teaches new Celebrants and our children is the meaning of community - through stories and actions. We model what we expect our community to be, and we give graphic, hands-on community experiences. We have small charities and work together at other charities. We expect our adherents to participate in community projects, to create a surplus from which we can all draw at need, whether that surplus is a pantry, a clothing bank, time, or companionship.

This isn’t something we frequently see in the broader Pagan community, and it’s certainly not something that is a common part of any of the assorted Pagan training we’ve had or heard about. For those Pagans who are solitary, or who get their instructions about being Pagan from books, there’s even less mention of community, what it is, what it means, why it’s important, how to have one. They never learn the real power of community because there are few teachers for it.

One of the reasons so many Pagans don’t know who other local Pagans are, don’t know where to donate funds or supplies, don’t know who needs help or who can provide it is because they haven’t learned the basics of community. Even though people like Amber K and Judy Harrow and Mary Kay Simms have written books that detail how to form covens and circles - and done a fine job of that - they’ve skimmed over the importance of community outside the ritual space. They have included information on group dynamics, and spoken of having social activities - very useful information - but there’s really very little about what community is and what it does for each individual within it and how it becomes more than the sum of its parts.

People don’t have to be friends to be a part of a community. Being friends certainly makes building community easier; it doesn’t make the community stronger. It’s not necessary for Pagans to belong to the same religion in order to build a community together. The basic ingredients are just that: basic. They have to live in the same geographic location, share common interests, and interact with one another on a regular basis. They need to get to know one another, really know one another, and you don’t do that by being Samhain Pagans.

People don’t have to always get along or do everything together. In a community, it’s OK for people to occasionally opt out of participating. If they opt out too often, that’s a sign of trouble and the community leaders need to pay attention and find out why they’ve stopped participating.

Community doesn’t form spontaneously. It has to be created. There have to be rules and those rules have to be enforced consistently. There don’t have to be a lot of rules, but they do need to be there, in black and white. The people within the community have to work together, have to participate, and when you get two or more people together, there has to be an understanding of how they’ll work together. It’s best if that understanding is spelled out unambiguously.

Leaders should never be new to the community and definitely should not be people who don’t expect to be in the area for long. Transients as leaders is a sure recipe for community failure. Allowing inexperienced people to assume leadership roles can cause community strife and failure. Keeping important secrets from one another can cause community strife and failure. One of the things I have seen time and again are people who claim to be Pagan leaders who advertise an event at their home, then refuse to give out the address because they’re afraid someone’s going to show up that they don’t like or the police will arrest them or something like that. That’s a destructive behavior for a community. I’ve seen people who claim to be Pagan leaders deliberately exclude someone from the community just because they don’t like them. Pagan leaders, real Pagan leaders, don’t have the luxury or option of excluding people because they don’t like them or they’re difficult to work with.

Other community destroying behaviors include unreliability, malicious gossip, and freeloading. These can all be controlled with firm community rules and guidelines, and open lines of communication. If someone isn’t participating, maybe it’s because they’re having problems the community needs to help them fix. That’s what communities are for. Once they’ve been helped, they’ll be able to return to being productive and participating members of the community again. They may return better and more committed than before, and that’s a Good Thing.

Consider a community like a cornucopia: all the people fill up the cornucopia and keep filling it even when it overflows. They get to enjoy the overflow secure in the knowledge that it is constantly being replenished. In times of great need, they can even empty that cornucopia because they know the community is still working to keep it full and everyone will be able to work together to bring it back to overflowing when the great need is over. People who draw out of the cornucopia without adding to it are thieves and should be treated as such if they refuse to contribute. If these freeloaders return, bearing hard work and commitment and add to the store in the cornucopia, then they should be welcomed into the community. People grow and learn, and sometimes those lessons are bitter ones. It is the role of the leaders of the community to integrate these people back into the community, and they’ll have to be prepared to be mistrusted for a long time.

Before you know it (well, after a decade or two, anyway), you’ll have the community that some Pagan leaders and Elders are complaining we don’t have. You’ll have the community some of us Pagans already have.

While I don’t personally agree with or support all of the following communities, they are good examples of Pagan community at work. And these are just the ones that have an on-line presence. I could name many more that don’t have websites, emailing lists, or any visible internet presence at all. Here are some good Pagan communities in no ranked order or specialty:

Its not all doom and gloom. Positive solutions to beat the crunch

id="desc">International Investment & QROPS Pension Adviser

With so much negative news on every single headline and news broadcast, it would be easy to think that every investment sector is suffering the bite of the credit crunch. Inflation, deflation and historically low interest rates are terms so common that we are now desensitised when once this would be completely shocking.

I am not the eternal optimist, however, I do enjoy finding positive solutions rather than feeding the negative frenzy that is all around us, just today I heard a chief economist in the USA advising all his clients to dump all sterling assets and sell out of the UK market completely. That sort of talk only brings about the negativity that it forecasts.

If like me, your investment, SIPP or traditionally cautious deposit clients are concerned about global stock markets, falling property prices, bank stability, falling pound and historically low interest rates, (just to mention a few of the challenges we are up against), then you will be pleased to know that there are very low risk, reasonably high return investments out there:

Such as Louis Group - An Isle of Man based family office, trading for over 90 years, offer over 7%pa on a 5 year fixed note. Also, this group boasts extreme liquidity as their assets far outweigh their liabilities, unlike practically every bank and institution on the high street.

Also, a range of funds, such as EEA, Corinthian and Centurion, that have consistently positive months, averaging 9% per year every year. These life settlement funds have no correlation to any other index or asset, providing client with peace of mind returns.

Also, have you seen Quadris? The environmentally friendly fund that invests in sustainable timber. That has returned over 32% this year alone and the upward trend of the performance graph speaks for itself. Check them out yourself, the fund is marketed by Global Adviser Solutions.

So, stop waiting for recovery and wondering what to do with your concerned clients cash, there are solutions and I can refer you to these companies so you can be armed with positive alternatives when you next speak to your clients.

How Abdul Kalam stole US secrets for Delhi

Delhi recently set off a rocket to the moon. This set off alarm bells in Washington. Richard Speier a reputable American defense analyst wrote an excellent article (U.S. Missile Nonproliferation Policy and India’s Path to an ICBM Capability Richard Speier) on the apprehensions of the US administration as well as the concerns of the US military with respect to the transfer of technology form the American Scout program to the Bharati corridors of duplication and reverse engineering. We have produces sections of that article and a plethora of other information from reputable sources to trace and track the thefts, stealing of sensitive US information by Bharati scientists with approval from the highest icons of power in Delhi.

The path to India’s ICBM capability has spanned more than four decades and is largely based on space-launch vehicle technology obtained from foreign sources. The United States has taken measures over the last several decades to restrict missile proliferation, but the policies took effect only after India’s missile program had begun. Moreover, U.S. nonproliferation policy has also not been consistently applied, particularly in India’s case. Indeed, the relationship between space launch vehicles and missile proliferation seems to have been obscured. U.S. Missile Nonproliferation Policy and India’s Path to an ICBM Capability Richard Speier

While this theft is known in the intelligent community, it is often overlooked by the Murdockized press.

There are many dimensions to Bharat’s arms. First it is using all means necessary to come to a level to challenge other powers in Asia. However as Seier and a large body of American, Western and Russian arms experts note that it is donwright dangerous for the US or even Russia to arm Bharat. Russia takes the money and has refused to transfer technology. The US mulitnationals will never commit commercial sucide by sharing the secret “Coke formula” with the locl counterparts. However Bharat has used underground netwroks to acquire technology. This has been reported in the press but not highlighted.

Proliferation, overlooked by the previous administration will be a major issue for the new Democratic Administration. Already President Barack Obama has outlined this in his various papers. His advisors also have sent the signals to Delhi–making most Bharati leaders nervous and at least one literally having a heart attack!

India as a Space power!

1960s: NASA trains Indian scientists at Wallops Island, Virginia, in sounding rockets and provides Nike-Apache sounding rockets to India.[1] France, the United Kingdom, and the Soviet Union also supply sounding rockets.[2]

1963-1964: A. P. J. Abdul Kalam, an Indian engineer, works at Wallops Island, where the Scout space-launch vehicle (an adaptation of Minuteman ICBM solid-fuel rocket technology) is flown.[3]

1965: Following Kalam’s return to India, the Indian Atomic Energy Commission requests U.S. assistance with the Scout, and NASA provides unclassified reports.[4]

1969-1970: U.S. firms supply equipment for the Solid Propellant Space Booster Plant at Sriharikota.[5]

1970s: Kalam becomes head of the Indian Space Research Organisation (ISRO), in charge of developing space launch vehicles. During the same time period, the United States begins to consider a broad policy against missile proliferation.

May 1974: India conducts a “peaceful nuclear explosion.”

1980s: The United States and its six economic sum mit partners secretly negotiate the Missile Technology Control Regime (MTCR). After one and a half years of difficult negotiations on the question of space launch vehicles, all partners agree that they must be treated as restrictively as ballistic missiles because their hardware, technology, and production facilities are interchangeable. The MTCR is informally implemented in 1985 and is publicly announced in 1987.

July 1980: India launches its first satellite with the SLV-3 rocket, a close copy of the NASA Scout.[6]

February 1982: Kalam becomes head of the Defense Research and Development Organisation (DRDO), in charge of adapting space-launch vehicle technology to ballistic missiles.

May 1989: India launches its first Agni “technology demonstrator” surface-to-surface missile. The Agni’s first stage is essentially the first stage of the SLV-3. Later, the Agni becomes a family of three short- to intermediate-range ballistic missiles.[7]

1990: The United States enacts a sanctions law against missile proliferation. Two weeks later, the Soviet Union agrees to supply India with cryogenic upper-stage rockets and technology, and the two parties become the first countries sanctioned under the new U.S. law.[8]

1993: The United States lifts sanctions on Russia after Moscow agrees to limit the transfer to a small number of rocket engines and not production technology.[9]

1994: India launches the Polar Space Launch Ve hicle (PSLV). Stages 1 and 3 are 2.8-meter-diameter solid-fuel rockets. Stages 2 and 4 are liquid-fuel Vikas engines derived from 1980s French technology transfers.

The earliest reported date for when the Surya ICBM program, using PSLV technology, is said to have been officially authorized. However, India’s space and missile en gineers, if not the “official” Indian government, had opened the option much earlier.

May 1998: India tests nuclear weapons after decades of protesting that its nuclear program was exclu sively peaceful. The United States imposes broad sanctions on nuclear- and missile/space-related transfers.

India ’s minister of state for defense (and former head of DRDO), Bachi Singh Rawat, says India is developing an ICBM known as Surya that would “have a range of up to” 5,000 kilometers. A little more than two weeks later, Rawat is reportedly stripped of his portfolio because of his disclosure.[13]

2000s

The United States lifts many of the technology sanctions it imposed in 1998. Subsequently, Prime Minister Atal Bihari Vajpayee visits the United States amid agreement to broaden the technology dialogue.

December 2001: A U.S. National Intelligence Estimate states, ” India could convert its polar space launch vehicle into an ICBM within a year or two of a decision to do so.”[15]

July 2002: Kalam becomes president of India.

September 2002: The United States tells India it will not object to India launching foreign satellites as long as they do not contain U.S.-origin components.[16]

April 2003: The last mention of India as a proliferator or a supplier to proliferators is made in the director of central intelligence’s unclassified semi-annual report to Congress on the acquisition of weapons of mass destruction.[17]

July 2005: Bush agrees to cooperate with India on “satellite navigation and launch,” and Indian Prime Minister Manmohan Singh agrees to “adherence to Missile Technology Control Regime…guidelines.”[20]

August 2005: According to Indian Ministry of Defense sources, there are plans to use the noncryogenic Vikas stage for the Surya and to have the missile deliver a 2.5-3.5-metric-ton payload with two or three warheads with explosive yields of 15-20 kilotons.[21] U.S. Missile Nonproliferation Policy and India’s Path to an ICBM Capability Richard Speier

It is a paradox of American and Japanese policy that is building India to counterbalance China.

Why does India, a poor country, want to explore the moon instead of using that money to alleviate poverty?

The government ultimately sanctioned the funds - the mission is all set to take place early 2008 - but only after critics were appeased by protracted public debates and several seminars….The project, yet to be formally cleared by the government, will cost $2.2 billion in the first phase to put an Indian in orbit by 2014, and at least twice as much in the second phase to land him or her on the moon by 2020 - four years ahead of China.

A country where hundreds of millions live below the Indian poverty line (Rs 1250) and scores of millions live below Sub Saharan penury levels buys a Russian rocket, paints the Tri-Color on it and claims it as an Indian achievement in science and technology. India’s space odyssey - from bullock cart to moon rocket. Submitted by kashif on Wed, 11/29/2006 - 01:53. Features By K. Jayaraman

All of Indi’a Rockets have failed. 1) Agni 2) Pirthivi 3) Akash 4) Trishul and 5) Nag 6) Agni.

Prithvi: Failure: To date the only reliable delivery system inducted is the Pirthvi missile with a range of 300 kilometres. The subsequent versions of this missile are still undergoing tests. The pride of India the Agni missile tested last time landed 200 kilometres off target.

Akash: Failure: After several years of testing has been shelved for reasons best known to the Indians. Akash was meant as a substitute for Pechora. On the Akash missile, which was the subject of the DRDO media conference here on Tuesday, former air chief S. P. Tyagi said:“Akashwas to be ready at a certain time, but it wasn’t. I had to change everything to make up for the delay.” Both missiles were part of a programme to develop indigenous weapons, which began in July 1983, with plans for Agni, Prithvi, Trishul, Akash and Nag missiles.

Trishul: Failure: Trishul is being replaced by Israeli Barak and Russian systems. Trishul, for instance, has been tested over 80 times so far without coming anywhere near becoming operational. It was, in fact, virtually given up for dead in 2003 after around Rs 300 crore was spent on it, before being revived yet again.

Nag: Failure: The Nag proved to be as deadily as the Holy Cow.

ENDNOTES

1. Sundara Vadlamudi, “Indo-U.S. Space Cooperation: Poised for Take-Off?” The Nonproliferation Review, Vol. 12, No. 1, March 2005, p. 203.

2. Gary Milhollin, ” India’s Missiles: With a Little Help From Our Friends,” Bulletin of the Atomic Scientists, November 1989.

3. Ibid.

4. Ibid.

5. Vadlamudi, “Indo-U.S. Space Cooperation.”

6. Alexander Pikayev et al., ” Russia, the U.S., and the Missile Technology Control Regime,” Adelphi Paper No. 317, International Institute for Strategic Studies, March 1998.

7. Robert Norris and Hans Kristensen, ” India’s Nuclear Forces, 2005,” Bulletin of the Atomic Scientists, Sep tember/October 2005.

8. Pikayev et al., ” Russia, the U.S., and the Missile Technology Control Regime.”

9. Ibid.

10. V. G. Jaideep, ” India Building ICBM With 8,000-Plus Km Range,” Asian Age, February 8, 1999, pp. 1-2; Barbara Opall-Rome, “Agni Test Undercuts U.S., Angers China,” Defense News, April 26, 1999, p. 17.

11. Agni IRBM Built to Carry Nuclear Warhead,” Jane’s Defence Weekly, April 28, 1999.

12. Vivek Raghuvanshi, ” India to Develop Extensive Nuclear Missile Arsenal,” Defense News, May 24, 1999, p. 14.

13. Canadian Security Intelligence Service, “Ballistic Missile Proliferation,” Report No. 2000/09, March 23, 2001; Iftikhar Gilani, “Premature Disclosure of ICBM Project, Rawat Stripped of Defence Portfolio,” Daily Times, November 23, 1999.

14. “Khrunichev Space Center to Supply Rocket Boosters to India,” Interfax, April 16, 2001.

15. “Foreign Missile Developments and the Ballistic Missile Threat Through 2015,” December 2001.

16. . Raja Mohan, ” U.S. Gives Space to ISRO,” Hindu , September 30, 2002, p. 11.

17. Director of Central Intelligence, “Unclassified Re port to Congress on the Acquisition of Technology Relat ing to Weapons of Mass Destruction and Advanced ConventionalMunitions, 1 January Through 30 June 2002,” April 2003.

18. Office of the Press Secretary, The White House, “Next Steps in Strategic Partnership With India,” Janu ary 12, 2004.

19. Moscow Agentstvo Voyennykh Novostey, November 1, 2004 (internet news service in English).

20. Office of the Press Secretary, The White House, “Joint Statement Between President George W. Bush and Prime Minister Manmohan Singh,” July 18, 2005.

21. N. Madhuprasad, “Boost to Indian Armed Forces’ Deterrence Arsenal; India to Develop Intercontinental Ballistic Missile,” Bangalore Deccan Herald, August 25, 2005.

Richard Speier is a private consultant on nonproliferation and counterproliferation issues. Speier spent more than 25 years in government at the Office of Management and Budget, the Arms Control and Disarmament Agency, andthe Office of the Secretary of Defense. While in government, he helped negotiate the Missile Technology Control Regime (MTCR). This article is based on a paper published by the Nonproliferation Policy Education Center.

1. Glenn Kessler and Peter Slevin, ” Washington Post Reporters Interview Powell,” The Washington Post, October 3, 2003.

2. Office of the Press Secretary, The White House, “Joint Statement Between President George W. Bush and Prime Minister Manmohan Singh,” July 18, 2005.

3. For early reports, see Maurice Eisenstein, “Third World Missiles and Nuclear Proliferation,” The Washington Quarterly, Summer 1982; “Liquid Fuel Engine Tested for PSLV,” Hindustan Times, December 13, 1985, p. 1; “Growing Local Opposition to India’s Proposed National Test Range at Baliapal, Orissa,” English Language Press, October 1986; “India Faces Rising Pressure for Arms Race With Pakistan,” Christian Science Monitor, March 9, 1987, p. 1. The latest detailed report, appearing less than six-weeks after the presidents’ joint statement is N. Madhuprasad, “Boost to Indian Armed Forces’ Deterrence Arsenal; India to Develop Intercontinental Ballistic Missile,” Bangalore Deccan Herald, August 25, 2005.

4. Vivek Raghuvanshi, “Indian Scientists Poised to Test-Launch Country’s First ICBM,” Defense News, April 30, 2001, p. 26.

5. International missile nomenclature defines an ICBM as a ballistic missile with a range of 5,500 or greater. However, Indian officials have sometimes exaggerated missiles’ capabilities by bumping missiles into the next range-class.

6. Gary Milhollin, ” India’s Missiles-With a Little Help From Our Friends,” Bulletin of the Atomic Scientists, November 1989; Sundara Vadlamudi, “Indo-U.S. Space Cooperation: Poised for Take-Off?” The Nonproliferation Review, Vol. 12, No. 1, March 2005, p. 203.

7. See Arun Vishwakarma, “Agni-Strategic Ballistic Missile,” April 15, 2005. The report states that India is taking a different ICBM approach: developing a 1.8-meter-diameter, solid-fuel rocket that will extend the Agni to intercontinental range and that could be the basis for a longer-range ICBM. The 1.8-meter-diameter rocket represents a combination of PSLV and Agni technology. Such a lighter ICBM makes far more military sense than a PSLV-sized missile. The lighter ICBM might be mobile and able to survive a first strike. However, Vishwakarma consistently reports far higher ranges for the existing Agni missiles than have been reported elsewhere. Given this reporting bias, Vishwakarma may be describing the wish lists of Indian engineers or programs that have not yet been funded. The PSLV exists, and the existence of a 1.8-meter-diameter missile has not yet been reported except by Vishwakarma. The impending test of the Agni-3 may reveal whether a 1.8-meter-diameter rocket stage, which could make possible a mobile ICBM, has been developed. See “Missile Plan,” Bangalore Deccan Herald, November 26, 2005; Rajiv Nayan, “Agni Three Missile: Sino-Centric?” Bangalore Deccan Herald, December 12, 2005; Sayan Majumdar, “Defense Developments for 2006,” New Delhi India Defence Consultants, January 13, 2006.

8. Moscow Agentstvo Voyennykh Novostey, November 1, 2004 (internet news service); Vishwarkarma, “Agni-Strategic Ballistic Missile.” It is possible that either or both of these references have conflated the Surya-1 with the Agni program.

9. John Wilson, ” India’s Missile Might,” The Pioneer, July 13, 1997, p. 1.

10. Brahma Chellaney, “Value of Power,” The Hindustan Times, May 19, 1999.

11. See Richard Speier et al., Nonproliferation Sanctions (Rand Corporation, 2001).

12. For an official Indian history of relations as of 2002, see http://www.indianembassy-tehran.com/india-iran.html.

13. Barbara Opall-Rome and Vivek Raghuvanshi, “India’s BalancingAct,” Defense News, September 15, 2003, p. 1; Sultan Shahin, “India Sticks WithIran, for Now,” Asia Times, September 20, 2003; Patricia Nunan, “U.S. Signals Concern About India-Iran Pipeline Project,” VOA News.com, March 17, 2005; Vivek Raghuvanshi, “India, U.S. to Boost Tech Flow,” Defense News, December 12, 2005.

14. Those sanctioned, according to the Wisconsin Project on Nuclear Arms Control, include Bharat Electronics Ltd., Dr. C. Surendar, Dr. Y.S.R. Prasad, NEC Engineers, the Nuclear Power Corporation of India, Projects and Development India Ltd., Rallis India, and Transpek Industry Ltd.

15. ” Iran’s Ballistic Missiles: Upgrades Underway,” IISS Strategic Comments, November 2003; Opall-Rome and Raghuvanshi, ” India’s Balancing Act.”

16. John Larkin, “India Bets on Nuclear Future: Backing Probe of Iran Draws Closer Look at New Delhi’s Ambitions,” The Wall Street Journal, November 4, 2005; Somini Sengupta, “Nuclear Deal and Iran Complicate Efforts by U.S. andIndia to Improve Ties,” The New York Times, January 23, 2006; Jo Johnson and Caroline Daniel, “New Delhi Faces a Diplomatic Balancing Act Ahead of Bush’s State Visit,” FinancialTimes, January 26, 2006; “India’s Left Parties Demand Recall of U.S. Envoy,” AgenceFrance Press, January 30, 2006.

17. Nicholas Kralev, “Firm Helping Arms Program Sanctioned,” Washington Times, February 20, 2003; “Indian Police Arrest Man for Alleged Export of Chemicals to Iraq,” Agence France Presse, October 18, 2003.

18. “DRDO Plan to Export Missiles,” The Hindu, November 21, 2005.

19. Robert D. Blackwill, “The India Imperative,” The National Interest, Summer 2005, pp. 9-15.

20. Israel has already stepped into the breach to contract for an October 2006 Indian launch of an Israeli radar imaging satellite. See Barbara Opall-Rome and K. S. Jayaraman, “India to Launch Israeli Spy Sat,” Defense News, November 14, 2005, p. 1; “India to Launch Israeli Military Imaging Radar Satellite,” Aviation Week & Space Technology, November 21, 2005, p. 17.

21. Mir Ayoob Ali Khan, “Agni-III to Get Light Motor for Bigger Bombs,” The Asian Age, Oc tober 14, 2005.

22. “Report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China,” 105th Cong., 1st sess., 1999, H. Rep. 851.

23. Bureau of Export Administration, U.S. Department of Commerce, “Control Policy: End-User and End-Use Based,” Regulation Part 744. ISRO was removed from the “entities” list under a U.S.-Indian agreement signed on September 17, 2004.

World Financial News in a snapshot

Currently Listening To: We Got A Big Mess On Our Hands - The Academy Is…

- Obama seeks public support for proposed $825 billion recovery package, pledging to use funds to create jobs, improve health care and expand renewable energy

- Iceland’s prime minister voices “contempt” for some of the actions by banks that triggered the country’s economic collapse

- China must do more to ease public distress as it battles a slowing economy and rising unemployment, leadership meeting says

- Nomura Holdings Inc <8604.T>, Japan’s largest brokerage, is expected to post net loss of 300 billion yen in October-December, Japanese daily Nikkei reports

- Coffee chain Starbucks could cut another 1,000 jobs in coming weeks, according to report in the Seattle Times

- Bank of England Monetary Policy Committee member David Blanchflower says British interest still have a way to go if they are to follow United States, where rates are close to zero

- Canada Prime Minister Stephen Harper signals budget he will introduce this week will contain permanent tax cuts

- Ford Motor Co has enough liquidity to fund its restructuring plan and sees no need to ask for government loans, chief executive Alan Mulally says

MARKETS

- U.S. S&P 500 and Nasdaq rise but Dow sheds 45.24 points, 0.56 pct, to 8,077.56 after GE warns of extremely difficult 2009

- Europe shares end weaker, retreating for 12th time over past 13 sessions to hit lowest close in 6 years. Nikkei falls 3.8 pct

- Dollar touches 23-year high vs sterling, 6-week high vs euro as weak UK and euro zone data lead investors to seek greenback

- Oil up more than 6 pct as mounting evidence that OPEC complying with bulk of record output cuts counters gloomy data

- Longer-dated U.S. Treasuries prices down for 5th consecutive day as investors worry about impact of large amounts of new debt

QUOTES

“If we do not act boldly and swiftly, a bad situation could become dramatically worse.” - U.S. President Barack Obama.

“I would like to use this opportunity to state my disbelief and contempt for some of the things that have been coming into the daylight in regards to the banks.” - Iceland Prime Minister Geir Haarde.

“It certainly appears that the housing market was a bubble and that rates should have been raised earlier than we did, and cut much sooner when the housing market turned,” Bank of England Monetary Policy Committee member David Blanchflower as quoted by the Times.

“We must combine encouraging economic development with improving people’s welfare. Strive all out to expand employment and improve the social security system, so that the public has more confidence in their lives.” - Chinese Premier Wen Jiabao

“There is some hope here that the worst is over, but we don’t expect any sharp upturns soon. The environment as we move into 2009 is extremely adverse.”- Chris Williamson, chief economist at Markit, which conducts the euro zone Purchasing Managers Index.

EVENTS/DIARY/DATA

Monday Jan 26

- U.S. National Association of Realtors issues existing home sales for December.

- U.S. Conference Board issues leading economic indicators for December.

Will it get any worse?

Musharraf Era performance: Pakistan Flourishes

Links and Footnotes:

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Balkans and Failed States Rank

Failing State?

Failing state is defined by authors of index as follows:

A state that is failing has several attributes. One of the most common is the loss of physical control of its territory or a monopoly on the legitimate use of force. Other attributes of state failure include the erosion of legitimate authority to make collective decisions, an inability to provide reasonable public services, and the inability to interact with other states as a full member of the international community.

The 12 indicators (used in Index/AR) cover a wide range of elements of the risk of state failure, such as extensive corruption and criminal behaviour, inability to collect taxes or otherwise draw on citizen support, large-scale involuntary dislocation of the population, sharp economic decline, group-based inequality, institutionalized persecution or discrimination, severe demographic pressures, brain drain, and environmental decay. States can fail at varying rates through explosion, implosion, erosion, or invasion over different time periods.

The numbers above are correlating with columns in Failing State Index table below.

The Index

From original Failed State Index (more in original story ) I have selected following countries to my modified table:

An finally here is the Index:

Final notice

This article - and statistics behind it - and my earlier article “Freedom in Balkans” are complementary to each other - same problems are viewed from different perspectives. However in general all rankings which I have quoted are representing more or less anglo-american point of view - its values and research methods. If rankings were made e.g. by some byzantine institute the results could be differ - the viewpoint and tradition for example regarding democracy are not one to one with western views. If these limitations are noted so I anyway think that discussion about findings in different countries could be valuable material for further development.

Evaluate Adsense With Some Type of Balance

Evaluate Adsense With Some Type of Balance

Author: IB SERVE

There are times Google’s heralded ad affiliate program isn’t in your long term business interest. Oh no I said it!

AdSense isn’t the unstoppable revenue engine for every eBusiness. Before I am taken out and flogged by the eCommerce pundits — please let me explain what I mean in my defense.

I make revenues from AdSense at a very high click-through rate. I experience high click-through rates with AdSense without resorting to questionable tactics like tricking site users with photos (the AdSense trick and tip dujour).

So my perspective is from one who has made decent income from AdSense to fund aspects of his business like advertising seminars — and outsourcing to his virtual assistants. Yes, AdSense is a legitimate and significant revenue source. However evaluate AdSense with some type of balance.

By now you may have heard about people like Joel Comm.’s six figure income with AdSense, or Jason Calacanis of Weblogs being on his way to generating 1 million dollars in AdSense revenue. Google’s Ad revenue sharing affiliate program for publishers certainly seems to be an eSales Nirvana for many webmasters.

But there are obvious and not so obvious times not to use AdSense ads on your sites. Let’s list - examine - and explain them below.

1. On Sales or Mini-sites

This is a no-brainer. If you are trying to sell a particular product that is important to your bottomline, you don’t want AdSense ads distracting your customers from either joining your email list, or hindering your site’s online sales process.

However I do see hybrid sites that are mini-sites or full scale eCommerce sites, with AdSense at the bottom of their pages. This might not be so bad since only 1% - 15% of your site visitors will either buy from you or fill out a form.

The thinking with this approach is you might as well make money from disinterested parties using up your server’s bandwidth.

2. SEO Business Sites

If your livelihood depends on search engine optimization or marketing for a living you might want to think twice about displaying AdSense Ads on your site. I can tell you this from personal experience. I once was on top of MSN for search engine marketing in my local area. I concentrated on my local area because I found people felt more comfortable hiring an eCommerce consultant locally.

One day my site fails totally out of the MSN index. After intense study I noticed that I obviously had a filter on my site from MSN.

I analyzed all the top ranking sites in MSN and noticed the only difference between me and the other top ranking sites was I had Google AdSense ads on my site. Someone at MSN felt that my AdSense ads, and perhaps to a less extent, my book on SEO, was getting a free ride in the MSN search engine database.

In fact I noticed that there were no sites with AdSense ads for at least the first 3 pages. Plus the sites with AdSense were only using 1 ad unit at the bottom of the home page (there were very few of them in the top 5 pages).

I knew it was strange to not have AdSense ads on the top Internet marketing sites. This prompted me to scan other industries where I noticed the same trend.

Many of the leading SEO gurus have sites that have been banned from the top listings by the search engines. It seems the more visible you become, the more of a target your sites are to the search engine auditors.

Some of my sites are still on the top of MSN with AdSense ads but that doesn’t mean they won’t also be targets in the future.

Let’s face the facts. MSN and Yahoo! have competing ad networks to Google’s, and this competitive situation is rife for a potential backlash against SEO sites with AdSense ads.

Many SEOs will point to exceptions to this position. However you have been warned!

Think about it, how long will MSN and Yahoo! sit back and watch SEO driven websites use their search indexes to fund Google? Did you know SEO in MSN and Yahoo(!) — is much easier to obtain.

Therefore optimized sites are creating an ad sales wealth transfer from MSN and Yahoo into the pockets of Google! It won’t be long before Yahoo! and MSN begin to devalue ranking on AdSense sites in their databases — if not outright ban them.

If you are in the search engine business stay search engine neutral, or create multiple sites for different search engines.

3. When AdSense Becomes Your Only Business Model

When you become so myopic in your thinking that you build a business solely on AdSense revenue — think again my friend. Why build a business solely on the largess of Google?

I don’t know if your realize it or not, but the sites making the real big AdSense money usually have a following that doesn’t depend on the search engines. Internet mavens like Chris Pirillo or Joel Comm have been on the Internet a while and have followings for their websites. Therefore they can consistently make six figures with AdSense.

These content powerhouses are an asset to Google and not the other way around. But do you think Google is going to sit back and watch just anybody make big bucks off of their top rankings?

If you do a search on most keywords you will notice many of the top ranking sites are news sites, .gov sites, or .org sites these days. The only exception is in industries where these sites don’t really exist like eCommerce industries (clothing, shopping, etc.).

No doubt in most industries you will notice a conspicuous scarity of AdSense sites in the top rankings. In other words don’t bet your future fortunes on AdSense.

An IPO based on projections of AdSense revenue isn’t in the future for the average eBusiness. Think of Google AdSense as supplemental income. Building a business solely on AdSense revenue isn’t just silly — it’s just plain stupid

Article Source: http://www.articlesbase.com/affiliate-programs-articles/evaluate-adsense-with-some-type-of-balance-632275.html

About the Author:

http://www.googlefund.com http://www.adsense.reprintarticlesite.com

Obama Index

By Joe Chase of IndexBeating.com

Since Obama was elected there have been lots of articles and TV stories about how to “Invest in the Obama Administration” and profit from his infrastructure spending and economic stimulus activity.  I was thinking that iShares, WisdomTree or another fund company would come out with an Obama ETF, but so far I haven’t heard of one.  So I decided that I would make my own “Obama Index” and write a post about it.  

The very day I was thinking about what stocks to put in the index Jim Cramer unveiled his “Obama Accountability Index”  consisting of, GM, GE, Caterpillar, Bank of America, Citigroup, and JP Morgan.  He chose these stocks because they will recover if there is a recovery in the financial sector (BAC, C, JPM, GE) manufacturing (CAT, GM) and the overall American economy (GE).  This is very heavy in the financial sector and manufacturing, but doesn’t include much else.  I think Cramer failed to include some of Obama’s most important campaign promises. I think he should have included alternative energy and infrastructure. 

For my Obama Index I chose General Electric to represent the overall economy, and Bank of America and a regional bank ETF to represent the financial sector. I added Caterpillar, Deere, and Gemeral Motors to reflect manufacturing and Honeywell for new building activity.  I couldn’t use a solar ETF because they include mostly Chinese companies so I chose three American solar companies, Evergreen Solar, First Solar, and SunPower.  I included two small communication infrastructure companies, MazTec and Dycom.  I also included Vulcan Materials, a company that make materials for roads.  Caterpillar will also benefit from new roads being built.

I think these companies will accurately reflect the effect of Obama’s plans.  It is important to note that this will take a long time for his plans to influence the earnings of these companies, and economic conditions will influence their prices in the short run.  I think this should be looked at as a relative index to the S&P for the short run, and as a absolute return index in the long run.  I’ll keep a chart of the index on the sidebar in a week or so once there is enough data.

Scary, they

First Here are the links…

The American Recovery and Reinvestment Bill of 2009

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A Guide to Reading the America Recover and Reinvestment Bill- TIME MAGAZINE

Source: Time Magazine

“Madness is to think of too many things in succession too fast, or of one thing too exclusively” — Voltaire

The American Recovery and Reinvestment Bill of 2009 should be required reading for every citizen from billionaires to the average person. It was issued by The Committee On Appropriations and is the road map for the $825 billion that the Congress and Administration intend to put into the U.S. economy to jumpstart the economy out of the recession.

The most important part of the document may be the description of how the country was dragged into the worst economic period in its history. ( See pictures of the Top 10 scared traders.)

At the beginning of the bill, the authors write: “Since 2001, as worker productivity went up, 96% of the income growth in this country went to the wealthiest 10% of society. While they were benefiting from record high worker productivity, the remaining 90% of Americans were struggling to sustain their standard of living. They sustained it by borrowing … and borrowing … and borrowing, and when they couldn’t borrow anymore, the bottom fell out.”

If that analysis is true, then two other things must be accurate. The first is that the cause of the recession was Americans becoming overextended in their use of credit. The other one, which is a consequence of the first, is that if the government can facilitate future consumer borrowing, the economy will be righted again in short order. That would mean that more complex methods of solving the problems of the recession, such as spending money on infrastructure, would be unnecessary. It would be simpler to take $825 billion and make it available for home equity loans, enlarge credit card lines, and auto loans.

But, the authors of the bill are not willing to follow their own logic, so they have crafted another plan. The first assumption of what the program will do, and among the most important of its goals, is only mentioned in passing. “This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs.” This is a little twist on what is being said in public.

The general assumption about job creation under the program is that it will add 3 to 4 million jobs. But in the introduction to the bill the assumptions about job loss are laid out quite clearly: “Credit is frozen, consumer purchasing power is in decline, in the last four months the country has lost 2 million jobs and we are expected to lose another 3 to 5 million in the next year.”

The mathematics of the two sets of employment analysis taken together would show then that no new jobs would be created. The three million or so jobs which will be lost in 2009 will simply be replaced by three million new ones. The jobs lost late in 2008 will not be replaced in this program, leaving a two million job deficit Joblessness will stay at about 7.2%

Other than those details, the money will be well spent.

The states need help, and the federal government means to provide it: A sum of $79 billion in state fiscal relief will be provided to prevent cutbacks to key services

After the plans to help the states, cut taxes, and provide new infrastructure for the nation, the programs get a little off track.

The bill means to spend $44 million to repair the U.S. Department of Agriculture’s headquarters. About $400 million will go to repairing national monuments in Washington, which are somehow considered essential to national infrastructure.

Additionally, Congress plans to pay out $200 million to provide financial incentives for teachers and principals to do their jobs better. Another $100 million will be used to establish a set of grants to provide $100 to local governments and nonprofit organizations to remove lead-based paint hazards in low-income housing.

Perhaps the best investment in the bill is for $80 million to ensure that worker protection laws are enforced as recovery infrastructure investments are carried out. In other words, there will be a police system set up to make sure that no one with a new job working on national infrastructure with money provided by the government will have his or her rights violated.

The bill calls for over one hundred programs which Congress plans to enact. These include addressing problems as diverse as community block grants, upgrading the forestry service, bridge removal, and NASA research funding. The remarkable thing about the legislation is that almost every program is ill-defined and subject to broad interpretation and a wide variation as to how it might be enacted.

In a sentence, The American Recovery and Reinvestment Bill of 2009 will have to build a bureaucracy larger than any ever created by the US government in order to manage its many parts.

The first sentence of the bill reads “The economy is in a crisis not seen since the Great Depression.” If it requires all of these plans to get America back on the road to recovery, the process will take a decade.

Douglas A. McIntyre

See pictures of the global financial crisis.

For constant business updates, go to 24/7wallst.com.

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*** My Cure for the coming runaway inflation train? Read below…

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By: Sean Hyman of mywealth.com

I think this one may be a shocker to many…that gold is going to be much higher at the end of 2009 than it is right now. I think it will take out its highs just above $1,000 an ounce and will head for at least $1,250 an ounce. (Gold is presently trading around $853 an ounce.)

When I was a stock broker, I hated gold. To me it was the dumbest investment on the planet. Of course I worked as a broker when gold was in a multi-year bear market.

But the more that volatile booms and busts have caused the need for more government intervention, the more of a believer I’ve become in gold.

Let’s look at several of the dynamics that have helped to form my view for gold in 2009.

South Africa is home to some of the biggest gold mines in the world. In 2008, their gold output shrank as exploding input costs caused them to close some of their most expensive mines. (Produce less of the metal and the speed of the supply shrinks which helps to support the price.)

This has been one dynamic that has helped to support prices in 2008 and that has kept gold in an 8 year bull market. Even in 2005 and 2008 when the dollar rallied, gold still held its ground. This shows a lot of strength for the metal since the dollar and gold largely trade somewhat opposite of each other (being that gold is denominated in dollars and when the dollar is rising, it tends to calm the fears for the currency which typically dulls the demand for the precious metal).

In fact, had it not been for tons of hedge fund failures and liquidations, I think gold would actually be much higher than it is right now.

With the credit crisis in full swing, the Fed has responded by turning on the printing presses at full speed. This enormous increase in the money supply (which is temporarily clogged up in the banks) will eventually be unleashed on the economy. Once this happens, you will quickly see deflation erased and we may actually move into a period of hyper-inflation.

Why would I go so far as to think that? Heck, the Obama administration may print as much as a few trillion dollars to help out the banks according to former central banker Volcker.

We’ve also got another stimulus package coming within weeks according to the Obama administration.

Another reason why I feel that a huge bout of inflation will return is because of interest rates. If you’ll remember, Congress got pretty harsh with Alan Greenspan for taking rates down to 1%. They even went so far as to accuse him of causing the recent bubbles in the economy, which he denies.

Well, if the “1% cheap money” inflated things into the stratosphere, what do you think will happen with Ben Bernanke’s interest rate range of 0% to 0.25%? Could you say it would have any less of an effect? No, it will have an even greater “bubble effect” in time as the cheap money actually is released out into the economy.

Tomorrow, I’ll continue with “Part 2” of this “gold story”… So stay tuned!

Gold Will Shine Again in 2009 Part 2

by Sean Hyman

I assure you that Obama’s economic advisors will be the “drain-o” that gets the pipes unclogged. When this happens, the Fed knows that it will have to “mop up” this excessive liquidity in the financial system.

However, here’s what I predict will happen: The Fed, while it wants to be a forecaster of the economy really just ends up becoming a “responder” after the fact to what’s going on in the economy. Therefore, between the time that the Fed starts to see the inflationary signs in the economy and starts the process of draining the excess liquidity from the economy, it will be too late. The hyper inflationary effects will already be in play. They will be “late to the ball game” yet again.

When all of this starts to happen (and possibly a bit beforehand), savvy gold investors will sense it coming and will buy up gold ahead of time…positioning themselves like a surfer that gets out ahead of the coming wave that will propel him forward.

The Fed will do its best at that point to drain the money supply and hike rates, but there are delays from when they start to act and when it actually starts to effect the economy. This “lag time” will cause a huge return of inflation in a big way that will propel gold ever higher and will eventually dilute the dollar as well.

You see, when there’s more of something in existence, it begins to hold less value. So as the money supply is quickly increasing, the dollar will eventually feel the effects of it. Remember, there’s that delayed “lagging” period which is why it hasn’t already been felt even now.

However, as sure as the sun is coming up tomorrow…it’s coming. So get prepared ahead of time. For, the key to successful investing is to buy just ahead of the massive move. This requires an investor to “think ahead”. You can’t just see what’s happening at present and prosper like you should in your investing. It requires one to be “forward looking” and thus “forward thinking”.

When all of this unfolds, investors will buy gold (which is essentially exchanging their dollars for gold) as they seek safety, liquidity and an “insurance policy” against runaway inflation.

So with the economy deeply damaged, unemployment claims hitting almost 600k as of this writing, there’s not going to be a huge incentive for investors to sell gold. That’s why gold has only come off of its top by 17.9% and stocks have been 40+% off of their highs on average. You can see its underlying strength just in that fact alone.

Also, remember that gold supplies will continue to tighten in 2009 just as they did in 2008. Why? Africa’s production of gold sank 14% which was the lowest levels since 1899. That’s serious! But it’s not just a South Africa story. U.S. gold production fell 2% last year. While China (which has now become the world’s biggest producer of gold) had their production rise 3% last year, the “net” result collectively among all countries is a net slowdown in gold production.

Central bank selling in gold was down a full 42% last year. And you’d be an idiot of a central banker to sell a bunch of gold in 2009 with the U.S. and global economy still hobbling along. Therefore, you can count on these guys not adding to the selling.

Therefore, get ready to buy gold, sell dollars and buy foreign currencies like the euro and especially the Aussie dollar which is greatly helped by rising gold and other commodity prices.

Most of the increase in gold and selling of dollars may come more in the 2nd half of the year than the 1st half due to the delayed effect of Fed policy and as the Obama administration starts to get its feet wet in tackling the economic woes.

But be aware and watch for the change just in case it happens even a bit sooner than I think.

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The investment markets are yielding to the fact that the global economy will remain weak for the better part of 2009.

As a result, investors will continue to seek safe havens.

Under normal conditions, these safe haven investments would include land and real estate. These assets have intrinsic value; or in other words, their value will never fall to zero. But with falling prices, investing in real estate is out of the question for most people right now. And there’s little doubt that investors will look elsewhere for safety against financial crisis.

The best safe haven asset in the world right now is still gold because it is never considered to be a liability.

And we believe that safe haven investment demand will drive gold prices during 2009. With this in mind, we would like to present a broad overview of Gold World’s 2009 gold outlook. But before we get into that, let’s review what happened to gold prices in 2008.

Gold Was One of the Best Investments of 2008

In March 2008, gold prices hit a record high of $1,033 an ounce as the gold bull market entered its seventh year of life. This was followed by a normal 18% correction, which drove gold prices back down to $850 an ounce.

Gold prices subsequently rebounded and were once again closing in on the $1,000 level in mid-July. At the same time, however, the fundamental and psychological effects of the slowing housing and credit markets were just beginning to devalue significantly the investment markets across the board.

As a result, many long gold positions had to be sold in order to cover losses from investments in other markets. Over the next several months, this forced selling pressure pushed gold prices down.

Gold prices were also held down during the second half of 2008 as the U.S. dollar enjoyed a +20% rally. Foreign governments, institutions, and banks began buying the U.S. dollar, which despite a legion of problems continues to be the world’s most important reserve currency, as a hedge against domestic economic turmoil.

These factors contributed to a significant drop in the price of gold, which officially bottomed out for the year at an intraday low of $683 an ounce in October 2008.

Gold prices have subsequently bounced off of the $700 level as major selling has dried up, and fresh buying has come into the market.

Despite three 20% corrections and serious deflation in the market, gold exited 2008 with a positive 5.4% gain for the year. Although subtle, this gain outperformed every major equity index and commodity in the world. Here are just a few examples…

This made gold one of the best investments of 2008.

And the 2009 gold outlook looks just as strong.

Despite a bit of downside in the immediate future, we expect gold to have a stellar year.

Global economic turmoil and deflation will undoubtedly continue to influence gold prices in the near-term. A short-term pullback in gold prices from current levels to $800—maybe even a bit lower—before a recovery is not out of the question. However, we expect gold prices to break new records during 2009.

For our current perspective, we expect gold prices to reach as high as $1,300 during 2009, which would be a profit of over 50% from current levels.

Gold prices in 2009 will be supported more heavily by supply/demand fundamentals than in the previous years of this gold bull market.

As we’ve previously discussed, during the third quarter of 2008, world gold demand outstripped supply by 10.5 million ounces. This deficit was worth $8.5 billion and was the largest supply/demand deficit since the gold bull market of the 1970s.

Official 4Q 2008 world gold supply/demand figures will be calculated and reported later this month. Gold World will report them to you when the data is released.

In the meantime, though, all estimates suggest that there will be another very large deficit in world gold supplies from the fourth-quarter, with investment demand continuing to drive the market.

We expect that a continuing surge in investment demand could push gold prices as high as $1,300 at one point during 2009.

There will likely be a bit more volatility in the gold market in 2009 as more and more speculators come into the market. It is likely that the gold market will experience three or four price peaks (selling points) during 2009.

How to Invest in Gold for 2009

As we expect a near-term drop in gold prices as a result of continuing deflation, we are advising our readers to hold off on any physical gold buying for the immediate future. As previously mentioned, gold prices could dip back down to $800 before recovering again.

Nevertheless, we expect 2009 to be another great year for gold investors.

Good Investing,

Tomorrow we’ll check on what’s the latest on the Obama eligibility issue.

Achieving MDG 1 in Senegal: Agricultural Development Challenges and Strategy

This study will explore Senegal as a case in development challenges in sub-Saharan Africa. The scope of the study centers on MDG 1 in lieu of a broader discussion of Senegal’s progress in achieving the MDGs as a whole. The study will first consider MDG 1 in the context of three indicators: (1) the prevalence of extreme poverty, (2) hunger, and (3) unemployment. The focus of this study will then narrow to examine Senegal’s development strategy as it is articulated through its Poverty Reduction Strategy Papers (PRSPs). An examination of one of Senegal’s largest development impediments, its status as a net importer, will then be considered; in particular, the paper will discuss Senegal’s standing as a net food importer and how this hinders the nation’s ability to promote food security and GDP growth in the struggle to eradicate extreme poverty and hunger. Lastly, the paper will engage a discussion of demand-side development solutions in the form of innovative agricultural programs that promote domestic rice production.

MDG 1

Any successful development strategy for increasing food security in Senegal must incorporate a heavy emphasis on domestic rice production. Supply-side structural adjustment reforms such as trade liberalization and deregulation have had the undeniable effects of increasing rice imports and diminishing domestic rice production and are demonstrably not part of a pro-poor growth strategy. However, imposing higher tariffs would amount to a serious contradiction to over a decade of trade policy, would jeopardize aid from donor nations, and would likely have deleterious effects on overall growth.

The rain-fed drip irrigation project in Dap Dior is funded by the Israeli government and regional and international aid organizations. In this system, when rain begins to fall, farmers commence sowing seeds. The system employs a specially-configured design of drip irrigation engineered specifically for rain-fed water. Farmers can control the flow of water by means of a central tap which has the capacity to distribute water evenly across an entire field while reducing evaporation. Because the irrigation source is wholly derived from rainfall and due to the highly efficient design of the drip equipment, water costs are next to none. In addition, the minimal labor and the low maintenance involved (the system can function for up to five years without maintenance) allow farmers to spend time performing other work while reducing costs.

The success of this program is demonstrated by the fact that farmers who have used it see a large enough profit margin to purchase new systems for other fields. One potential weakness is that if severe drought ensues, the system will not provide enough water to sustain crops. However, in the event of severe drought, even with traditional irrigation methods, crops are unlikely to flourish. Ultimately, this system provides an innovative means of irrigating crops through a combination of replicable rain-fed technology which is sustainable, provides a healthy profit margin, and increases efficiency.

Projects such as GOANA and those in Dap Dior will be crucial to effect a sustained increase in domestic food production. In addition to funding for these projects, technology, seeds, fertilizer, and irrigation equipment are critical. These are all factor markets that can be expanded domestically as an opportunity for new business development and job creation. Every effort should be made to produce fertilizer and build irrigation equipment domestically. This will require coordinated policy that takes into account both agricultural and industrial development plans as a cohesive poverty reduction strategy.

While Senegal saw significant progress in the first generation of its Poverty Reduction Strategy, it has since seen a decline in GDP growth. Extreme poverty and hunger continue to plague a significant portion of the population, particularly in rural areas. The interconnectedness of food insecurity, food import dependence, unemployment, and overall GDP growth mandate a holistic policy approach that factors each of these hurdles into its development strategy. Supply-side solutions such as trade liberalization have not benefited the poorest of the poor, who continue to struggle for access to a minimum level of dietary sustenance. Senegal is not alone in its development predicaments, but it does have a particularly extreme dependency on rice imports. Investment in innovative rice production projects should play a central role in agricultural policy initiatives. The profits to be gained from agricultural modernization and greater efficiency will fundamentally reduce deficit spending in the form of food imports, promote greater food security, and raise employment levels in the agricultural and industrial sectors. Achieving MDG 1 is possible only with a commitment to policy and funding that pursues innovation, investment, and modernization.

Appendix B: Microcredit and Philanthrocapitalism

While aid has played a central role in development since before the articulation of the MDGs, a new generation of financing that embraces novel sustainable funding alternatives should be adopted for long-term growth. Government spending has been shown to stimulate growth and should remain a central component of investment, but it is limited when deficit spending is already high, particularly for developing nations.

Microcredit lenders have the capacity to provide small sums of startup capital or critical raw materials to people disenfranchised from traditional banking systems. However, these types of initiatives will not flourish without encouragement on a policy level. As identified in Senegal’s PRSP II, in the past, government bureaucracy and red tape limited business growth. A comprehensive development strategy should facilitate innovative financing such as microcredit, in addition to government spending and international aid. However, regulation of such microcredit enterprises will be crucial in protecting against predatory lending practices.

I

Barack Obama was directly confronted on prime time television last night over allegations swirling around the internet that he is a secret Muslim who worships the Koran, during a Democratic presidential debate in Las Vegas.

Mr Obama, who was raised as a Christian by his white mother despite his Kenyan father being Muslim, has been dogged by smears and innuendo for months that he is in fact an Islamist trying to enter the Oval office by stealth.

“Let’s make clear what the facts are: I am a Christian. I have been sworn in with a Bible. I pledge allegiance [to the American flag] and lead the pledge of allegiance sometimes in the United States Senate when I’m presiding.”

Mr Obama is a member of Chicago’s Trinity United Church of Christ and is an actively practising Christian. But opponents, particularly on the Republican side, delight in reminding people that his middle name is Hussein, taken from his father, a Harvard educated economist who left the family when Mr Obama was two.

After a deeply acrimonious dispute between Hillary Clinton and Mr Obama over the issue of race, which has dominated the campaign for over a week, the two blamed aides and campaign surrogates for the controversy and jointly pledged, on Martin Luther King’s birthday, to put the matter behind them.

Yet both sought to gain the advantage on other issues. Mr Obama accused Mrs Clinton of taking a page from President Bush’s playbook with earlier statements that the next commander-in-chief could expect to be tested quickly by terrorists - and that the next president would not have time to learn on the job.

Mr Obama said: “When Senator Clinton uses the spectre of a terrorist attack… I think that is part and parcel with what we’ve seen, the use of the fear of terrorism in scoring political points, and I think that’s a mistake.”

Asked during the NBC debate whether she had meant to say terrorists would test Mr Obama more than her, Mrs Clinton replied, “No, of course not,” before adding, “it matters who’s president.”

The debate comes four days before Nevada’s Democratic caucuses. In contrast to previous contests in predominately white Iowa and New Hampshire, Hispanic voters and union muscle in Las Vegas will have a big say in who prevails.

Mr Obama has been endorsed by the state’s biggest union, but Mrs Clinton is being backed by several smaller trade organisations. This led her husband Bill to tell an audience in Nevada yesterday that Mr Obama was the “establishment” candidate in the Silver State and his wife the insurgent - a new interpretation on the Democratic race.

MUSLIMS are those who give themselves to the will of GOD.

“Obama.. was raised as a Christian by his white mother “

This is new news.

Obama’s mother, grandmother and grandfather were atheists and would not have raised Obama as a Christian.

This however is not my point. It’s not so much that “religion doesn’t matter”. Ideally, it shouldn’t. (not an oxymoron, an opinion) It’s that ever since 9/11, negative stereotypes towards Muslims have increased and thus, god forbid, if Barak Obama was “Muslim”, ignorant people would assume he would somehow bring about terrorism.

Obviously, I think as a nation we need to look at these issues more closely because issues like racism, sexism, and anti-islamic sentiments still exist today!

And yes, even though he is biracial if he chooses to identify as being black then he is black! So stop saying he isn’t!

I just think its sad how he has to keep conveying he is a Christian..it just shows you the white,male, christian dominated society of America.

Islam does not permit Muslims to convert. The penalty for renouncing Islam (apostasy) is death.

Obama did not have a choice. He was born to a Muslim father. In Islamic law, he is a Muslim. His father may have “renounced” Islam, but Islam regards that as apostasy,

Islam is not like Christianity, which requires a person to commit him/herself to Christ, in order to be admitted to membership of the Church.

Similarly, Islam does not recognize secular laws, so that our right to freedom of religion (or none) does not excuse someone who renounces Islam.

To put it another way, my twin brother was born jaundiced, but he ain’t yellow now. And it would seems decidely un-Christian of me if I were to accuse him of being secretly yellow now on the basis that he once was, through not fault of his own.

You might like to have a look at this, too:

http://urbanlegends.about.com/library/bl_barack_obama_muslim.htm

This is the link to Obamas “christian” church. See if it hits you the wrong way, as it did me.

Who is this man? All I know for sure is that there are millions of people who, like me, feel with something deep inside us, that there is something under the surface that seems….sinister.

So what if he was a muslim??

its 2008, not 1958 !!

Jerry (Miami, Florida), get your facts right. Obama was brought up by his Christian mother, so by saying that he’s not a Muslim, he is not denying his upbringing.

Bizarre racism. Has anyone thought that with one black parent and one white parent, one Christian parent and one Muslim parent, he might actually be capable of healing divides rather than creating them?

The people do indeed get the rulers they deserve. God help us.

Obama only has a muslim father who was not there for th best part of his life, he follows Christianity and thats exactly what he is and where his faith lays! So, why is it thats this is being blown out of proportion? Clinton is crafty and this is typical political tactics! WISE UP!

Isn’t the US supposed to be the land of the free, with any US born citizen allowed to achieve the highest office. Are we saying today that being a muslim disqualifies him from running for president? This whole debate shows the true nature of racism and anti-muslim feeling endemic in the US.

Is it a surprise that the muslim masses distrust the motives of the US when such a debate takes place?

Some US folks accuse us of interfering in their politics. But the President is the leader of the West let us not forget that.

It’s a pity that Mr Obama by virtue of what he defines himself has unwittingly introduced ethnicity in the Presidential campaign. This will no doubt help to destabilise this bastion of democracy.

People seem starry eyed about his credentials. But from here he appears as one of the many highly skilled motivational speakers that are so unique to the USA.

Hillary didn’t even cry when Bill had an affair. (My heart would be broken.) Do you really think crying over a tough race is gonna cause me to vote for Hillary?

How’s he going to do that then? Jump in a time machine, be born to a different mother, a black one? For crying out loud, you’ve just said in the first few paragraphs how his mother is white, so why do you perpetuate this insane label of him as black? He’s HALF WHITE, HALF BLACK.

HE IS NOT BLACK!!!

In my opinion all these religions are man made, if people want to practice a religion then they should keep it home and in their own circles and not let it interfere in the mainstream community at large.

However, sadly, i don’t think Mr Obama will win the nomination let alone the presidency cos along with these religious slurs and his race(though mixed) cos the US is not ready to vote in a capable non-white person in as president yet, maybe in 20 years or so. Shame though because i think Mr Obama represents the breath of fesh air that most people are gasping for.

I hope everyone does not believe the comments posted here. Research the questions you have, use reliable sources, and be guided by common sense.

How’s he going to do that then? Jump in a time machine, be born to a different mother, a black one? For crying out loud, you’ve just said in the first few paragraphs how his mother is white, so why do you perpetuate this insane label of him as black? He’s HALF WHITE, HALF BLACK.

HE IS NOT BLACK!!!

I fear that someone has been feeding you incorrect information about Mormons. Mormon worship services, which occur in chapels, have always been open to the public. If you are referring to temples, yes, those are closed to the public, but there is really nothing for the public to see, since no worship services occur in temples. Mormon temples are for ordinance work, such as baptisms, marriages, and the sealing of families together for eternity. Unless someone is participating in one of those ordinances, there is no reason to be there.

With regard to the subservience of women, you definitely are misinformed. Apparently you don’t know very many mormon women. Not a subservient crowd, and that is NOT a principle taught in the Church of Jesus Christ of Latter-day Saints. My understanding is that Huckabee issued a statement a few years ago about women being subservient to their husbands. Definitely not the mormons.

By many accounts, Nikita Khrushchev came away from the 1961 Vienna summit thinking that John F. Kennedy was a neophyte — and subsequently decided to test the new president in Cuba and Berlin.

Would Obama similarly acquit himself? Perhaps. But query whether today we can even afford a learning curve that, in the 1960s at least, allowed for a Bay of Pigs.

And JFK was much more of a realist than Obama. In his inaugural, JFK spoke of passing the torch to a new generation, but also noted that said generation was tempered by war — something Obama omits. JFK campaigned on the missile gap. He had commanded a submarine in the war, and his father of course was a legendary, perhaps even infamous, diplomat. He was much more John McCain than Barack Obama.

I could very easily see someone like Vladimir Putin testing Obama by, say, invading Georgia.

As long as he does a good job, that should be all that matters.

This has gone a long way to re-affirm my thoughts about the pointlessness of religion, and the problems it creates where none existed before.

However, some of the black enpowerment statements of Obama’s church would give cause for concern, except that Obama himself has refused emphatically to court the black vote, perhaps because he has moved beyond his unhappy childhood.

Clinton’s campaign is indecent.

“They alone seek leave of thee who believe not in Allah (God) & the Last Day & whose hearts feel doubt, so in their doubt they Waver” (Quran, al-Tauba 45)

I’ve a dream that Sen Barrack Obama will be the next and 1st black president of the united states of america……..He gat a good mission so lets all support him.

Obama constant need to affirm his “christian� identity, would never happen in the UK. In fact to me it is one of the most troubling aspects of his character. I find it strange that someone with a fairly multicultural non-ethnocentric liberal upbringing, should choose to “re-discover� his black identity and attend a church which is so afrocentric. Lets not forget that as child of an african academic, brought up by his white mother, with a racism free middle class upbringing, he has little in common with the former slave history of the majority black american experience. I am left to conclude either that Obama as a young man with presidential aspirations, cynically made this move to give himself a political base, or that he is a man of questionable judgment and intelligence. I would have been more impressed with him had he chosen not to make his (mixed)race an issue.

Don’t believe everything you read on the internet or what you hear down the pub.

It’s ill-informed and bigoted rambling like yours that makes me fear for the world, to be honest.

While I understand the radical stance of the church in historic term, this does pose some further questions about his core values.

‘Change’ in and of itself is not good. Just look at Britain. It has changed in the last twenty years beyond recognition and it’s a mess. I think he will struggle now simply because further scrutiny of his church and it political ties will undermine him.

And I believe the process has shown that America is not racist, simply that they are not willing to jeopardise their country and the world at large.

Had the issues been of race and not national securtiy I think they would have been brushed aside, as they should by any decent human being.

He is a Christian man with morals and values. I simply say leave the man alone, allow him to campaign, my choice in the beginning was Hillary, I am democrat and if she is the nominee for the party I am definitely voting Republican. Very disappointed in Clintons.

Definitely an Obama voter, lets speak truth, leave the lies out.

OK, he attended a predominately muslim school in Indonesia for two years, but he also attended a Catholic school for two years too. He only met his biological father once; his stepfather was not strongly religious; and his mother was actually secularist - she taught the young Barack to respect all the world’s religions. She took him to church at Christmas and Easter, Chinese New Year celebrations, Shinto shrines, Hawaiian burial sites. And in fact, the adult figures who may have had more influence on his values than anyone may have been his mother’s parents, who were from Kansas and raised as Baptists. Now what’s wrong with that?

I suspect that he will uphold the Constitution - he taught constitutional law at the University of Chicago. So no need to worry.

Go Obama, or Go Home!!

Remember, Iowa is 97% white and Obama won in Iowa to the chagrin of racists and bigots. Those interested in racism and bigotry could probably join the Ku Klux Clan and other organization dedicated to bigotry and leave our elections alone.

Go MITTSTER!!

Ingrid

He has an overwhelming lead in delegate votes to date. He even led in delegate votes prior to the big win in Michigan.

Only Mitt does well in all types of states in all regions of the country!! He consistantly finishes first or second!

Go MITTSTER!!

I will vote for him if Obama doesn’t win. He’s the only other sensible candidate.

Please note the maximum number of characters is 300.

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U.S. President Barack Obama and his wife Michelle attend the Presidential inaugural prayer service<!–

President Barack Obama, right, and first lady Michelle Obama dance together at the Neighborhood Inaugural Ball in Washington<!–

The scene is set at the US Capitol for Barack Obama to take the oath of office as 44th US president on January 20, 2009 in Washington

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Roger Biduk; Dow Ends Week With the Blues

Roger Biduk writes:

Federal Reserve sets stage for Weimar-style Hyperinflation

 

The latest Fed move is further indication of the degree of panic and lack of clear strategy within the highest ranks of the US financial institutions. Unprecedented Federal Reserve expansion of the Monetary Base in recent weeks sets the stage for a future Weimar-style hyperinflation perhaps before 2010.

THE WORLD today!

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1. Barack Hussein Obama took power as the first black US President - Hope for a Change - Yes we can -

A crowd that may have reached over two million people of all backgrounds celebrated as Barack Hussein Obama was sworn in as the 44th President of the United States, calling on Americans to join him to confront the economic crisis and wars, warning that there are many and serious problems caused through past mistakes, needing time to be met in a changed world, but making hope that they can and will be solved, appealing for unity. Coming Government initiatives of Democratic President Obama should receive a more comfortable support in a Congress, where the Democratic Party has strengthened its majorities in both Houses, in the House reaching 257 seats/up 21 seats remaining 178 seats for the Republican Party and in the Senate reaching 58 seats/up 7 seats leaving 41 seats to the Republican Party with one race still pending in Minnesota. Paying tribute to Dr. Martin Luther King, Obama called on Americans to help the needed, to contribute to their communities and to take part in public service projects! The President has already nominated Timothy F. Geithner, president of the Federal Reserve Bank of New York, involved and experienced in handling the financial crisis, the most immediate problem facing Obama, as his future Treasury Secretary, also naming former Treasury Secretary Lawrence Summers to head his Economic Council and Peter R. Orszog as Director of the Office of Management and Budget to review and downsize Federal budget, appointing former Federal Reserve Chairman Paul Volcker as Chairman of the new White House Economic Recovery Advisory Board, Shaun Donovan to be his Secretary of Housing and Urban Development/HUD, where he worked already during the Clinton administration, an increasingly important role as the economic crisis began with the mortgage problems, Mary Schapiro, with more than two decades of experience as regulator, as chairman of the Securities and Exchange Commission/SEC, urging to reform financial regulations, and Gary Gensler, a former Tresury Department official, as chairman of the Commodity and Future Trading Commission/CFTC.  Obama and his economic team cooperated with leaving President Bush to inject confidence into the market, coordinating rescue plans for Citigroup and Bank of America, urging Congress to release the second $350 Billion of the $700 Billion bailout fund and moving to stimulate consumer spending and housing. Obama confirmed Robert Gates, a moderate Republican, asking him to remain at least one more year as his Defence Secretary, naming his former rival Hillary Clinton as Secretary of State. The Democrats shaped a party platform setting principles that commits the party, declaring itself united behind a commitment that every American man, woman and child be guaranteed to have affordable, comprehensive health care, the expectation to complete withdrawal of US combat troops from Iraq within 16 months, promises of energy rebates to struggling families, pension subsidies, higher taxes for families earning over $250.000, for others tax brakes, Billions for economic stimulus, direct high-level diplomacy, without preconditions, in the case of Iran, negotiations to amend the North American Free Trade Agreements/NAFTA with Canada and Mexico, and more. Federal budget has increased to $3,1 Trillion from $1,8 Trillion; the gross national debt is actually more than $10,5 Trillion, more than the combined GDP of China, Japan and Canada, and adding Medicaid, Medicare and Social Security commitments, as a nation there is a $50 Trillion hole, an invisible mortgage of $450.000 for every American family. Energy independence, the war on terror and federal spending are all important issues to deal with immediately, surging the federal budget deficit to a near-record amount of $454,81 Billion for the fiscal year ending September 30/3,2% of GDP up from $161,53 Billion in 2007/1,2% of GDP and soaring the projected deficit for the coming year to  $438 Billion, which could increase another 83 Billion, to a record of $521 Billion, and up to $1,186 Trillion or more, considering proposals for another round of economic stimulus measures, credits for automakers, running General Motors and Ford out of cash, as well as tax-cuts, made by Congressional leaders and urged by Obama. His economic team  worked on an ambitious and significant economic recovery plan, called ‘American Recovery and Reinvestment Bill of 2009′, including permanent middle-class tax cuts, tax cuts for individuals and businesses could reach with about $275  Billion an important proportion of the new stimulus package , and the creation and preservation of 3 Million and up to 4 Million jobs during the next two years through large infrastructure investments, school and hospital modernisation and an energy savings program for public buildings, costing  up to $550 Billion, totalling tax breaks  and spending about $825 Billion, 5% to 6% of the US gross domestic product, to enter into effect as soon as possible after his inauguration on January 20. Probably Congressional leaders will be able to settle differences and find consensus to pass the bipartisan initiative by mid-February as expected by President Obama. To be effective the stimulus plan has to get the private sector going and revive general confidence! The Treasury Department has asked Congress to change terms of a recently approved $25 Billion loan for the car industry into direct loans, arguing the $700 bailout fund is not applicable, but a final decision keeps pending as the three carmakers presented their survival plans and needs under the worst scenario persisting recession until 2010, requesting GM $18 Billion, Ford $9 Billion and Chrysler $7 Billion, exceeding the total amount of $34 Billion the $25 Billion originally discussed. The White House and Congressional Democrats were close to agree on a short term rescue plan of about $14 Billion giving the big three carmakers  GM, Ford and Chrysler conditioned direct emergency bridge loans, creating a new White House position with enormous power the so callel ‘car szar’ and planning the United Auto Workers Union/UAW to seek for a stake in GM including a seat on its board in exchange  for concessions by its members, but  the initiative failed after Republican Senators opposed deal. Changing his restrictive position former President Bush allowed to use the $700 Billion bailout fund to help Detroit and announced a rescue package of $17,4 Billion, extending $13,4 Billion in emergency loans to General Motors and Chrysler in December and January with another $4 Billion eventually available in February, requiring that companies show they are financially viable by March 31, while Ford appears to be in a better financial position declining a short term assistance, pulling Kirk Kerkorian, the billionaire investor out of the company, selling his remaining shares. Meanwhile Fiat is closing a deal to take an initial stake of 35% in struggling Chrysler, aimed to help both carmakers. Obama had joined earlier this year a congressional delegation visiting Afghanistan, Kuwait, Iraq, Jordan, Israel, Germany, France and Britain to prove his foreign policy experience, discussing in Baghdad the future strategy and a time horizon for a withdrawal of US combat forces from Iraq, suggested to take place by the end of 2010, or earlier. The objective of his trip was to listen to leaders he has been visiting to get a sense of what their interests and concerns are, giving a clear message that if elected to the White House, America will intend to continue to show leadership but with a style less unilateral and building partnerships around the world, defending a strong relationship between the US and Europe and engaging more actively with Asia, the Middle East, Latin America and Africa. What Obama wanted to communicate on both sides of the Atlantic, the US and Europe, is the enormous potential of us restoring a sense of coming together! Reacting on the invasion of South Ossetia by Georgian forces, Russia’s massive assault on Georgia, a defiant show of strenght, produced, as expected, a measured response from Obama and a forcefully demand from former President Bush, requesting to stop military operations immediately and reciprocate without delay a ceasefire offered by the Georgian government, accepting President Medvedev a tentative peace plan brokered by French President Sarkozy, who visited Moscow on behalf of the European Union and signing a revised framework for a deal to halt fighting, made it clear that Russian troops will remain as peacekeepers in Abkhazia and South Ossetia, the two breakaway regions of Georgia pretending to join the Russian Federation. NATO foreign ministers urged President Medvedev to keep his word and pull out Russian combat troops from Georgia, sending former President Bush American troops to Georgia to oversee a humanitarian mission, monitor if Russia was honoring ceasefire and Russian troops were withdrawing from Georgia, deepening US commitment in this country, an important transit corridor for oil and gas from Central Asia and the Caspian region to the West. New US tensions with Moscow could produce a more hostile Russia disrupting international order and creating problems, although there is the desire of its economic elite, with close ties to Prime Minister Putin, to integrate with the rest of the world, being Russia also member of the Group of 8 major powers/G8 and existing the NATO-Russian permanent Joint Council. As both houses of Russia’s parliament voted to recognise the independence of the two separatist regions South Ossetia and Abkhazia, decree already signed by President Medvedev, the conflict moved from a military one to a political one, putting new pressure on Georgia and adding tensions with the US and the EU, taking Russia the risk to become more isolated. Since the conflict with Georgia, to become soon jointly with Ukraine member states of NATO, foreigners have very fast pulled out of assets and the stock markets in Russia, which came under unprecedented pressure and had to suspend trading, declining Russian foreign currency reserves, the world’s third largest, to $542 Billion. After the Russian Government pledged to boost liquidity by more than $100 Billion, the ruble denominated MICEX and the dollar denominated RTS both resuming trading surged sharply. Russia also announced it will cut the duty on oil exports helping its oil companies to save a total of $5,5 Billion. But the country is not immune to global credit crisis, falling its reserves further to $484 Billion, as authorities were spending about $125 Billion to support the devaluated ruble, the stock markets and the banking system to avoid a collapse of its economy, also hurt increasingly by dropping oil prices, which could produce a budget deficit, remaining volatility and sistemic risks in Russia’s financial markets, lowering Standard and Poor’s the country’s foreign currency credit rating, contracting Russi’a economy facing recession. The NATO-Russian Council failed to discuss crisis in Georgia, suspending NATO the Russian Council, and the European Union, conscious of its reliance on Russian energy supplies and a growing economic interdependence, declared to be prepared to resume a constructive dialogue with Russia, but would postpone talks on a real new EU-Russia partnership and cooperation accord unless Moscow withdrew its troops to pre-conflict/August 7-positions in Georgia. Finally Russian troops retreated from Georgia to the two enclaves of Abkhazia and South Ossetia, having Moscow established diplomatic relations with both. US-Russian relations are fragile and lack the necessary mutual trust, entering into a ‘ping-pong-ping’ diplomacy, hoping President Medvedev, who has launched a constitutional amendment to extend the presidential term from actually 4 to 6 years, on the arrival of the Obama administration to restore relationship. The White House was concentrating on the weakening US economy and to convince a skeptical public to support a $700 Billion rescue initiative for the financial sector. The new legislation creating the Troubled Asset Relief Program/TARP includes basic principles, such as protection of taxpayers obtaining warrants on equity from participating companies regardsless of whether the Government is purchasing mortgage related and other troubled assets directly or buying them through an auction process, helping to ensure that taxpayers benefit in the future if share prices of the firms increase; the US Treasury Department is required to establish a mandatory financial industry-funded program to guarantee the distressed assets it acquires through the recue plan; the US President five years from now will have to ensure taxpayers are reimbursed fully for expenditures under the bailout, having the financial institutions to pay for any shortfall; participating firms can chose to unload bad assets via US-Government acquisition or by participating in a financial industry-funded insurance program, paying participating firms in that fund premiums to insure those assets; a so-called Financial Stability Oversight Board has to be established; there will be help for homeowners facing foreclosure and limits on the compensation of executives whose firms take bailout money; the amount of $700 Billion is going to be splitted in three parts, starting with $250 Billion following another $100 Billion if needed, giving the Congress 15 days to object the final $350 Billion to be disbursed. After the first draft of the bailout package was rejected by the House, the Senate approved strongly on Wednesday evening 10/01/08 voting a new version of the financial rescue plan, including a proposal from both presidential candidates to raise the federal insurance limit for consumers’ bank deposits from actually $100.000 to $250.000 to restore public confidence, allowing the bill the Federal Deposit Insurance Corporation to borrow unlimited amounts of money from the US Treasury Department in connection with this larger coverage that would extend until the end of next year, backing also up the decision of the Securities and Exchange Commission to loosen rules to figure out the value of assets for which there are no buyers, adding also $100 Billion in tax breaks for households as well as business and individual tax reductions, and an extension of unemployment pay, winning as expected the revised measure Friday 10/03/08 by a comfortable margin the approval also of the House. Former President Bush signed this same afternoon the bill, one of the largest-ever government intervention in the economy, formally known as the Emergency Economic Stabilization Act/EESA, into law, expecting to prevent a crisis on Wall Street becoming a crisis in communities across the country. Working the US Treasury Department already to put the rescue plan into effect, it has the responsability to design an effective program to achieve its objectives, acting soon and properly and fairly price the assets it will buy, implementing total transparency around pricing to allow market accurately value its assets, probably outsourcing the work to run auctions and manage the assets to professionals. There is some hope the new legislation will help to deal with the worthening credit crisis, restoring a more freely flow of money through the global financial system and of credit to the economy to limit extent of recession! In a coordinated emergency move with the world’s most important central banks the Federal Reserve led official rate cuts by a half point, trying to stop further global economic damage, probably a first step to lower interest rates around the world. Creating the Money Market Investor Funding Facility/MMIFF to stimulate further credit markets the Federal Reserve will lend up to $540 Billion to a group of five specially created funds administered by J.P.Morgan Chase, that will buy up to $600 Billion of three-months unsecured and asset-backed commercial paper to provide liquidity to the money market mutual funds, taking the first 10% of losses, supplementing an earlier program under which the Federal Reserve planned to by commercial paper directly from issuers. The out going Bush administration, naming the Bank of New York Mellon under a contract lasting three years as master custodian firm overseeing the $700 Billion bailout fund, changed primary focus of its rescue package and is prepared, as a short time Government intervention, to spend up to the amount of the first installment of $250 Billion buying preferred equity stakes in major US banks, saying the fresh capital is not to hoard it but to deploy it, having lost valuable time to act on the worsening credit crisis, which translated into the actual international crisis after US-authorities decided not to save Lehman Brothers! Federal regulators announced they will guarantee for a fee new bank debt up to three years and extend insurance for non-interest-bearing accounts through 2009. Banks invited to join the US Treasury Department´s capital purchase program with the respective amounts proposed, encouraged to expand and look for mergers taking over competitors, are: $10 Billion each Goldman Sachs and Morgan Stanley, $25 Billion each Bank of America (including the soon to be acquired Merrill Lynch) and Citigroup, $20 Billion to $25 Billion Wells Fargo, $3 Billion Bank of New York Mellon, $2 Billion State Street Corp, another $125 Billion for smaller banks.  The Federal Reserve, planning the way to use part of the $700 Billion rescue fund to buy and renegotiate mortgages, as to address the underlying fundamentals of the crisis, is working closely with the Federal Deposit Insurance Corporation/FDIC which released a new plan to refinance mortgage loans of 1,6 Million households costing the Government an estimated $24,4 Billion. Also considers widening financial rescue to insurance companies buying equity stakes to improve their balance sheets and to help troubled US car sector through their financing arm. GMAC, the financial arm of General Motors, is becoming a bank-holding company after the Federal Reserve granted a respective request, getting access to capital from the $700 Billion bailout fund and to the Federal Reserve’s low interest short term emergency loans, announcing  the Federal Reserve  it will take a stake of $5 Billion in GMAC  against preferred shares paying a dividend of 8%, lending another $1 Billion to GM to help GMAC to reorganize itself as bank holding company, enabling GMAC to improve its financing offers to vehicle buyers. Putting the original plan to buy troubled mortgage assets on hold, facing fresh criticism from Congressional leaders over its handling of the bailout package, and giving priority to reactivate credit markets helping consumers, not accomplished with the capital injections into banks, as consumer spending is dropping causing recession, the Treasury Department said it will focuse on banks, non-bank financial institutions and consumer lenders, eventually requesting to raise private capital to qualify, to increase availability of credit to people and stimulate consumer purchase, reducing foreclosures and providing credit card loans, student loans and car loans. The idea is committing up to $800 Billion starting February 2009 to unfreeze the consumer debt market helping households and small businesses to borrow money, providing the Federal Reserve under a new Term Asset Backed-Securities Loan Facility/TALF up to $200 Billion in nonrecourse loans to holders of asset-backed securities supporting consumer and small business loans, including hedge funds, funding the Treasury Department through the Troubled Asset Relief Program/TARP $20 Billion to absorbe losses under the new program up to this amount. In addition the Federal Reserve plans to buy up to $100 Billion in mortgages held by Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Banks in an effort to improve their cash-flow and lower interest rates, purchasing another $500 Billion in mortgage-backed securities issued by these agencies. The Treasury Department disclosed guidelines for Systemically Significant Failing Institutions/SSFI program, it uses to justify emergency aid under the Emergency Economic Stabilization Act/EESA  out of the $700 Billion bailout fund, preventing disruption of financial markets to limit impact on the economy, protecting American jobs, savings and retirement security. The Senate approved release of the remaining $350 Billion of the $700 Billion bailout fund, while the House is expected to introduce with its vote stricter conditions on how to manage the package, considering also recommendations to create a Government owned ‘bad bank’ with the sole purpose to buy up the toxic assets from banks. As financial sector faces new huge losses requiring more Government aid, the Obama administration could consider to take over banks obtaining full voting rights, requiring that those banks write down their losses, before being recapitalized with taxpayers’ money to continue lending.  Their troubled assets would be placed into a bad bank until they can be properly valued and sold.

http://www.BarackObama.com/

http://www.WhiteHouse.gov/

http://www.WhiteHouse.gov/news/

“Organizing for America” http://my.barackobama.com/neworganization/

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2. Economic Outlook - Excesses & Consequences = Insolvency & Lack of Trust & Excessively indebted Government & Overindebted Households & Undercapitalized Banks & Oversized Financial Sector& Underregulated Markets & Speculations & Contracting Economy Wordwide in 2008 & Deepening Global Recession in 2009 - Market Adjustment - New Opportunities - Recovery -

The US economic growth fell sharply in the last three months of 2007, as the credit crunch took effect, slowdown triggered by a slump in building activity by 16,9%, the biggest fall in 25 years, collapsing housing prices, producing severe US financial market problems and progressively a global financial crisis causing recession. The prestigious independent National Bureau of Economic Research declared that the Nation has been in recession since December 2007, producing a significant decline of stocks, confirming negative economic projections, falling constructing spending 1,2% in October and manufacturing activity to the lowest level since 1982. Former President Bush signed a two year bipartisan $168 Billion US economic stimulus plan with tax rebates for consumers and tax relief for business to calm financial markets and help desesperate homeowners and the Federal Reserve has put into force liquidity measures with repeated interest rate cuts, taking into account the worthening financial crisis, high volatility of stocks and the deepening recession, cutting its key interest rate to a historic low, dropping target range for federal funds rate to between zero and 0,25%, level where it probably will stay for the moment, lowering the federal discount rate to 0,5%, coordinating emergency measures with the world’s most important central banks also reducing main and direct lending  rates. The US economy is weakening fast, falling consumer spending in October for the fourth consecutive month, which accounts for about 70% of the US gross domestic product, at an annualized rate of 3,7% in the third quarter and 1% in October, reporting most of the big retailers double-digit declines in October and November, dropping consumer confidence 23,4 points to an all time low of 38, and there is growing evidence that people begin struggling to meet their payments, declining housing prices and business investment, along with spreading unemployment reaching 6,8% in November, climbing claims for unemployment benefits to the highest level in 26 years and jumping jobless rate to a record high of 7,2% in December with a total of 2,6 Million jobs lost in 2008, while average unemployment rate is expected to hit 7,9% in 2009. Because of the financial crisis nearly 1 in 5 American households feel pressure because of tight cash and 1 in every 475 US households received a foreclosure filing in September. The US consumer price index fell 1% in October from the previous month, the biggest drop in 61 years, showing a new record decline of 1,7% in November, but remaining prices excluding food and energy unchanged. Manufacturing activity suffers declines worldwide, dropping in the United States in December to its lowest level in 28 years. Eroding consumer spending power and an eventual continued price decline, turning inflation negative, could produce a deflationary spiral. The IMF warned financial markets are fragile and there is still no end in sight to financial crisis, increasing its previous estimation on overall losses originated by the subprime mortgage crisis from $945 Billion to $1,4 Trillion, including loans and securities related to commercial real estate, the consumer credit market and corporations potential losses, requiring the global financial system in the coming 5 years fresh capital of about $675 Billion to mantain an at least modest credit growth. US car sales of Ford, General Motors and Toyota fell more than 31% and of Chrysler 53% in December in comparision with one year earlier, increasing concerns about the prospects for survival of US automakers. The car industry is facing sales problems worldwide as recession is deepening, announcing Toyota it will report an operating loss of $1,66 Billion for the fiscal year ending in March, the first operating loss in 71 years, lowering also its global vehicle sales forecast for this year to 8,97 Million, down 4% from one year earlier, having projected sales of 9,5 Million vehicles. With a drop of 11% against 2007 General Motors sold 8,35 Million vehicles in 2008 losing its position as the world’s largest automaker for the first time in 77 years to Toyota. US retail-sales declined another 2,7% in December and dropped 10,8% compared with one year earlier, a record fall since 1992. US-GDP grew 0,9% in the first quarter of this year, a seasonally adjusted healthy 2,8% in the second quarter, as exports were even stronger, far above expectations a few months ago, but economy contracted 0,5% in the third quarter and as recession deepened 5,7% in the fourth quarter, reaching a weak annual growth between 1,1% and 1,4% in 2008. US growth projections for 2009 have been adjusted to -1,7%/-2,2%, lasting recession at least until the second half of the year. The IMF  lowered its estimate for world growth from 4,1% to 3,7% or less in 2008, down from 5% in 2007, revising also global growth outlook for 2009 again downwards to 2,2% or less due to the severe global financial crisis with falling confidence of consumers and companies, afraid of a fast dropping demand, saying it will reduce again projections for 2009 to 1%-1,5%, as the industrialised countries face a full year contraction! The US one year inflation increased to 5,60% in July (including food and energy), but declined to 1,07% in November and 0,09% in December. The economic growth forecast 2008 for the 27-nation European Union is being revised downwards to 1,4% declining in 2009 to 0,2% and for the 16-nation Eurozone to 1,2% in 2008 dropping to 0,1% in 2009, while inflation rate outlook this year for EU is 3,9% and for the Eurozone 3,2%, but reached 3,7% in October in the EU and hit 3,6% in the Eurozone in September falling to 1,6% in December, where it is expected to average 2,2% in 2009. The European Central Bank/ECB alarmed about the financial crisis changing economic outlook, slowing economic growth worldwide and falling the Eurozone into a worsening recession after contracting their gross domestic product for the second time by 0,2% in the three months to September, suggesting projections that the economic decline will reach 0,5% in the final three months of the year, and taking into account the dropping inflation within its target of an annual rate of 2%, lowered its key rate in small steps from 4,25% in September to actually 2%, expecting the market possible future rate cuts. EU leaders reached agreement on an €200 Billion economic stimulus package, the equivalent of about 1,5% of the EU’s gross domestic product, coming €30 Billion from the European Investment Bank to increase lending to small businesses and for projects supporting renewable energy and cleaner transport, including €4 Billion in soft loans for the car industry, to strengthen recovery, avoiding a deeper and longer recession in Europe. Economies of the 30 member countries of the OECD are contracting, entering Germany and Japan into a recession, and the forecast for the entire group is that their gross domestic product will drop 0,3% in 2009, falling the US economy 0,9%, Japan 0,1% and Europe 0,5%. Developing countries will not be immune from a general slowdown of economic growth and recession among wealthier nations and withdrawals of money by worried investors reducing their exposure in more risky markets are going to push some local currencies to new lows weakening their economies, recommending the IMF to make the fight against inflation to one of their top priorities! BRIC countries Brazil and Russia, commodity producers and beneficiaries of higher commodity prices, will have with 5,6% and 6% respectively lower growth rates in 2008, while the somewhat frenetic growth in India and China, both commodity consumers, will also slow down temporarely and continue with estimated 6,8% and 9% respectively in 2008, projecting China a growth of probably 8% for 2009. A fast weakening global economic growth is producing a decreasing demand of commodities and lower commodity prices, easing pressure on inflation, and as the interest differential between the Euro and the Dollar remains in favor of the US currency the Dollar is getting stronger and gaining grounds against the Euro, at least temporary. The Federal Reserve and the world’s most important central banks acted repeatedly to inject cash and securities into the money markets to reduce persistent liquidity pressures, increasing also size of its cash auctions and currency swaps with the European Central Bank and the Swiss National Bank in nearly 50% to provide more Dollars to their banks, which are also holders of Dollar loans in the mortgage sector needing Dollars to meet their obligations. Due to continued fragile circumstances in financial markets the Federal Reserve extended emergency lendings for banks, introduced in March, until the end of January 2009 of next year and in a coordinated action the European Central Bank and the Swiss National Bank are also extending their operations to include auctions of 84-days funds. Since the subprime mortgage crisis cash rich Sovereign Wealth Funds (SWF) injected more than $80 Billion to recapitalize and rescue some of the world’s biggest financial institutions - Citigroup, Merrill Lynch, UBS, Morgan Stanley, Barclays, Standard Chartered, HSBC). In an emergency deal authorized by the Treasury Department and the Fed, JPMorgan Chase bought the troubled fifth largest US investment bank Bear Stearns reaching worth of revised deal about $1,2 Billion. JP Morgan Chase first-quarter earnings dropped 50%, Merrill Lynch reported worse than expected earnings for the first-quarter and Citibank lost $5,1 Billion in the same period, Wells Fargo’s profit fell 11% and Bank of America’s earnings 77% to $1,21 Billion, Goldman Sachs and Lehman Brothers confirmed both smaller than expected first-quarter profit declines of 53% and 57%. However Lehman Brothers announced a  net loss of $2,87 Billion for the second quarter ending on May 31, expecting a new record loss of $3,9 Billion for the third quarter after writedowns of $5,6 Billion, and after failing to reach an agreement with foreign investors and unable to complete a rescue plan is facing liquidation after filing for Chapter 11 bankruptcy protection, owing more than $613 Billion to creditors in the US, Europe and Asia. Barclays Bank, which walked away from a possible rescue of the investment bank because it did not obtain government guarantees, bought Lehman’s core US-broker-dealer-operations in a $1,75 Billion deal, turning itself into a universal bank, as Japan’s largest brokerage Nomura acquired Lehman’s flagship operations in Asia and its equities operations and investment banking in Europe and the Middle East. While the Federal Reserve, the European Central Bank and the Bank of England have taken steps to avoid potential risks and market disruptions, 10 of the world’s biggest private banks agreed to pool $70 Billion into a liquidity fund to support liquidity and reduce financial market volatility. The S.E.C. took emergency actions to stop abusive short-selling of stocks in financial institutions in difficulties and banned temporary short-selling of 799 financial stocks and jointly with the Financial Accounting Standards Board decided to loose fair value accounting standards, without changing underlying principles of the accounting measure, giving financial companies room to employ estimates and their own judgement to value complex mortgage related assets, but need to disclose their methods to investors. Goldman Sachs earnings dropped for the second quarter by 11%  to $2,09 Billion and for the third quarter in a troubled most challenging environment to $845 Million, down 70% from a year ago and announced a fourth quarter loss of $2,12 Billion, the first losing quarter since the company went public in 1999. Morgan Stanley reported a second quarter net income of $1,026 Billion, down from $2,363 Billion/57% a year ago, a third quarter net income of $1,43 Billion, 7% less than a year earlier and after three quarters of profitable results suffered a $2,3 Billion fourth quarter loss due to the difficult market conditions which impacted profoundly. The shares of this two last remaining US investment banks facing a crisis of confidence came under pressure and both Goldman Sachs and Morgan Stanley changed their investment banking model transforming themselves, with the approval of the Federal Reserve, into traditional bank holding companies, getting under stricter regulations as commercial banks protected by the federal safety net, requiring them to hold more capital in relation to their portfolio of investments. Morgan Stanley is negotiating to receive a capital injection from the Mitsubishi UFJ Financial Group, the largest Japanese Bank, suspending merger talks with Wachovia and discussions about increasing the participation of the China Investment Corp/CIC, already a shareholder with a 9,9% stake. As also Japanese markets begin to feel the financial crisis, announcing the Government it will supply public funds to the country’s lenders, Mitsubishi UFJ plans to raise up to Y990 Billion/$10,5 Billion in fresh capital to improve its balance sheet, after paying $9 Billion for a 21% stake in Morgan Stanley  and $3,5 Billion to take over 100% of the Union Bank of California. In an admirable demonstration of much needed confidence Billionaire Warren Buffett/Berkshire Hathaway plans to invest $5Billion in form of perpetual preferred shares in Goldman Sachs and will have warrants to buy another $5 Billion in common stock. Goldman Sachs is going to raise at least additional $2,5 Billion in common equity in a public offer. Citigroup posted a $2,5 Billion second quarter loss, reporting mortgage and credit related costs of $11,7 Billion, having lost more than $17 Billion in the last three quarters and taken about $55 Billion in writedowns and increased credit costs since mid-2007. The firm revealed a $2,8 Billion net loss for the third quarter, the fourth consecutive period, reflecting $4,9 Billion in credit losses and an increase of $3,9 Billion in provisions for loan losses. As Citi shares have fallen more than 60% in one week finishing Friday at $3,77, showing shares as stock market tumbles its lowest level in nearly 6 years with more losses feared, the bank’s largest individual shareholder Saudi billionaire Prince Al-Waleed Bin Talal announced he will increase his stake from actually 4,3% to 5%, considering the shares actually dramatically undervalued. According to a rescue plan, negotiated by worried regulators, the Government will grant loan guarantees of up to $306 Billion, backed by residential and commercial real estate, agreeing to cover up to 90% of the losses on those securities in exchange for $7 Billion worth of preferred stock earning a dividend of 8%, also  providing another $20 Billion against preferred shares, in addition to the $25 Billion already injected out of the $700 Billion bailout fund. Tightening Government control of Citigroup the company will have to absorbe $8 Billion already reserved to cover assets and $29 Billion of the first losses as well as 10% of the remaining amount of potential losses. After the rescue announcement Citi shares went up 66% to $6,26 on Monday, however deepening losses, declining confidence, additional capital needs, suffering more than other major banks from the financial crisis, force the financial giant to reshape its organization, considering to integrate its brokerage operation Smith Barney into a  joint venture with Morgan Stanley, receiving Citigroup about $2,5 Billion, leaving Morgan Stanley with a controlling 51% stake and the right to purchase all of the new unit over a period of up to 5 years. Citigroup reported for the fourth quarter a loss of $8,29 Billion, the fifth consecutive quarter loss, and for the full year 2008 a loss of 18,72 Billion, putting new pressure on the company to dismantle its money losing operations, isolating them into the new unit called Citi Holdings, keeping  its healthy key businesses in a unit called Citicorp. In a deal pushed by the Federal Government Citigroup had accepted to buy banking operations of the regional bank giant, mortgage troubled Wachovia with assets of $812 Billion for $2,1 Billion in stock, assuming $53 Billion in debt, agreeing the Government to share part of future losses that might be generated by Wachovia’s failing mortgage portfolio, however Wells Fargo announced it closed a $15,8 Billion stock deal, approved by directors of each company, to buy all of Wachovia, keeping the bank intact preserving the value of an integrated company without government support, providing a superior value for its shareholders to the transaction with Citigroup. Wachovia revealed a record third quarter loss of $23,9 Billion. It now appears that after Citigroup and Bank of America also Wells Fargo will need further Government help. Wells Fargo, the biggest bank of the West Coast, announced that second quarter profit dropped 23% to $1,75 Billion and reported stronger than expected third quarter earnings of $1,64 Billion. Merrill Lynch revealed for the second quarter a $4,65 Billion loss, taking $9,4 Billion in additional writedowns of troubled assets, posting losses of about $19 Billion for the past four quarters, having taken a total of $52 Billion in writedowns since the beginning of the crisis, and is planning to raise capital selling its 20% Bloomberg stake worth about $4,43 Billion, its controlling interest in Financial Data Services with an enterprise value of about $3,5 Billion and receiving $8,5 Billion in fresh capital from shareholders, including $3,4 Billion from Sovereign Wealth Funds Singapore’s Temasek Holdings, with an 8,85% stake its largest shareholder as of June 30, and the Kuwait Investment Authority/KIA. The company reported a third quarter loss of $5,2 Billion, against a loss of $2,24 Billion for the same period a year earlier. As difficulties continued requiring Merrill Lynch to raise even more capital, the company encouraged by the Federal Reserve, which officially approved its  merger with Bank of America, agreed to be bought in a rescue take over for about $50 Billion by the bank, making BofA the second largest financial institution in the world. BoFA said it made a fourth quarter loss of $1,79 Billion plus a $15,31 Billion loss at troubled Merrill Lynch, but is still showing a profit of about $4 Billion for 2008, receiving a fresh Government capital injection of $20 Billion, after having obtained already $25 Billion out of the bailout fund, making the Government with a 6% stake the bank’s largest shareholder, absorbing also against an additional $4 Billion stake in preferred stock with a yield of 8% up to $98,2 Billion in losses on illiquid assets of $118 Billion, 75% of those are from Merrill Lynch. Bank of America, which also purchased the troubled mortgage giant Countrywide earlier this year, reported a second quarter net income of $3,41 Billion, down 41% from a year ago, tripling credit loss provisions to $5,83 Billion up from $1,81 Billion last year, and a third quarter net income of $1,2 Billion, a third of the level of a year ago, planning to sell $10 Billion in stock to raise capital and half its dividend in an effort to overcome credit crisis. JPMorgan Chase posted for the second quarter a $2 Billion net income, down 54% from a year earlier, saying it will take total charges and other related expenses of about $10,5 Billion to clean up the balance sheet of Bear Stearns, the troubled investment bank bought earlier this year, revealing net earnings of $527 Million for the third quarter, declining 84% from a year earlier, with $3,6 Billion in mortgage related writedowns and increasing provision to $6,7 Billion to cover rising losses, after the bank bought in another emergency deal brokered by the Government, for $1,9 Billion almost all of Washington Mutual/WAMU, with $307 Billion in assets the nation’s largest savings and loan and among the worst hit by the housing crisis. WAMU account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100.000 and additional deposits will be backed by JPMorgan Chase, having to absorb at least $31 Billion in losses from this take over, creating a nationwide retail franchise rivalled only by Bank of America. JP Morgan Chase showed a modest profit for the fourth quarter of $702 Million and for the full year of 2008 a net income of $5,6 Billion, 64% lower than in 2007. The Bank of New York Mellon reported a 53% drop in third quarter earnings of $303 Million, down from $640 Million a year earlier. Important rating agencies, like Standard & Poor’s, blamed for awarding high ratings to subprime mortgage securities agree to reform some of their core business practices according to regulatory suggestions from the Securities and Exchange Commission/SEC. Confidence in banking sector sank, downgrading Standard and Poor’s 11 important banks, including Bank of America, Citibank, Goldman Sachs, Morgan Stanley, J.P.Morgan Chase, Wells Fargo, Barclays PLC, UBS, Credit Suisse, and Deutsche Bank.  The magnitude of credit related losses in the financial sector and continued concerns about major banks and insurance companies, in addition to growing speculations about deep troubles at major hedge funds and increasing doubts in relation with the unregulated credit default swap/CDS $54,6 Trillion market, are prolonging and deepening its negative impact on the stock markets and on the economy, taking financial stocks their worst losses in a generation. Investors withdraw about $150 Billion in December from hedge funds, which had borrowed also heavily money, and as hedge fund outflows increase they will have to sell assets, estimating analists that the hedge fund industry, which managed at its peak beginning 2007 about $2.200 Billion in assets, is going to shrink according to estimates by more or less 45%/$1.000 Billion due to withdrawals and investment losses. Also smaller regional lenders are becoming increasingly vulnerable, practicing American banks a new found caution reducing even business loans! The credit crisis has con

Tzadik Consulting: Why we are making another bubble

Yes I said it and others aren’t.  We are making another bubble right now.  I know this may not be what you have been hearing on the news, or even want to hear, but hear me out.  This is not looking back at the tech, housing, or emerging market bubbles, but rather making a call several years forward.  I was optimistic before 2008, but the fundamentals of our economy have changed in ways that it was difficult to predict.  Let me first explain how a bubble is created and why we are in the beginning stages of one right now.

We evaluate stocks based upon the price of the stock versus the earnings per share of the stock.  The average P/E based on 100 years of prior stock market history was about a 15.  The P/E in early 2000 hit almost 45, meaning that investors were paying 45 times earnings for a stock.  Many technology stocks were actually losing money, and some were even trading at several hundred times earnings, but this didn’t stop “day traders” from buying stocks repeatedly.  When the stocks were so expensive in early 2000, investors finally ran out of money and couldn’t afford to continue buying them, so finally the buying stopped.  Finally the selling began, and it didn’t end till the early part of 2003.  When prices are at very high “multiples” their earnings, cash flows, etc… start to not be attractive anymore.  The free markets will naturally correct this because when investments are overvalued the buyers will dry up.

This bubble occurred because anytime investors are buying stock (ownership) in companies that are losing money, which many of the technology companies at that time were, or companies that were very expensive in relation to their valuation, then the long term outlook for their performance can be disastrous.  Any technology investors of the late 90’s were left in shambles between 2000-2002.  Many companies went bankrupt or are have not recovered their share prices since this bubble burst.  In respect to the Nasdaq, which is a compilation of technology companies, this index hit ~5000 in March of 2000.  Today it is ~1500.  The  70% drop speaks for itself.

In early 2003 interest rates fell so low that people started to buy real estate.  The low interest rates, coupled with the federal government mandates for new home ownership lending let people buy homes that they never should have been able to purchase, and others buying many homes simply for an “investment.”  Suddenly the real estate broker became as hot as the stock broker in the later 90’s or the commodity broker in the late 70’s.  As with other bubbles, the prices rose year after year until the inventory became so great, and the cost of commodities to build everything rose so much, that the ability to generate income off these properties (i.e. renting the homes out) went caput. This lead to another burst bubble.  Anytime prices rise so high that the income, dividends, cash flow, etc., can’t justify a price of that magnitude, the long term outlook for those investments are not positive.

Ask yourself, what investments are the federal government, or rather the tax payers, investing in?  Are we buying companies at great valuations?  Companies that have clean balance sheets with free cash flow?  These questions could go on and on and the answer to them all is no.  We are currently building a portfolio of companies that can’t afford their employees, have failed business models, inferior management groups, and have no short term outlook to make money in the near run; not to mention many of these companies have no concept of what a “green company” should be.  Whenever we buy real estate, stocks, commodities, or any investment that is overpriced, it can take decades to recover that share price.  How long do we think it will take to work through all the credit card debt that consumers have?  Solve the commercial, industrial, and residential mortgage problem?  Remember everything has been financed including cars, yachts, and planes even.  Anything that has been financed is in trouble, and the companies that spotlight these are the banks and financial services companies that we keep pouring money into.  Don’t even get me started on the automakers.

The point I’m trying to make is that anytime we buy into investments that are overvalued, losing money, or on the verge of bankruptcy, the long term performance of those investments can be expected to be very poor.  When investors, or in this case the federal government via the taxpayers, create an entire portfolio of the worst companies on wall street.  We can even put ourselves in a deep recession, and if we continue to own the worst of breed that are publicly traded we can even enter a depression.  Everyone please remember, saving jobs comes with a cost.  That cost might just be a prolonged recession, or even a re-enactment of the early 30‘s.  With this said I think there are phenomenal investments out there now, at valuations we have not seen in ages both in the stock as well as real estate markets.  Those of Pfizer, Microsoft, Exxon Mobil, Allstate, WellPoint, and many others are at amazing valuations that are unbelievably attractive.  Down here in south Florida real estate is a buyer’s market.  Land and fractured buildings can be bought for almost nothing as long as there is cash to back up the offer.  Banks are dropping 15M mortgages for 5M just to raise cash.  Homes are going for the same discounts.

I want to leave this blog on two notes.  One that I think the economy is heading into waters that I think we haven’t seen for some 80 years.  Two, that anyone who has cash on hand needs to take a serious look at the markets out there.  Remember, valuation, valuation, valuation.  At Tzadik Consulting we’ve been extremely active in all aspects of the capital markets lately, and our portfolio of clients have been involved in some very interesting transactions of recent.   I always like to think outside of the box, ahead of the curb, and hopefully on the side of success.  Below is an amazing quote from a tremendous mutual fund manager.  Sometimes the shortest quotes hit home the best.

How is the Mortgage Industry In The UK Holding Up?

Thank you for your question Graham, sorry for the delay in reply.

As I see it, there is a fundamental problem in what Gordon Brown wants and is expecting to get from the major UK banks, and the causes that have brought this particular problem about.

A lot of the cheap lending that took place across the US, UK and mainland Europe was based on lending backed by assets. When it turned out those assets were based on Fannie Mae and Freddie Mac style repackaged subprime mortgage products that had been converted into CDO’s, not only did their value get wiped out, as the reality of this type of lending caught up with the banks, all the products associated with them (like Credit Default Swaps) also reversed from safe money-making assets into bad insurance policies that had to be paid out.

Now it can be said that moves have been made to stem these losses through government share purchases, the creation of a liquidity scheme to replace the private interbank lending that died when reality hit, and the moves to allow banks to swap bad assets for good Treasury bonds.

However, even though this is all well and good for the banks, and may just about keep them afloat (even RBS) it does not change the fact that all the industries that had created assets which backed the lending between 1999 and 2007 have now dissappeared. These assets that were part of what is being called the ’shadow banking sector’ made all this lending possible to home owners in the UK, and now it’s gone and is unlikley ever to come back, so too is the lending that made its way to UK home buyers.

So, although the Labour government keep playing the information game and convincing everyone that by saving the banks they can now order them to turn the lending tap back on, the potential profits from CDO’s (Consolidated Debt Obligations) and CDS’s (Credit Default Swaps) have gone, and the net book value that also allowed billions in lending to take place has also gone, there will be no immendiate return to what we’ve been used to in the past 8 years in terms of the high volume of lending.

It seems that this should be apparent to any policy makers looking at what has caused such destruction to the UK banking sector. Even though we see record losses posted (like the £20 billion by RBS in January) the Labour government, the Treasury and the FSA are still not allowed to mention this elephant in the room; the decimated CDO and CDS markets. In their twisted logic it probably has something to do with ’speak no evil, see no evil, and the situation will eventually go away as the market picks up’.

Fact is, that’s wrong. I don’t think any financial firm anywhere in the world, whether its banks or others, will allow subprime mortgages back into the game, so all we’ve got to look forward to is lending based on deposits which was the original core of real old style lending.

What is the longstanding affect from this disappearence of sufficient lending by UK banks? Well we’ve seen the first installment - the collapse in UK house prices. This unfortunatley is only the first wave of consequences.

Still to come we have the record repossession rates from Q3 & Q4 of 2009, and Q1 & Q2 of 2010 as the unemployment caused by struggling UK businesses combines with the real collapse in mortgage payments from people who have lost their income. This will further hurt the banks and restrict lending, and also see house prices dive further as banks swamp the auction houses with repossessed properties.

We’ll then start to hear talk of a bottom to the falls in house prices as its decided that house prices can’t fall any further and all the pain must surely have been dealt by now. Unfortunatley however that is only the end of the second wave of negative consequences.

The real end of days situation that marks the start of the third wave is when all the Labour governments’ economy-breaking spending pledges to help UK banks come back to haunt us. The first signs of problems are already on us, the price of UK bonds have collapsed. This is because as we make more promises of cash to banks with money we don’t already have, bond holders know we’ll be looking to sell about £800 billion new government backed gilts (bonds everywhere else).

The more you sell the more worried the market gets that you won’t meet the payments, so the price of them falls. Then there’s the fact that the new bonds will pay out less as the Bank of England have a very low interest rate, so the returns aren’t worth the risk, pushing prices down further. This then means that the government will need to sell more of them to raise the £800 billion it needs to fund its promises, further weakening our ability to pay the returns. At this point we’d expect to see the UK credit rating drop from ‘triple A’ as many people are  currently discussing.

How does this affect wave three of the housing market? Well, this will cause our currency to collapse and alongside the perpetually stupid idea of ‘Quantative Easing’ (printing money) which will cause a spike in inflation, we’ll see the Bank of England need to raise interest rates to counter these two problems. For UK homeowners this will mark the most devastating part of this economic collapse, because those who have hung on so far will see rising prices again and higher interest rates. As fixed rate deals are harder to get,  as banks have restricted lending, the index linked tracker mortgages and the variable rate customers will have swollen in volume and they’ll be hit by a higher mortgage cost. This will cause a new wave of defaults and reposessions, and result in a further drop in already depressed housing prices.

So overall how is the UK housing market holding up? Unfortunatley they haven’t even seen how bad or how far this depression will go, most have no idea what negative equity is or how it will bankrupt them when they get repossessed, and with 3 million unemployed by Q4 2009, they’ll wonder why no one ever warned them that a situation like this could occur.

As bad as things are at the minute, and as much as stupid people are seeing the ‘green shoots of recovery’ to entice more misguided purchases to take place, the mortgage industry is about to get a whole lot worse, and not stop getting worse for a long time to come.

At least that is how I see it. For rays of sunshine you have to be looking underground like all the UK policy makers are doing, with their heads buried firmly in the sand!

Cambodia Keeps Tax Breaks as Shortage of Cash Prevents Stimulus

From Bloomberg.com January 26, 2009:

Cambodia, reliant on overseas aid to finance a quarter of the national budget, said it will extend tax breaks for clothing manufacturers and invest in power plants as a cash shortage restricts its ability to provide economic stimulus.

“We cannot distribute cash to the people,” Hang Chuon Naron, secretary-general of the Ministry of Economy and Finance, said in a telephone interview from Phnom Penh on Jan. 23. “What we can do is give targeted tax cuts to garment factories and spend more on infrastructure so we can prepare for economic development in the future.”

Cambodia needs to reduce business costs because it can’t afford the stimulus measures adopted by richer neighbors Thailand, Singapore and Malaysia. The International Monetary Fund said the economy, Southeast Asia’s second poorest, may grow 4.75 percent this year, the slowest pace in 11 years.

Opposition leader Sam Rainsy said the government should ask for more grants and loans to fund a $500 million stimulus package he has proposed. The money would go to stabilizing crop prices and the construction of irrigation and road networks, he said.

“The Cambodian government is disconnected with reality and when the fallout materializes, it will be a terrible awakening,” Sam Rainsy said in an interview from Phnom Penh. “Every country around the region has announced a stimulus package, but Cambodia has done nothing so far.”

The government will extend a 2006 profit tax exemption for garment factories until the end of this year, Hang Chuon Naron said. That will help cut costs for an industry that accounted for 12 percent of gross domestic product in 2007 by supplying clothes for retailers such as Gap Inc. and Stockholm-based Hennes & Mauritz AB.

Donor-Funded

The tax breaks will be coupled with donor-funded investments in rural roads, power plants, irrigation systems and telecommunications networks, he said. More than two-thirds of the nation’s labor force work at least some of the time in the countryside, according to the Economic Institute of Cambodia.

Tourism, construction and garments, which together make up more than 60 percent of the economy, all face threats to growth this year, Hang Chuon Naron said. The number of foreign visitors may fall by 20 percent, construction will slow and garment exports might drop more than the 2 percent decline in 2008, he said.

“It’s very difficult to make a judgment about garment exports this year because we don’t sell high-end products,” he said. “We have to look at the real figures for the first quarter, which will be crucial.”

Dwindling Factories

The number of garment factories fell 10 percent to about 260 last year, leaving 20,000 workers without jobs, said Roger Tan, secretary-general of the Garment Manufacturers’ Association of Cambodia. The industry, which employs about 320,000 of Cambodia’s 14.2 million people, sells 70 percent of its products to the U.S., where retail sales have fallen for six straight months.

“Even if factories want to operate on the same scale, they may be forced to reduce their scale on account of reduced credit lines,” Tan said in an interview. “Buyers in Europe and America are telling us to ship on consignment.”

Cambodian lawmakers last month passed a $1.8 billion budget for 2009, increasing spending by a third from last year. The passage came days after donor countries pledged $950 million in aid, almost 40 percent more than they offered in 2008.

Last year marked an end to four straight years of economic growth in excess of 10 percent spurred by foreign-investment friendly policies such as 99-year leases for agricultural land, tax holidays and low import tariffs. The boom helped Prime Minister Hun Sen’s party win 73 percent of seats in a July election.

Stock Exchange

The country plans to open its first stock exchange in December, undeterred by a global financial crisis that halved the value of markets in neighboring Thailand and Vietnam last year. Government coffers may soon get a boost from petroleum concessions in the Gulf of Thailand, where Chevron Corp., the second-biggest U.S. oil company, struck oil in 2005.

The government doesn’t have many options to boost the economy besides tax cuts and tackling corruption to ensure a more efficient use of donor funds, said Kang Chandararot, an economist with the Cambodia Institute of Development Studies. Transparency International, a global non-governmental organization, ranked Cambodia 166 out of 180 countries in its 2008 Corruption Perceptions Index.

“Not wasting the money we received from donor countries is the only way to induce private investment,” he said by phone from Phnom Penh. “Confidence in the real estate and construction sectors is in free fall.”

US - Housing Starts, Permits in U.S. Slump to Record Low

Jan. 22 (Bloomberg) — U.S. builders broke ground in December on the fewest houses since record-keeping began as sales and credit dried up, signaling the real-estate slump will keep hurting economic growth.

Housing starts fell 16 percent last month to an annual rate of 550,000 that was less than forecast and the lowest since the government started compiling statistics in 1959, the Commerce Department said today in Washington. Building permits, an indicator of future projects, were also at a record low.

Builders, whose shares have lost 76 percent of their value over the last three years, are slashing prices to compete with a record number of foreclosed homes coming onto the market. Barack Obama’s advisers say the president will use up to $100 billion in financial-rescue funds to ease the mortgage crisis.

Another government report showed the number of Americans filing first-time claims for unemployment benefits rose last week, matching a 26-year high. Initial jobless claims increased by 62,000 to 589,000, more than forecast, in the week ended Jan. 17, according to a Labor Department report today in Washington.

Worse Than Projected

Economists had forecast starts would drop to a 605,000 annual pace from a previously estimated November rate of 625,000, according to the median of 69 forecast in the Bloomberg survey. Estimates ranged from 500,000 to 688,000. November starts were revised up to 651,000 in today’s report.

For all of 2008, starts dropped 33 percent to 904,300, down from 1.335 million in 2007 and also the fewest since records began.

Building permits fell 11 percent in December to a 549,000 annual pace. They were forecast to drop to a 600,000 pace, according to the Bloomberg survey.

Home prices dropped 1.8 percent in November, the biggest decline since records began in 1991, the Federal Housing Finance Agency reported today. Values were own 11 percent from the peak reached in April 2007.

Construction of single-family homes dropped 14 percent to a 398,000 rate, today’s report showed. Work on multifamily homes, such as townhouses and apartment buildings, decreased 20 percent from the prior month to an annual rate of 152,000.

Regional Breakdown

Housing starts declined in three of four regions of the country, led by a drop of 25 percent in the Midwest. Starts rose 13 percent in the Northeast.

The National Association of Home Builders/Wells Fargo index of builder confidence slumped to a record low for January, the Washington-based association said yesterday.

U.S. foreclosure filings in December were 41 percent higher than a year earlier, pushing up the inventory of unsold homes, RealtyTrac Inc., a seller of default data, said this month.

Obama’s National Economic Council Director Lawrence Summers said last week the president intends to use between $50 billion and $100 billion of the remaining half of the $700 billion bank- bailout fund enacted last year to address the foreclosure crisis.

Falling borrowing costs have yet to reverse the downturn in sales. The average rate on a 30-year fixed mortgage fell to 4.96 percent earlier this month for the first time on record, Freddie Mac said in a report last week.

KB Home, the fourth-largest U.S. homebuilder that caters to first-time buyers, reported a $307.3 million net loss on Jan. 9 for the fourth quarter and said the housing market would remain difficult this year.

“The housing industry continues to confront unprecedented downward pressure,” Chief Executive Officer Jeffrey Mezger said in a conference call with analysts and investors. “These conditions persist nationally with no visible signs of lessening in the near term.”

Source: Bloomberg

Bob Chapman - International Forecaster - 25th January 2009

By: Bob Chapman, The International Forecaster

Posted Sunday, 25 January 2009

The following are some snippets from the most recent issue of the International Forecaster.  For the full 37 page issue, please see subscription information below.

US MARKETS

We are not going to belabor this point but it is deadly important. Private equity investors and professionals are pulling their money out of banks. A professional run on banks has begun. If you have CDs or funds in banks that exceed six months of operating expenses remove them immediately. Your alternative is gold and silver related assets or Swiss franc Treasuries. If you need help email me or call 1-800-375-4188.

Our Treasury is going to have to raise over $2 trillion to fund fiscal needs in the next six months, which will be no easy feat. Will foreigners continue to fund such massive reckless spending? We do not know. We do not believe they want too, but do they have much choice? They are holding 64.5% of their foreign reserves in US dollars. The US Treasury’s needs for funds are enormous and fulfilling those needs will be very difficult. Are US Treasuries still the world’s safest investment? We do not believe they are. Today this is a false perception, as it has been several times in our history. History is replete with other major nations defaulting on their bonds and arbitrarily devaluing their currencies in the last 150 years. The bottom line is there are no safe bonds or currency from any nation. Gold always has been and always will be the only safe option.

Today we have zero interest rates or for that matter negative rates if you consider the loss via real inflation. Owners of US debt are losing at least 10% annually on their investment. Our unprecedented expansionary monetary policy can only end in disaster via hyperinflation and default and devaluation. Even a 10% yield in today’s market cannot compensate for the loss in buying power.

The creation of American debt is totally out of control and there will come a time when foreigners will be forced to say no – no more. They will be under enormous pressure from their own constituents. Besides, who is capable of funding such debt? China and Japan are loaded up. Oil producers are in a bind. England is on the edge of bankruptcy, as are Ireland and Spain. Perhaps Germany and France can help. We do not know who’ll attempt to help, but more than $2 trillion in a year is a lot of money. We do not think it can be done and that means the Fed buys the Treasury’s bonds, bills and notes by creating more fiat money monetizing the debt and sending inflation straight into the stratosphere. That means much higher gold prices are in our future.

There is no flight to the dollar. There has been a flight from other currencies to the dollar for several reasons and those reasons are now history. We could see the dollar again test the upper limits on the USDX at about 88, but that should be it. We expect the dollar to firmly put in a double top. In fact, we may well never get to 88, which often happens in situations like this. The dollar has gone up as much as it is going too. Can you imagine what a dollar at this level will do to exports? It will probably cut GDP ½% to 1%, and at this stage that would be most unwelcome.

The dollar is going lower versus other major currencies, which have all just fallen versus the dollar over the past five months. Next all the currencies will take a bath versus gold. As an aside, events in Europe are horrible.

England and Europe are trapped in depression and England is bankrupt. In Greece and in the Baltics and South Balkans they are having the worst riots in almost 20 years. S&P has cut Greek debt to near junk and the bonds of Italy, Spain, Portugal and Ireland are on negative watch. As we told you before this is a worldwide catastrophe. There will be no decoupling. Ireland has nationalized the Anglo Irish Bank, the biggest bank in the country. The social fabric is being torn as it soon also will be in the US and other countries. The entire world is entrapped in a web created to bring about world government.

Latvia’s streets look like a war zone, but little of this carnage reaches us via the US media. This is important, as are the riots in Greece. They were all about economic and financial failure and no jobs. This is going to happen worldwide.

As we’ve said, the major financial institutions in the US are broke. The Fed and Treasury know and a few in Congress. The rest of our legislators do not understand or want to understand. Congress is only interested in payoffs and pedophilia. These are the same people who allowed $350 billion in TARP funds to be stolen.

There is no question now but Bank of America and Citigroup are broke. Plus banks in Canada and Europe. You can add JP Morgan Chase and Goldman Sachs. They went a bridge too far. These are banks and investment banks owned or controlled by the Illuminist Black Nobility. The connections in these stocks and others are just the prelude to oblivion. Wait until the derivative bomb explodes.

As the Baltic Dry Index falls 95%, oil and gas prices are decimated. Oil falls from $147 to $35.00 a barrel in order to destroy OPEC in another power play. In the end Russia will emerge as a winner. This is how fascism works.

Our new President tells us he is committed to pressing China on its currency practices. Don’t hold your breath. Just more political posturing.

President Obama is freezing salaries for top White House aides and will put in place new stricter ethics and lobbying rules.

He also said he will change the way the FOIA (Freedom of Intermation Act) is interpreted. There will be more transparency. He will err on the information release side.

The CBO says only $136 billion of the $355 billion that House leaders want to allocate to infrastructure programs will be spent by October 1, 2010. The rest will be spent after the recession/depression is projected to have ended. The report does not analyze the entire $825 billion stimulus package.

Building industry economists who have been perpetually wrong, see a deepening correction this year – see no recovery until 2010. We say more wishful thinking. Inventory of unsold homes is 11.5 months. That won’t be reduced anytime soon.

The ISM Index of factory activity was 32.9 versus 32.4 originally reported for December. The non-manufacturing index was 40.1 in December versus 40.6 previously reported. What poor reporting.

The NAHB/Wells Fargo Housing Market Index was 8 in January, down from 9 in December. Chairman Sandy Dunn says, “Clearly conditions in the nation’s housing market are not getting any better until the federal government takes substantial action to encourage qualified buyers to get back into the market.”

The gauge of current single-family homes sales fell to 6 from 8. The index of sales for the next six months increased to 17 from 16. The prospective-buyer traffic measure also climbed to 8 from 7.

They say through the end of 2009 housing prices will have fallen 45%, a broad countrywide number.

The S&P/Case-Shiller Home Price Index fell 25.3% from March 2006 to October 2008. The expectation is for a 29% fall in 2009. Houses are going to fall to 1995 levels and we could see 1981 levels.

Me vs. the market: Do I know what I

One reader, CD, left this comment on my previous post on the market:

Hey smart alec,

Stay away from stocks, funds, bonds, unlesss you know what you are doing. In the sense spending at least 20 hours/week on investing and constantly monitoring the markets.

Sell every freaking fund and put them into money market account, preferably a t-bill only.

Having said that if you still would like to go long and invest, here is my advice for you:

- Never ever buy a single stock, especially nowadays. It is simply too risky.

- Always be a trend investor on indexes. Think about what will happen in the next two to six months. For instance, bank stocks may go up a little due to more “free” money thrown at them.

- Understand put/call options and how they work. How you can utilize them to set your selling and buying points.

- Understand the bond market. It is ten times larger than the stock market and usually a good indicator of the overall economy.

- Watch CNBC, Bloomberg, even Cramer. But never ever buy or sell based on their advice. They are always providing you what is already priced into the market and usually do not give you the full picture.

Good luck.

I disagreed with certain points of this comment, namely, that I would need to spend 20 hours a week monitoring the market before I put money in stocks or funds. However, CD’s words gave me a lot of food for thought… in that, do I really know what I’m doing?

I have an understanding of general macroeconomic conditions and the workings of stocks and bonds. I also have an academic knowledge of calls and puts, but I certainly don’t’ follow the market as closely as CD suggests, nor do I engage in call or put options.

So, given all of the above, am I ready to invest in this market?

I think so.

There are two types of investors that should do well:

I think some of CD’s advice works for Investor Type #1. I, however, am Investor Type #2. I am a buy-and-holder. I DON’T have 20 hours a week to study the markets. And even if I did, I don’t think I can select the winners, year in, year out. This means that I am content with market returns.

So, I invest in index funds with very low expenses, and I intend to hold these funds for a VERY long time. My time horizon is 40+ years, so I think it IS okay (in fact, it might be beneficial) not to follow the market every single day (even though I do, though I never act on it). I don’t want to be an emotional investor.

This market has scared me, because I AM afraid that “this time it’s different,” that all the things we’ve learned from the past no longer holds true. This is my first real bear market, and it’s not fun watching my “little purse” shrink even further.

But to sell everything and put all my money into T-bills would be a reaction motivated by FEAR - and truth be told, I am just NOT that afraid right now. It might be naivete, or the lack of responsiblity for anyone but myself, but I’m feeling okay about the current market right now. (I probably won’t be if the Dow is still at 8,000 in ten years… but for now? I’m good).

And my purse might be little now, but I believe that with a diversified portfolio and consistent savings (and a couple pieces of cash-flow positive real estate holdings in the future), I will have a good chance of achieving my financial goals. I might be petite, but don’t be fooled - one day, I’m going to carry a big purse.

Can Islam Save The Economy ?

Jim Rogers

This is a calm and logical interview that gives a basic overview of what’s happening economically.

I had heard his name before but just looked at videos of his today. I like that he’s calm and not alarmist. Peter Schiff is good at capsulizing, and Max Keiser is entertaining and informative, but Jim Rogers is the most respected on the whole, and I like this interview.

For people who are living month-to-month the thought of investing and commodities and all these things is too overwhelming, but understanding that if the governments print more paper money then it means there are more ‘dollars’ to pay for the same amount of food and other products. This means everyone is willing to pay more to get their share, which means that prices rise. It’s supply and demand. So if we look ahead and know that prices are going to rise, and that these economists who have a history of being correct say it will really, really rise soon, then it’s wise to spend a percentage of your monthly income on buying extra food and other needs now. People used to have a pantry and it’s a good idea. There are already food shortages on shelves in America. These economists are saying it will get much worse and we’re entering an economic winter.

u.s. will pay (but of course)

War-related defence spending and civilian aid will boost Israel’s budget deficit and increase borrowing, said former treasury official Yoram Gabai, who is now the chairman of the Pe’ilim fund management unit of Bank Hapoalim. Raising the money at home might impede central bank efforts to cut borrowing costs and revive growth. “The government must use the US loan guarantees to raise money abroad - a step that needs US approval - to prevent a problem in the domestic market,” Gabai said. In 2003, the US awarded Israel as much as $9b in guarantees. The rise in costs comes as growth eases and tax collections may decline. Morgan Stanley predicted the economy would stagnate next year, after expanding at an average rate of 5% in the past five years. Last year the TASE’s benchmark index posted its biggest annual loss since 1983. Israel’s budget deficit might widen to as much as 6% of GDP this year, up from about 2.1% last year, as tax revenue falls 5%, according to Vered Dar, the chief economist at Psagot Investment House. The central bank has cut its benchmark rate by 2.5% in the past three months to a record low of 1.75%. The index rose 5% during the recent Gaza operations, which investors anticipated would have little effect on the economy. The shekel gained about 0.5% during the conflict. S&P and Moody’s retained their rating for Israeli sovereign debt in reports issued during the fighting. S&P reiterated its A rating and stable outlook on Tuesday, citing the government’s “commitment to continued fiscal discipline”. Moody’s retained its A1 rating in a Jan 7 report. The war had “minor” direct impact on the Israeli economy, trimming just 0.1% off economic growth, Gabai said.

PRINCE ALWALEED

Meltdown: Iceland on the brink - World warned of ‘food crunch’ threat

Décryptage, Analyses, Veille - Downside The World News

 

http://www.independent.co.uk/news/world/europe/meltdown-iceland-on-the-brink-1515753.html

 

 

 

 

http://www.ft.com/cms/s/0/a3efea7e-eafc-11dd-bb6e-0000779fd2ac.html?nclick_check=1

 

 

January 26, 2009 at 5:55 pm

TKS Solutions Unveils New Tax Reporting and Private Equity Capabilities for Penny Partnership and Accounting Software Solution

TKS Solutions Unveils New Tax Reporting and Private Equity Capabilities for Penny Partnership and Accounting Software Solution

Enhancements Give Investment Firms Expanded Performance and Productivity

Mt. Kisco, NY (PRWEB) January 26, 2009 — TKS Solutions LLC, a provider of partnership and shareholder accounting solutions for the financial industry, today announced enhancements to its flagship software Penny® - It Works. New capabilities include expanded tax reporting features, intelligent master/feeder linkages and tranche or deal-based private equity allocation options.


Contact Information

[Via http://www.prweb.com]

Gold as an Inflation Hedge

Few more articles about investors using gold as a potential inflation hedge.

Greenlight Capital

Our current chairman of the Federal Reserve, Ben Bernanke, is an “inflationist.” When times were good, he supported an easy money policy. Even when the Fed raised rates, Bernanke took great pains to give the markets many warnings to insure that the higher rates wouldn’t break up the credit party, i.e. bubble formation. Now that the cycle has turned, the Fed has promised to resort to “all means necessary” to head off the effects of the collapsed bubble. Rates have effectively been lowered to zero. The Fed is making loans collateralized by toxic waste and has now begun a policy called “quantitative easing” — a fancy term for “printing money.” The size of the Fed’s balance sheet is exploding and the currency is being debased. Combined with an aggressive fiscal policy, it is clear that the authorities are going “all-in” to try to mitigate the near-term effects of the economic collapse. Our guess is that if the chairman of the Fed is determined to debase the currency, he will succeed. Our instinct is that gold will do well either way: deflation will lead to further steps to debase the currency, while inflation speaks for itself. We have bought gold, calls on gold, an index of gold mining stocks (GDX) and calls on higher long-term U.S. interest rates. We have also moved some of our cash into foreign currencies, particularly the Japanese Yen.

January 26 - CAT to dump 20,000 - Sprint to disconnect 8000 jobs - ING withdraws 7,000 jobs - Lights out for 6000 at Phillips - Pfizer/Wyeth to cut 8000 jobs - Home Depot to ax 7000 jobs - GM slashes 2000 more - IBM chopped at least 1400 - Lincoln Financial exits 540

Mike: This week is shaping up to be tough for job losses as CaterpillarING GroupSprint, Pfizer,  Home Depot and Philips  have already announced thousands of job cuts this morning.  This is also a big week for economic reports and those readings will indicate if the recession is getting worse, or if it is slowly improving. The majority seem to think that the readings will reflect a weakening economy. 

 

US companies announced they’re cutting 45,000 jobs by 9 am Eastern Time on Monday morning, even before the US stock market opened, according to a quick count by Raw Story.

 

 

- Microsoft/Google/IBM/Yahoo  News & Rumors -

 

via Yahoo! Profits Likely Down, More Layoffs Possible - Forbes.com.

 

ADOTAS — Yahoo will be releasing its Q4 results tomorrow, with analysts expecting a revenue and profit drop.

While Yahoo’s search will still be strong, display advertising,  its main business,  is expected to show the biggest dip. Despite massive layoffs, ‘giddy like school girls’ investors will want more cost cutting and a clear plan to win back market share from Google and others. It’s unlikely that they will get that tomorrow.

via Yahoo leaks and more cuts could loom » Adotas.

 

The firings took place in the sales and distribution unit, according to a copy of a Jan. 21 separation agreement sent by Lee Conrad, national coordinator for the Alliance for IBM. The organization, which is seeking union recognition at IBM, said similar cuts probably were made at the company’s software unit.

 

- General Economic News -

 

Mike: This weeks economic numbers include:

 

Mike: Both reports came in better than expected, but with caveats: Home prices plunged, which is great if you’re buying but bad if you’re selling or trying to get a home equity loan. The LEI number was better only because the fed pumped more money into the system. 

* Update: NEW YORK (AP) — A flood of federal bailout money pushed a private research group’s monthly forecast of economic activity unexpectedly higher in December, while a decline in home prices boosted housing sales.

- Existing home sales rose 6.5 percent in December to an annual rate of 4.74 million units, as the median home sales price plunged 15.3 percent to $175,400 from $207,000 a year ago. The decline is the largest year-over-year drop in records going back to 1968.

Separately, the New York-based Conference Board’s monthly forecast of economic activity increased 0.3 percent in December. Economists surveyed by Thomson Reuters had expected a 0.3 percent decline.

- If the jump in the money supply had been excluded, the index would have dropped a hefty 0.6 percent in December, said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y.

With most components falling steeply, the Conference Board said unemployment could rise to 9 percent from 7.2 percent as the country remains in an intense recession through spring.

via Leading economic indicators, home sales rise - Yahoo! Finance.

 

* Jan. 26 (Bloomberg) — More U.S. companies project they’ll pare staff in the next six months as pessimism mounts the economy will contract this year, according to a survey by the National Association for Business Economics.

The poll’s net employment reading fell to a minus 22 this month, the lowest level since 2001, from minus 15 in the previous survey in October, the report showed today. More than three- fourths of the participants forecast the economy will shrink this year, twice as many as in the last survey.

via Bloomberg.com: Worldwide.

 

* Raleigh | The number of North Carolina workers who want a job but can’t find one remains at an all-time high, with nearly 400,000 of the state’s residents out of work, according to statistics released Friday.

The jobless rate hit 8.7 percent in December – the highest level since the recession of the early 1980s, when the rate reached 9 percent in June 1983. The national unemployment rate was 7.2 percent, marking the 11th straight month North Carolina’s rate was above the national average, according to the Employment Security Commission of North Carolina.

via N.C. unemployment in December rises to 8.7 percent | StarNewsOnline.com | Star-News | Wilmington, NC.

 

* For the second time in five years, the state Unemployment Insurance Trust Fund is set to go broke – big time broke.

The fund that pays benefits of up to $450 a week to the jobless sank into the red for the first time in its 60-year history in 2004. California borrowed $214 million from the federal government to continue paying benefits.

via California unemployment fund nearly out of money - Sacramento News - Local and Breaking Sacramento News | Sacramento Bee.

 

* The gusher of venture funds that flowed into the biotech field thinned significantly in the fourth quarter of last year. With risk-taking out of fashion, VC investments plunged 33 percent in the last three months of 2008. And biotech investing dropped 31 percent, according to a report from PriceWaterhouseCoopers, the National Venture Capital Association and Thomson Reuters.

 

- Municipal News -

 

* BOSTON — For the people who put together budgets that oversee everything from police patrols to garbage collection to schools, this will be a momentous week.

Gov. Deval Patrick has a Wednesday deadline to file two documents that could reverberate in local government circles for years.

He must file a plan to close a $1.1 billion budget shortfall this fiscal year — something he has said will include $128 million in midyear cuts to local aid. He also will file a proposed budget for fiscal 2010 on Wednesday, with even deeper cuts — $375 million — to cities and towns.

via SouthCoastToday.com: Patrick set to outline cuts.

 

*BATAVIA — Declining budgets and a pay raise requirement have led to layoffs at the Clermont County Jail.

Sheriff A.J. Rodenberg said Monday that four jail officers will be laid off in March and a 32-bed cellblock will be shut down.

via Clermont Co. To Lay Off Jailers, Shut Down Cellblock - Cincinnati News Story - WLWT Cincinnati.

 

* The Phoenix City Council next week will consider budget cuts for Phoenix Sky Harbor International Airport.

The airport plans to cut close to $16 million during the 2009-2010 budget year, which begins July 1, while cutting 47 positions.

 

 

- US and some Canada News -

The job cuts, equal to 5.4 percent of the workforce, are part of a plan to reduce operating expenses by 1 billion euros this year, Amsterdam-based ING said today in a statement distributed by Hugin. Supervisory board Chairman Jan Hommen, a former chief financial officer at Royal Philips Electronics NV, will succeed the 56-year-old Tilmant.

via Bloomberg.com: Worldwide.

 

 

The company suffered a net loss of €186 million (£176 million) for 2008 after a fourth quarter loss of €1.47 billion, partly because of a writedown in the value of its Lumileds diode light unit. In 2007, it reported a net profit of €4.16 billion.

Gerard Kleisterlee, the president and chief executive, said that the fourth-quarter losses, the first quarterly loss since the first quarter of 2003, reflected “the unprecedented speed and ferocity with which the economy softened in 2008″.

via Philips to cut 6,000 jobs as slowdown bites - Times Online .

 

The Dutch electronics giant says its net loss for 2008 has hit £175 million, following a slump in demand for its products.

The job losses will take effect worldwide, and are due to be staggered over the next year.

via Philips cuts 6,000 jobs as profits plunge | Electricpig.

 

The deal comes as Pfizer’s profit takes a brutal hit from a $2.3 billion legal settlement over allegations it marketed certain products off-label, or for indications they are not yet approved. The New York-based company is also cutting 10 percent of its work force, slashing its dividend, and reducing the number of manufacturing sites.

via The Associated Press: Pfizer to buy Wyeth for $68 billion, cut jobs.

 

The boards of directors of both companies have approved the deal.

Pfizer also said it would cut more than 8,000 jobs to cut costs in anticipation of cholesterol drug Lipitor losing patent protection in 2011. Pfizer said it would cut 10 percent of its staff and close five of its manufacturing plants but did not specify which ones.

 

* Minnesota State College-Southeast Technical has begun trimming its budget — including laying off staff — in anticipation of cuts to its state funding.

Despite increasing enrollment, largely because laid-off workers are attending the school, the school eliminated six positions, which accounts for about 2 percent of its workforce, said Southeast Tech President Jim Johnson

via MSC-ST trims budget with six layoffs : Winona Daily News.

 

* Healthcare firm Intercytex Group Plc (ICX.L: Quote, Profile, Research) said on Monday it would cut about half of its 76 staff in the UK and the United States, and halt new projects to save cash, sending its shares down as much as 36 percent.

via UPDATE 1-Intercytex to cut 50 pct jobs to stay afloat | Markets | US Markets | Reuters .

 

* NORFOLK, Va. - Children’s Hospital of The King’s Daughters has laid off 28 workers and cut 90 vacant positions in a move to offset revenue losses and declining Medicaid reimbursements.

via Norfolk hospital lays off 28; 90 vacant jobs cut -- dailypress.com.

 

The company said that it also planned to closely examine all of its costs and spending.

“We have initiated actions which will remove about 20,000 workers from our business and every indirect spend dollar will be heavily scrutinized,” Caterpillar said in a statement.

via Caterpillar Moves to Cut 20,000 Jobs - NYTimes.com.

 

Additional moves reportedly being considering include shifting thousands more Sprint workers to other companies in outsourcing contracts, but the company didn’t make any announcements on that point Monday.

via Sprint cuts thousands of jobs - Update | Sprint Connection | News and views on Sprint Nextel.

 

The nation’s largest home improvement retailer says the cuts announced Monday morning will affect about 2 percent of its work force.

via Home Depot to cut 7,000 jobs, close Expo chain - Yahoo! Finance.

 

The Detroit automaker, which already closed most of its 22 plants in North American this month because of slow sales, is taking the additional steps into next quarter after GM cut its estimate for U.S. sales this year to 10.5 million, GM spokesman Chris Lee said. The automaker doesn’t have an estimate yet of total vehicle production cut.

via Bloomberg.com: Worldwide.

 

via Hospitals & IDNs | Healthcare Finance News.

 

via Altus to cut 107, end Trizytek efforts - Boston Business Journal: .

 

The airfreight and maintenance company cut approximately 200 jobs in December.

via Journal of Commerce Online — Kalitta Air cuts more jobs.

 

via KTTC Rochester, Austin, Mason City News, Weather and Sports -Federal-Mogul layoffs hit Lake City.

 

via Merillat cutting 70 jobs today | Culpeper Star-Exponent.

 

via UPS laying off about 60 aircraft mechanics nationwide | courier-journal | The Courier-Journal.

 

via InnerWorkings shares tumble after downgrade - Forbes.com.

 

via Hickey-Freeman stays open as parent company files for protection | democratandchronicle.com | Democrat and Chronicle.

 

via Lincoln Financial to cut more jobs - The Business Journal of the Greater Triad Area: .

 

via Brooks Automation to cut 20 percent of work force - Forbes.com.

 

Employees across the country – from Washington state to Maine – were affected by last week’s layoffs, said Rose Cummings, vice president of corporate communications for FairPoint. Only legacy markets were affected, not the landline regions FairPoint bought from Verizon Communications Inc. in early 2007 for $2.3 billion.

 

via AdaEveningNews.com - Ada, Oklahoma - Integris Health lays off 73.

 

via Freescale to cut 90 jobs in March | Statesman Business Blog.

 

Barnes, which also is freezing the pay of its salaried workers, did not disclose the number of staffers being laid off. Last year, the company reduced its payroll by about 800 to some 5,700.

via Barnes Group Sells Unit, Cuts Output .

 

The company anticipates production will cease this spring, impacting about 40 employees at the plant, said Sharon Basel, communications manager for General Motors.

via Cadillac Drops The XLR Closing Assembly Line March 1st - AutoSpies Auto News.

 

 

 

- International News -

 

 

 

* Thousands of Japanese car workers will soon draw part of their pay from the government under a scheme to prevent redundancies at companies hit by production cuts.

Mazda and Mitsubishi Motors, respectively Japan’s fifth and sixth biggest carmakers, have applied for the employment adjustment grants, according to industry officials, and others may follow soon.

The grants are available to struggling manufacturers of all types but the particularly sharp downturn in the car sector, combined with a recent expansion of the programme, has made carmakers eligible for large levels of support.

via FT.com / Companies / Automobiles - Tokyo to help pay car workers’ salaries .

 

* NEARLY 100 jobs are under threat at a Gwent car parts plant, a union says.

The Cwmfelinfach-based Mollertech company is consulting on making 99 redundancies, according to the Community union, which is representing workers at the site.

via 100 jobs could go at Gwent auto plant (From Campaign Series).

 

* The German memory chip-maker Qimonda has filed for bankruptcy protection just a month after receiving a 325m euro ($416m; £307m) rescue package.

via BBC NEWS | Business | German chip-maker goes bankrupt.

 

* More jobs are set to be axed from Palmerston North communications firm Sitel, stoking fears the city’s call centre industry is in terminal decline.

Sitel did not return calls yesterday, but the Engineering Printing and Manufacturing Union (EPMU) confirmed the company was reviewing its 111 call centre operations and jobs would be shed.

via Call centre layoffs spark decline fears - Local News - Manawatu Standard .

 

* Jan 26 (Reuters) - Non-woven fabric maker Fiberweb Plc (FWEB.L) said on Monday it would cut about 150 jobs, close a loss-making plant, cease production at another and lower spunbond production to reduce costs as it restructures its European operations.

via UPDATE 1-Fiberweb to restructure European ops, cut 150 jobs | Reuters .

 

* DUBLIN, Jan 26 (Reuters) - Royal Bank of Scotland’s (RBS) (RBS.L) Irish unit, Ulster Bank, said on Monday it was merging with its sister lender First Active resulting in the loss of up to 750 jobs.

via UPDATE 2-Royal Bank of Scotland to cut 750 Irish jobs | Industries | Financial Services & Real Estate | Reuters .

 

* NASSAU, Bahamas (AP) — A big Bahamas resort says it has laid off nearly a fifth of its employees as the world economic crisis slashes tourism across the Caribbean.

A statement from the Westin and Sheraton Grand Bahama Our Lucaya Resort says 181 employees, or about 18 percent of its beachfront workforce, have been let go.

via The Associated Press: Bahamas resort lays off 181 as crisis cuts tourism.

 

* Troubled furniture chain Land of Leather is to close 33 stores with the potential loss of 95 jobs, administrators said.

via icRenfrewshire - 33 Land of Leather stores to close.

 

* In addition to closing ten magazines, Kalev Meedia also laid off people working for the TC-channel Kalev Sport and news portal www.kalev.ee, aripaev.ee reports.

150 of Kalev Meedia’s 200 employees will be laid off, 11 out of 30 people on Kalev Sport will stay working.

via balticbusinessnews.com - Kalev Meedia to lay off 150 employees .

 

A further 36 branches of struggling childrenswear chain Adams have been closed with the loss of 267 jobs, administrators said.

PricewaterhouseCoopers (PwC) said 62 jobs have also been cut at the company’s head office in Nuneaton.

 

- Hiring News -

 

* CHEYENNE — Despite increasing unemployment rates and news of layoffs in Laramie County, many companies are still hiring.

In fact, there continues to be a variety of job openings, Joan Evans, the director of the Wyoming Department of Workforce Services, said.

Most of them are in areas like management, clerical, medical and trade positions, Evans added.

via Wyoming Tribune Eagle Online : Attention job seekers: Many places still hiring.

 

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Commercial Mortgage Lending: Government (Fannie

The credit markets are extremely tight today. It is nearly impossible to get a commercial mortgage for land or development, and almost equally difficult to find financing for retail, hospitality or office properties. The economic recession and the credit squeeze have combined to devastate the commercial real estate finance industry.

There is, however, at least one bright spot in the world of commercial mortgages; multi-family (apartments). Despite a severe contraction in the credit markets there is no lack of liquidity for multi-family loans. Property owners and investors will find plenty of money available for the purchase and the refinance of good quality apartment buildings.

Stabilized (low vacancy, good income) apartment properties make excellent collateral for commercial mortgage lenders. Because of their steady cash-flow they hold their value well and sell quickly even in down markets. In the world of commercial real estate multi-family is the most prized asset class. Multi-family properties are certainly not immune to economic realities but lenders know that apartments have a relatively strong track record in all economies.

The quasi Government entities Fannie Mae and Freddie Mac are offering tremendous support to the multi-family sector. Fannie and Freddie are buying huge amounts of apartment mortgage paper including purchase loans, refinance loans and even construction loans. The dollar amounts are staggering, these agencies have committed hundreds of billions to fund apartment buildings.

Loan-to-value ratios (LTV) are lower today then they were a few years ago but many lenders will still lend up-to 75% of a properties value. Apartment buildings need to have strong operating income in order to qualify for institutional funding and they have to be in good condition. Borrowers need to have a decent credit score of 640 or better and should be able to demonstrate a net worth and savings commensurate with the loan being sought.

Most multi-family commercial mortgages have fixed rates for a period of 5, 7 or 10 years but are amortized over 25 or 30 years to keep the payments low. Rates are based on an established index such as the yield of the 3 or 5 year U.S. Treasury Bond. A margin of 3%-5% is added to the index rate to establish the mortgage rate. If the short term Treasury is low, as it has been recently, investors can expect quotes of 6%-8% depending on the lender.

It’s not “easy” to get loan, but good quality multi-family deals are getting funded. Deals or borrowers who don’t meet the new, tougher standards will have to look to private funding sources and will be forced to pay higher rates and points.

MasterPlan Capital LLC has a new, small balance ($1MM-$5MM), multi-family commercial mortgage loan program and is actively funding the purchase and refinance of stabilized apartment buildings. We have over $100MM in lending capacity dedicated to small multi-family loans. Borrowers may apply online. Our simple, 1 page commercial mortgage loan application takes only a moment to complete and we will respond the very next business day.

Preparing for fund applications

Find new books and literate friends with Shelfari, the online book club.

Tokyo stocks surge five percent

Lupe Lasano - The People’s Champ

Japan’s Nikkei stock index soared five percent Tuesday after the government said it was planning to provide public funds to companies to help them through the economic crisis.

The benchmark rose 387.84 points to 8,069.98 by mid-afternoon.

Investors welcomed news that Japan’s trade and industry ministry is drawing up a scheme to channel public funds to non-financial firms as part of efforts to ease a credit crunch in Asia’s largest economy.

See the full post at Tokyo stocks surge five percent

Top-Paying Affiliate Programs to Sign-Up With

Top-Paying Affiliate Programs to Sign-Up With

There are so many Different Affiliate Programs to choose from and it can be different to know which one to signup for. For a comprehensive list of the top-ranking and highest paying affiliate programs, in order of popularity, go to http://www.clickbank.com/marketplace.htm

As an affiliate for a merchant, if you prefer to get paid affiliate commissions through Pay Pal rather then receiving a check every two weeks, then checkout PayDotCom.com it is a huge affiliate center with a market place of products you can promote. Personally I sell my e-book on both Click Bank and PayDotCom.com This way, my e-book getting more exposure and sales through both venues. In order to be able to accept two payment processors, I created two websites with the same contents but different URL,s and different payment buttons. If u plans to do the same thing, just make sure you add a robots no follow text on one of your website (the website which you do not want the search engines to index). To prevent that, you should create a simple robots.txt file and insert that in to the html of your website.You can download your free robots.txt generator from http://www.basisoft.com/download.html

One feature PayDotCom.com has which click bank and the other affiliate centers I use do not have is the ability to communicate directly with affiliates. With paydotcom.com you can email affiliate personally or by broadcasting the entire group, as well as track their website Statistics and number of clicks per number of sales. This information can help your marketing efforts.

When considering which affiliate programs are best for you, I recommended that you choose products or affiliate programs which are specifically related to your site’s content and target audience. You can also promote a variety of online digital products as an affiliate. What is nice about using click bank is that you can create a free account, after which you are given a unique affiliate ID. You can then choose from a huge array of products to promote and all of the commissions that you earn are paid to you together. In the past, before the Click Bank and CJ (see below) were developed, you would be sent checks from each company you were an affiliate for and that was often a nuisance. The majority of the affiliate programs you will signup with will no have a direct deposit or pay pal transfer option. They will only make payment by checks and these are sent out every 15 days.

Commission Junction (CJ) is also one of the best all-in-one affiliate program websites to sign with. It is extremely popular and widely known for its variety of different affiliates programs.

Personally, I mostly use Click Bank, Pay Dot Com and CJ but I suggest  that you  look around because most companies have affiliate programs now. Just scroll Down to the button of which ever website you are viewing and look for a little affiliate’s link. Some business owners do not like to display the link on their Home Page  for every one  to see and so  the affiliate’s  link can sometime be  found  in  the “About Us” section of a website. You may well be surprised at the companies offering affiliate programs – even volunteer organizations have  them now and offer high-paying commissions. There are several of  them posted on the CJ website. Clickbank.com  offers affiliate programs which sell digital products that can downloadable online.

PayDotCom.com works with pay pal payment and detailed affiliate tracking to help you manage campaigns.

CJ.com is known for having the best affiliate programs with companies that sell actual tangible items.

Shareasale.com has more than 1,000 merchants in  their network. You can create a free account and  then browse the programs according to: Pay-Per-Click, Pay-Per-Lead Pay-Per-Sale.

Linkshare.com  runs the largest pay for performance affiliate marketing network on the internet.

Click Bank Marketplace

Personally, Click Bank has been the most profitable affiliate resource center that I have been involved with. Checks are sent out like clock work every two weeks. Adding affiliate programs to promote couldn’t be easier - All you must do is type in the unique Click Bank ID you were given when you registered with them into the hyperlink and you’re set. There is no need to signup and then wait for approval to promote any of the websites or informational products offered here.

Commission Junction :- www.cj.com

If you would like to sell physical goods rather than downloadable once Commission Junction would definitely be the best one to signup with. This is a hugely known site with the best affiliate programs for companies that sell actual tangible items.

Share a sale :- www.shareasale.com

Pretty Polish

**Had a test today, which is why I was so MIA. **

Sigh. Nail polish has been ruling my world. And ruining my ever decreasing funds.

Anyway…

My final thoughts, is that I wouldn’t buy it again. Perhaps the other ones are different, but for the Pretty Pink, I found it too expensive for a 10ml bottle, and the polish too streaky.

Plus I like things with a bit of shimmer and shine to it :P

Anyway I think I got this with the 101 free samples code, but I didn’t get anything other than my polish. And when I received my tinted cream…I didn’t get my free gift. Guess they have been busy with a lot of orders…anyone else experience it as well?

WALL ST RISES, BUOYED BY DRUG SECTOR DEAL

ETF/CEF Discussion: With all the gloomy news in the markets, RSI decided to do some bottom fishing. So the above candidates are for those who anticipate the market coming around at some point in the future. Let’s look at the various sectors. First there are the foreign funds. Next are the consumer funds plus the small cap sector. Lastly are the home construction and real estate arena. This is quite a conglomeration of the beaten down sectors. Strangely missing are the tech, energy and material sectors. I guess RSI expects them to lag the chosen areas. We shall see about that.

IMF sees worse ahead

Axel Bertuch-Samuels, deputy director of the IMF’s monetary and capital markets department, said the IMF expects the world economy to grow between 1 and 1.5 per cent this year — a “huge” cut from its November forecast of 2.2 per cent growth.

The world economy grew 5 per cent in 2007 and is seen to be in recession if growth is below 3 per cent.

The IMF, which is expected to release detailed 2009 forecasts for individual economies tomorrow, said in November that most advanced economies would shrink this year while growth in the large, emerging economies would slow sharply to about 5 per cent.

Analysts say Australia’s economy will at best tread water this year.

Some expect a six-month technical recession — or two straight quarters of negative GDP — while others expect a deeper decline.

ABN Amro expects Australian GDP will fall 1 per cent this year compared with market forecasts for growth of 1 per cent.

HSBC Australia chief economist John Edwards said Australia was doing well in comparison with the US and much of Europe — and that amid the “global gale, to be upright is some sort of distinction”.

China, he said, showed signs in the December data of a possible pick-up, which could restore growth to just below 8 per cent by late this year.

But the IMF’s Mr Bertuch-Samuels told Reuters the IMF was far less optimistic and would downgrade its growth forecasts for China and India.

“(Overall world growth) will be revised to 1 to 1.5 per cent in 2009, which is huge,” he said.

“Global economic prospects have deteriorated in recent months, consumer and business confidence have dropped to levels that we have not seen in decades, and activity too has dropped sharply.”

Analysts expect a weak Australian inflation reading tomorrow will clear the path to more steep cuts by the Reserve Bank of Australia next Tuesday.

HSBC’s Mr Edwards said the December quarter Consumer Price Index was likely to show a 0.4 per cent fall to about 3.6 per cent, largely due to falling petrol prices.

Source: Heraldsun

Retirement Advice for All Ages

Retirement Advice for All Ages

Life goals

The financial planning profession is undergoing a revolution, with planners migrating from a money-centered orientation to what Certified Financial Planner Roy T. Diliberto calls “financial life planning.” The more humanistic movement focuses on what clients want to achieve in their lifetime and helps them to reach those goals by working with them in managing their personal finances.

Quiz people about their financial goals and you’ll get general statements about owning a home, raising a family, providing for their children’s college educations, traveling and saving for retirement. Financial life planning puts a finer point on these goals, allowing client and planner to build a roadmap to accomplishing them.

When you’re in your 20s, it’s very difficult to make retirement savings a priority. That’s because you have competing goals for your income such as paying down student loans, buying a car, furnishing your apartment, saving for the down payment on a house. But if your employer offers matching contributions to a 401(k) retirement account, take up the offer. Otherwise you’re turning away free money that would help you achieve your goals.

Money invested in your 20s has 30 to 40 years to earn a return. Wait until your 40s to start investing for retirement and that money only has about 20 years to grow. You’ll need to put a lot more aside to achieve the same nest egg.

My favorite statistic in this area comes from “The Girl’s Guide to Retirement” but, don’t worry guys, it applies to you, too:

Saving early builds substantial wealth 

Age Annual Savings Savings at 65 

25 $5,000 $1.3 million 

45 $5,000 $230,000 

Taxes and Investing

If you’re saving for retirement, there are a host of tax-advantaged accounts: Roth IRAs, traditional IRAs, plus employer plans such as 401(k), Roth 401(k), 403(b) and 457 plans. They’re called tax advantaged because some are tax-deferred, such as traditional IRAs, 401(k) and 403(b) accounts, while others — the Roth IRA and Roth 401(k) — are tax-free for qualified distributions.

Contributions to traditional IRAs, 401(k) and 403(b) plans are typically made with pre-tax dollars and qualified distributions are taxed at ordinary income rates when the money comes out of the account. Roth IRA and Roth 401(k) contributions are made with after-tax dollars and qualified distributions are free of federal income tax. Nonqualified distributions, for example, those taken before age 59½ in the case of IRAs, can result in a 10 percent penalty tax.

Money can also be invested in taxable accounts. It’s called a taxable account because you have to pay taxes on the investment earnings in the year that they are recognized in the account. The taxes vary depending on whether the investment earnings are qualified dividend income, interest income, short-term capital gain or long-term capital gain. The tax code also changes with time, so applicable tax rates on these different types of investment earnings can go up or down. Tax-efficient investing in a taxable account can make sense as an alternative to retirement savings in tax-advantaged accounts.

Once you decide on the types of accounts you will contribute to, you can work on the investments held in these accounts. A 401(k) or 403(b) plan typically has a limited list of investments to choose from, but other retirement and taxable accounts don’t face the same limitations. To open IRA, Roth IRA and taxable accounts, you can choose from among banks, brokerage houses or mutual fund firms.

401(k) or IRA?

If your company has a 401(k) plan where the company matches a portion of your contributions, it makes sense to contribute at least up to the limit of the match. After that, where you put your retirement money depends on your income level and investment goals.

I’m an advocate for financial flexibility. Unlike employer-sponsored plans, an IRA or Roth IRA account lets you avoid the penalty tax on early distributions in certain situations. For example, first-time home buyers can tap up to $10,000 of IRA money for a down payment on a home penalty free.

If you are covered by your employer’s retirement plan, then your ability to contribute tax-deferred dollars to a traditional IRA may be limited, depending on your Modified Adjusted Gross Income (MAGI). Your ability to contribute to a Roth IRA doesn’t depend on whether you are covered by your employer’s retirement plan, but eligible contribution limits phase out if your income exceeds a certain level.

If you can’t contribute to a Roth because your income is too high and you can’t contribute pre-tax dollars to a traditional IRA, you can contribute after-tax dollars to a traditional IRA. It can make sense to do so because the income restrictions on the Roth go away in 2010 and you can then convert your traditional IRA monies on a pro-rata basis to a Roth IRA account.

Don’t forget about the spousal IRA or the Retirement Savings Contributions Credit that are allowed up to certain income levels.

Clear as mud? IRS Publication 590, Individual Retirement Arrangements, does a good job of walking you through the rules.

Asset allocation and risk

The common asset-allocation decision among investments is between stocks, bonds and cash, or mutual funds/exchange-traded funds (ETFs) that invest in stocks, bonds or cash. Cash is financial shorthand for money market investments that are short-term debt securities with a final maturity of less than one year. Bank deposits can be classified as cash if they are held in a money market account, checking account or a short-term certificate of deposit, or as bonds if the certificate of deposit has a maturity longer than one year.

Your retirement investments face two major risks: principal risk and inflation risk. With principal risk, the risk is that your investments decline in value. Inflation risk involves the decline of the purchasing power of your investments over time. Conservative investors tend to be more concerned about the risk to principal, but they should be just as concerned about purchasing power risk.

A simple illustration with car prices explains why you need to worry about both. If car prices go up by 5 percent each year, a car that costs $30,000 today will cost $38,288 five years from now. Invest $30,000 today for five years in a CD with an after-tax yield of 4 percent and you’ll have $36,500. Your insured deposit never faced any principal risk, but you won’t be able to afford to buy the car for cash five years from now when you could have today. Take this example out 30 to 40 years and the importance of having your investment returns outpace inflation is magnified.

So you shouldn’t hold a lot of cash in your retirement accounts early in your career. Choosing a specific allocation between stocks, bonds and cash is a balancing act between the investor’s tolerance for risk and his or her investment goals.

Active vs. passive

Active investors believe they can beat their investment benchmarks through investment selection and/or market timing. There are a host of active strategies that include sector rotation, value investing, momentum investing and market timing.

In an extreme example of market timing, someone aims to invest in the stock market when it’s heading higher, sitting on the sidelines the rest of the time. The problem, of course, is that investors are generally lousy at predicting future market movements.

A passive investor is willing to accept average performance. Buy-and-hold investors in indexed mutual funds or exchange traded funds (ETFs) are passive investors. Market timers can also own index funds or ETFs, but they actively trade the shares based on their outlook for the market.

Bond investors can try to time the market too. When interest rates go up, bond prices go down. Active bond investors try to avoid being “long and wrong” — meaning they don’t want to invest in long maturities when they expect interest rates are heading higher. They also don’t want to be “short and sorry,” investing in shorter maturities only to see interest rates head lower.

Tactical asset allocation changes the mix of assets based on what looks cheap or expensive in the eye of the portfolio manager or investor. If stocks look expensive, then the manager lightens up on stock exposure and adds the proceeds to either cash or bonds.

Account fees for actively managed funds are typically much more expensive than for indexed mutual funds. That makes it that much harder for active managers to beat the performance of the benchmark index net of fees.

In the early stages of investing for retirement, a low-cost, no-load, indexed mutual fund that mirrors the holdings of a broadly based market index is a solid investment decision.

Retirement Advice for All Ages

Retirement Advice for All Ages

Retirement Advice for All Ages

Retirement Advice for All Ages

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As economy falls, more people put money away in savings
Smart Moves to Make After the Fed Cut

4 ETF Strategies For A Down Market

by Hans Wagner

Exchange-traded funds (ETFs) are rapidly becoming a popular investment tool for many investors. As with any investment, it is important to understand the downside risks. ETFs are traded like stocks, so they inherit many of the same risks as stocks. However, there are several strategies that ETF investors can use to protect their capital during a down market. These strategies include knowing when to sell, knowing how to allocate your assets, following the rotation of sectors and using hedging techniques. (For the basics, review our Exchange-Traded Funds tutorial.)

* Risk Tolerance: Every investor should know how much risk he or she can tolerate. If you are having trouble sleeping at night due to concerns over the market, then you have reached your limit and it is probably a good time to sell. You’ve already made the losses, so now it’s time to save what’s left. (To learn more, read Personalizing Risk Tolerance.)

* Stop Orders: Stock investors have long used stop orders to protect their portfolios. Fortunately, investors in ETFs can use the same stop techniques available for stocks, such as trailing percent stops, limit stops, volatility stops or some other variation that helps close out a position at a predetermined amount. (For more on arranging stop orders, read A Logical Method Of Stop Placement.)

* Ready Money: If you will need the cash for some purpose in the next couple of years, it is a good idea to reduce your risk and move your money to a low-risk investment now. Investors can move to less volatile ETFs or sell for cash to preserve gains should the market turn down.

* Balancing Act: Rebalancing your portfolio is always a good idea. Should your ETF run up in value, providing a nice gain, it might overweight your portfolio toward one sector or industry. A good strategy is to sell part of the ETF to capture the profits and then diversify your reinvestments. This approach protects your profits should the market take a dive. (Learn more about fine-tuning in Rebalance Your Portfolio To Stay On Track.)

* Expectations: Investors who beat the market may find that their initial reasons for purchasing an ETF have changed. Maybe it failed to meet your expectations, or the fundamentals underlying the investment changed for the worse. When this happens, it is a good time to sell and move on to another opportunity.

One of the best ways to protect your ETF portfolio is to know when to sell before a market tumbles, or to have your wits about you to sell before further losses occur. If investors follow sound selling principles during up markets, these same principles will serve them well during down markets.

Sample strategies to help reduce exposure in a down market include:

* Reducing your portfolio’s exposure to sectors, asset classes or equity capitalizations that are likely to perform badly in a down market

* Filling voids in a portfolio with ETFs that fill out your allocation strategy. You can do this by buying or selling short sectors that are likely to over- or underperform relative to the overall market. If you are concerned that the market may get weaker, then buy an ETF that shorts a sector and/or the market.

* Over- or underweighting a portfolio to gain exposure that will reduce the downside risk. Let’s say an investor’s portfolio is composed of stocks from many sectors in the S&P 500, but he or she is concerned that a market downturn will hurt the portfolio. This investor could purchase a consumer staples sector ETF to increase exposure to a sector that typically does better in a down market.

ETFs provide investors with the tools to allocate their assets to reflect their portfolio strategies, especially in a down market. For these strategies to succeed, the bear market ETF must have high negative correlation to your long portfolio. (Read more in Five Things To Know About Asset Allocation.)

The business cycle is a long-term pattern of changes in gross domestic product (GDP), which follows the four basic stages: expansion, prosperity, contraction and recession. After a recessionary phase, the expansionary phase starts again. According to investor Sam Stovall’s 1996 book “Sector Investing”, each sector is stronger at different points along the business cycle. Investors can identify the sectors that align with the business cycles and invest accordingly. ETFs are excellent choices when employing this strategy, especially during a down market.

Investors who follow this strategy adjust their portfolio’s sector weight to align with the sectors that are most likely to perform best. Sector-oriented ETFs give these investors an efficient way to redirect their portfolios. When faced with a market that is trending down, these investors can use ETFs that invest in sectors that normally outperform a down market, such as consumer staples, utilities and healthcare. Investors who are more aggressive could use ETFs that short the market or a sector that is likely to perform worse than the market. (Get details on how ETFs enable these techniques at ETFs Smooth Road For Sector Rotation Strategies.)

ETFs that short an index or a sector give investors new ways to employ hedging strategies. For example, if your portfolio is long the market and you are concerned that the slowdown in the economy will cause the market to fall, you could either move part of your portfolio to cash or acquire an ETF that shorts the market. In this way, you could realign your portfolio to be 75% long and 25% short, using an ETF that shorts the market. This would be similar to a portfolio that is 50% long and 50% cash.

Options on ETFs offer investors another proven way to hedge their positions. Two conservative approaches involve covered calls and protective puts. Covered calls allow investors to lock in profits and/or provide some downside protection in the event the market turns. The seller of a covered call receives downside insurance equal to the amount of the option premium. If the ETF falls by more than the premium, the position will lose money but still outperform holding the ETF alone.

Investors seeking insurance against sharp ETF declines who want to hold the shares to avoid negative tax consequences can purchase “protective” put options. A put on an ETF allows an investor to sell if the share price falls below the strike price. The put typically increases in value as the ETF declines. If the ETF stays flat or increases in value by the end of the option period, the put expires worthless. (You can learn the basics of these contracts in our Options Basics Tutorial.)

http://www.investopedia.com/articles/exchange-traded-funds/09/etf-strategies-recession.asp

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Investment Styles

He also offers an insightful explanation of ‘Fund Managers Investment Styles’, that we thought you might find interesting:

We will review his book shortly.

Search Engine Optimization (SEO)

SEO is an acronym for “search engine optimization” or “search engine optimizer.” Deciding to hire an SEO is a big decision that can potentially improve your site and save time, but you can also risk damage to your site and reputation. Make sure to research the potential advantages as well as the damage that an irresponsible SEO can do to your site. Many SEOs and other agencies and consultants provide useful services for website owners, including:

Keep in mind that the Google search results page includes organic search results and often paid advertisement (denoted by the heading “Sponsored Links”) as well. Advertising with Google won’t have any effect on your site’s presence in our search results. Google never accepts money to include or rank sites in our search results, and it costs nothing to appear in our organic search results. Free resources such as Webmaster Tools, the official Webmaster Central blog, and our discussion forum can provide you with a great deal of information about how to optimize your site for organic search. Many of these free sources, as well as information on paid search, can be found on Google Webmaster Central.

Before beginning your search for an SEO, it’s a great idea to become an educated consumer and get familiar with how search engines work. We recommend starting here:

If you’re thinking about hiring an SEO, the earlier the better. A great time to hire is when you’re considering a site redesign, or planning to launch a new site. That way, you and your SEO can ensure that your site is designed to be search engine-friendly from the bottom up. However, a good SEO can also help improve an existing site.

Some useful questions to ask an SEO include:

While SEOs can provide clients with valuable services, some unethical SEOs have given the industry a black eye through their overly aggressive marketing efforts and their attempts to manipulate search engine results in unfair ways. Practices that violate our guidelines may result in a negative adjustment of your site’s presence in Google, or even the removal of your site from our index. Here are some things to consider:

One common scam is the creation of “shadow” domains that funnel users to a site by using deceptive redirects. These shadow domains often will be owned by the SEO who claims to be working on a client’s behalf. However, if the relationship sours, the SEO may point the domain to a different site, or even to a competitor’s domain. If that happens, the client has paid to develop a competing site owned entirely by the SEO.

Another illicit practice is to place “doorway” pages loaded with keywords on the client’s site somewhere. The SEO promises this will make the page more relevant for more queries. This is inherently false since individual pages are rarely relevant for a wide range of keywords. More insidious, however, is that these doorway pages often contain hidden links to the SEO’s other clients as well. Such doorway pages drain away the link popularity of a site and route it to the SEO and its other clients, which may include sites with unsavory or illegal content.

There are a few warning signs that you may be dealing with a rogue SEO. It’s far from a comprehensive list, so if you have any doubts, you should trust your instincts. By all means, feel free to walk away if the SEO:

If you feel that you were deceived by an SEO in some way, you may want to report it.

Obama lobbies for stimulus as economy clouds darken

Obama, hoping for strong cross-party support for his rescue plan, scheduled talks for Tuesday with congressional Republicans who have said his 800-billion-dollar-plus stimulus plan is too expensive and will not work.

Speaking as Geithner’s appointment won Congressional approval, Obama underlined the urgency of the work at hand, noting that 2.5 million jobs were lost last year and seven major corporations had just announced thousands more cuts.

“You have got your work cut out for you as I think everybody knows. But you also have my full confidence, my deepest trust, my unyielding belief that we can rise to achieve what is required of us at this moment.”

Geithner, a senior Treasury official in the 1990s, brings inside knowledge of how the crisis has unfolded from his most recent job as president of the New York Federal Reserve.

“Our agenda, Mr. President, is to move quickly to help you do what the country asked you to do … to restore confidence in America’s economic leadership around the world,” he said at his swearing-in ceremony.

Among his immediate objectives were “to make our economy more productive … to restore trust in our financial system with fundamental reform (and) to make our tax system better at rewarding work and investment,” he said.

Geithner took the oath amid a slew of grim news on the jobs front from all sides of the globe.

Japanese firms have been severely affected by the downturn, which has pushed the world’s second-biggest economy into its first recession for seven years.

A survey released Tuesday said 400,000 temporary workers in Japan’s manufacturing sector are expected to lose their jobs by the end of March.

But despite the grim news, Tokyo’s Nikkei stock index soared 4.9 percent as investors responded positively to reports that the government plans to channel funds worth 1.5 trillion yen (17 billion dollars) to struggling industries.

Meanwhile in India, Asia’s third-biggest economy, the central bank reduced its growth forecast to seven percent due to the deepening worldwide recession as it held leading interest rates at a historic low of 5.5 percent.

An earlier raft of measures worth around 31 billion euros, approved in November, was denounced as insufficient.

Just The Early Stages of Economic and Financial Collapse - USA: 93-year-old freezes to death at home after firm limits power use

Décryptage, Analyses, Veille - Downside The World News

 

 

 

BAY CITY, Mich. - A 93-year-old man froze to death inside his home just days after the municipal power company restricted his use of electricity because of unpaid bills, officials said.

Marvin Schur died “a slow, painful death,” said Kanu Virani, Oakland County’s deputy chief medical examiner, who performed the autopsy.

Neighbours discovered Schur’s body on Jan. 17. They said the indoor temperature was below zero Celsius at the time, the Bay City Times reported Monday.

“Hypothermia shuts the whole system down, slowly,” Virani said. “It’s not easy to die from hypothermia without first realizing your fingers and toes feel like they’re burning.”

Schur owed Bay City Electric Light & Power more than $1,000 in unpaid electric bills, Bay City manager Robert Belleman told The Associated Press on Monday.

A city utility worker had installed a “limiter” device to restrict the use of electricity at Schur’s home on Jan. 13, Belleman said. The device limits power reaching a home and blows out like a fuse if consumption rises past a set level. Power is not restored until the device is reset.

The limiter was tripped sometime between the time of installation and the discovery of Schur’s body, Belleman said. He didn’t know if anyone had made personal contact with Schur to explain how the device works.

Schur’s body was discovered by neighbour George Pauwels.

“His furnace was not running, the insides of his windows were full of ice the morning we found him,” Pauwels told the newspaper.

Belleman said city workers keep the limiter on houses for 10 days, then shut off power entirely if the homeowner hasn’t paid utility bills or arranged to do so.

He said Bay City Electric Light & Power’s policies will be reviewed, but he didn’t believe the city did anything wrong.

“I’ve said this before and some of my colleagues have said this: Neighbours need to keep an eye on neighbours,” Belleman said. “When they think there’s something wrong, they should contact the appropriate agency or city department.”

Schur had no children and his wife had died several years ago.

Bay City is on Saginaw Bay, just north of the city of Saginaw in central Michigan.

http://ca.news.yahoo.com/s/capress/090126/world/frozen_indoors

January 27, 2009 at 11:25 pm

What Is the Spending Multiplier on a Pack of Condoms?

This Sunday, Speaker Nancy Pelosi (D-CA) created quite a stir when she attempted to defend Section 5004, of the House’s economic stimulus plan which allows the Medicaid bailout portion of the spending plan to be spent on family planning clinics. The leftist organization Media Matters came to Pelosi’s defense claiming “The National Family Planning & Reproductive Health Association says such policies are extremely popular.” But Media Matters and their leftist allies completely miss the policy point underscored by highlighting the stimulus plan’s family planning loophole. The Associated Press explains why this issue goes way beyond family planning:

While the debate surrounding the overall impact of the measure pits economists and their statistics against one another, Republicans quickly seized on the family planning money as evidence that the Democrats were advancing an agenda that went beyond the economy.

The entire intellectual underpinning of President Barack Obama’s spending plan rests on the belief that certain types of government spending creates a “multiplier effect” which raises national income beyond the size of government’s initial spending increase. So, for example, Mark Zandi has concocted a table which purports to show that for every one dollar the government spends building “Infrastructure” GDP will grow by $1.59. There is also an entry on Zandi’s table for “General Aid to State Government” which Zandi knows for an absolute fact has a 1.36 spending multiplier. So if Obama’s stimulus plan bails out California’s spendthrift government, and Sacramento then spends that money buying condoms for Nancy Pelosi’s constituents, Mark Zandi wants us to believe that this entire transaction will increase GDP by $1.36 for every $1 in condoms Sacramento buys. Does anybody really believe this?

Again, the family planning issue is just one example of how the left is using the cover of the stimulus to advance their long-term goals of increasing the size of the federal government. The stimulus plan increases Washington’s control over spending on education, spending on health care, spending on the environment, and even spending on local law enforcement. As the Washington Post editorialized this weekend: “All of those ideas may have merit, but why do they belong in an emergency measure aimed to kick-start the economy?”

They don’t. Before he had to toe the official administration line, National Economic Council director Larry Summers said that in order to be effective, any stimulus bill must be “timely… targeted … and credibly temporary.” As we have already proven, there is nothing temporary about this stimulus spending. But new Congressional Budget Office numbers show there is nothing timely about it either. According to the CBO cost estimate of the stimulus plan, only 52% of the spending in the bill will occur by the end of FY 2010. This is well short of President Obama’s own standard of 75% of the spending taking effect over the next year and a half. The CBO details the reason for the untimeliness of the spending:

Frequently in the past, in all types of federal programs, a noticeable lag has occurred between sharp increases in funding and resulting increases in outlays. Based on such experiences, CBO expects that federal agencies, states, and other recipients of funding would find it difficult to properly manage and oversee a rapid expansion of existing programs so as to spend added funds quickly as they expend their normal resources.

Defending all the left wing spending in the stimulus bill, Speaker Pelosi told Politico last week: “Yes, we wrote the bill. Yes, we won the election.” This statement perfectly reflects the attitude of those in power on Capitol Hill. They are driven to use the current economic emergency to advance their long held partisan interests. There is nothing “timely, targeted, and temporary” about the left’s agenda. By Larry Summers own criteria, this stimulus bill is guaranteed to fail.

Quick Hits:

Acalanes Union High School District Parcel Tax

My blog is focused primarily on city business, but I wanted to report on the new parcel tax increase for the AUHSD (which is it’s own entity, not linked to the city).  The recession means impending cuts for the school district, which could lead to lost jobs.  The AUHSD is funded by state funds, a cut of property taxes, a parcel tax and bond proceeds funded through extra property tax.  Lafayette residents currently pay $189 in parcel taxes to the AUHSD, along with $313 for elementary schools (Walnut Creek pays less than $90 for elementary schools, but Moraga and Orinda pay a bit more than us).

Now the AUHSD is looking into raising the parcel tax.  I don’t think anybody in town disagrees that healthy funding helps ensure that we have great schools, but I see some serious mis-prioritization recently.  We just approved a bond measure for the AUHSD (paid for through extra property tax, or in this case, an extension of a current one until several decades into the future).  It was for capital improvements to expand facilities.  That’s an important thing, but, if we care about our teachers’ jobs, or - what I think should be the paramount consideration - our childrens’ educations, then this was done backwards.

We should be funding in-classroom operations as a priority, not infrastructure expansion.  Residents can afford only a certain amount of money for the education of Lafayette’s children.  Shouldn’t we have made sure that we could actually pay the salaries of the teachers before we decided to renovate the photo lab, update video production equipment, create a new 3-D art studio, replace the pool and deck and do work on athletic facilities?  One day they’re pushing parcel taxes to keep classes small, the next day they’re telling us we can afford to fund a $93M bond.

There’s nothing wrong with wanting to spoil our children with state-of-the-art equipment for any activity they could ever think of, but we just had to raise $1M in donations to pay for operational expenses, like teacher salaries and are still running at a deficit.  I know that the District’s heart is in the right place, but we need better long term planning for the sake of our teachers and, ultimately, our students.

Here, as a treat, I have included a link to a video produced by students at Miramonte that shows off how their programs have fostered creativity:

Homebuilders Woes

On the surface, a U.S. housing law passed in July that provides first-time home buyers with a tax credit looks like a boon for builders. But even as the law will give to the industry, it will also take away, eliminating a long-standing incentive where builders enticed buyers into purchasing homes by providing the down payment on mortgages insured by the government. Known as “seller-funded down payment assistance,” builders could pay up to 6 percent of a home’s sale price. But from October 1, the law will ban this practice because mortgages secured with assisted down payments have expected foreclosure rates up to three times higher than other loans, Housing and Urban Development (HUD) spokesman Lemar Wooley said. The ban is a near-term negative for the industry, since it will shrink the pool of potential buyers, raise cancellation rates and weigh on already-depressed builders’ shares — their index .DJUSHB sits 75 percent off its lifetime high. The chief executive of the largest U.S. home builder, D.R. Horton Inc (DHI.N), said he “got suicidal” over the ban. “I’m absolutely shocked by it. And I’m upset by it,” Horton CEO Don Tomnitz told analysts on a recent call. “To take 10 percent, 20 percent, 30 percent of the buyers out of the home buying decision, at a point in the economy that they did, it’s absolutely ludicrous.” While the new law contains a $7,500 tax credit for first-time buyers, that will not offset the ban on down payment assistance, which had no such restrictions, National Association of Home Builders (NAHB) CEO Jerry Howard said. The credit, which benefits buyers at tax time, is also not as intuitive as an up-front gift, one portfolio manager said. “It’s still an incentive, it’s just not as good an incentive,” said Todd Lowenstein, whose HighMark Value Momentum Fund owns 181,000 shares of Pulte Homes Inc (PHM.N). What’s more, builders had come to rely increasingly on down payment assistance as the credit crunch forced more buyers into the very government mortgages affected by the ban, Morningstar analyst Eric Landry said. A BIG CHUNK Assisted down payments secure about a third of the Federal Housing Authority’s portfolio today, up from 18 percent five years ago, HUD’s Wooley said. In reducing the number of potential buyers, whether or not they could afford down payments, the ban “could cause another leg down” for builders by depressing home prices further and forcing them to write off the value of more land, JP Morgan analyst Michael Rehaut said on a conference call for clients. It could mean share price declines of another 10 percent to 20 percent over the next three to four quarters, Rehaut said. Also, cancellation rates could rise because agreements to buy homes struck before October 1 could see any assistance invalidated by a routine credit recheck after that date, said Bill Renner, NAHB’s director of single-family finance. Builders such as Horton and Centex Corp (CTX.N), which both target first-time buyers, will especially feel the loss because more of their customers need either financial help or a government-backed loan, or both. Horton assisted 21 percent of buyers in its latest quarter, up from 7 percent in all of fiscal 2007, while Centex assisted buyers in a quarter of closings. Lennar Corp (LEN.N) tops the big builders with about a third of its closings using down payment assistance in the second quarter, spokesman Scott Shipley said. NO ESCAPE But no builder will escape the hit to first-time buyers. At this point in the cycle, a builder’s focus is on luring first-timers, said analyst Jim Wilson of JMP Securities. Meritage Homes Corp (MTH.N), the No. 12 U.S. builder, has talked about re-pricing communities to attract lower-end buyers. About 15 percent of its closings used down payment assistance last quarter, spokesman Brent Anderson said. Even luxury builder Toll Brothers Inc (TOL.N), which does not offer down payment assistance (DPA), will be hurt as owners struggle to trade up, CEO Bob Toll said on a conference call. “We would expect that the whole daisy chain of the market will be impacted to some extent,” he said. Still, some builders see the logic in the ban. “The end of DPA will probably pressure industry sales in the near term, but over time, our buyers and the market will adjust,” Centex Chief Financial Officer Cathy Smith said on a conference call. “We continue to believe that a return to more normal qualification standards is a very good thing long term, even if it carries with it a little short-term pain.” In response to the law’s passage, Centex has developed a program that helps home buyers save down payment funds. Pulte launched a promotion offering all customers $7,500 in savings in addition to the tax credit for first-timers. While the DPA ban is a short-term negative, Wall Street has exaggerated its importance, UBS analyst David Goldberg said. “It’s a problem they’re going to have to overcome, but they’ll overcome it,” Goldberg said. -Reuters

Column on Stimulus Bill

So I have a column out today criticizing part of the stimulus bill and making a suggestion.  Enjoy!

http://media.www.diamondbackonline.com/media/storage/paper873/news/2009/01/27/Opinion/Environmental.Stimulus.Thinking.Like.Its.1999-3598314.shtml

document.write(’<li id=”cp_article_more”><a href=”‘ + document.location.toString() + ‘#cp_article_tools”>Article Tools</a></li>’)

How else can local and state politicians proclaim with an infallible sense of pride that there are thousands of infrastructure projects backlogged and ready to go? The “good news” is they’re perfect for President Barack Obama’s stimulus plan. Why have we had trillions of dollars’ worth of infrastructure spending waiting for shovels to hit the ground since before I hit kindergarten? Is it because the government isn’t spending enough of your money? Yeah, that’s a rhetorical question.

Or is it because the majority of our land-use policies, transportation policies and infrastructure planning have been based on a flawed 20th century model for growth?

Our cities have been expanding at an unsustainable rate, swallowing up rural land that dares to reside on the edge. The creation of all these suburbs on the edges of cities means people and the new infrastructure they require - especially the roads connecting them back to the city - are spread out like butter on a slice of bread. This expansion took place at a pace so furiously irresponsible that governments could no longer raise the funds to upkeep the new roads, bridges, schools, firehouses or even Vice President Joe Biden’s hair plugs. All that stuff costs a lot of money.

There’s a major environmental negligence with these kinds of growth policies as well. Everyone driving to and from the city for work gets stuck in congestion. We end up with worsening air pollution, water pollution from runoff and increased gas consumption. Then, all of our local and state officials declare that we need to clean up our environment while promoting the same poor growth policies that were causing the pollution in the first place.

The majority of the delayed projects that Obama is planning to resurrect follow our 20th century growth model - that’s when they were designed. To an individual lacking peripheral vision, the stimulus money needs to go into these outdated initiatives where shovels are ready to hit the ground. But the leaders of our local governments, our state governments and our federal government need to stake a step back. Try looking at the whole picture rather than at just a single pixel.

There needs to be a conscious recognition that the way to address the economic, national security and environmental challenges we face is not by building new roads. It’s not by further expanding our cities. Poor land use and transportation decisions have driven each other for far too long. Investments need to be made that will have long-lasting positive ripple effects for decades.

Invest massively in bus transit by replacing and upgrading every single fleet of every region in the nation. The struggling automakers can learn how to make buses, right? Fast-track all of the mass transit projects in the books, and revitalize what we already have. This includes light rail, subways, rapid transit and freight rail. Make everything state of the art. This will take cars and trucks off the roads, reduce our infrastructure upkeep costs, decrease the check amounts we write to foreign countries for fuel and cut carbon emissions at the same time.

These investments should be the priority of the economic stimulus when it comes to transportation. The stakes couldn’t be higher. What do we want for our money? Good news, or “good news?” Change, or more of the same? Yeah, that’s a rhetorical question.

Matt Dernoga is a junior government and politics major. He can be reached at mdernoga@umd.edu

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January 27 - Corning cuts 3500 - Baker Hughes releases 1500 - Target aims to cut 1500 - 1300 gone at Ashland - Clariant drops 1000 more - PPG to end 4500 jobs - Volvo dumps 650 in VA - United Stationers sending 250 to unemployment

Mike: Let’s hope Tuesday is a lighter layoff day than Monday turned out to be. Still plenty of earnings and economic reports to sway the market and the layoff announcements. There have been a few large layoff announcements this AM starting with  Corning  cutting 3500 and  Ashland laying off 1300

 

Outrage of the day: So the taxpayer pays to give retention pay to the same people that drove the company into the ground, which resulted in them having to beg the taxpayer for a bailout. Instead of being investigated, they are treated with kid gloves and buckets of taxpayer cash. Nice work if you can get it:

About 400 workers at the financial products unit may get the money in two installments, said the people, who declined to be named because the payments were confidential. The business was responsible for about $34 billion in writedowns since 2007 as the market value of swaps AIG sold to banks plunged amid the subprime mortgage market collapse.

via Bloomberg.com: U.S..

 

Citigroup, which received funding from last year’s taxpayer bailout, canceled their plans to buy a $50 million executive jet after the news drew disapproval from President Obama.

A Citigroup spokesman said Tuesday that the beleagured bank had no intention of accepting the jet.

Citigroup ordered the jet in 2005, when the company had cash to spare, and was set to receive it this year. The bank originally said canceling the sale would mean that it would have to pay millions of dollars in penalties.

A White House spokesman told Reuters Tuesday that President Obama did not believe “that’s the best use of money” by a company receiving money from last year’s bailout.

 

 

 

 

 

- Microsoft/Google/IBM and other Rumors /News-

 

The results, due out after the stock market closes, are expected to show Yahoo’s long-running struggles worsened during the final three months of last year.

via Yahoo’s 4Q expected to reflect deepening slump - BusinessWeek.

 

According to an IBM employee who asked to remain anonymous said this morning, “I just received a call from my manager,” said the IBM employee, who works on the manufacturing segment of the local plant. “They performed a resource action … my personal job wasn’t affected, but others in my department were.”

via IBM in Vermont starts layoffs | burlingtonfreepress.com | The Burlington Free Press.

 

“We did this last week on the 21st and today,” said IBM spokesman Doug Shelton, referring to the layoffs.

Shelton would not comment on how many IBM employees were laid off, what departments they worked in and where they were located.

 

Microsoft was pouring research-and-development funds into its Entertainment and Devices Division at an accelerated pace in the months prior to announcing last week’s layoffs, according to the company’s latest regulatory filing. The numbers may explain why that division appears to have been hit hardest by the cutbacks. They also show how abrupt the company’s financial pullback has been.

via Before cutbacks, R&D soared in Microsoft Entertainment Division - TechFlash: Seattle’s Technology News Source.

 

 

 

 

- General Economic News -

 

Mike: Below are some of the economic reports that are imprtant to potential layoffs. To see the entire list, go to:Bloomberg.com: Economic Calendar.

 

“Despite the modestly positive sales influences which came from sales over Martin Luther King Jr. weekend, the presidential inauguration kept consumers home watching television coverage rather than in stores,” said Michael P. Niemira, chief economist at the ICSC.

 

 

Prices in 20 metropolitan areas tracked by S&P fell 2.2 percent from October as housing continues to suffer from a huge supply of unsold homes, tighter lending standards and record foreclosures.

 

The Conference Board, an industry group, said its sentiment index fell to 37.7 from a revised 38.6 in December, confounding forecasts for a small uptick.

“Consumers remain quite pessimistic about the state of the economy,” said Lynn Franco, director of The Conference Board Research Center. “Until we begin to see considerable improvements in the expectations index, we can’t say the worst of times are behind us.”

The NABE survey released Monday, Jan. 26, was conducted between Dec. 17 and Jan. 8. It depicts the worst business conditions since the survey began in 1982.

“We’re in for quite a serious downturn,” said Premus, who predicts an economic crisis unrivaled during the lives of the Baby Boomers and subsequent generations. “It’s really just beginning.”

via Prof: Downturn ‘just beginning.

 

Nevada’s unemployment rate jumped to 9.1 percent in December. That is a full percentage point higher than it was in the previous month.

Nevada’s unemployment rate is the highest it has been in more than two decades and the eighth highest in the nation for December.

via Las Vegas Now | Nevada Unemployment Hits 9.1 Percent.

 

Nine out of 10 companies have put cost-cutting strategies in place — from hiring freezes to furloughs — in hopes of weathering the recession.

That’s according to a national survey released this week by Chicago-based job placement consultancy Challenger Gray & Christmas Inc.

 

- Municipal News -

 

* The Carroll County sheriff said Monday that five jail employees will be laid off as a result of an economic crunch.

Sheriff Dale Williams said the cuts will take effect in mid-February. Four part-time workers and one full-time worker will be laid off.

via Carroll County Jail Announces Layoffs - News Story - WTOV Steubenville.

 

* The Brandon Board of Aldermen has laid off 10 employees in several departments and cut six open positions.

via Aldermen in Brandon lay off 10 employees | clarionledger.com | The Clarion-Ledger.

 

* MONROE, N.C. — The sheriff in a North Carolina county is warning that layoffs of deputies could mean a slower response time in emergencies.

Union County Sheriff Eddie Cathey and the county commissioners would meet Tuesday to discuss the county’s $15 million budget shortfall due to the slumping economy, The Enquirer-Journal of Monroe reported.

County officials laid off 40 employees Friday and commissioners proposed laying off 11 deputies in the sheriff’s department.

 

 

- US and some Canada News -

 

 

via Corning to cut 3,500 jobs - Yahoo! News.

 

 

 

* DENVER - OppenheimerFunds announced Monday plans to reduce its workforce by less than 10 percent.

The asset management company currently employs more than 2,600 people and Jeaneen Pisarra, VP, director of media relations, says the layoffs will leave 225 people without jobs.

 

* PORTLAND, Ore. (AP) — Chainsaw and yard care product maker Blount International Inc. on Monday said it will permanently close its plant in Milan, Tenn., by the end of June, eliminating nearly 100 jobs.

via The Associated Press: Blount closing Tenn. plant, to eliminate 100 jobs.

 

* Lighting manufacturer Acuity Brands Lighting Inc. will close its Austin plant this spring, resulting in the lay-off of 34 workers.

via Acuity Brands Lighting closing Austin plant - Austin Business Journal: .

 

* GROVELAND | The dire economic situation that is forcing business closures across the country has hit home in South Lake County with the closing of a distribution center for a major retailing chain that is putting more than 100 people out of work.

via Over 100 Jobs Lost as Center Closes | theledger.com | The Ledger | Lakeland, FL.

 

via Virbac Corp. to close Fort Worth facility - Dallas Business Journal: 

 

* Motoman has laid off about 40 Dayton-area employees, affecting work sites in Troy and at its West Carollton corporate headquarters, a company spokesman said Monday, Jan. 26.

via 40 lose jobs at Motoman.

 

The Houston-based company started laying off 1,500 of its 40,000 employees in a process that will likely stretch over a couple of weeks, said Gary Flaharty, the company’s director of investor relations.

via Baker Hughes will cut 1,500 jobs with 200 in Houston | Energy | Chron.com - Houston Chronicle.

 

* PARIS, Tenn. (AP) - Nobel Automotive of Paris, which makes hoses and tubing for cars, is laying off two-thirds of its work force.

Plant officials told The Paris Post-Intelligencer that 44 of its 66 employees will be laid off within the next 60 days because of the failing economy.

via WHNT, Huntsville AL News, Weather, Radar -Paris plant laying off 2/3 of work force.

 

* Wilson Sonsini Goodrich & Rosati P.C., one Silicon Valley’s most venerated law firms, said it is laying off 45 lawyers in a sign that the recession is tightening its grip on Bay Area firms.

The cuts, which largely affected practices tied to the capital markets, are equal to 6.5 percent of the firm’s legal head count.

The firm also laid off 68 staff members.

via Wilson Sonsini laying off 45 lawyers - San Francisco Business Times:

 

via Vudu Lays Off (Another) 15 Percent « NewTeeVee.

 

* To cope with shaky economic times, the Danville Museum of Fine Arts and History has temporarily laid of some employees and decided to close the gift shop.

via Danville museum closes gift shop, lays off workers | GoDanRiver.

 

via HP cutting 150 to 200 jobs - Columbian.com.

 

Nearly 100 employees at Johns Manville are preparing for indefinite layoffs set to begin on April first. We are told a majority of those cut will come from inside plant seven on Dutch Road were they make microfiber which is turned into fiberglass mats for roofing shingles

via Johns Manville plant layoffs - 1/27/09 - Toledo News - 13abc.com

 

via Breedlove cuts jobs | Local & State News  | The Bulletin .

 

via Ashland posts 1Q loss, plans 1,300 job cuts - Forbes.com.

 

* BUTTE - The Montana Standard has laid off two full-time and four part-time employees as the paper’s owner consolidates circulation customer service.

via BillingsGazette.com :: Standard announces 6 layoffs.

 

* BRIDGEPORT — A northern West Virginia flat glass maker says it will lay off 75 percent of its work force this week because of the downturn in the automotive industry.

The 180 layoffs at AGC Flat Glass North America’s plant in Bridgeport will take effect Thursday.

via - Glassmaker to cut 180 of 240 workers at WVa plant

 

* The Ottawa Hospital is eliminating 61 health-care support jobs, most of which are in the health-records department, it was announced Monday.

Only 24 of the positions are filled by full-time employees. The rest are part-time workers.

via Ottawa Hospital cutting 61 jobs.

 

* Gevity HR said Tuesday that it is laying off about 10 percent of its staff as part of cost reduction measures aimed at saving the company approximately $19 million.

The Bradenton-based company, which provides payroll and human resources outsourcing services for about 6,000 client companies around the country, had 781 people on staff, according to Yahoo’s Finance site. Company officials said they would provide more details on layoffs and staffing later in the day.

via Gevity HR cuts staff by 10 percent | HeraldTribune.com | Southwest Florida’s Information Leader.

 

via LECG announces layoffs, predicts quarterly loss - San Francisco Business Times: .

 

* Yanagawa of South Carolina Inc. has announced the temporary layoffs of the majority of its employees. The layoffs, which will affect 145 of the company’s 176 employees, will go into effect on March 2 and last through June 30 of this year, company officials said

via The Item - South Carolina.

 

* ASHBURN, Va. (AP) - The Washington Redskins have made a second round of layoffs, dismissing six employees in the stadium ticket office and four seasonal employees.

via Redskins lay off 10 in 2nd round of cutbacks | WNCT.

 

The 650 workers’ last days on the job will be in March and April, said company spokesman Jim McNamara. Currently about 1,300 workers build Volvo trucks at the plant.

via 650 lose jobs at Volvo truck plant in Dublin | Richmond Times-Dispatch.

 

* CRANSTON – Cranston Print Works Co. plans to lay off about 75 workers, mostly in central Massachusetts, as its phases out a fabric-printing operation that dates back to 1824.

via Cranston Print to idle 75, mostly in Mass. - PBN.com - Providence Business News.

 

The second largest U.S. retailer said Tuesday that it will cut 1,500 jobs, most of them at its Minneapolis headquarters. The company started to notify workers of the cuts Tuesday, although the number of jobs affected is not yet known.

 

* On Thursday, one of the customers of E.K. Machines announced a cutback in its operations.

Officials at E.K. Machines then announced layoffs Thursday and Friday of about seven part-time employees who were in training. Errthum said the layoffs are temporary, but it’s impossible to know for sure how long they will last.

via WiscNews.com : Beaver Dam Daily Citizen Online.

 

A report by the Edson Leader confirmed that while the notices won’t necessarily result in layoffs, they have employees on edge.

via pulpandpapercanada.com - Pulp & Paper Canada - 1/27/2009.

 

* Elcoteq, an electronics manufacturing services company, will be initiating a mass layoff to deal with economic concerns, the company said in a “WARN” letter to the Texas Workforce Commission

via Elcoteq to cut 96 jobs - Dallas Business Journal: .

 

* Edlund, a Burlington-based company that develops and manufactures foodservice equipment, is laying- off seven full-time employees.

via Fox 44 - Burlington and Plattsburgh News, Weather and Sports - Fox44.net | Burlington: Edlund Co. Lays Off Workers.

 

The news was confirmed today by Stephen Feeley. He’s the director of communications for American Express Business Travel.

via American Express Cuts 46 Jobs in Linton, ND | KXNet.com North Dakota News.

 

* Of all the cost-saving measures announced by major U.S. publishers in past weeks, those at HarperCollins have until now been relatively mild. However, this morning, the company presented a voluntary retirement package to its U.S. employees, raising the possibility of future layoffs. According toPublishers Lunch, the offer applies only to employees over the age of 55 who have been with the company for more than five years, and for now does not affect Canadian workers:

via - HarperCollins offers voluntary retirement package to U.S. employees

 

via Basilea adding 100 jobs, prepares drug launch - FierceBiotech.

 

* RUMFORD, Maine — NewPage Rumford announced Tuesday that it was eliminating 130 jobs. They include 30 salaried and 100 hourly employees.

via Rumford Mill Announces 130 Layoffs - Portland News Story - WMTW Portland.

 

* The Missoulian announced today that it has laid off four employees and two others were told their jobs will end Feb. 13 as part of a workforce reduction.

via Missoulian: Missoulian announces layoffs: Posted on Jan. 27.

 

About half of the positions eliminated will occur this week, according to a release from the Deerfield-based company.

via United Stationers to layoff 250 :: News Sun :: Business.

 

* The Waupaca foundry in Etowah announced today it is laying off 70 people according to ThyssenKrupp corproate spokesperson Matt Rhodes.

via 70 Lose Jobs in McMinn County | plant, people, rhodes - Local News - WTVC Newschannel9.com.

 

via RTTNews - Latest Earnings,Upcoming Earnings, Pos Pre Announcements, Pos Pre Announcements , Positive Surprises, Negative Surprises, Hot Stocks, Stock Split Calendar, Stock Buybacks, Dividends, Negative, Positive PreAnnouncements,Surprises …. .

 

“That process continues, especially in light of the reduction in capital projects we have announced,” said Day. The company does not have a specific target for workforce reduction, Day added.

A 10% cut to the company’s 5,000 contractors could provide a significant cost reduction on the order of $50 million a year, and is currently being considered, the company said.

via 2nd UPDATE:Valero Swings To Loss In 4Q On $4 Billion Goodwill Charge.

 

The Richfield-based retailer told corporate workers in an e-mail and in meetings Tuesday that an unknown number of employees will be laid off on Feb. 19. The laid off workers will remain employed with the company for 30 days, and will get a less generous severance package than those who volunteered to leave.

via Best Buy to lay off workers.

 

* WOODBRIDGE — The future of the prestigious 61-year-old Woodbridge Country Club is in doubt as more than a dozen staff members were let go Monday, and the owners plan to file for bankruptcy due to a multimillion-dollar debt, a board member confirmed Monday.

via Woodbridge CC lays off 12, plans to file for bankruptcy- The New Haven Register - Serving Greater New Haven, CT.

 

* The Division of Athletics and Recreation laid off seven full-time employees and three staff members have applied for the voluntary severance package offered by DU, saving the division $665,000 per year, according to Dan Van Ackeren, chief financial officer of Athletics and Recreation.

Thus far at least 111 staff employees have left DU under the severance and lay off initiatives instituted in November.

via Athletics cuts jobs - Sports.

 

* Saint Joseph’s College in Standish announced $1 million in budgets cuts today, including the elimination of 14 positions.

The cuts, which total 3 percent of the school’s overall budget, did not affect financial aid to students, according to the school.

via MaineToday.com | News Update: Saint Joseph’s College cuts 14 staff positions.

 

* The interim chief executive of Mercy Hospital in Devils Lake says the hospital is laying off about 20 people.

via Ap |  The Jamestown Sun  | Jamestown, North Dakota .

 

PPG is eliminating fewer than 1,000 jobs under a restructuring plan announced in September and is considering boosting cuts to as many as 4,500 employees, Bunch said in an interview today in New York.

via Bloomberg.com: U.S..

 

via 5 3 eliminates jobs in West Michigan.

 

* Hancock Fabrics Inc (HKFI.PK) said on Tuesday it would cut about 30 corporate and store support positions, or about 9 percent of its corporate workforce, and take other actions to lower expenses.

via UPDATE 1-Hancock Fabrics cuts jobs, benefits to save cash | Markets | Markets News | Reuters .

 

At least 10 Gaston County residents were among 171 complaints sent to the Better Business Bureau after L.A. Weight Loss Center abruptly closed 10 locations in the Charlotte area last month, according to BBB spokeswoman Janet Hart.

via Job losses, layoffs continue in Gaston | clinic, medical, company - Local Business - Gaston Gazette.

 

via Leader-Telegram Online.

 

Mike: I like the word “displaced” since it sounds so much better than laid off, or at least that seems to be the reason you would use that word to describe a layoff

Le Sueur Inc. Human Resources Director Paul Johnson said the firm “displaced” 110 employees last week, the company’s largest-ever workforce reduction.

via The Free Press, Mankato, MN - NEW: Le Sueur Inc. has layoffs.

 

* Columbia Flooring Inc. will lay off employees at its manufacturing plant in Danville.

The workplace reductions will “take place as the company manages production to parallel consumer demand,” according to a written statement from the company.

A representative declined to provide details about the layoffs when contacted by phone Tuesday.

via Columbia Flooring to lay off workers | GoDanRiver.

 

* The economic downturn has led to fewer work weeks at the largest private employer in the Northeast Kingdom.

- Ethan Allen Furniture is scaling back production at its plants in Orleans and Beecher Falls.

 

* As part of its effort to get back on track financially, Crystal Cathedral laid off an unknown number of staff last week, including the church’s executive pastor and the pastor of its Hispanic ministry.

via Crystal Cathedral Lays Off Staff, Sells Land| Christianpost.com.

 

via Nissan to cut 110 U.S. jobs, close design studio | Reuters .

 

The statement cited the “global financial environment,” noting that “Russell is not immune to the changed environment and is actively taking steps to reduce expenses.”

Russell has 1,100 employees in Tacoma and another 1,000 employees in 20 offices across the globe, a spokeswoman confirmed, so the layoff will affect more than 400 employees.

via Business & Technology | Russell Investments cutting 20% of staff | Seattle Times Newspaper.

 

* A Rowan County company that transports newly-made trucks plans to lay off up to 100 workers by March 16, anticipating a dropoff in business from the nearby Freightliner plant, according to a notice filed with the N.C. Department of Commerce.

Auto Truck Transport of Cleveland said the cutbacks are necessary because Daimler Trucks North America – Freightliner’s parent company – plans to cut heavy truck production at its Cleveland plant by 50 percent this spring.

via Rowan plant cutting up to 100 jobs | CharlotteObserver.com.

 

via Bloomberg.com: Japan.

 

Several Plano ISD employees will lose their jobs under a plan to reduce the district’s multimillion dollar budget deficit.

School board members voted last week to approve a reduction in force that’s estimated to save Plano ISD $1.5 million. Under the plan, the layoff would target employees in two departments: elementary advanced academic services and library/media services.

 

 

- International News -

 

 

* THE world’s biggest lead and zinc mine closed yesterday despite a promise that its $120 million expansion will be allowed to go ahead.

More than 300 workers were laid off at the operation near Borroloola.

via 300 mine workers laid off - Northern Territory News.

 

* LONDON (ICIS news)–Clariant on Tuesday said it planned to cut 1,000 jobs to reduce costs during the downturn as the Swiss specialty chemicals company reported a 5% drop in sales for the full year 2008.

via 96FM.

 

via RTTNews - Breaking News, financial breaking News, Positive EPS Surprises, Stock research …. .

 

MORE THAN 4,000 workers at the Bataan and Cebu plants of Japanese electronics maker Mitsumi had lost their jobs, the Trade Union Congress of the Philippines (TUCP) said yesterday.

via BusinessWorld Online: Mitsumi fired more than 4,000 workers — TUCP.

 

* AMSTERDAM, Jan 27 (Reuters) - Amsterdam airport operator Schiphol Group [SCHP.UL] said on Tuesday it would cut 10 to 25 percent of its 2,200 workforce as a result of a strong decline in traffic and increased international competition.

via Schiphol airport to cut up to 25 pct workforce | Industries | Industrials, Materials & Utilities | Reuters .

 

via Scapa cuts 11 per cent of workforce after sales slump - Crain’s Manchester Business .

 

* Bulgarian bathroom fixtures manufacturer Ideal Standard Vidima is screening its workforce as it seeks to slash 150 jobs by the end of the month, executive director Krasimir Kolchev said.

The job cuts will hit all departments of the Sevlievo-based plant, with work quality, discipline and education among the selection criteria.

 

- Hiring News -

 

* SingleSource Property Solutions will lease just over 30,000 square feet of space at the Southpointe office park in Washington County with plans to add up to 50 staff members.

In February the company will move into the space at the Stealth Technology Center, at 333 Technology Dr., from its current headquarters in Upper St. Clair. The move will result in a doubling of the company’s headquarters space.

via SingleSource moving to Southpointe, hiring 50 - Pittsburgh Business Times: .

 

* With our unemployment number the highest it’s been in several decades, thousands of Nevadans are desperately searching for jobs.

But there is some good news on the job front: the U.S. Census Bureau is looking to hire hundreds of temporary workers here in southern Nevada. News 3’s Maria Silva has more on the recruiting efforts and why the census count is so important to Nevada.

 

Mike: This  was actually a better day than yesterday, but there were still a number of large layoff announcements, including Corning and Target. It would be a good sign if the improvement continues throughout the week. We can hope anyway.  Until tomorrow, I’ll leave you with  a laugh……..

 

 

 

 

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H.R.1 Economic Stimulus Bill and Education

The House version of the Economic Stimulus Bill contains a tremendous amount of cash for education programs. I won’t go into the merits of the bill as a whole, but I do agree with the basic economic concept of deficit spending in a time of economic downturn to promote employment. The bill is likely to pas the House in a similar form as presented here, but may see significant modifications in the senate. The highlights below are extracted from the House Appropriations Committee report on the pending legislation.

Teaching in California in a time of state budget woes, in a Title 1 district, in a Title 1 school, I can say that this bill is welcome news.

Summary:

Education for the 21st Century: To enable more children to learn in 21st century classrooms, labs, and libraries to help our kids compete with any worker in the world, this package provides: • $41 billion to local school districts through Title I ($13 billion), IDEA ($13 billion), a new School Modernization and Repair Program ($14 billion), and the Education Technology program ($1 billion). • $79 billion in state fiscal relief to prevent cutbacks to key services, including $39 billion to local school districts and public colleges and universities distributed through existing state and federal formulas, $15 billion to states as bonus grants as a reward for meeting key performance measures, and $25 billion to states for other high priority needs such as public safety and other critical services, which may include education. • $15.6 billion to increase the Pell grant by $500. • $6 billion for higher education modernization.

Bill Report:

Africa: Subsidies That Work

Africa: Subsidies That Work

analysis

Washington, DC — In the 2008/2009 agricultural season, Malawi is spending $186 million to subsidize fertilizer and seeds for poor farmers, tripling the previous year’s figure of $62 million. Malawi’s success in this program, against donor advice, has made the country a grain exporter and helped contain food costs. The emerging consensus is that such subsidies are essential for African agriculture. In November the UN’s Food and Agricultural Organization rewarded Malawi President Bingu wa Mutharika, who also serves as his country’s Minister of Agriculture, with the Agricola Prize.

Ironically, donor opposition to agricultural subsidies in Africa was coupled with refusal by rich countries to reduce their own expensive subsidies to commercial farmers in their own countries.

Yet the case for subsidies is far more compelling for African smallholder farmers who often lack minimum access to agricultural inputs. In Malawi, the program has more than paid for itself by reducing costs for food imports.

Even supporters of increased subsidies warn, however, that subsidies must also be sustainable, and that other factors must be considered, including the cost of imported inorganic fertilizers and long-term impact on the environment. Scientists who collaborated in a multi-year “International Assessment of Agricultural Knowledge, Science and Technology for Development” (IAASTD) stressed the need to find and implement more energysustainable forms of agriculture, adapted to different ecological conditions.

This AfricaFocus Bulletin contains several articles on the food input subsidy program in Malawi and its impact on policy thinking on the continent, as well as links to several additional references.

Another AfricaFocus Bulletin placed on the AfricaFocus website today (but not sent out by e-mail given its length and technical content) contains the Sub-Saharan Africa Summary from the IAASTD meeting last year in South Africa, as well as a statement by civil society organizations released at that meeting). See http://www.africafocus.org/docs09/ag0901.php, For more from and about IAASTD, see

http://www.agassessment.org,

http://www.agassessment-watch.org, and

http://www.panna.org/jt/agAssessment

For previous AfricaFocus Bulletins on agricultural issues, see http://www.africafocus.org/agexp.php

For previous Bulletins with material on Malawi, visit http://www.africafocus.org/country/malawi.php

++++++++++++++++++++++end +++++++++++++++++++++++

Malawi’s grain subsidy programme bears fruit

Southern African News Features SANF 09 no 2, January 2009

http://www.sardc.net

Sanf mailing list: Sanf@sardc.net

http://lists.zol.co.zw/mailman/listinfo/sanf

The turnaround in Malawi, from being a food deficit country to one producing surplus grain and overcoming food shortages has demonstrated that regional countries have the capacity to be food secure if they apply the right policies.

The grain subsidy programme that was introduced in 2005 has seen the government increasing the provision of maize seed and fertiliser to the smallholder farmers by more than 75 percent.

As a result, Malawi has since 2005 trebled maize production from 1.2 million tonnes to 3.4 million tonnes in the 2007/2008 agricultural season.

The government policy intervention — a reintroduction of fertiliser and seed subsidies that began in 1999 — is profoundly supported by the Malawian President Bingu wa Mutharika, who doubles as Minister of Agriculture.

Starting in 2005, the government distributed coupons to low-income farmers to allow them to purchase two 50kg bags of fertiliser equivalent to US$7, one-fifth the market price.

In addition, the government provided vouchers to buy seeds enough for planting half an acre each. As a result, the average farmer’s yield increased to two tonnes per hectare from 0.8 tonnes in 2005.

In the 2007/2008 agricultural season, the subsidy programme cost the government US$62 million or 6.5 percent of its total budget.

The programme was initially criticised by economists and multilateral agencies who argued that the expansion of subsidies would worsen the budget deficit and create distortions in the market.

But Malawi’s recent successes in turning around the agriculture sector and ensuring food security for the country has confounded critics. In fact, the phenomenal increase in maize production has saved the country a yearly budget of US$120 million that it had spent in 2005 importing food aid.

As highlighted by Malawi’s Deputy Minister of Agriculture, Frank Mwendifumbo, the important lesson for policy makers in the region is that government subsidies are necessary for growth in agriculture. Such an intervention is in line with the SADC Declaration on Agriculture and Food Security that was adopted by SADC Member States in Tanzania. [in 2004; http://www.sadc.int/index/browse/page/173]

Among the medium to long term targets, the SADC leaders agreed to ensure that all Member States progressively increase agricultural finance allocation to at least 10 percent of national budgets within a period of five years.

In the 2008/2009 agriculture season, Malawi plans to spend US$186 million in an ambitious farm input subsidy programme for 1.7 million peasant farmers, agriculture authorities recently announced.

ADB & Mozambique Back Farm Subsidies

Mozambique 130 - Joseph Hanlon - June 9, 2008

For full issue see:

http://www.gg.rhul.ac.uk/Simon/GG3072/Moz-Bull-130.pdf

“You can’t manage agriculture commercially without subsidies”, said Mozambique’s Planning and Development Minister Aiuba Cuereneia.

“This used to be taboo, but now it is being accepted. We are now seeing international organisations talking about subsidizing agriculture.”

Cuereneia is chair of the African Development Bank (ADB) Board of Governors, and he was speaking at a press conference in Maputo on 16 May after the ADB approved the African Fertiliser Facility to make subsidised fertilizer available to farmers. He said the decision was not unanimous. The United States was opposed to the fertilizer facility, “but the Board of Directors voted for it”.

ADB President Donald Kaberuka said African agriculture used to suffer from low producer prices, and farmers had little incentive to produce. Now, with the sharp rise in grain prices internationally, there were incentives — but fertilizer prices had also soared, so “there must be some degree of fertilizer subsidy”.

Such subsidies should be “market-smart” and targeted, and they would require support from international institutions. He recognised that “fertilizers are not enough. If there is no road, you will produce tomatoes, but they will rot. For markets to operate, the infrastructures must be working — the roads and the irrigation systems — this will prevent the crops from rotting before they reach market”.

But speaking to parliament on 7 May, Agriculture Minister Soares Nhaca made no mention of fertiliser subsidies. Instead, he said the government was promoting large scale imports of fertilizer which should reduce the price paid by farmers. The longer term solution, he claimed, is to attract private investors willing to set up fertilizer factories in Mozambique.

A harvest of hope for African farmers

Malawi subsidies stimulate a bumper crop

By Michael Fleshman

Africa Renewal, United Nations

Email: africarenewal@un.org

Web: http://www.un.org/ecosocdev/geninfo/afrec/

In a world still shaken by skyrocketing food prices and the sometimes violent street protests that have accompanied them (see Africa Renewal July 2008), the search is on for ways to increase food production in Africa and other chronically hungry regions.

Tito Jestala, who farms a tiny plot of land in Chiseka, Malawi, thinks he has the answer.

In 2005, more than 30 of his neighbours died of malnutrition in one of the periodic droughts that have swept Southern Africa. Even in a good year, he told the UK newspaper The Independent, he could coax barely 250 kilogrammes of maize from his exhausted land. But over the past two years his harvest has tripled, producing plenty of food for his family and leaving more than enough to sell at the local market.

The difference, Mr. Jestala says, is fertilizer. For years this basic input was simply beyond his means and those of millions of other African farmers. Costing the equivalent of about $50 a bag, fertilizer was just too expensive to use. And buying it on credit was too great a risk for farmers at the mercy of unreliable rains and poor-quality seeds. But in 2005 the government of President Bingu wa Mutharika began subsidizing fertilizers and high-yielding seeds for Malawi’s smallholders. The action cut fertilizer prices by 80 per cent and slashed the cost of hybrid maize seeds from 600 kwacha per bag to 30.

The impact was dramatic. The following year Malawi’s maize harvest more than doubled, to 2.7 mn tonnes. It rose again in 2007 to 3.4 mn tonnes - enough to feed the nation and sell 400,000 tonnes to the UN’s World Food Programme (WFP) and hundreds of thousands of tonnes more to neighbouring countries, generating $120 mn in sales.

The formerly aid-dependent country even donated 10,000 tonnes of maize to the WFP’s nutrition programme for people living with HIV/AIDS.

This year the government plans to spend $170 mn to expand the programme in the hope of reaching more farmers and capitalizing on higher world maize prices. “As long as I am president,” Mr.

Mutharika was reported to have told his cabinet in 2007, “I don’t want to be going to other capitals begging for food.”

‘A very bold decision’

In fact, say experts at the UN Food and Agriculture Organization (FAO), Malawi’s turnaround is the result of a combination of factors, including the return of sufficient rain, the incentives offered by higher world food prices and increased government investments in other parts of the country’s rural economy.

Yet there is little doubt that the decision to make high-quality seeds and fertilizers affordable for smallholders like Mr. Jestala has been the key to Malawi’s success. The subsidy programme is already being seen as a model by a growing number of African governments and international development and agriculture agencies.

But the programme has encountered difficulties in gaining acceptance from donors. In 1999 the government had introduced a more modest programme of free “starter packs” of fertilizer and seeds for family farmers in an effort to boost production. The results were impressive, but the subsidies ran afoul of the pro-market policies of the World Bank and International Monetary Fund (IMF), which argued that subsidies were “crowding out” commercial sales and constituted undue government interference in the economy. Under considerable pressure from these financing institutions, the programme was phased out. The IMF also insisted that Malawi sell much of its national grain reserve to pay off the debts of the state-owned maize marketing agency.

Most Malawian farmers, however, were too poor to pay commercial rates for fertilizer and seeds. As a result, maize yields plunged.

When drought struck in 2001 neither farmers nor the government had adequate grain stores to see them through, and more than a thousand people are estimated to have died. Then after the failed 2005 harvest left 5 million of Malawi’s 13 million people on the brink of starvation, the newly elected government of President Mutharika defied the donors and launched the subsidy scheme with its own funds.

That move proved decisive, Kanayo Nwanze, vice-president of the UN’s International Fund for Agricultural Development (IFAD), told Africa Renewal. “It was a very bold decision to provide subsidies for seeds and fertilizers over the objections of the development partners,” he said, noting that during one meeting with senior Malawian officials a furious representative of a donor country had stormed out of the room. “But the government stood its ground and said ‘We’re going to do it. It is our programme and we’re going to do it.’”

With success literally growing all around them, “the next year the donors supported it,” Mr. Nwanze noted. It also made good economic sense, he continued, since the savings from reduced imports and increased export sales generated three to four times more revenue than the subsidies cost.

The importance of the Malawi subsidy programme for the rest of Africa, Mr. Nwanze observed, is that “t is a story that can easily be repeated in other parts of Africa”and has the potential to produce big gains in a short time at relatively modest expense. A growing number of countries, including Zambia, Ghana, Senegal and Kenya, have announced plans for similar subsidies and more governments are expected to follow suit.

The African Development Bank (ADB), often a critic of state interventions in economic affairs, announced in May that it had established a special fund to mobilize financial resources for greater fertilizer production and use, including subsidized sales to family farmers. The move was part of a $1 bn increase in the ADB’s farm lending portfolio.

Failed policies

The new emphasis on smallholder farming and food self-sufficiency represents a sharp break with past policy by donors, international financial institutions and African governments alike. Since at least the 1980s, African governments have pursued structural adjustment policies mandated by the World Bank and IMF. These included focusing on high-value commercial and export crops and developing non-agricultural pursuits for those displaced by such activities. Government subsidies and marketing programmes were said to be too costly, to impede private business involvement and to be prone to mismanagement and corruption. Government withdrawal from agriculture, donors insisted, would allow the private sector to move in.

But as FAO and World Bank data show, investment in African agriculture instead went into a steep decline. This was reflected in reduced use of fertilizers and improved seed varieties, fewer agricultural extension and marketing services and a steady drop in crop yields, soil fertility and rural incomes.

A 2007 analysis of agricultural lending to Africa by the World Bank’s Internal Evaluation Group confirmed that countries had been pressured into privatizing marketing and extension services and ending farm subsidy programmes to make room for private entrepreneurs and investors. But, the analysis added, such businesses too often failed to materialize.

In addition, FAO Director-General Jacques Diouf noted at a June 2008 food summit in Rome, the percentage of official development assistance devoted to agriculture dropped from 17 per cent to 3 per cent between 1980 and 2005.

The shift in emphasis away from agriculture, in particular smallholder food production, was no oversight. Under the pro-market, trade liberalization policies pursued by international financial institutions and many bilateral donor agencies, governments were advised to stay out of farming and allow commercial growers to produce niche-market products like flowers and seasonal fruits instead of low-value food items.

The view of these groups was expressed succinctly by then US Agriculture Secretary John Block, who, according to journalist and activist Martin Khor, told a world trade conference in 1986 that “the idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on US agricultural products, which are available in most cases at lower cost.

Dwindling donor support, the World Bank evaluation asserted, encouraged neglect by national governments as well. “s the decline in lending continued, so too did the decline in recognition within governments that agriculture was central to development.”World Bank advice and structural adjustment policies have had a major impact on African agriculture, the study acknowledged, “ut results have fallen short of expectations.”

‘An absolute disaster’

In the view of many agronomists and development economists, the results have been little short of ruinous. After being a net food exporter in the 1970s, Africa is now heavily reliant on commercial imports and emergency aid, the FAO reports. Some 42 African countries depend on imports in even the best of times. It is the only world region where crop yields per hectare have remained stagnant - and where as many as one in three people are chronically malnourished.

“The end of government subsidies to African farmers because of structural adjustment programmes was an absolute disaster,” says Akin Adesina, the vice president of the Alliance for a Green Revolution in Africa (AGRA), a non-governmental rural development initiative headed by former UN Secretary-General Kofi Annan that is a leader of international efforts to revive African agriculture.

“Today African farmers are almost the only ones in the world who receive absolutely no government support of any kind,” he told Africa Renewal, noting that farmers in wealthy countries currently receive more than $300 bn in government payments annually. African farmers “are left on their own to sink or swim, and as we have seen they are simply sinking.”

“What AGRA is saying,” Mr. Adesina continues, “is that there is a need now to recognize that government has to play a role in subsidizing African farmers. The key with subsidies is to do them in ways that reach the poor and also build the market. We are calling those smart subsidies, and we are calling for smart subsidies all across Africa. If Malawi can do it, everyone can.”

IFAD’s Mr. Nwanze agrees. Previously, he explains, the depth of poverty in African farming communities made it impossible for most farmers to buy the improved seeds, fertilizers, tools and other inputs they need. “I can’t for the life of me understand why [subsidies] have been blocked in the developing world. It’s totally ridiculous. Here we are talking about an environment where most farmers have no access to credit and no access to inputs and we’re telling governments that you cannot subsidize agricultural production.”

For three decades, Mr. Nwanze notes, IFAD has worked with governments in developing countries to provide credit to family farmers, increase access to inputs and connect them to local and regional markets. “We have seen it work time and again. To me, smallholder agriculture is the key for those countries.”

Arguing with success

But have the global food price shock, recognition of the economic importance of African agriculture and the Malawi success story brought the era of “sink or swim” policies to an end? Have they prompted a generous helping hand to Africa’s hard-pressed, mostly female family farmers? Not quite.

Agronomists, economists and governmental and intergovernmental policymakers agree that neither subsidies nor fertilizer is by itself a solution to Africa’s complex agricultural problems. Making African farming profitable, sustainable and productive will require land reform, political empowerment of rural communities, access to local, national and global markets and long-term investments in irrigation, sustainable fertilizer use and soil management, health and education, modern farm technology and extension services, and transport and communications systems. These strategic investments are detailed in the Comprehensive Africa Agriculture Development Programme of the continent’s development blueprint, the New Partnership for Africa’s Development (NEPAD).

There are also doubts about global and national political commitment. Only six of Africa’s 53 countries have followed through on a 2003 commitment to devote 10 per cent of their national budgets to agriculture.

Internationally, the recent collapse of talks at the World Trade Organization, in part over the issue of subsidized Northern food exports to poor countries, suggests that powerful farm lobbies in wealthy countries still covet privileged access to developing countries’ markets at the expense of local producers. Europe’s system of trade preferences for African and other developing country imports, dubbed the “everything but arms” initiative to by EU trade ministers, has so many obstacles to agriculture imports that it is only half-jokingly referred to as the “everything but farms” agreement by critics.

Nor is everyone persuaded by Malawi’s model subsidy programme, despite its success. Michael Morris, a World Bank economist and expert on fertilizer subsidies, confirms that there has been a shift in the Bank’s thinking about smallholder agriculture and government subsidies. But he argues that government support for family farmers should be smaller, “smarter” and better targeted than in the past.

“The Malawi government is doing many things well” with its subsidy programme, he told Africa Renewal. However, “We do have some disagreement about tactics.” Those disagreements, he says, concern the costs, whether the subsidies are creating dependencies or laying the basis for self-sustaining commercial sales, and whether the subsidies are reaching the intended beneficiaries.

“We’re always being charged that the bank is being ideological and dogmatic about subsidies because economic theory tells us subsidies are bad,” Mr. Morris notes. “The bitter experience was that when you had subsidies on fertilizer it really attracts . . .

politically and economically powerful people who go after the fertilizer. I think that explains the ambivalence that the Bank has had about subsidies. What has changed is the recognition that things simply weren’t happening on the ground. The private sector wasn’t getting the job done.”

Under such circumstances, he concedes, governments can target “market-smart” subsidies that “build the basis for a sustainable private-sector-led input distribution system that can function on its own.” Even then, he cautions, “the conditions for using those subsidies are pretty rigorous. You really want to be targeting them not only at the end user but also at different stages along the whole supply chain. . . . There are lots of opportunities to use subsidies to lower costs in those various stages,” including by providing financing and training for importers and distributors and by stimulating demand by educating farmers and distributing small demonstration packs.

Governments and donors must also evaluate the cost of fertilizer subsidies against other needs. Mr. Morris estimates that fertilizer subsidies now consume 60 per cent of Malawi’s agriculture budget.

“That’s just a huge amount. There are many other things — extension services, irrigation, research — that are not being done as a result.” Unless African governments incorporate an “exit strategy” into their subsidy programmes, he concludes, “you commit larger and larger amounts of money into something that will never be able to pay for itself. We need to think of other opportunities and other options. We have to pick our spots.”

To date, however, Malawi’s subsidy programme has more than paid for itself. And the government has cracked down at the first signs of abuse, by sacking a senior cabinet minister for selling subsidy coupons to wealthy farmers and by toughening eligibility requirements and oversight procedures.

In a video address to a special meeting of the UN Economic and Social Council on the world food crisis in May, President Mutharika called on the international community to help Africa support its farmers: “International stakeholders like the World Bank . . .

should not continue with the feeling that they have all the solutions in Washington. They should listen to policymakers at the local level and learn from that.”

Additional Resources on Fertilizer Subsidies

UK Department of International Development

International Fertilizer Association

http://www.fertilizer.org/ifa/Home-Page/LIBRARY/Issue-briefs

“Food Prices and Fertilizer Markets” 8 December 2008

International Federation of Organic Agriculture Movements (IFOAM) http://www.ifoam.org

http://tinyurl.com/dxwdty

“Organic Agriculture, instead of chemicals, for food security in Africa” 8/28/2008

AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please write to this address to subscribe or unsubscribe to the bulletin, or to suggest material for inclusion. For more information about reposted material, please contact directly the original source mentioned. For a full archive and other resources, see http://www.africafocus.org

Nation

NEW YORK (AP) — This is one recession Americans aren’t going to spend their way out of.

Americans are in no mood to spend their way out of this recession.

The Conference Board said Tuesday its Consumer Confidence Index edged down to 37.7 this month, a record low, from a revised 38.6 in December. It stood at about 87 just a year ago.

Americans are battered by headlines about massive job cuts, including thousands at Home Depot, Corning, General Motors and Caterpillar in just the past two days, and are still watching the values of their homes and retirement funds dwindle.

“Virtually, there is no confidence out there,” said Bernard Baumohl, chief global economist at The Economic Outlook Group LLC. “Household anxiety has reached a point that we can count them out to get us out of the recession.”

Economists believe Americans will remain in a financial funk until they start seeing fundamental improvements in the economy, including a turnaround in the housing and job markets. And two other reports Tuesday suggested that’s unlikely to come soon.

The Labor Department announced that state unemployment rates shot up nationwide in December, with Indiana and South Carolina racking up the largest monthly increases. South Carolina’s jobless rate bolted to 9.5 percent, more than 2 percentage points above the national rate.

And the Standard & Poor’s/Case-Shiller 20-city housing index dropped by a record 18.2 percent in November from the same month a year earlier — the sharpest annual rate since the index’s inception in 2000.

The gloomy news initially sent the Dow Jones industrial average lower, but by mid-afternoon it took heart from some positive earnings reports, finishing up about 58 points at 8,174.

President Barack Obama and Congress are scrambling to enact a $825 billion package of increased federal spending, including money for big public works projects and for states, as well as tax cuts to revive the economy.

That could encourage Americans to spend more, but Baumohl believes the relief would be only temporary unless financial institutions become healthy enough to revive lending. Tighter credit has been a challenge for shoppers and businesses alike.

Federal Reserve policymakers are gathering this week to examine what other tools they can use to help ease a recession that started in December 2007. They are all but certain to leave the benchmark interest rate at its current record low.

But without the help of consumer spending, which accounts for more than two-thirds of economic activity, the economy faces a slow recovery. In past recessions, consumers had helped the economy dig itself out of its funk.

Americans “are feeling extremely bad about jobs — both current and expected,” said Lynn Franco, director of The Conference Board Consumer Research Center.

The Conference Board survey showed fewer people expect to get raises over the next few months, or for jobs to be plentiful.

Nationally, the unemployment rate, which stands at a 16-year high of 7.2 percent, could hit 10 percent or more later this year or early next year, according to some analysts’ estimates. Michigan and Rhode Island already had unemployment rates in double digits last month. And the pink slips keep coming.

Corning Inc. said Tuesday it is cutting 3,500 jobs, or 13 percent of its payroll, as demand slumps for the glass used in flat-screen televisions and computers. A day earlier, tens of thousands of layoffs were announced by Pfizer, GM, Caterpillar, Texas Instruments and Home Depot.

The consumer confidence survey, which sampled 5,000 U.S. households through Jan. 21, showed Americans remain pessimistic. Nearly 48 percent now say business conditions are “bad,” while less than 7 percent say conditions are “good.”

Shoppers’ splurges on everything from sweaters to pillows in recent years have kept factories humming in China and have fueled store expansions and hiring in the United States.

Now the most severe spending pullback in decades is sending a number of stores into liquidation, with Circuit City and discount clothing chain Goody’s Family Clothing among the biggest names. The merchants that manage to survive are slashing inventories and closing stores, sending pain to all corners of the economy.

Stores limped through the weakest holiday period in four decades by one measure, and retail sales appear to be only deteriorating in January. The National Retail Federation, the world’s largest retail trade group, predicts that retail sales will fall 0.5 percent this year, well below the meager 1.4 percent gain last year.

AP Real Estate Reporter J.W. Elphinstone in New York and AP Economics reporter Jeannine Aversa in Washington contributed to this report.

No comments yet.

Vital Market Signs When FOMC Met Previously

 

In the six weeks since the FOMC last gathered and cut the Fed funds target to a band of 0.0-0.25% from 1.0%, ten-year Treasury yields have been steady on balance.  Although 0.5% weaker against the Japanese yen, the dollar has recouped 4.2% against the euro and about that same amount against a trade-weighted index of other currencies.  Such appreciation would exert a similar effect on the U.S. economy as a rate hike of 40-50 basis points, neutralizing half the stimulus of December’s rate cut.  Stock prices are 4.2% lower now than then, and oil prices have eased another 6% but been unable to sustain sub-$40 levels.  Economic news in the U.S. and world darkened, and the situation of many financial institutions grew more dire. 

Presidential power was transferred to the Democrats, and it quickly became clear that Obama’s call for a new bipartisanship would be ignored.  Despite a much bigger voter mandate than when Bush beat Gore eight years ago, President Obama will have a much harder time legislating fiscal change than Bush did in 2001.  That probably translates into more delay in implementing a stimulus and greater-than-expected compromise in the composition of the economic support.

A considerable burden still rests on monetary policy.  But the Fed’s scope for reducing nominal short-term interest rates is now exhausted.  The statement that will be issued in just over three hours takes on even more importance than before.  It will be tempting for officials to speak in broad terms, pledging to do whatever is required.  One challenge is to convince the business, investor, and voting public that the Fed is issuing more than words and that a basis exists  for confidence about the future.

Copyright 2009 Larry Greenberg.  All rights reserved. No secondary distribution without express permission.

Mortgage Rates Slightly Lower Wednesday Morning (FNMA 30-yr 4.5 at 101.18 +2/32); Fed Announcement Later Today

Favorable repricing took place yesterday.

The 30-yr fixed FNMA required net yield (60 day) is now at 4.55%.

The Dow is up 125 points.

New Overnight Developments Abroad: Softer Dollar Ahead of FOMC Announcement

The dollar relinquished another 2.2% against the pound sterling but also dropped 0.9% against the Australian dollar, 0.7% against the Canadian dollar, and 0.6% relative to the euro. The yen lost 0.4%. The new U.S. government is reportedly moving closer to buying up a lot of bad bank assets. The FOMC announcement comes at 19:15 GMT. The Fed funds rate is already centered on 0.125%, so focus is on quantitative easing measures.

The Russian rouble’s controlled depreciation resumed.

Stocks rallied in Asia and Europe. South Korean Kospi up 5.9%. Singapore +4.8%. India +2.8%. Pakistan +3.4%. Japanese Nikkei +0.6%. Australia +1.5%. South Africa +1.4%. German Dax is trading 2.3% higher, and the Paris Cac shows a gain of 2.3%. Italy up 2.2%. British Ftse +1.7%.

Sovereign bond yields steady in Japan (10-year JGB at 1.265%) but down in Europe. Oil is flat at $41.54/barrel. Gold is off 1.3% at $887.60/ounce. Euribor rates continued to edge downward, with the 3-month now at 2.115%.

Japanese automakers reported big December-over-December declines in production. The Shoko Chukin index of small to mid-sized activity worsened for a fifth straight month to a lower-than-anticipated 24.8 in January from 29.4 in December.

The Reserve Bank of New Zealand is expected to cut its cash rate at least by another 100 basis points today. Such is at 5.0% now after four reductions totaling 325 basis points since last July.

The Korean rate cut to 3% from 4% last month was decided by a 6-0 vote, Bank of Korea minutes revealed.

A 0.3% quarterly drop in Australian consumer prices in 4Q08 trimmed on-year inflation to 3.7% from 5.0%. Gasoline prices fell 18.2% from 4Q07. Core CPI went up 0.75% from 3Q versus 1.25% in the prior quarter and by 4.35% from 4Q07. PPI and CPI data show that upstream costs are not getting passed on. Skilled job vacancies fell 45% in the year to January. The Reserve Bank of Australia is expected to slice its cash rate on February 3rd from 4.25% to 3.25-3.5%.

German consumer confidence was higher than projected in February at 2.2 after an upwardly revised same 2.2 score in January. Reduced inflation is having a positive effect. German consumer prices in January fell monthly by 0.6% in North Rhine Westphalia, 0.5% in Brandenburg and Saxony, and 0.3% in Bavaria and Hesse. Much of this drop was seasonal, as package tour costs settled back. On-year inflation is running at 1% or marginally above.

In Italy, where better-than-expected consumer sentiment was reported yesterday, business confidence slid to a record low in January of 65.5 from 66.8 in December.

Spanish GDP fell 1.1% last quarter and by 0.8% from 4Q07, hit by a collapsing construction sector and financial market strains. GDP was 0.8% lower than a year earlier after posting a 0.9% rise in the year to 3Q08. Growth in full-2008 slowed to 1.1%.

Switzerland’s index of leading economic indicators sank to a record low in January of -0.87 from -0.45. The president of the Swiss central bank observed a lack of factors pointing to a recovery even in 2010.

Swedish retail sales slid 0.1% m/m and by 1.1% year/year in December. Expected inflation in Sweden dropped very steeply since October, a survey showed.

Norwegian business confidence had a record low reading of -23 last quarter after -7 in the third quarter. Unemployment climbed to 2.9% in 4Q.

South African consumer price inflation slowed to 9.5% in December from 11.8% in November and to 10.3% core from 12.1%. South African interest rates are expected to be cut next week.

Icelandic consumer price inflation climbed to 18.6% in January from 18.1%, reflecting substantial depreciation of the Icelandic crown.

French consumer confidence was better than forecast at -41 in January after -44 in December but a corporate survey found expectations of diminishing demand for products in the current quarter.

At the annual World Economic Forum in Davos, the escalated call for yuan appreciation by the new U.S. administration has been criticized.

Serbia’s dinar hit a record low against the euro and required intervention support. Saudi central bank officials said their economy is not in recession.

Copyright 2009 Larry Greenberg.  All rights reserved. No secondary distribution without express permission.

Home Values Drop 18.2% As Citi

In real estate related market news today…

Home prices dropped by 18.2% in November versus the year ago period, accordingly to the Standard & Poor’s/Case Shiller index.   The index also shows the impact of a declining market: since August 2006 prices have dropped every month for a combined total of 28 consecutive months.  ”The free-fall in residential real estate continued through November 2008,” David Blitzer, Chairman of the Standard & Poor’s Index Committee, noted in a statement.

And more media scrutiny has forced some Citigroup executives from traveling in a new fancy jet, eating bon bons and sipping champagne as they jet set to find out where their next bailout will come from.  Citigroup received over $45 billion in capital from the government TARP funds, but it still planned to purchase a Dassault Falcon 7X for a cool $50 million.

Now, on to our real estate investing section…

Future History

If hindsight is 20/20 then it should come as no surprise that we often like to take a quick walk down memory lane; after all, those that do not learn from history are doomed to repeat it…or so they say. As the first month of 2009 comes to a close, it’s only natural to wonder what the rest of this year will have in store and how it will come to be remembered in the history books in years to come.  Here are a few solid guesstimates with implications for short sale investors today and tomorrow…

1.      Undoubtedly President Obama is likely to make it into the history books not only for becoming the first African American President in the history of the nation but also for whatever transpires during this term. Faced with two wars and one of the worst economic climates to strike the nation since the Great Depression, the challenges are very real.

Today

As I write Gold is currently down $10.80 at $886.90, taking a much needed breather from its recent upward thrust. If Gold can hold and consolidate around this level the next target will be $920 and then $950. Today’s post contains articles on how to trade gold for those who don’t like risk, much tecnical analysis and more… -jschulmansr

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Gold appears to have run into resistance near the $920 level which is blocking its upward path for now. Since we know that the funds are purely technical traders and have been buying, both adding new longs and for those who were short, getting out by covering, while open interest has been steadily increasing, it is safe to say that the bullion banks are the ones blocking the upward trajectory. Nothing new there and it does not take much observation for those who have been watching gold the last 8 years to know this.

The inability of the mining shares to continue higher yesterday, even in the face of a much higher bullion price, gave some paper longs at the Comex a reason to cash in some profits and emboldened the bears to dig in their heels.

To show you how fickle these markets have become, do you remember when gold was following the equity markets around not all that long ago. They went down – it went down. They went up – it went up. It was all about the famous “risk aversion” or deleveraging trade. Now the exact opposite seems to be happening. The equities go up and gold goes down. Well guess what they have come up with to now explain this turn of events? Yes – risk aversion!

Here’s the latest – equities are going up because supposedly some of the news from the banking sector is not as dire as many have come to expect. The bearish sentiment in the equity markets is misplaced. Gold has been going up because of banking sector fears and currency risk. Ergo – gold should now go down as those fears are overblown because the risk averse psychology has become too excessive. In other words – all’s clear and the water is just lovely so dive on in!

I could not make this stuff up if I tried.

Had enough – how about this one?  – Gold has now broken its relation to the Dollar. The fact that the Dollar was being bid up was evidence of a panic into safety. Now that the Dollar is going down it means that the panic is subsiding. Therefore gold should go down as well which means the inverse relationship between gold and the Dollar has been severed.

Again, I am just repeating the latest mantra du jour.

Just wait and see – when gold starts going up as the Dollar starts going down the same guys who came up with the latest explanations will be singing how the historic relationship between gold and the Dollar has been restored once again. No matter what happens – they will have proven to be right! Geniuses all!

It reminds me of the global warming crowd. When droughts were springing up and record highs were being shattered it was called global warming. When record snowfalls suddenly showed up and record lows were being set as people all over the globe freezing their keisters off,  it morphed into climate change. No matter which way the temperatures go, that crowd will always be right! Shame on you climate destroyers for not cramming your family into something that more closely resembles a go-kart rather than an automobile on your assorted trips around town. If you had any concern for the planet you would be riding a horse to work. Then again that creature gives off methane gas which is actually being seriously considered as a pollutant and thus liable to be taxed by the idiots in Washington DC, so no matter what you do, you are royally screwed. It’s too bad that there remains no undiscovered country where freedom loving people who believe in honest money and limited government could sail off to and found a nation where the money changers and government control freaks would be banned from entering.

By the way, did you notice that the new President just signed the death sentence for the US automotive industry yesterday by mandating new mileage efficiency standards – all in the name of saving us from a problem that does not exist? Yep – nothing like telling an industry already on life support that their most profitable units, the bigger and safer vehicles, will have to go in favor of smaller, less profitable ones. Don’t touch the unions however whose demands have forced the US auto industry into concentrating their efforts on the more profitable lines (the larger vehicles) in an effort to offset the financial drain imposed upon them by the exorbitant salaries and benefits that they are forced to pay these same unionized workers.

Remember that big move up in Copper yesterday? Remember how the existing home sales number ran all the shorts out and pushed the market right into technical chart resistance threatening an upside breakout? Well, that is history today as it went “KERPLUNK”! To show you how utterly insane these markets have become and the farce that the hedge funds have turned them into, consider this – Copper closed at 1.4720 on Friday. On Monday it rallied sharply blasting upwards closing at 1.5865 reaching a high of 1.6310. Today it collapsed making a low of 1.4545 and closed at 1.4850, down 10 cents a pound. In other words, it went NO WHERE in TWO DAYS but in the process it careened all over the place blowing out upside buy stops before triggering a wave of downside sell stops today. And to think this hedge-fund created madness has become the price discovery mechanism by which commercial producers and end users are somehow supposed to be able to enter into contracts and hedge risk to ensure profitability. I have been watching these futures markets for more than 20 years and I have never seen such idiocy. This is what happens when computers have taken over trading decisions based on nothing but the latest price tick. I know it sounds excessive to some, but I honestly have come to believe that the entire futures industry is very close to being destroyed by these out of control hedge funds. A commercial entity simply cannot use these markets to hedge and without commercials these markets cannot survive since they will serve no useful purpose whatsoever as all that will be left is hedge funds trading their algorithms against the algorithms of other hedge funds with the commercials using forward contracts amongst themselves and bypassing the futures markets altogether.

Back to gold – technically gold still looks very good although it has stalled just below the $920 level. Ideally, it would hold support on any subsequent RE-test of the Downsloping trendline of the wedge formation on the weekly chart which is drawn off the July and October highs. That comes in near the $880 level. I would prefer to see it consolidate above the $880 level but would view an ability to hold above the $870 level as still friendly. Failure at $870 would give the shorts enough impetus to try to shove it back to $850- $840.

Upside resistance remains near $920 while more formidable resistance comes in near the $945-$950 region. That corresponds to both Downsloping trendline resistance drawn off the peak high made back in early 2008 and the July high which also happens to be the highs made back in October last year. Those are the parameters we are working with technically.

On the daily chart, all of the major moving averages, including the 100 day moving average are all now trending solidly upwards. The 10 day is close to making a bullish upside crossover of the 20 day which will give some trend following funds a reason to buy while the RSI remains below the 70 level. So we have room to run to the upside IF, and this is a big IF, the market can push through the bullion bank selling near $920. The inability of the mining shares to continue moving higher does concern me however. In an ideal bullish environment for gold, the shares move higher alongside the bullion price.

It looks to me like the weakness in crude oil today is contributing some downward pressure in gold as many of those fund algorithms use its price action as a factor in their selling or buying of commodities. Weaker crude oil prices give rise to the deflation scenario and that still leads some to sell gold because of misguided notions of how it will perform during periods of general price deflation. Again, gold is primarily a currency – not a commodity, and it will rise when faith in paper currencies falters, all of the arguments of the deflationists notwithstanding. When governments slash interest rates to NOTHING and issue more and more paper IOU’s, the sheer supply guarantees that they will lose value meaning that investors seeking wealth preservation are buying scraps of paper that pay zero return and lose any “value” that they might have once possessed. Gold thrives in such periods as it is solid, substantial and cannot be diluted by conniving Central Bankers. Which would you rather have in your hand during times of financial chaos and upheaval – a promise by a politician or a metal which has stood the test of 6,000 years? If you have any problem making a decision, I suggest you take a good look at the price chart of the British Pound and especially the price of gold in Sterling terms.

The HUI and the XAU were unable to manage strong closes above their former double tops make back in mid-December of last year and early January of this year in yesterday’s session meeting up with selling from the opening bell and never quite being able to shrug that off. Still, their charts look good as they are consolidating right around that former double top. I would like to see them hold above the 10 and 20 day moving averages near the 115 – 116 level in the XAU and 279 - 282 in the HUI.

Bonds finally saw an up day today which is to be expected given the beating that they have taken of late. The downdraft in bonds could be called “parabolic in reverse”. Jim likes to call it a “waterfall”, which is an apt description considering the fact that if one were long while this has occurred, they have indeed taken a bath in their trading accounts or better yet, drowned under a sea of red ink.

The Dollar is generally weaker today although it has bobbed back and forth between a small gain and a small loss. The charts still appear to show a technical failure near the 88 level. It is treading water above the 50 day moving average (barely) while the 100 day lies near the 83.50 level. A breach of that level and it should move back down to retest 80.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

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But volatile stocks are volatile in both directions and when the gold market corrected, junior miners lost all of those gains and then some. Amateur investors that were patting themselves on the back and recommending investments to their buddies based on their recent success were caught off-guard by the severity of the decline in the junior mining sector and suddenly found that they gave back most or all of their gains. To be sure, some booked profits and got out before the ship sank, but most were caught unsuspecting and unwilling to believe the party could be over so quickly. Many junior miners lost 80% or more of their market cap during the past year or two.

Precious metals investors have a sour taste in their mouth in regards to junior miners and have largely dismissed the entire sector as too risky. For many investors, junior miners have been removed from their portfolios, watch lists and consideration set for future investments. Newsletter writers and analysts that couldn’t contain their excitement over the next “5-bagger” rarely mention a word about juniors these days. While much of this condemnation is warranted, I think we should be careful not to throw the baby out with the bath water.

While I will acknowledge that 75% or more of junior mining companies are not good investments and many will go out of business with credit markets contracting, there are still quite a few impressive juniors that deserve a second look now that the dust has settled. Mine production is decreasing and the larger miners will need to acquire junior miners with quality properties in order to add to their pipeline and keep their production numbers growing. After a massive sell-off that brought the entire sector crashing down, some of the most promising juniors have finished a bottoming pattern, consolidated and have already began moving up very impressively. Cash-strapped investors and weak hands have been shaken free of their junior mining shares as the focus has shifted to more “safe” and liquid investments. Has this produced an opportunity for savvy precious metals investors to pick up quality mining companies at undervalued prices? Here are my main criteria for selecting which junior mining companies are worth my investment dollars.

click to enlarge

Those that are comfortable with a higher risk/reward proposition might want to take a second look at junior mining companies during 2009. If the trend continues or accelerates as investors warm back up to juniors, we could see the return of another explosive few years for junior mining companies as gold pushes above $1,000 on its way towards its inflation-adjusted high of $2,300.

Now From One of the Masters’ Himself Jim Sinclair

 

First, to keep things in proper perspective, GLD has already appreciated 27% since Nov 12, 2008. Also, let us not forget that central banks have a perverted sense of humor and plenty of “funny money” and other diversionary tricks up their sleeves to defer the inevitable arrival of inflation. With this as our background, I will jump right into my strategic analysis for trading or investing in gold.

GLD hit resistance at 90.19, has retreated and appears headed to test support at 86.50 with the possibility of also filling a minor gap at the 85 level.

If support holds, the natural inclination is to buy (entry at 86.75 with a stop loss at 84.12 for -3% maximum loss). Assuming one is playing this trade for an exit at its most recent resistance, i.e. at 90.19, the risk to reward ratio is only at 1.33. In a fear-driven market environment, I am strongly inclined to pass on these odds (even with beer goggles).

Ideally, a trade with a minimum risk to reward ratio at 3 or 4 is much more seductive, even in interesting times like these. However, to find the ideal opportunity, one needs to be patient and think counter-intuitive to the buy low and sell high paradigm. Hypothetically (I only say “hypothetically” because I have been long GLD at 74.85 since Oct 29, 2008), I would wait for GLD to break above its resistance at 90.19 and buy at $90.50. This would confirm that there is additional demand and fresh support at this level.

Here is where the trade can get a little tricky. There is some resistance at the 92 level and one should probably anticipate a minor pullback and retest of the newly established level of support at the 90 area. However, if support is violated, I am willing to accept a stop loss at 89 for a -1.5% maximum loss of capital. In the majority of instances when support fails the “retest”, this signals a false breakout.

Now let’s get to the good part. If the breakout is legitimate, then GLD should run to the 97.50 area, which is its next level of major resistance and also where I would definitely be inclined to book some short-term profits or at least hedge my position with long puts and/or short calls. Under this scenario, this trade presents a much more attractive risk to reward ratio at 5.24.

Gold certainly has both technical and fundamental positives going for it. The short, intermediate, and long term are all trending upward while the monetary policies of global central banks reflect a desperate willingness to accept future inflation to avert the immediate threat of deflation. Another tail wind, also aiding gold’s bullish movement, is the recent weakness and apparent correction in the U.S. Dollar Index.

In summary, the example of the above trading strategy is an opinion on how to play gold for those who are risk averse and can ill afford to lose more capital. Otherwise, for those turned on by a fundamentally bullish or bearish bias towards the precious metal, assume the position (pun intended) and enjoy the ride along with all its ups and downs. Yeah Baby!!!

Disclosures: Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports

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Daily Forex Report; 28 January 2009

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Forex market

Forex market - the interbank international exchange market. Banks of the different countries are trading among themselves in currencies of the different countries. But the total volume of these operations is huge, in day he exceeds 3 billion US dollars! It also is Forex market! Forex market reminds the Internet - he belongs to nobody, nobody can operate it.

Exchange-traded Forex futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Forex futures volume has grown rapidly in recent years, but only accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).

The foreign exchange (currency, or Forex, or FX) market exists wherever one currency is traded for another. It is by far the largest market in the world, in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. Retail traders (small speculators) are a small part of this market. They may only participate indirectly through brokers or banks and may be targets of Forex scams.

Market size and liquidity

The foreign exchange market is unique because of the following featuries:

- trading volume,

- the extreme liquidity,

- the large number of, and variety of, traders,

- geographical dispersion,

- long trading hours - 24 hours a day (except on weekends).

- the variety of factors that affect exchange rates,

Average daily international foreign exchange trading volume was $1.9 trillion in April 2004 according to the BIS study Triennial Central Bank Survey 2004

- $600 billion spot

- $1,300 billion in derivatives, ie

- $200 billion in outright forwards

- $1,000 billion in Forex swaps

- $100 billion in FX options.

There is little or no ‘inside information’ in the foreign exchange markets. Exchange rate fluctuations are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in GDP growth, inflation, interest rates, budget and trade deficits or surpluses, and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time.

On the spot market, according to the BIS study, the most heavily traded products were:

- EUR/USD - 28 %

- USD/JPY - 17 %

- GBP/USD (also called cable) - 14 %

and the US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%). (Note that volume percentages should add up to 200% - 100% for all the sellers, and 100% for all the buyers). Although trading in the euro has grown considerably since the currency’s creation in January 1999, the foreign exchange market is thus still largely dollar-centered. For instance, trading the euro versus a non-European currency ZZZ will usually involve two trades: EUR/USD and USD/ZZZ. The only exception to this is EUR/JPY, which is an established traded currency pair in the interbank spot market.

There are some Forex market advantages: liquidity, efficiency, cost, quotations unambiguity, the margin size.

1) High liquidity. (i.e. an opportunity of reception under the transaction of money, instead of the goods). The market on which money are assets, have highest of all possible liquidities. This circumstance is powerful attractive force for any investor since it provides to him freedom to open and close a position of any volume. The FOREX market with an average trading volume of over $1.5 trillion per day is the most liquid market in the world. That means that a trader can enter or exit the market at will in almost any market condition minimal execution barriers or risk and no daily trading limit.

2) Efficiency (a 24-hour market). The main advantage of the Forex market over the stock market and other exchange-traded instruments is that the Forex market is a true 24-hour market. Whether it’s 6pm or 6am, somewhere in the world there are always buyers and sellers actively trading Forex so that investors can respond to breaking news immediately. In the currency markets, your portfolio won’t be affected by after hours earning reports or analyst conference calls. Recently, after hours trading has become available for U.S. stocks - with several limitations. These ECNs (Electronic Communication Networks) exist to bring together buyers and sellers when possible. However, there is no guarantee that every trade will be executed, nor at a fair market price. Quite frequently, stock traders must wait until the market opens the following day in order to receive a tighter spread. A trader may take advantage of all profitable market conditions at any time; no waiting for the ‘opening bell’.

3) Cost. Forex market traditionally has no commission charges, except for a natural market difference (spread) between the prices of a supply and demand. The retail transaction cost (the bid/ask spread) is typically less than 0.1% (10 pips or points) under normal market conditions. At larger dealers, the spread could be less than 5 pips, and may widen considerably in fast moving markets.

4) Quotations unambiguity. Because of high liquidity of the market the sale of practically unlimited lot can be executed on a uniform market price. It allows to avoid a problem of the instability, existing in futures and other share investments where during one time and for a determined price can be sold only the limited quantity of contracts.

5) The margin size. The size of credit “shoulder” (margin) in Forex market is defined only by the agreement between the client and that bank or broker firm which provides to him an output on the market, and makes 1:33, 1:50 or 1:100, for example. On Forex market the traditional size of “shoulder” 1:100, i.e., having brought the mortgage in 1000 dollars, the client can make transactions for the sum, equivalent 100 thousand dollars. Use of an opportunity of crediting, together with strong variability of quotations of currencies, also does this market highly remunerative and highly risky. A leverage ratio of up to 400 is typical compared to a leverage ratio of 2 (50% margin requirement) in equity markets. Of course, this makes trading in the cash/spot forex market a double-edged sword the high leverage makes the risk of the down side loss much greater in the same way that it makes the profit potential on the upside much more attractive.

6) Always a bull market. A trade in the FOREX market involves selling or buying one currency against another. Thus, a bull market or a bear market for a currency is defined in terms of the outlook for its relative value against other currencies. If the outlook is positive, we have a bull market in which a trader profits by buying the currency against other currencies. Conversely, if the outlook is pessimistic, we have a bull market for other currencies and a trader profits by selling the currency against other currencies. In either case, there is always a bull market trading opportunity for a trader.

7) Inter-bank market. The backbone of the FOREX market consists of a global network of dealers (mainly major commercial banks) that communicate and trade with one another and with their clients through electronic networks and telephones. There are no organized exchanges to serve as a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets. The FOREX market operates in a manner similar to the way the NASDAQ market in the United States operates, and thus it is also referred to as an ‘over the counter’ or OTC market.

9) Unregulated. The FOREX market is generally regarded as an unregulated market although the operations of major dealers, such as commercial banks in money centers, are regulated under the banking laws. The conduct and operation of retail FOREX brokerages are not regulated under any laws or regulations specific to the FOREX market, and in fact many of such establishments in the United States do not even report to the Internal Revenue Service (IRS). The currency futures and options that are traded on exchanges such as Chicago Mercantile Exchange (CME) are regulated in the way other exchange-traded derivatives are regulated.

10) Equal access to market information.Professional traders and analysts in the equity market have a definitive competitive advantage by virtue of that fact that they have first access to important corporate information, such as earning estimates and press releases, before it is released to the general public. In contrast, in the Forex market, pertinent information is equally accessible, ensuring that all market participants can take advantage of market-moving news as soon as it becomes available.

11) Profit potential in both rising and falling markets.In every open FX position, an investor is long in one currency and short the other. A short position is one in which the trader sells a currency in anticipation that it will depreciate. This means that potential exists in a rising as well as a falling FX market. The ability to sell currencies without any limitations is one distinct advantage over equity trading. It is much more difficult to establish a short position in the US equity markets, where the Uptick rule prevents investors from shorting stock unless the immediately preceding trade was equal to or lower than the price of the short sale.

12) Most brokers have very good trade execution software. There are only a handful of stock brokers that have execution platforms that offer order-cancels-order type controls and other contingent orders. I’ve looked at several forex-based platforms, and forex brokers place a premium on putting high levels of functionality into traders’ hands. This makes business sense – if you find it easier to execute your strategy, you’re likely to trade more often. This is one area where the equities world could learn a thing or two from their forex counterparts.

According to the BIS study Triennial Central Bank Survey 2004

53% of the transactions were interbank or interdealer strictly

33% of the transactions dealt with a fund manager or an kind of financial institution not associated with banks and a dealer (like bank for instance).

14% were held between non financial organizations and dealers.

Commercial banks take the majority of currency deals. Accumulating the markets exchange conversion cumulative needs due to clients’ operations as well as means accommodation or attraction and their movement to other banks are the main bank activities. Banks can carry out their independent deals for their own purpose aside from customers. Large international banks such as Deutsche Bank, Barclays Bank, Union Bank of Switzerland, Citibank, Chase Manhattan Bank, Standard Chartered Bank affect the exchange markets in the world considerably by the daily operations at the amount of billions dollars. Such dramatic volumes can have an influence on the currency price or the quotation. Such large players usually contain the groups of bulls and bears.

The interbank market deals with the commercial turnover majority as well as speculative trading considerable amounts carried out daily. Billions of dollars is possible turnover for a large bank. Besides the customers’ transactions, the majority of the operations are made for the bank’s own account and by proprietary desks.

The exchange brokers from abroad led the major part of their business by creating low-paid anonymous counterparts and facilitating interbank transactions some time ago. Recently the majority of this business got down to using such electronic systems as EBS, Reuters Dealing 3000 Matching (D2), the Chicago Mercantile Exchange, Bloomberg and TradeBook(R). The traders are still listening in on ongoing interbank trading through the brokers squawk box but the trading amount got much smaller lately.

“Bulls” is the name for the participants of the Forex market who try to make the currency price higher.

Bears are supposed to be concerned with the currency price reduction in the Forex market. The common market process is a balance between bulls and bears market and in case of a currency price change it is mostly not very significant. Though when either bulls or bears take the lead the exchange prices may change dramatically.

Commercial companies are one of the key financial players as far as they are interested in foreign exchange in order to pay for goods produced or services provided. These companies usually deal with small trading amount comparable with the banks or speculators but can have a brief effect on the market rates. Still, the streams of foreign trade are the important factors affecting the permanent currency rates. The exposures of some multinational companies happened due to covering very large positions can have a strong effect of the market in case the players are not aware of these processes.

Investment Management Firms. They usually deal with considerable accounts being the assets of such customers as pension funds and endowments. are quite important players for the exchange market as far as they use it to make the transactions of their foreign securities easier. For instance in order to pay for and redeem foreign equities purchases and sales the manager of an investment company having an international equity portfolio will have to deal with the certain market that will force him to sell or buy foreign currencies. The purpose of such transactions is profit increase and they are not considered as speculative, being secondary for the investment decisions. There are special Currency Overlay units included in the investment management firms that try to make profit of customers’ assets with a minimum risk using currency operations. These transactions may have an affection on large trades as far as the number of the dedicated currency managers in not high whether amount of their AUM (assets under management) is considerable.

Companies with foreign investments: These companies use Forex market for their foreign trading operations. The companies being the participants of international Forex market such as regarding importers have a stable foreign currency demand whether the exporters have large amounts of the currency on offer. Both these kinds of the companies have short-term deposits to hold their currency. That’s why these companies don’t use the Forex market directly due to using commercial banks for conversion and depositary operations.

The companies carrying out foreign investments of assets, such as Investment Funds, International Corporations, Money Market Funds. These kinds of companies contain a number of international investment funds that are following the policy of their investments diversification by placing the assets in various governmental and company securities. Georges Soros’s “Quantum”, and ” Dean Witter” fund are well-known funds of this kind. Xerox, Nestle, General Motors, British Petroleum and others are the kind of companies that deal with the international industrial investments for purposes of joint ventures, creating branches and others.

Hedge Funds: These funds, known due to George Soros’s Quantum fund, have raised their importance during the 1990s currency speculation in an aggressive form. Billions of dollars at the disposal of these funds along with the billions that can be borrowed make Hedge Funds the possible better support for the currencies of the countries welcoming Hedge Funds than central banks are.

The reputation of the Hedge Funds has raised due to their recent aggressive currency speculations. As far as the amounts of money in such funds are increasing they are very attractive for foreign exchange markets. These markets can speculate with tens billions of dollars due to their leverage so consolidation of the players known as the “herd instinct” of these funds can be very unpleasant. Though, these funds are not thought to be successful without the strategy that sounds. It is also thought that the actual functioning of these funds is instable financial weakness using and uncovering for the purpose of returning the normal values to realignment.

Speculation: Currency speculators and the influence they cause to the currencies depreciations are widely and regularly disputed. Thought the speculators are considered to carry out such important functions as supporting hedgers for the market and entrusting the risks with suitable people from the point of view of some economists like Milton Friedman. Others (for instance Joseph Stiglitz) consider this not an economical approach, but mostly a political or dedicated to the free market one.

The key speculators provided by professionals are the well-capitalized “position traders” as well as the major hedge funds.

Many countries are quite suspicious to such operations as currency speculations. From this point of view, the traditional forms of investment including stocks and bonds bring more effective economic rise by supplying the capital unlike currency speculations. This is considered just as gambling that often doesn’t go along with the economic policy. The currency speculations obliged the Central Bank of Sweden make a short-term rise of the interest rates up to the value of 150% a year that has been followed by krona devaluation. One of the most determined advocates of this point of view, Mahathir Mohamad who used to be the Prime Minister of Malaysia, called George Soros and other speculators the main culprits of the Malaysian ringgit devaluation in 1997.

The follower of the opposite opinion, Gregory Millman, argues that speculators make the international agreements to be “enforced” as well as forecast the consequences of the main economic “law” for the purpose of making profit being compared to “vigilantes”.

Simply speaking, the speculators of the forex market just accelerate the economical process bringing the economy to an unavoidable collapse in case the instable financial masses occur or the economy is carried out badly. A soon collapse is supposed to be better way out than a prolonged depression. Thus, it is supposed that in order to distract the public attention from putting the economy into decline Mahathir Mohamad along with the other critics blame the speculators.

Central banks - they provide the currency security from its exchange rates considerable leaps causing economical crises as well as monitors the balance of export-import processes that can be generally called currency regulation. Exchange markets are under direct pressure from central banks. It can affect the market either by direct currency pressure which is the straight line affection or by varying the interest rates and money assets which is called indirect affection. As far as they can be interested in uptrends as well as downtrends due to the certain targets, they can not be called either bulls or bears. In case the aim of the central bank is to affect the national currency it acts alone in the forex market, but if it cooperates with other central banks their goal is likely a joint intervention or common currency policy. The key players in the sphere having the greatest influence are: Bundesbank (the central bank of Germany), Bank of England (the Great Britain), the central bank of the USA and Federal Reserve System (US Federal Reserve or just FED).

Foreign exchange markets are dependent on national central banks as well as the inflation, the interest rates, as well as the money support are under control of the latter. Sometimes there are some certain goals for the national central banks concerning their national currencies target exchange rates. As well as they possess their own substantial foreign exchange reserves, they can use these reserves for the purpose of economy stabilization. The stabilization strategy for the central banks offered by Milton Friedman is trading for profit which means buy as soon as the exchange rate gets too low and to sell in order it is too high. Though while the central banks do not have any risk of the bankruptcy in case of large losses, there is no reason for them to follow this strategy.

It is enough for the central banks to provide some rumor or expectations in order to make the currency stable but to the countries with an unstable currency policy it is possible to apply such methods as an aggressive intervention. Still, it doesn’t always let the central banks achieve their goals. Any central bank can be easily defeated by the combination of market resources. The 1992-93 ERM collapse has suffered various kinds of these operations as well as the South East Asia later.

Currency stock exchanges are the reality for the transitive economies. Legal person currency exchange and Forex exchange rate shaping are realized by the currency stock exchanges. Forex exchange rate is usually widely affected by the state due to the market density.

Forex broker firms - they provide the currency conversion or credit-depositary processes between the foreign currency purchaser and seller as well as the meeting of the above mentioned ones. The broker firms have their fee by charging the percent out of the operation sum.

The share of the retail brokers is insignificant in accordance with the general amount of foreign exchange market. A daily retail volume estimated by one broker is from $25 to $50 billion according to CNN-provided data which makes only about 2% of the whole volume. According to the National Futures Association official cited by CNN as well, “Retail forex trading has increased dramatically over the past few years. Unfortunately, the amount of forex fraud has also increased dramatically.” The retail forex makers generally work with two different trading desks. The first one called “non-dealing” desk is used for the actual foreign exchange trading and is generally traded by the proprietary. The second one called “dealing desk” or “trading desk” is used for traiding off-exchange with retail customers. As far as a great number of retail speculators of the currency are beginners and are hardly profit-making the “offset” of the clients’ trades on the interbank market is impossible as it’s asked by the makers that have to take the same position with the clients. The interbank market would have a stable income from the market makers in case all trades were offset. In case the market maker considers the net positions of its clients to be quite insecure it usually applies offsetting.

The dealing desk has roughly the same functions as currency exchange counter does in the bank. The retail customer sees the interbank exchange rates at a dealing desk (in the bank lobby as well) only after the rates coming from the interbank system are adjusted at a non-dealing desk in order to preserve the market makers’ (or the banks’) profit. That’s why the prices of dealing desks can’t be considered as a direct currency exchange index being the value substituted by the originating broker.

The off-market pricing done by retail market makers on the retail trading platforms gives sense to the arbitrage which is still effectively avoided by makers by moving the pickers (which is a widely used name for arbitrages) off from their systems as well as by a sharp reduction of market activity of the latter.

Most Forex brokers, excluding rather small number of them, do not provide a direct access to the interbank trading for their customers due to two obvious reasons. First reason is a limited number of banks which are ready to deal with private investors’ orders and the inability for the brokers to offer this service as a result. The second is that as far as the traders’ losses transform directly into the market makers’ profit while using the dealing desk model, it is very profitable for such firms as Gain Capital, SaxoBank, FXCM, GFT, and FX Solutions to follow it.

Dealing desk brokers can not only be in charge of the trading but the pricing as well and they can adjust it in any way and any moment to raise the income while non-dealing desk brokers earnings come only out of transaction commissions (fees). To prove this some traders try to make a requotation of a counteroffer done by a market maker by satisfying the execution order of the trader that rejects the order based on the defined terms instead of accepting the offer and places another one that is thought to meet the interests of the market maker.

It is worth mentioning that the retail speculators are not actually in beneficial conditions due to the “rules of the game”. Possible large profits are the bait for the inexperienced and moreover low-capitalized (because of the account minimum of 250-500 USD) speculators. What is more, some traders are compelled to take unreasonably large positions because of low position size varying from 10,000 to 100,000 units on major platforms. Very high leverage at the amount of 1:100 or even 1:200 is considered to be the worst thing about retail Forex firms. The average leverage used by professional traders generally doesn’t exceed 1:10 whether retail Forex firm use such a high leverage without any notification. Such account defaulting may lead to a margin call that would be profitable for the market maker in order the trade is not offset.

Dealing desk brokers being market makers besides creating made-up, off-exchange pricing, also correspond liquidity sources, completely independent and competing, for the banks that take part in the trading by acing as interbank system market makers. Brokers are defenseless before possible off-exchange trade taking out that is thought as a ground for interests conflict.

The insurrection that took place more than 35 years ago forced the minor investors leave the big stock brokerage firms due to possible discounts. The companies like Schwab, E-trade, Ameritrade, Datek, and Fidelity dealing with on-line brokerage, are sure that’s it’s the possible way of retail Forex market development. The reason for the investors to abandon their brokers is that the latter used to trade for their own benefit (leading so-called churning accounts), or the benefit of the corporate customer, nut not the private investor. It is possible as well to make the traders work without non-dealing desks offering the direct access to the market accordingly.

The Wall Street Journal says that “Even people running the trading shops warn clients against trying to time the market. ‘If 15% of day traders are profitable,’ says Drew Niv, chief executive of FXCM, ‘I’d be surprised.’ ” in Currency Markets Draw Speculation of July 26, 2005. It was also said that for the United States “it is unlawful to offer foreign currency futures and option contracts to retail customers unless the offeror is a regulated financial entity” relied on the data of Commodity Futures Trading Commission. The NFA (National Futures Association) members are legitimate retail brokers having the FCMs (or “futures commission merchants”) registration with CFTC. NFA gives he possible customer a possibility to the FCM status of the broker. The Securities Investor Protection Corporation controlling stock brokers doesn’t have any power concerning retail Forex brokers that are hardly regulated at all. An increasing number of Forex frauds was announced by the CFTC.

Interbank brokers: Some time ago, making the interbank trading easier and providing anonymous deals were the job of the foreign exchange brokers who had a modest income out of these operations. The electronic systems which are now used by the majority of this business’ participants are seen to be as a sphere adapted for banks only. The traders are still listening in on ongoing interbank trading through the brokers’ box but the trading amount got much smaller lately.

Customer brokers. A specialized services related to the foreign exchange are demanded by private and commercial clients. Analysts and strategic offer the clients to use the dealing services proposed by non-banks. The private clients are mostly not supported by the banks that can’t offer an adequate dealing for the commercial clients of a medium size as well as don’t possess the necessary resources. The nature of the services provided by these brokers, such as Saxo Bank, is generally oriented to the service but is close to the investment brokers.

There are no central exchange headquarter for foreign exchange because it is an open market where dealers negotiate their own price feeds through proprietary platforms. The main geographic trading center however, is in London, followed by New York, Tokyo, Hong Kong and Singapore.

Banks throughout the world participate and play a big role in forex, although their roles have been greatly reduced from yesteryear. John Atkin points out in his book The Foreign Exchange Market Of London that “The Bank had long used a mixture of nods, winks and arm twisting to influence the behavior of participants in the domestic money and banking markets.” It is no secret that banks dominate the top level of access for the best Forex spread. Using their big pool of clients along with their own accounts, inter-bank market made up more than half of all Forex transactions.

In the late 1930’s banks were the market maker for specified currencies. According to Atkin, “In the case of the US dollar / sterling rate, the Bank announced - when the market re-opened on 5 September 1939 - that its buying rate for dollars would be $4.06, and that its selling would be $4.02. This spread of 4 US cents or 400 points, compared with a normal peacetime inter-bank spread of 13 points, or less.” His observation serve to highlight the profitable spread enjoyed by banks in that era. This trend continued until after World War II, when a normal foreign market exchange market slowly became apparent.

Banks do not have total control over foreign exchange rates as they fluctuate according to as actual monetary flow, budget, trade deficits, changes in GDP growth and interest rates and other economic conditions. In foreign exchange platforms, virtually everyone get access to major news at the same time, and banks are no different. Nevertheless, banks still gain the upper hand from monitoring the trend of their customers’ order flow.

Apart from normal banks, central banks also participate in the foreign exchange market to regulate currencies in protection of their economy.Central banks or and national banks serve a dominant role in controlling inflation, interest rates and money supply. Since a country’s currency rates have direct implications on it’s economy through the trade balance, almost all central banks tend to intervene to influence the value of their currencies. This is known as managed float.

Forex in gaining popularity as stocks are becoming more volatile in recent times, thanks to the looming global economy slowdown. However, a representative from the National Futures Association (NFA) has this to say, “retail forex trading has increased dramatically over the past few years. Unfortunately, the amount of forex fraud has also increased dramatically…” With the onset trend of online forex companies, there are no way to regulate these scams.

The National Futures Association’s website also point out that you can verify with the Commodity Futures Trading Commision (CTFC) and the firm’s NFA membership status as well as disciplinary history by calling (800) 621-3570. While most online forex companies are legitimate, they may tend to mislead customers into thinking that they can make big money without risk in the bid for more business. Certainly they do not tell you that some 95% of investors never make money from foreign exchange.

Another foreign exchange companies ‘facility’ that you should stay away from is the margin they offer. Typically in the range of $3000, this is the ‘upfront credit’ you can use to trade on top of your actual account balance. Investors should be wary that this amount are to be paid back if a loss occur so it may be a risk they can’t afford.

Selecting the right foreign exchange company can help you become the other 5% who find riches in forex. Among the factors that you need to consider are educational tools, risk management advice, customer support, trading software, hidden cost and PIPS.

Since you are pretty much on your own, an online chat support or a toll free number are of paramount importance. So far, this two methods will work the fastest and to the point compared to troubleshooting tickets or email. Many reputable forex firms offer quick and reliable support so this should not be too much of an issue.

Next, you’ll want to select a company with a trading software that’s easy to use and reliable. This can easily be assessed by using a few demo accounts. Some foreign exchange companies may have real time trading softwares that does not require downloading. There may also be concern of its server’s uptime which can be very frustrating especially if a buying opportunity present itself. Do a little research to see if your forex company have a back up server.

Last but not least, if you are a new to forex, it helps to pick a brokerage that provide education and strategies on forex trading. With this educational tools, you can try and apply what you learn using your demo account, which usually comes free with your account. Although foreign exchange companies will assure you about making money with forex. you get the first hand experience using a demo account. From there, it is plain to see what is hype and what is real opportunity.

The bottom line is to rely on your own judgement and learning the ropes in foreign exchange without subscribing to the get rich quick mentality advertised by foreign exchange companies. Like any other types of investment, money don’t fall from the sky and only the well informed will succeed.

GEITHNER HIRES GOLDMAN SACHS LOBBYIST

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The global economic news is uniformly terrible.  This doesn’t stop the US or Israel from going to war all over the place.  And it certainly is fueling internal rebellions and wars all over the planet.  The IMF says, this is the worst year since the Great Depression.  US housing is being hosed, badly.  Ditto, UK housing.  Geithner’s vow to separate the Treasury from the clutches of Goldman Sachs is thrown in the crapper after he hires, for his second-in-command, guess who?  A GS lobbyist!  Wow.  Bet they are best drinking buddies!  Talk about charmed circles.

BBC NEWS | Business | World growth ‘worst for 60 years’

World economic growth is set to fall to just 0.5% this year, its lowest rate since World War II, warns the International Monetary Fund (IMF).

Back in October, only a Pangloss clone could make such a ridiculous prediction.  Voltaire was making fun of Dr. Pangloss, not creating the primary model for modern economic pundits.  

YouTube - Candide - 03 Best of all possible worlds

IMF History

In the Candide songs there is these lyrics about Snakes: all about ‘temptation’.  The snakes in our economic garden of Eden are the same who people who work in the IMF.  After all, the fastest route to President of the World Bank, for example, is to murder lots and lots and lots of peasants across the planet.  The winner of that game then is promoted to where they can do this, using banks.  The IMF is run by a French socialist, Strauss-Kahn.  

 

France: Sarkozy names Socialist Party’s Strauss-Kahn to head IMF

Of course, he is a pettite socialist with a very small ’s’.  Like the Labour Lords, he is also corruptible.  Seems, this is the red thread running through many stories this year.  Corruption, large and small, has so infested all systems surrounding money creation, it is impossible to tell the criminals apart from the few non-criminals.  Indeed, this is why the system is collapse.  A lack of virtue leads to chaos and criminal behavior.  I remember the West mocking Russia when it made a transition to ‘democracy’: it all fell apart and the nation was looted. 

 

Well, we are now the looted nations!  And Russia, under the iron rule of a KGB maniac, is winning, bit by bit.  Not to mention Communist China.  The West loves to flatter itself vis a vis China: look at the milk scandal there!  Some children died.  It was a terrible, terrible thing.  So what did the Chinese do? 

Execute the top executives of the guilty firms!  Wow!  On the other hand, the much better US which preens itself of product safety: a corporation produces peanut butter.  

 

Officials say peanut plant knew of salmonella

 

This is every bit as bad as the Chinese story.  Will the peanut brains running this joint be shot in the back of the head?  Will they even be arrested?  No?  Well…score one for the Chinese and a diseased raspberry for the US.  It is worse:  

 

Study Finds High-Fructose Corn Syrup Contains Mercury - washingtonpost.com

HFCS has replaced sugar as the sweetener in many beverages and foods such as breads, cereals, breakfast bars, lunch meats, yogurts, soups and condiments. On average, Americans consume about 12 teaspoons per day of HFCS, but teens and other high consumers can take in 80 percent more HFCS than average.

 

Good grief!  It is bad enough that world industries have poisoned all the fish!  Now this?  This story is every bit as bad as the Chinese poison story.  Worse. To save money and increase profits, the US puts lots and lots of corn sugar in everything.  Corn sugar makes our children very fat at a very young age.  It is in their soft drinks, for example.  This means, just like with the melamine scandal in China, the biggest corporations are poisoning our children!  This metal is very, very bad for our health and our brains!

 

This sugar substitute should be banned.

 

Of course, the army of lobbyists working for Pepsi won’t let this happen.  In England, they tested pop drinks and found that the most toxic of them was the orange-type drinks.  This is the very ones that parents think might have a teensy bit of good health in them!  The oranges are prominently displayed on the drinks!  Instead, these are the most deadly.  Will Congress hold hearings?  Will Obama protect our children?  Or will they all bow to lobbyists?

 

The answer is obvious!  This is why the call to eliminate lobbyists in the Treasury should be universal except…wait…hold on…here is the latest news from our darling tax dodger who is in charge of the IRS as well as our Treasury:

 

Geithner enlists lobbyist as top aide - Jeanne Cummings - Politico.com

Mark Patterson, a former advocate for Goldman Sachs, will serve as chief of staff to Geithner as the Treasury Department revamps the Wall Street bailout program that sent an infusion of cash to his former employer. 

Patterson’s appointment marks the second time in President Barack Obama’s first week in office that the administration has had to explain how it’s complying with its own ethics rules as it hires a bevy of Washington insiders for administration jobs. 

Last week, the White House announced the president had waived the ethics rules to clear the way for the nomination of William Lynn, a former Raytheon lobbyist, to be deputy defense secretary. 

HAHAHA.  I will die laughing, that is certain.  The cruel program to make me go insane won’t work.  I refuse to go mad.  Or rather, I am mad…at Geithner, Obama and the Democrats in Congress.  What the hell are they doing?  HAHAHA.  Exit one Gollum Sachs and enter a new one, stage right!  This is why  executing these criminals is necessary.  Otherwise, they keep crawling out from under the floor boards like cockroaches.

 

Bloomberg.com: Worldwide

Fannie Mae Foreclosure Sale at 50 Cents on $1 Shows Price Reset 

The banks who made these many useless and impossible to pay off loans are not eating the losses.  To keep up the fiction that our housing sector is a money-maker, we have to first have the taxpayers soak up all losses.  Then, the banks can pretend to be banks and the homebuyers can get fake low-interest loans that do not reflect risk at all.

 

Arrest the guys who handed out these loans!  The defaults happened before the economy contracted.  These are not defaults due to job losses, these are defaults due to the bankers handing out loans to dead beats, illegal aliens, criminals in prison [yes, prisoners were buying and flipping houses!] and assorted corrupt politicians who wanted $999,0000 loans on their second homes so they could use it as an ATM.   Corruption from top to bottom led to a hyper-housing bubble.  During this bubble, the Federal Reserve, the Treasury, all the politicians and the media refused to believe there was a bubble and when it popped, long before the stock market fell or jobs contracted, these same criminal elements refused to believe it popped!

 

Either they are all too stupid to be allowed outdoors unescorted or they are criminals.  I lean towards the criminal.  At least this gives them credit for being smart alecks.

 

Obama Plans Fast Action to Tighten Financial Rules - NYTimes.com

The administration is also preparing to require that derivatives like credit default swaps, a type of insurance against loan defaults that were at the center of the financial meltdown last year, be traded through a central clearinghouse and possibly on one or more exchanges. That would make it significantly easier for regulators to supervise their use.

Officials said that the proposals were aimed at the core regulatory problems and gaps that have been highlighted by the market crisis. They include lax government oversight of financial institutions and lenders, poor risk management efforts by banks and other financial companies, the creation of exotic financial instruments that were not adequately supported by their issuing companies, and risky and ill-considered borrowing habits of many homeowners whose homes are now worth significantly less than their mortgages.

One problem here: obviously, the GS lobbyist needed to be in the highest ranks of the Treasury to insure that any and all laws are written so gnomes can break the laws, lie, cheat and steal.  So we will have no real reforms.  Unless we arrest and send to China, as a gift, all lobbyists.  Heh.  The container ships are all empty going back to Asia.  Why not fill them?  Take them to the Bird’s Nest and have Roman-style games with lions, etc.

 

Bloomberg.com: Worldwide

Stocks in Europe, Asia, U.S. Futures Rise; Banks, SAP Advance 

Whoopee.  The international investment community is happy that we will suck down all poisons.  They drink champagne and we drink toxic mercury-laced Pepsis and Cokes.

 

Bloomberg.com: Exclusive

TARP Bank Shares Dwarf Decline in S&P 500: Chart of the Day

 

Hooray!  We get the losers and the investors who created this problem can flock to the winners.  This is why the S&P is going up.  While the ‘financials’ plummet.  Thank you, Treasury, thank you, Federal Reserve.  We may have to abolish both.  Heh. Or the Chinese will take over both, this is the more likely end.

 

Krugman- Bad Faith Economics - NYTimes.com

It’s as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch. (The actual cost of a free school lunch, by the way, is $2.57.)

The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts.

AAAARRRRGH.  Where do these people come from?  Krugman is supposed to be a genius.  HAHAHA.  OK: according to him, being a Dr. Pangloss, he wants to think, despite obvious signs that the Obama group is as corrupt as the Bush gang, the ‘job creation’ business will lose us only $100,000 per job.   Great balls of fire!  The losses will equal two regular jobs?  What sort of deal is this???

 

I never made more than $100,000 a year!  I have no hope of making that, now! My little blog here is OK but no big moneymaker, that is certain!  No rich people pay me to say, ‘Arrest them all,’ when I am talking about these same people!  What sort of idiot is Krugman, anyway?  We are deep, deep in debt, the government out of control spending is destroying us for years, and we are going to spend $100,00+ per job to ‘create jobs’?  Eh, we could spend that much to hire the unemployed to go around, arresting all lobbyists and then herding them aboard Chinese container ships and send them to the Bird’s Nest in Beijing.  The fear this will create will cause gnomes to hesitate when it comes to poisoning our children or outsourcing our work. 

 

Actually, we could use the Steeler’s stadium and have the lions rip them apart, here!  Why let the Chinese pros do the job?  I think Americans are just as talented.

 

Pentagon 1, Obama 0 (Cato @ Liberty)

Planning for the 2010 federal budget began in 2008. The Office of Management and Budgetinstructed agencies to prepare documents for the incoming administration showing “current services baselines” and program estimates for the coming fiscal year. That means “just explain what you’re spending now and project it forward for next year.” The idea was to allow the Obama appointees to shape the budgets quickly when they came into office.

 

GEITHNER HIRES GOLDMAN SACHS LOBBYIST

The global economic news is uniformly terrible.  This doesn’t stop the US or Israel from going to war all over the place.  And it certainly is fueling internal rebellions and wars all over the planet.  The IMF says, this is the worst year since the Great Depression.  US housing is being hosed, badly.  Ditto, UK housing.  Geithner’s vow to separate the Treasury from the clutches of Goldman Sachs is thrown in the crapper after he hires, for his second-in-command, guess who?  A GS lobbyist!  Wow.  Bet they are best drinking buddies!  Talk about charmed circles.

BBC NEWS | Business | World growth ‘worst for 60 years’

World economic growth is set to fall to just 0.5% this year, its lowest rate since World War II, warns the International Monetary Fund (IMF).

Back in October, only a Pangloss clone could make such a ridiculous prediction.  Voltaire was making fun of Dr. Pangloss, not creating the primary model for modern economic pundits.  

YouTube - Candide - 03 Best of all possible worlds

IMF History

In the Candide songs there is these lyrics about Snakes: all about ‘temptation’.  The snakes in our economic garden of Eden are the same who people who work in the IMF.  After all, the fastest route to President of the World Bank, for example, is to murder lots and lots and lots of peasants across the planet.  The winner of that game then is promoted to where they can do this, using banks.  The IMF is run by a French socialist, Strauss-Kahn.  

 

France: Sarkozy names Socialist Party’s Strauss-Kahn to head IMF

Of course, he is a pettite socialist with a very small ’s’.  Like the Labour Lords, he is also corruptible.  Seems, this is the red thread running through many stories this year.  Corruption, large and small, has so infested all systems surrounding money creation, it is impossible to tell the criminals apart from the few non-criminals.  Indeed, this is why the system is collapse.  A lack of virtue leads to chaos and criminal behavior.  I remember the West mocking Russia when it made a transition to ‘democracy’: it all fell apart and the nation was looted. 

 

Well, we are now the looted nations!  And Russia, under the iron rule of a KGB maniac, is winning, bit by bit.  Not to mention Communist China.  The West loves to flatter itself vis a vis China: look at the milk scandal there!  Some children died.  It was a terrible, terrible thing.  So what did the Chinese do? 

Execute the top executives of the guilty firms!  Wow!  On the other hand, the much better US which preens itself of product safety: a corporation produces peanut butter.  

 

Officials say peanut plant knew of salmonella

 

This is every bit as bad as the Chinese story.  Will the peanut brains running this joint be shot in the back of the head?  Will they even be arrested?  No?  Well…score one for the Chinese and a diseased raspberry for the US.  It is worse:  

 

Study Finds High-Fructose Corn Syrup Contains Mercury - washingtonpost.com

HFCS has replaced sugar as the sweetener in many beverages and foods such as breads, cereals, breakfast bars, lunch meats, yogurts, soups and condiments. On average, Americans consume about 12 teaspoons per day of HFCS, but teens and other high consumers can take in 80 percent more HFCS than average.

 

Good grief!  It is bad enough that world industries have poisoned all the fish!  Now this?  This story is every bit as bad as the Chinese poison story.  Worse. To save money and increase profits, the US puts lots and lots of corn sugar in everything.  Corn sugar makes our children very fat at a very young age.  It is in their soft drinks, for example.  This means, just like with the melamine scandal in China, the biggest corporations are poisoning our children!  This metal is very, very bad for our health and our brains!

 

This sugar substitute should be banned.

 

Of course, the army of lobbyists working for Pepsi won’t let this happen.  In England, they tested pop drinks and found that the most toxic of them was the orange-type drinks.  This is the very ones that parents think might have a teensy bit of good health in them!  The oranges are prominently displayed on the drinks!  Instead, these are the most deadly.  Will Congress hold hearings?  Will Obama protect our children?  Or will they all bow to lobbyists?

 

The answer is obvious!  This is why the call to eliminate lobbyists in the Treasury should be universal except…wait…hold on…here is the latest news from our darling tax dodger who is in charge of the IRS as well as our Treasury:

 

Geithner enlists lobbyist as top aide - Jeanne Cummings - Politico.com

Mark Patterson, a former advocate for Goldman Sachs, will serve as chief of staff to Geithner as the Treasury Department revamps the Wall Street bailout program that sent an infusion of cash to his former employer. 

Patterson’s appointment marks the second time in President Barack Obama’s first week in office that the administration has had to explain how it’s complying with its own ethics rules as it hires a bevy of Washington insiders for administration jobs. 

Last week, the White House announced the president had waived the ethics rules to clear the way for the nomination of William Lynn, a former Raytheon lobbyist, to be deputy defense secretary. 

HAHAHA.  I will die laughing, that is certain.  The cruel program to make me go insane won’t work.  I refuse to go mad.  Or rather, I am mad…at Geithner, Obama and the Democrats in Congress.  What the hell are they doing?  HAHAHA.  Exit one Gollum Sachs and enter a new one, stage right!  This is why  executing these criminals is necessary.  Otherwise, they keep crawling out from under the floor boards like cockroaches.

 

Bloomberg.com: Worldwide

Fannie Mae Foreclosure Sale at 50 Cents on $1 Shows Price Reset 

The banks who made these many useless and impossible to pay off loans are not eating the losses.  To keep up the fiction that our housing sector is a money-maker, we have to first have the taxpayers soak up all losses.  Then, the banks can pretend to be banks and the homebuyers can get fake low-interest loans that do not reflect risk at all.

 

Arrest the guys who handed out these loans!  The defaults happened before the economy contracted.  These are not defaults due to job losses, these are defaults due to the bankers handing out loans to dead beats, illegal aliens, criminals in prison [yes, prisoners were buying and flipping houses!] and assorted corrupt politicians who wanted $999,0000 loans on their second homes so they could use it as an ATM.   Corruption from top to bottom led to a hyper-housing bubble.  During this bubble, the Federal Reserve, the Treasury, all the politicians and the media refused to believe there was a bubble and when it popped, long before the stock market fell or jobs contracted, these same criminal elements refused to believe it popped!

 

Either they are all too stupid to be allowed outdoors unescorted or they are criminals.  I lean towards the criminal.  At least this gives them credit for being smart alecks.

 

Obama Plans Fast Action to Tighten Financial Rules - NYTimes.com

The administration is also preparing to require that derivatives like credit default swaps, a type of insurance against loan defaults that were at the center of the financial meltdown last year, be traded through a central clearinghouse and possibly on one or more exchanges. That would make it significantly easier for regulators to supervise their use.

Officials said that the proposals were aimed at the core regulatory problems and gaps that have been highlighted by the market crisis. They include lax government oversight of financial institutions and lenders, poor risk management efforts by banks and other financial companies, the creation of exotic financial instruments that were not adequately supported by their issuing companies, and risky and ill-considered borrowing habits of many homeowners whose homes are now worth significantly less than their mortgages.

One problem here: obviously, the GS lobbyist needed to be in the highest ranks of the Treasury to insure that any and all laws are written so gnomes can break the laws, lie, cheat and steal.  So we will have no real reforms.  Unless we arrest and send to China, as a gift, all lobbyists.  Heh.  The container ships are all empty going back to Asia.  Why not fill them?  Take them to the Bird’s Nest and have Roman-style games with lions, etc.

 

Bloomberg.com: Worldwide

Stocks in Europe, Asia, U.S. Futures Rise; Banks, SAP Advance 

Whoopee.  The international investment community is happy that we will suck down all poisons.  They drink champagne and we drink toxic mercury-laced Pepsis and Cokes.

 

Bloomberg.com: Exclusive

TARP Bank Shares Dwarf Decline in S&P 500: Chart of the Day

 

Hooray!  We get the losers and the investors who created this problem can flock to the winners.  This is why the S&P is going up.  While the ‘financials’ plummet.  Thank you, Treasury, thank you, Federal Reserve.  We may have to abolish both.  Heh. Or the Chinese will take over both, this is the more likely end.

 

Krugman- Bad Faith Economics - NYTimes.com

It’s as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch. (The actual cost of a free school lunch, by the way, is $2.57.)

The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts.

AAAARRRRGH.  Where do these people come from?  Krugman is supposed to be a genius.  HAHAHA.  OK: according to him, being a Dr. Pangloss, he wants to think, despite obvious signs that the Obama group is as corrupt as the Bush gang, the ‘job creation’ business will lose us only $100,000 per job.   Great balls of fire!  The losses will equal two regular jobs?  What sort of deal is this???

 

I never made more than $100,000 a year!  I have no hope of making that, now! My little blog here is OK but no big moneymaker, that is certain!  No rich people pay me to say, ‘Arrest them all,’ when I am talking about these same people!  What sort of idiot is Krugman, anyway?  We are deep, deep in debt, the government out of control spending is destroying us for years, and we are going to spend $100,00+ per job to ‘create jobs’?  Eh, we could spend that much to hire the unemployed to go around, arresting all lobbyists and then herding them aboard Chinese container ships and send them to the Bird’s Nest in Beijing.  The fear this will create will cause gnomes to hesitate when it comes to poisoning our children or outsourcing our work. 

 

Actually, we could use the Steeler’s stadium and have the lions rip them apart, here!  Why let the Chinese pros do the job?  I think Americans are just as talented.

 

Pentagon 1, Obama 0 (Cato @ Liberty)

Planning for the 2010 federal budget began in 2008. The Office of Management and Budgetinstructed agencies to prepare documents for the incoming administration showing “current services baselines” and program estimates for the coming fiscal year. That means “just explain what you’re spending now and project it forward for next year.” The idea was to allow the Obama appointees to shape the budgets quickly when they came into office.

War, war, war.  That is the fascist solution.  We will kill lots and lots of extremely poor peasants.  After all, our bankers can take over international banking systems unless they first show they are extremely cruel and utterly inhuman.  Then, they can play banker for third world nations.  Which always have to pay their debts.  Incidentally, both Russia and China felt the lash of the IMF and World Bank in the past.  And if we think they don’t itch to apply the lash to us, we are nuts.  But then, look at our rulers. They are sick peanuts that kill you if you butter your bread with it.

 

Library Day In The Life: Wednesday

No gym on Wednesdays, because I always have 8:30 meetings.  Despite an impending Snowpocalypse and still having a raging sinus headache and feeling generally awful, I made it to work by 8:20, retrieved my laptop, and went downstairs for two back-to-back meetings.

9:30:  Canceled second meeting — a Collection Development Committee meeting to do a refresher training on how to do inventory with the portable scanner, and how to run the circulation-by-fund-code report — due to inadvertent double-booking of the librarian who was going to do the training.  Rescheduled for next week.

9:40:  Email.  Printed lots of stuff for Faculty Senate and conference calls.

10:00:  Several ILL articles have arrived, so I printed them.  One of them… well.  Student scanning technicians are sometimes not detail-oriented.  So I took that one down to ILL, and asked Glen if he could bounce my request back into the queue, since what I was sent was unusable.  No problem.  Picked up a requested book at the circ desk, then back to my office.

10:15:  More email, plus my daily Bloglines, Twitter, Facebook, and FriendFeed check-ins.  Communicated with the catering office about a Faculty Senate event, emailed a consortial buying agency about my thumbs-up appraisal of their new blog, printed receipts for a SUNYLA reimbursement, and drafted an email to a student seeking an internship.  Updated Faculty Senate website.

11:30:  Wandered about the halls hoping to find several other librarians to talk to about the student internship.  Found two of the three, chatted, tried to firm up plans.  Bumped into two more colleagues who were doing an impromptu Stickam demo, and hung around for a minute to watch.  Nifty.

11:50:  Decided that eating lunch would be smart.  Boots, parka, scarf, mittens, as well as laptop and ID, and I headed off to Becky’s Place to spend some quality time with campus wireless, a cafe booth, and a sandwich.

12:00: Me and a grilled roast-beef panini settle into a booth with Managing Outsourcing in Library and Information Services.  Professional reading goes down better with a little lunch.

12:30:  Still in my booth, I chat up a faculty member and then start scheduling meetings with the Tech Services Team Leaders to discuss ideas being floated by another colleague, replying to further emails in re: catering for Faculty Senate, and taking notes on long term planning ideas for Technical Services.

1:00: Still in my booth.  Liking it over here today.  Updated my campus web page to reflect the changes to my liaison responsibilities, worked on the narrative portions of my tenure application, and made lists of documents that I need to compile in print.

1:45: Back to the library.  Prepping for afternoon conference calls.  Gathering up more received ILL articles.  Phone call from vendor.  Email about faculty senate, internships, and collection development documentation on the wiki.

3:00: First of two afternoon conference calls, which I am recording for the benefit of any committee members who cannot attend the meetings.

3:40:  Talked with colleague about her process for managing library interns.  Talked with faculty member about our institutional repository and how it might be useful to him for the grant he’s just applied for in support of formalized undergraduate research partnerships.

4:15:  Second conference call.

5:00:  Back to my office with speakerphone and laptop in tow.  Paused at the foot of the stairs to waylay my boss as she tried to leave for the day, updating her on conversation about institutional repository, and about intern situation. Actually went to office, and sent email to campus Blackboard administrator, asking for a course for my committee so we can share sound files. Checked email, checked blogs, checked voicemail.  Made notes on my whiteboard about to-dos, and wrote this.

5:30:  All done!  Going home, in the snow…

No comments yet.

Laughing at our friends at the Post Office

If you wonder why we’re in the recession we’re in, let’s look at our friends at the Post Office:  They market a product that some of us haven’t used in years (I mail one piece of mail per month).  And they show their ire at us not using it by….raising their prices every year.  So yeah, people aren’t buying my product, therefore I will RAISE my prices and that will make them buy more.  Oh wait, that didn’t work…

If the change happens, that doesn’t necessarily mean an end to Saturday mail delivery. Previous post office studies have looked at the possibility of skipping some other day when mail flow is light, such as Tuesday.

Total mail volume was 202 billion items last year, over 9 billion less than the year before, the largest single volume drop in history.

And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.

“The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge,” Potter said.

That doesn’t mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.

If it did become necessary to go to five-day delivery, Potter said, “we would do this by suspending delivery on the lightest volume days.”

The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.

Dan G. Blair, chairman of the Postal Regulatory Commission, noted in his testimony that cutting service could also carry the risk of loss of mail volume. He suggested Congress review both delivery and restrictions it imposed on the closing of small and rural post offices.

The post office’s problem is twofold, Potter explained.

“A revolution in the way people communicate has structurally changed the way America uses the mail,” with a shift from first-class letters to the Internet for personal communications, billings, payments, statements and business correspondence.

He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.

STOCKS JUMP ON REPORTS OF PLAN FOR BAD BANK ASSETS

Catch you tomorrow.

Retierment. What is that?

We have been conditioned to work as hard as we can and to save for those golden years. To that I say BS. I took my professors advice and at 35 quit my job, sold everything we owned including our house and moved to where my wife  and I want to spend the rest of our  life.  Time are tough today but that does not mean you should not plan for tomorrow.

To assist you in your retirement planning I have included in this weblog several chapter from the Ultimate Guide to Retirement.

Headlines

With all the layoffs announced just on Monday it did seem like the sky was falling. Include earning reports and hell has frozen over. Or so the devil would want you to think.

What to Buy and Why: Barron’s 2009 Roundtable

Remember the 3 Bases your selections must pass to hit home base?

Scott Black - The market is a random walk. I can’t tell you if it’s going up, down or sideways, only that the economy hasn’t bottomed.

Marc Faber - I’m not optimistic about the global economy. The next Madoff case - the next Ponzi scheme - is the U.S. government. It will go bust. It is only a question of time.

Oscar Schafer - I’m not sure what the market will do in the next six to 12 months, but my picks will do well in the next 12 to 24 months.

Mario Gabelli - Barack Obama will be president in two weeks… Infrastructure spending will mean not only bridges but broadband and a smart grid.

Happy trading

Bank bailout could cost $4 trillion

NEW YORK (Fortune) — The cost of the bank bailout is likely to be much higher than $700 billion.

While the Obama administration hasn’t asked Congress for more money yet, some experts warn that government spending on support for struggling financial services companies will ultimately reach into the trillions of dollars.

The first half of the controversial $700 billion program to help banks has already been spent — mostly on buying up preferred shares of troubled banks.

Part of the remaining $350 billion may be used to purchase troubled assets from bank balance sheets and place them in what Federal Deposit Insurance Corp. chief Sheila Bair has dubbed an “aggregator bank.”

And while taxpayers will surely recover some of that sum eventually, more money is likely to be needed in order for the bank rescue to work.

“The amount of working capital you’d expect the government to take into this would be around $3 trillion to $4 trillion,” said Simon Johnson, a senior fellow at the Peterson Institute for International Economics and author of its Baseline Scenario financial crisis blog.

Johnson, who until last year was the chief economist at the International Monetary Fund, said that banks will need more rounds of capital from the government because their cushion against losses is too thin. He also said that there is a need to get rid of some of the toxic assets weighing on financial institutions before they can recover.

With that in mind, he thinks that the net cost to U.S. taxpayers for a broadened bailout would be about $1 trillion to $2 trillion, or between 5% and 10% of U.S. gross domestic product. He said this figure is “in line with the experience” of other nations that have tried massive banking system restructuring.

Johnson isn’t the first to estimate that the final cost of a bank bailout will be well north of $1 trillion. FBR Capital analyst Paul Miller said in November that just the top eight U.S. financial institutions alone needed at least $1 trillion in new common equity.

But calls for a comprehensive response from the government have increased in recent weeks following the free fall of bank stocks.

The KBW Bank index has dropped 35% in January after a 50% plunge in 2008, as investors worry that the government may be forced to nationalize some banks — and wipe out shareholders in the process. Shares of Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) have been particularly hard hit.

“The big banks are a hope trade right now,” Johnson said.

Though the Obama administration hasn’t said it will need more money beyond the second $350 billion installment of the Troubled Asset Relief Program, or TARP, officials have not ruled out the possibility of asking Congress for further funds.

Vice President Joe Biden said on CBS’ “Face the Nation” Sunday that the first task for the likely new Treasury secretary, Timothy Geithner, will be to assess whether the remaining $350 billion in funds available under TARP will be enough to stop the bleeding.

Geithner said last week that he didn’t yet see the need for more money, but stressed that the Treasury may have to “act flexibly” if the problems in the economy and the financial sector deepen.

While officials will have to spend huge sums upfront to show the market that they won’t let important institutions fail, Johnson said taxpayers won’t have to end up on the hook for the entire amount of money that’s being injected into banks.

Johnson said the government could get warrants in banks receiving assistance that would convert to common shares once the government sells them. He also said the government could hire private equity managers to oversee the assets the government takes on — and sell them when the time is right.

These arrangements, he said, should allow the Treasury to extract some gains for taxpayers when the economic free fall ends and the banking system starts to recover.

Some observers believe asset values are so depressed right now that as long as the government has a well designed plan that restores investor confidence, taxpayers should profit from the financial bailout

“I think we have seen prices fall to a point where the government could very easily make money, though I’d be very happy if we end up breaking even,” says Gary Hager, president of Integrated Wealth Management in Edison , N.J.

If the history of previous banking system rescues is any guide though, there’s also a good chance that removing toxic assets from bank balance sheets could leave taxpayers with a significant tab.

When Congress created the Resolution Trust Corp. in 1989 to clean up the mess left by the collapse of the savings and loan industry, legislators gave the RTC $50 billion to close or resolve troubled institutions.

But the RTC wound up needing three additional infusions of taxpayer funds over six years, as regulators confronted an industry whose health was much worse than feared.

In the end, taxpayers took a $124 billion loss on the RTC’s operations, according to a 2000 study published by FDIC researchers Timothy Curry and Lynn Shibut.

The RTC resolved 747 institutions, with total assets of $394 billion, according to the study. That means taxpayers lost 31 cents on each dollar of assets handled by the RTC — an institution that, because it was simply disposing of the property of failed institutions, didn’t have to pay for assets it later sold.

In contrast, the widely discussed aggregator bank would be paying institutions that participate for their assets.

Details of how the aggregator bank would decide how much to pay for toxic assets have yet to be determined. But whatever method the aggregator bank uses, it could mean significantly higher startup costs than the RTC had.

So expect to see the Obama administration coming back to Congress for more money…soon.

http://money.cnn.com/2009/01/27/news/bigger.bailout.fortune/index.htm?cnn=yes

RESEARCH ii : SMOKE AND HEALTH

 

 

Big Inflation Coming and The Scariest Chart Ever

If this doesn’t give you pause, nothing will. From East Coast Economics:

Now, same chart through December 2008.

Anyone still think there are not some rough patches down the road?

“Stimulus” 101 Update: The Trillion Dollar Spending Plan Passes House

Small victories have been won.  First, we applaud conservatives for sticking together against a plan that offers no bipartisan solution to America’s economic problems. While bipartisanship was the talking point du jour this week, it was not evident in the actual language of the bill which was written by a precious few.  Second, we applaud President Obama for asking Speaker Pelosi to rightly remove the provisions for family planning and re-sodding the National Mall.  While countless other projects like this remain, it was a welcome sight to see the President in total agreement on these two, when pressed.  Third, we applaud the bipartisan spirit in the U.S. Senate when they joined together to support one more year of relief from Alternative Minimum Tax. Despite the Obama Administration urging them not to do so, Senators from both sides of the aisle were able to see that protecting as many as 24 million working families from tax increases during these tough economic times, is the right kind of ’stimulus’.

Below is an updated ‘101′ index as to why Spending Does Not Equal Stimulus:

“We have tried spending money. We are spending more than we have ever spent before and it does not work.” – FDR’s Treasury Sec. Henry Morgenthau Jr., architect of the New Deal.

AGF takes Q4 loss as sign of the times

Toronto’s AGF Management Ltd. saw more than $60 million melt away from its bottom line as plunging stock markets left the mutual fund heavyweight with a loss in the final three months of 2008.

AGF, which manages some $36 billion in assets, lost $19 million in the quarter ended Nov. 30. That translates into a loss of 21 cents a share.

The quarterly red ink represented a drop of $60.4 million on the profit line of AGF’s income statement. In the previous quarter, the company earned $41.4 million, or 46 cents a share.

The company said awful equity markets in Canada and other major economies pounded AGF’s revenue and profits.

“The extraordinary instability of financial markets over the past year has significantly impacted global investment management companies, placing downward pressure on assets under management and revenue,” said Blake Goldring, AGF’s chair and chief executive officer.

AGF’s revenue from its continued operations tumbled significantly in the fourth quarter compared to the previous three months, $152.2 million versus $184.7 million.

Even on the operating line, the company had a negative change of fortunes, chopping an $81.5-million continuing operating profit in the third quarter by 34 per cent, earning $54 million in operational earnings for the final three months of the fiscal year.

Also harming AGF’s results in the last quarter was a $46.3-million impairment charge. That amount consisted of $7 million in lost goodwill and $39.3 million because of the reduced net worth of some of the company’s high-net-worth clients.

AGF takes Q4 loss as sign of the times

Like other investment companies in North America, AGF has suffered financially because of falling equity markets.

Toronto’s main stock exchange, the TSX, currently trades at a level 42 per cent lower than the index’s 52-week high.

As a reflection of this trend, AGF saw its assets under management fall by 33 per cent in the fourth quarter, to $35.5 billion, down from $53.7 billion.

In addition, the company posted mutual fund sales of $651 million in the September-to-November period, down 49 per cent compared to the previous period.

48 Home Depot stores will close; Nashville loses 1
$35 trillion in infrastructure spending in next two decades: CIBC

Tough times for porn, booze


The Vice Fund, which invests in many of these industries, hasn’t done any better that the S&P 500 over the past year. A gaming and casino fund run by Ladenburg Thalmann closed in December.

What about my stimulus?

Market lore says people keep spending on sex, booze, butts and slots in hard times, no matter what. Sin is supposedly recession-proof.

But the widespread weakness among so-called sin stocks suggests the downturn has converted a lot of sinners into saints.

Playboy Enterprises (PLA, news, msgs) stock is down about 80% in the past year, twice the 40% decline of the S&P 500 Index ($INX). Casino operator Las Vegas Sands (LVS, news, msgs) is down more than 90%. And alcohol stocks such as Diageo (DEO, news, msgs) and Constellation Brands (STZ, news, msgs) have done little better than the market.

The Vice Fund (VICEX), which invests in many of these industries, hasn’t done any better that the S&P 500 over the past year. A gaming and casino fund run by Ladenburg Thalmann closed in December.

All of this suggests Hustler publisher Larry Flynt might not have been kidding after all earlier this month when he asked Washington for a $5 billion “stimulus” package for the porn industry. Strippers, card dealers and bartenders are hurting just like, well, Wall Street bankers.

People are cutting back on porn, strippers and gambling.

They’re spending about as much as ever on booze and cigarettes, though drinkers may be trading down to the cheaper stuff.

For investors, this means the safer bets are on companies that satisfy those vices people are still feeding: butts and booze. Many of those stocks have been hammered in this market anyway, so they may even be bargains.

With humans being what they are, a return to good times will likely bring back robust spending on porn and gambling. But with a rebound in the economy and consumer spending still far off, it’s probably too early to buy these stocks in these sectors.

Playboy, that iconic purveyor of bunnies, hasn’t flashed its fourth-quarter results yet, but the writing is on the wall. Last week, Hugh Hefner’s company announced job cuts. More ominously, it is writing down at least $100 million in assets.

This is troubling because under accounting rules, companies must take assets off the books when they are deemed worthless because they won’t produce revenue. So Playboy is “telling you what financial performance will look like for the next year,” and it is saying it’s going to be bad, says one analyst who follows the company.

Like Playboy, Private Media Group (PRVT, news, msgs), a porn company based in Barcelona, Spain, saw revenue drop in the third quarter. “We are all getting hit. Everybody’s being affected by the recession,” Private Media operations chief Peter Cohen says.

And at Rick’s Cabaret International (RICK, news, msgs), a chain of high-end strip joints, revenue at clubs open more than a year was flat in the fourth quarter, compared with a 14.6% gain in the previous 12 months.

Business at strip clubs in several markets is still strong, though. One of those is New York City, so you have to wonder if bank-bailout money is finding its way into garter belts. Allan Priaulx of Rick’s attributes his clubs’ relative strength to a “flight to quality,” meaning that pole dancer fans on a budget choose high-end clubs like Rick’s rather than take a chance on a dive.

Profit margins are also getting squeezed. Feeling the pinch of the recession, big spenders are pulling back on premium drinks and lap dances. “We don’t have that person who’s spending $2,000 or $3,000 in a night as often as they used to,” VCG Holding (VCGH, news, msgs) chief Troy Lowrie told investors in a November conference call. VCG, which runs about 20 clubs in 10 states, saw revenue fall in the third quarter.

The recession has at least one upside for strip clubs. “There are more beautiful girls that come out in a poor economy,” Lowrie says. “The person that might have lost their $50,000-a-year secretarial job is now a gorgeous entertainer for us.”

But consumer spending is only half the double whammy that sent some gaming stocks down by 60% to 90% over the past year. The credit crunch arrived just as many gaming companies were in the middle of aggressive expansions funded by lots of debt.

They have little hope of turning profits on new casinos soon, but they still have the debt. “We see projects on the Las Vegas strip and even in Macau standing half-built,” says Charles Norton, the manager of the Vice Fund. “Companies are choking on their balance sheets.”

It’s way too early to think about doing much investing in the sector, says Norton. “It’s going to be pretty tough until 2010.” However, a peek at his largest holdings shows the ones he favors right now. Among them:

Wynn Resorts (WYNN, news, msgs) looks good in part because it has a stronger balance sheet than many of its competitors, Morningstar (MORN, news, msgs) analyst Sumit Desai says.

Scientific Games (SGMS, news, msgs) makes state lottery systems and games used by casinos. It should benefit as states turn to lotteries and gaming to make up revenue shortfalls caused by the recession.

Norton also has a big position in WMS Industries (WMS, news, msgs), which should benefit from the move to server-based slots, a big trend in the slot industry.

Norton is worth listening to in these sectors because his fund is up 41.6% since it was launched in August 2002, through the end of 2008, compared with 11.3% returns for the S&P 500 over the same time frame.

Goldman Sachs (GS, news, msgs) analyst Steven Kent has buy ratings on Pinnacle Entertainment (PNK, news, msgs) and Las Vegas Sands but advises investors to avoid several casino companies, including the near-pure play on Las Vegas, MGM Mirage (MGM, news, msgs).

But drinkers are trading down, Norton says. They now favor cheaper beers over premium imports or craft beers such as Samuel Adams from Boston Beer (SAM, news, msgs). They’re going for wine and beer over spirits. Those sticking to the hard stuff are trading down from high-end premiums like Grey Goose vodka to cheaper premiums like Svedka vodka, which Constellation sells.

Even though alcohol sales are holding up fairly well, alcohol stocks have been hit, as investors in this market ignore fundamentals and sell stocks indiscriminately, says Norton.

That makes well-run booze companies such as London’s Diageo decent stocks to buy for possible gains once the recession subsides. Diageo is one of the largest alcohol producers in the world, carrying Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Cuervo, Tanqueray and other well-known brands.

Nevertheless, cigarette stocks have been weak. This doesn’t make sense, because these companies generate so much cash. Plus their potential remains strong, especially in emerging markets. In countries like Russia, China and India, a growing middle class is trading up from cheaper local brands to premium cigarettes sold by Imperial Tobacco (ITY, news, msgs), British American Tobacco (BTI, news, msgs), Philip Morris International (PM, news, msgs) and other big international companies.

That’s one reason these are top holdings in the Vice Fund and may be a buy right now. “We still continue to see up trading in the emerging markets pretty much across the board,” Norton says. “The big driver of that is affordability. A can of Red Bull is more expensive in Russia than a pack of Marlboros. Parliament, a premium brand, costs less than a Snickers bar in the Ukraine.”

Both of these brands have been gaining market share in Russia, Ukraine and Latin America. That’s one reason Philip Morris, which sells them, saw volume grow 3.2% in the third quarter and net revenue advance 7.2%, excluding the gains from acquisitions.

The case for Altria Group (MO, news, msgs) is not so bullish, at least in the long term, because it sells cigarettes in the U.S., where sales continue to drop around 3% to 4% a year. That trend will likely continue as taxes keep going up. But as a one- or two-year play, Altria may do well as confidence returns to the market, because it has been beaten down. Altria sells for under $17 a share, down from a high last year above $24. But Morningstar analyst Philip Gorham believes the fair value is more like $27, one reason he gives it five stars, Morningstar’s highest rating.

US Postal Service, crying broke, is considering dropping deliveries at certain times of the year

Massive deficits could force the post office to cut out one day of mail delivery, the postmaster general told Congress on Wednesday, in asking lawmakers to lift the requirement that the agency deliver mail six days a week.If the change happens, that doesn’t necessarily mean an end to Saturday mail delivery. Previous post office studies have looked at the possibility of skipping some other day when mail flow is light, such as Tuesday.

Faced with dwindling mail volume and rising costs, the post office was $2.8 billion in the red last year.

“If current trends continue, we could experience a net loss of $6 billion or more this fiscal year,” Potter said in testimony for a Senate Homeland Security and Governmental Affairs subcommittee.

Total mail volume was 202 billion items last year, over 9 billion less than the year before, the largest single volume drop in history.

And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.

“It is possible that the cost of six-day delivery may simply prove to be unaffordable,” Potter said. “I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week.”

“The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge,” Potter said.

That doesn’t mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.

If it did become necessary to go to five-day delivery, Potter said, “we would do this by suspending delivery on the lightest volume days.”

The Postal Service raised the issue of cutting back on days of service last fall in a study it issued. At that time the agency said the six-day rule should be eliminated, giving the post office, “the flexibility to meet future needs for delivery frequency.

A study done by George Mason University last year for the independent Postal Regulatory Commission estimated that going from six-day to five-day delivery would save the post office more than $1.9 billion annually, while a Postal Service study estimated the saving at $3.5 billion.

The next postal rate increase is scheduled for May, with the amount to be announced next month. Under current rules that would be limited to the amount of the increase in last year’s consumer price index, 3.8 percent. That would round to a 2-cent increase in the current 42-cent first class rate.

The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.

Dan G. Blair, chairman of the Postal Regulatory Commission, noted in his testimony that cutting service could also carry the risk of loss of mail volume. He suggested Congress review both delivery and restrictions it imposed on the closing of small and rural post offices.

The post office’s problem is twofold, Potter explained.

“A revolution in the way people communicate has structurally changed the way America uses the mail,” with a shift from first-class letters to the Internet for personal communications, billings, payments, statements and business correspondence.

To some extent that was made up for my growth in standard mail — largely advertising — but the economic meltdown has resulted in a drop there also.

Potter also asked that Congress ease the requirement that it make advance payments into a fund to cover future health benefits for retirees. Last year the post office was required to put $5.6 billion into the fund.

“We are in uncharted waters,” Potter said. “But we do know that mail volume and revenue — and with them the health of the mail system — are dependent on the length and depth of the current economic recession.”

He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.

At the same hearing the General Accounting Office agreed that the post office is facing an urgent need for help to preserve its financial strength. But the GAO suggested easing the pre-funding requirement for only two years, with Congress to determine the need for more relief later.

Potter noted that the agency has cut costs by $1 billion per year since 2002, reduced its work force by 120,000, halted construction of new facilities except in emergencies, frozen executive salaries and is in the process of reducing its headquarters work force by 15 percent.

Postmaster General Says Mail Delivery May Be Cut

Journal of Political News & Constitutionalism

If the change happens, that doesn’t necessarily mean an end to Saturday mail delivery. Previous post office studies have looked at the possibility of skipping some other day when mail flow is light, such as Tuesday.

Total mail volume was 202 billion items last year, over 9 billion less than the year before, the largest single volume drop in history.

And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.

“The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge,” Potter said.

That doesn’t mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.

If it did become necessary to go to five-day delivery, Potter said, “we would do this by suspending delivery on the lightest volume days.”

The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.

Dan G. Blair, chairman of the Postal Regulatory Commission, noted in his testimony that cutting service could also carry the risk of loss of mail volume. He suggested Congress review both delivery and restrictions it imposed on the closing of small and rural post offices.

The post office’s problem is twofold, Potter explained.

“A revolution in the way people communicate has structurally changed the way America uses the mail,” with a shift from first-class letters to the Internet for personal communications, billings, payments, statements and business correspondence.

He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.

___

On the Net:

Commodity prices outlook 2009

After years of high growth, commodities companies are seeing the worst downturn since the World War II. Prices have declined by an average of 36 percent since the second quarter of 2008, according to the Reuters-Jeffries CRB Index, which covers a broad range of commodities. More dramatically, the price of oil has fallen from about US$147 per barrel in July to approximately US$42 per barrel by end of January 2009.

Some analysts think that commodities will come back in 2009, but much depends on the overall recovery of the global economy from recession, and in particular on the success of the various economic stimulus packages being proposed by governments around the world.

Recovery in China is the most important factor as that country uses more commodities than any other. China in 2007 represented in excess of 35 percent of global steel consumption, 8 percent of oil consumption, 22 percent of refined copper consumption and 32 percent primary aluminum consumption.

All of that demand has now dropped drastically, and will not bounce back unless the Chinese economy recovers. But that recovery is uncertain as it depends heavily on increasing consumption of Chinese exports in the West.

The effect on commodities producers has been devastating. “Our losses were driven by a 35 percent decline in aluminum prices, and a sharp drop in demand, particularly from the automotive, commercial-transportation, building and construction sectors,” complains Alcoa president Klaus Kleinfeld explaining the US$1.19 billion loss the Pittsburgh, Pennsylvania-based company saw in the last quarter.

“We are not immune from the challenges of the world’s commodity markets in a slowing global economy,” agrees Don Argus, chairman of the Melbourne, Australia-based mining company BHP Billiton whose markets range from iron ore and coal to crude oil and copper. “If these certain conditions persist we will have to cut production yet further.” BHP Billiton was to acquire its rival Rio Tinto, but abandoned the deal because of the plunge in commodities prices.

Overall, commodities companies need to see a rise in demand, regardless of what kind of commodity is under consideration. “While commodity markets are expected to remain lackluster overall in 2009, the ongoing retrenchment in prices will lead to reduced capacity expansions and rapid mothballing of some existing facilities. That opens the door for a recovery further down the line, but the speed with which that recovery is seen will vary from commodity to commodity,” wrote JPMorgan Chase analysts in a recent note.

Global oil consumption is expected to decline by 50,000 barrels per day in 2008 and by 450,000 bpd in 2009. This would be the first time in three decades that world oil consumption declines in two consecutive years. The Organization of Petroleum Exporting Companies has made repeated attempts to push the price of oil up by cutting production. In December 2008, the cartel announced a cut of 2.2 million barrels per day, the steepest production reduction ever made and one that added up to 5 percent of the global oil supply. Yet the price of oil fell on the very day the cuts were announced.

There is simply not enough short-term demand for crude. According to the International Energy Agency, growth in demand for crude oil is expected to decline to an average of 86.3 million barrels per day during 2009. Demand was at nearly double that figure in 2007. And analysts do not expecting any sustained rally in crude oil prices until mid-late 2009.

With prices at these levels, oil companies do not have sufficient funds to finance further exploration for oil. OPEC says that a “fair price” for oil, meaning one at which oil companies could expand supplies, would be at about US$75 per barrel. Nor has the recent conflict in Gaza had any measurable effect on oil prices.

The consequences are clear. Big players in the energy sector such as Exxon Mobil, Chevron, BP, and Royal Dutch Shell will withstand the price pressure thanks to their strong balance sheets and low cost structures. However, consolidation in the industry is expected to accelerate. High cost producers are unable to survive low energy prices and could merge to take advantage of cost benefits and synergies.

Copper was trading under US$1.30 from a record US$4.22 per pound seen in early July 2008. Aluminum has dropped in price by 36 percent and platinum has dropped from US$2,230 per ounce in March 2008 to around US$820 per ounce today.

Falling demand from China and from Southeast Asia is largely behind these declines which are having drastic effects on Australian and South African mining companies. Falling profits and reduced cash flows may lead to a situation where miners will no longer be able to stay in operation.

But a rebound in the price of copper and aluminum depends almost entirely on the success of the economic stimulus package in China.

Steel prices have plunged about 40 percent with subsequent impacts on producers.

On 5 November, the world’s biggest steel maker, ArcelorMittal doubled its production cuts and reduced its outlook for profit because of the fall in the price of the commodity. The current economic slowdown has taken its toll on demand from company’s clients including builders and car makers. Similarly, steel makers in Russia such as Severstal, Evraz and Mechel are curbing spending due to the aforementioned reasons.

Automakers may profit from the change. Operating profits of automakers in India are expected to improve owing to the fall in prices of key inputs such as steel, aluminum, copper and lead.

But high food prices could return faster than other commodities as demand for it is steadier than is that of other commodities. The price of foodstuffs is now quite low, but food distributors are not passing the decrease on to consumers, because they have been absorbing high prices for the past two years. The recession will push down food prices somewhat, but the decline is not expected to last even into the middle of 2009.

“For commodities to do well, they need demand and they need present demand. Until we see the physical demand picking up, we’re going to have a hard time moving forward,” says Matt Zeman, head trader at LaSalle Futures in Chicago.

Creativity: The Essence of Change

A look at creativity in advertising, an economic recession and its affect on urban revitalization.

The Creative Class and Urban Revitalization

“One of the things I think most economist have missed, is that creative people are intrinsically motivated. And if you look at most people who work in the creative fields, they’re not motivated simply by money, and for all of those economists who somehow believe you can spur national or regional growth by cutting taxes and using business incentives, the simple thing I would offer is, that isn’t it surprising that the fastest growing places in the world are typically the highest cost, most expensive places, putting the total emphasis on cost and business incentive factors, mix is a much bigger picture, creative people want to be in  places where they can be themselves, do their work, be excited, be the person, complete person they want to be.”

This message is powerful - our current economy is under attack, however creativity can motivate people to great measures. According to Florida, “Creativity is the new raw material;” now more than ever, we must utilize this raw material to our full potential. A wonderful example of creative people working collectively is the organization Planning For Good, which brings Account Planners and their friends together to solve problems for causes and non-profits. The project they focused on during the fourth quarter of 2008 was for a non-profit called The Idea Village, which launched a competition for entrepreneurs with ideas to retain young talent in New Orleans. When I first read about this project, I immediately thought of Richard Florida. Account Planners are “cultural creatives”, they are members of The Creative Class and by taking part in this project they are helping to bring The Creative Class back to New Orleans.

Creativity in a Recession

“…it’s often times like these – when things are at their worst – that potential for real and positive change is arguably at its very highest… Lean times can arguably beget innovation that is smarter than the innovation that springs from fatter times; innovations that are more practical and effectively more sustainable from both a social and financial standpoint.”

“…for the bravest inventors and entrepreneurs, conditions are ideal to pounce on a business opportunity. In periods of economic turmoil, people are hungry and work cheap, and entrenched companies often concentrate on in-house cost-cutting instead of exploring new markets, which can explode with the next turn of the business cycle… The most memorable crucible in modern history is, of course, the Great Depression.

The Renaissance

“The rise of the creative economy is making inequity worst. What’s happening is that, all these creative people are forcing themselves into about a dozen cities: New York, Washington, Chicago, San Francisco, Seattle, Austin and several more. Those cities are becoming growth meccas, they’re pulling away from the rest of the country and creating a lot of inequality within them. At the same time, housing is becoming unaffordable, for virtually anyone who has a middle-income job. So the creative economy is not generating just wealth and productive capacity and all these great things, it’s generating a whole heck of a lot of problems that no one in this country, whether they’re a democrat or republican even wants to face up to.”

When you read these words, you can’t help but wonder if the flight of the creative class could have helped cause the current recession. While I understand that many things have contributed to the current state, I also acknowledge the significance of these words. I grew up in Michigan and have spent most of my life there. When I moved to the Detroit area after to work at Ogilvy & Mather, I immersed myself in Detroit culture. I went to every music festival in the city; I explored all of the art galleries and cultural areas of Detroit. I loved Detroit. However, many years before this, Detroit began to deteriorate - it never really recovered from the race riots of the late 1960s. But I was determined to bring Detroit back. I introduced people to the hidden gems of Detroit: MOCAD, The Heidelberg Project, 4731 Gallery and Studio, Pewabic Pottery, Cadieux Cafe and my favorite Dally in the Alley. Around this time is when I learned about the creative class and became involved in some of the urban revitalization groups in Detroit like CreateDetroit. The first CreateDetroit event I attended was called Connect Four, at this event I really began to understand how the creative class could use their creativity to make a positive impact.

After working at Ogilvy & Mather for over 3 years, I was ready for a new experience. It was a difficult decision, but I was ready to grow personally and professionally. It was not until I decided to focus my career on digital advertising that I found the opportunity at Modernista! in Boston as an Interactive Account Executive on the Cadillac. After I made the move to Boston is when I realized that I was part of the problem Richard Florida spoke about - The Flight of the Creative Class. I moved from a city that scored low on the creative class index for technology, talent and tolerance, to one that scored high in all areas. I wanted to be surrounded by other creative people in an environment that embraced creativity and inspired me. However, these things exist in Detroit. They exist in every city. You need to find them and embrace them. If they don’t exist, create them. Use your creativity to make a difference and change the world. The current economic recession will change the way you view the world. This thought is evaluated in a Worldchanging post titled “Recession and Innovation.”

“What legacy will this convergence of crises, both financial and environmental, leave on the psyches of today’s young workers, students, artists and innovators? And what other solutions will emerge as intelligent messages of hope?”

“Given the current economic meltdown, the 75th anniversary of the New Deal has particular resonance. How might the current government stem the tide of economic and psychological depression? Can artists and designers help in similar ways today? It’s curious that the WPA style has been reprised in the recent past as a quaint retro conceit, but today may be an opportune time for a brand-new graphic language—equal in impact to the original initiative, but decidedly different—to help rally the cause of hope and optimism.”

However, we don’t have to wait for a similar initiative to come. Creativity and big ideas are inside us now and it’s the perfect time for change.

The Housing Market Can

In my opinion….as long as interest rates stay above 5% the housing market cannot rebound.  Tim Geithner should be pushing banks, especially banks that accepted TARP funds  to lend money below 5%.  Read article below released by the Mortgage Bankers  Association.

WASHINGTON, D.C. (January 28, 2009) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 23, 2009.  The Market Composite Index, a measure of mortgage loan application volume, was 732.1, a decrease of 38.8 percent on a seasonally adjusted basis from 1195.3 one week earlier.  This week’s results included an adjustment to account for the shortened week due to the Martin Luther King Jr. holiday. On an unadjusted basis, the Index decreased 46.5 percent compared with the previous week and 40.4 percent compared with the same week one year earlier.

The refinance share of mortgage activity decreased to 72.8 percent of total applications from 83.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 2.4 from 1.5 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.22 percent from 5.24 percent, with points decreasing to 1.05 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.98 percent from 4.99 percent, with points decreasing to 1.13 from 1.20 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 5.96 percent from 5.89 percent, with points decreasing to 0.06 from 0.07 (including the origination fee) for 80 percent LTV loans.

[...] Read the rest of this great post here [...]

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Captain Bligh sets sail to

Reader Bushie from Burnett sent in this little ditty and the associated press item from The Courier Mail:

With the Ship of State virtually rudderless, Captain Bligh is off to rob the treasury in Canberra. With the economic storm worsening and as the Ship flounders towards the reef (Election date), the captain and crew are panicking.

Ms Bligh is concerned resource-rich Queensland is dangerously exposed to the global financial crisis.

“Our own data shows that we are seeing a deterioration of the Queensland economy and it’s happened very rapidly,” she said.

Ms Bligh had a breakfast meeting with Prime Minister Kevin Rudd. The two agreed a national, co-ordinated bout of pump priming was needed.

Ms Bligh refused to reveal which projects would take priority but said the pair had agreed to “put the pedal to the metal” on major projects.

“Clearly these are unprecedented times and the PM and I are agreed to act swiftly, and carefully,” she said.

“By necessity our conversations are confidential while we get more detail on the proposals before us.”

The Consumer Price Index fell 0.3 percentage points in the December quarter, the largest quarterly fall since 1997, taking inflation to 3.7 per cent.

The figures show the decline was partially due to the drop in the price of petrol, down about 18 per cent over the quarter.

Treasurer Wayne Swan said the inflation figures were a timely reminder of the effects of the financial slowdown.

“I think it’s now clear that inflation in Australia is subsiding - as it is of course around the world - and it’s subsiding in response to the global financial crisis which is slowing growth dramatically in the global economy,” Mr Swan said.

The CPI figures also showed rising food bills had kept the financial pressure on Brisbane consumers.

The overall CPI for Brisbane fell by 0.2 percentage points in the last three months of 2008 - a smaller decline than most other capital cities.

Food prices in Brisbane jumped 2.7 per cent, more than twice the increase in Perth.

The data released by the Australian Bureau of Statistics yesterday showed Brisbane food bills were driven up partly by an 8.8 per cent spike in fruit and vegetable prices.

Last night the International Monetary Fund warned advanced economies were suffering their “deepest recession” since World War II.

The grim warning almost ensures the Reserve Bank will cut interest rates by up to 1 percentage point on Tuesday.

The IMF report - which will be released today in Washington - forecasts world economic growth to collapse from 3.4 per cent in 2008 to 0.5 per cent this year.

Advanced economies including the US, Europe, Japan and Australia will contract by an average 2 per cent for the year.

The economy of China is tipped to grow 6.7 per cent, down from 9 per cent last year.

This is particularly bad for Australia, with the IMF reporting that “anaemic global growth has reversed the commodity price boom”.

================================================================================

Contracting economies means RECESSION. If the economies contract much more than the 2% forecast above, then it would be a DEPRESSION. Now is definitely not a good time to be chasing fools gold with an expensive emissions trading scheme and the associated tax burden.  It wasn’t a good idea before this - man made CO2 is NOT causing catastrophic global warming. An ETS will not reduce world CO2 emissions.

Dems own the stimulus: All 188 GOP vote

The GOP is back! The House Republicans, all 188 of them, voted ‘No’ on the “stimulus” package offered by Obama/Pelosi. I refer to it as the Liberal Wishlist and Democrat Vote Insurance Act of 2009. It was a good statement for Republicans and helped rally the troops for Minority Leader John Boehner.

What Obama and the Dems were trying to do is co-opt the Republicans so that when the stimulus didn’t do miracles all of Washington would be blamed, not just Democrats. But this is more than just politics- knowing that something’s not going to work, I would hope the Republicans would refuse to just get in line and do the Washington two-step. As the Wall Street Journal says, they’re getting “ready for an Obamanomics meltdown” and are offering ideas of their own:

Rep. Tom Price (R-GA) “and company have drawn up their own plan, the “Economic Recovery and Middle-Class Relief Act,” which aims to stimulate the economy without new government spending. It calls for a permanent five-percentage point income tax cut across all brackets and also would lock in today’s low capital gains and dividend tax rates at 15%, instead of allowing rates to climb after 2010. Their plan would also index capital gains for inflation and slash America’s corporate tax rate to 25% from 35%. The bill offers a modest cut in nondefense discretionary spending.”

The WSJ also noted Price “calls the Democrats’ proposal “the non-stimulus plan” and says it “simply won’t work” because it offers no market incentives to create jobs. What the plan does offer are multibillion-dollar gifts to state governments, teachers unions, and the environmental lobby, with such gems as a $6 billion program to “weatherize modest-income homes.”

Barack Obama campaigned saying we had a spending problem and had to “change” that. Now that he is President he wants to fix a spending problem with more spending. Taking more money out of the economy to fund government largess will not give the benefits the Dems are promising. Doing something to let American KEEP more money so they can pay down debts, save, or have something to spend would do a lot more for the economy and jobs than $50 million for the National Endowment for the Humanities or $335 million for STD prevention.

U.S. Stocks Gain, Extending Global Rally, on ‘Bad Bank’ Plan

By Cordell Eddings

Jan. 28 (Bloomberg) — U.S. stocks rose, extending a global rally, as President Barack Obama prepared to set up a so-called bad bank to absorb toxic investments and Yahoo! Inc. and Germany’s SAP AG reported better-than-estimated earnings.

Citigroup Inc. and Bank of America Corp. surged more than 13 percent after a White House official said Obama’s team may announce the outlines of its plan next week. Deutsche Bank AG and Barclays Plc added at least 18 percent in Europe. Yahoo and SAP, the largest maker of business-management software, climbed more 5.2 percent. The Standard & Poor’s 500 Index gained for a fourth straight day, its longest streak since November.

“The impact of the bad bank idea is positive for equities in that it moves us in the direction of finding a solution to the cloud of bad assets that continue to weigh on proper valuations,” said Alan Gayle, senior investment strategist at Ridgeworth Capital Management, which oversees $70 billion in Richmond, Virginia. It’s “giving nervous markets a lift.”

The S&P 500 added 3.4 percent to 874.09, with financial companies posting 19 of the top 20 gains. The Dow Jones Industrial Average climbed 200.72 points, or 2.5 percent, to 8,375.45. Europe’s benchmark, the Dow Jones Stoxx 600 Index, rose 3.2 percent and the MSCI Asia Pacific Index gained 0.5 percent.

Benchmark indexes climbed to their highs after the Federal Reserve left its benchmark interest rate as low as zero and said it may keep it at “exceptionally low levels” for some time. The S&P 500, which has dropped for three straight weeks, is still 16 percent above an 11-year low reached on Nov. 20 amid optimism that Obama’s stimulus package will revive the economy.

Stimulus, ‘Bad Bank’

Treasuries fell, led by the biggest decline in 30-year bonds in three weeks, after the central bank failed to expand on its plan to buy government debt as a means to reducing borrowing costs. The dollar gained against the yen and euro as the Fed resolved to do whatever is needed to revive the economy.

The U.S. House is set to approve Obama’s proposed $816 billion economic stimulus package. The plan is aimed at pulling the economy out of recession through a combination of tax cuts and $604 billion in spending.

Citigroup added 66 cents, or 19 percent, to $4.21, while Bank of America, the largest U.S. lender by assets, jumped 89 cents to $7.39. JPMorgan Chase & Co. climbed 10 percent to $27.66. Fifth Third Bancorp and State Street Corp. jumped more than 31 percent.

Financial companies in the S&P 500 rallied 13 percent collectively, with 79 of 81 companies advancing.

‘Relief Rally’

The bad-bank initiative may allow the government to rewrite some of the mortgages that underpin banks’ toxic debt, in the hope of stemming a crisis that has stripped more than 1.3 million Americans of their homes. The S&P 500 fell 38 percent last year, the most since the Great Depression, after the collapse of Lehman Brothers Holdings Inc. froze credit markets and more than $1 trillion in losses at financial firms eroded profits.

“You’re getting a big relief rally in the financials and that’s lifting the whole market,” said Michael Binger, Minneapolis-based fund manager at Thrivent Asset Management, which oversees about $70 billion. “If the bad assets can be taken out, banks will feel more comfortable in where their capital ratios will be. And if that’s the case, they’ll be more ready to lend and the credit market freeze will thaw.”

Wells Fargo & Co., the second-biggest U.S. home lender, rallied 31 percent to $21.19. The bank maintained its dividend and said it doesn’t need more federal aid as it reported its first quarterly loss since 2001 following its takeover of Wachovia Corp.

Earnings Watch

Yahoo, owner of the second-most-popular U.S. search engine, added 7.9 percent to $12.24. Excluding items such as stock-based compensation, earnings were about 18 cents a share, buoyed by job cuts and rising domestic sales. That beat the 17 cents estimated by analysts in a Bloomberg survey.

Carol Bartz, in her first earnings conference call as chief executive officer, said she would consider offers to buy the company’s assets, while adding that she didn’t come to Yahoo with the intention of selling it.

Profits decreased 41 percent for the 144 companies in the S&P 500 that have released fourth-quarter results since Jan. 12. Analysts now forecast a 32 percent drop in earnings for the fourth quarter after saying in March 2008 that net income would rise as much as 55 percent, according to Bloomberg data.

Sun Rallies

Sun Microsystems Inc. added 22 percent to $4.86. The world’s fourth-largest maker of server computers reported sales and earnings that topped analysts’ estimates after cutting jobs to cope with the recession.

Life insurers advanced after state insurance commissioners endorsed industry proposals to loosen capital requirements, paving the way for a potential vote on Jan. 29 to change reserving rules. MetLife Inc., the biggest U.S. life insurer, jumped 20 percent to $33.27.

Deutsche Bank, Germany’s largest, surged 22 percent to 22.15 euros in Frankfurt. Barclays, the U.K. lender that turned down government funding last year, rallied 19 percent to 107 pence in London.

There are some signs that the Fed’s action has begun to thaw credit markets. Sales of commercial paper totaled $1.69 trillion last week, up from October’s low of $1.45 trillion, though down from $1.76 trillion in the first week of the year.

The cost of borrowing dollars in London for three months rose to a two-week high this week as confidence in the banking system weakened. The London interbank offered rate, or Libor, for three-month loans slipped 1 basis point to 1.17 percent today, according to British Bankers’ Association data. Libor had surged to 4.82 percent on Oct. 10. The TED spread, the difference between what the U.S. government and companies pay for loans for three months, fell 5 basis points to 100 basis points. The spread was 464 basis points on Oct. 10.

“The Fed has already dipped their toe into quantitative easing, now they want to see how far the credit markets thaw before they do anything big,” said Stephen Wood, who helps manage $150 billion as a senior portfolio strategist at Russell Investments in New York.

To contact the reporter on this story: Cordell Eddings in New York at ceddings@bloomberg.net.

Last Updated: January 28, 2009 16:30 EST

Recap - IMF/Britain/Quantum

It’s been a short-time since the last post, primarily due to university obligations (studies et. al) .

So what’s been happening in the world? Instead of creating a “bad bank” to swallow up the toxic assets that are present on the books of the big companies, Alistair Downing has decided to provide insurance against large losses. When questioned alongside Gordon Brown, the specific figures involved were not given. This option was seen to be heavily favoured primarily due to limitation in current next exposure to the tax payers with an assimilation of possible gain of revenue if losses do not materialise. A Goldman Sachs economist measured total exposure to be £120bn, or roughly 8% of GDP.

However, particularly looking at RBS, whose shares took a severe battering from traders in the past few weeks. The bank posted £8bn worth of losses for 2008 and upto £20bn write-downs in goodwill post acquisition of Dutch Bank ABN-AMRO. The government now holds more than 70% stake in the Scottish Bank and the possibility of the same scenario occuring to other British Financial Institutions is likely to result in the whole financial sector being hit hard by the traders.

Barclays CEO John Varley saw the shares lose more than 2/3 of their value within a brisk 11 day period. Many have been perplexed by the dive, particularly as the capital reserve ratio of the bank at 9% is significantly higher than the requirments set by FSA of 6-7%. The Chief Executive blamed the collapse in the share price due to the bottoming of sentiment among individuals.

Surprisingly in good news for the hedge-fund industry, Paulson & Co, a NY based fund, has profited over £270m in hedging that the RBS and Barclays share prices will tumble. As said on Million Dollar Traders, good traders can make money even in negative trading periods.

The collapse of many institutions, notable Lehman Brothers and swallowing up of Merill Lynch and Bear Sterns did not prevent bonuses this year being at levels deemed noteworthy. An average bonus this year of $110,000 was distributed among the remaining workforce, down by over 19,000 staff. The magnitude was still 6th highest on record, deeming IB an industry where the intellect truely does prosper.

Among individuals to suffer, Russian oligarchs have lost over £180bn, as the Moscow stock index Micex fell by 68% from it’s peak. The rouble collapsed by 27% over the same period, as investor confidence dropped. Analysts have blamed the weakening energy sector for the tumbling values.

So there have arisen quite a few sceptics with regards to the state of the British Economy. One of which has been the public citation by Jim Rogers, co-founder of the Quantum Fund with George Soros. Rogers said, “I would urge you to sell any sterling you might have. It’s finished. I hate to say it, but I would not put any money in the UK.”

These extremely strong words came on the back of receding oil exports from the North Sea and the ever-weakening financial sector that was seen as the backbone of the British Economy. The market reaction saw the pound fall by 4% against the dollar, falling to a 7-year low. The effect had not been seen since the collapse of ERM, when the same Quantum Fund profited by $1bn. (Wall Street Movie epitome?)

So to escalate the bad news ever-more, the IMF have predicted a slump of 2.8% for Britain this year. The figure will be greater than for most Western economies (predicted at 2%) and exceeds the previous predictions. The prediction is certainly a blow for Gordon Brown, who has insisted that Britain is better prepared than most countries to weather the storm. Alistair Downing predicted growth of 1.5% for 2010, but IMF’s prediction is a much smaller 0.2%.

The British and American institutions came under heavy scrutiny in the World Economic Forum at Davos, as the Chinese and Russian PMs have said bereft words upon the blind capitalist pursuit of profit. Wen Jiabao blamed “inappropriate macroeconomic policies of some economies” and “prolonged low savings and high consumption”. He blasted the “excessive expansion of financial institutions in blind pursuit of profit and the lack of self-discipline among financial institutions and ratings agencies”, while the “failure” of regulators had allowed the spread of toxic derivatives.

Freedom of choice?

id="authorIntro">Conservative Commentary from Mark A. Rose

“The first thing I’d do as president is sign the Freedom of Choice Act. That’s the first thing that I’d do.” — Senator Barack Obama, speaking to the Planned Parenthood Action Fund, July 17, 2007

Fortunately, that wasn’t the first thing Barack Obama did as president, but only because Congress hasn’t passed it yet. For those who don’t know, the Freedom of Choice Act is a grossly misnamed piece of legislation that would remove any freedom of choice for those who choose life. Oddly, abortion-rights activists typically refer to us pro-lifers as “anti-choice,” yet pro-abortion liberals are the most anti-choice people on the planet. Just recall the battle it took to legalize “Choose Life” license plates here in Tennessee.

Among many things, the FOCA would supercede any and all state laws that restrict abortion in any way. It would also overturn the Federal Partial-Birth Abortion Ban Act, which was passed back in the good ol’ days when Republicans ran things. Furthermore, FOCA would overturn laws restricting government funding of abortion and laws prohibiting abortions in public hospitals, meaning the concept of “choice” gets tossed out the window when that choice happens to be for life instead of abortion.

“Freedom of Choice Act” Index Page.

Unprecedented Crisis In US, UK, Australia, Europe

Today was like most any day in recent memory: Another day, Another day of grim news.

In the US, President Obama is struggling to cope with an “unprecedented crisis”, regulators closed Centennial Bank in California, Freddie Mac is asking for more cash, and 30 year bonds are getting shellacked.

Overseas, French and Flemish governments are intervening in the markets, the UK is shrinking at the fastest pace since 1980, and Australia needs action to save jobs. Rounding up the grim news, 1.2 million corporate networks have become infected with worms that attack Microsoft Corp.’s Windows operating system.

Here are the grim details.

Citing an unprecedented crisis Obama Presses Congress on Stimulus.

President Barack Obama said his administration and Congress will reach agreement within weeks on an $825 billion stimulus plan to cope with what may be an “unprecedented” economic crisis.

“We are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with,” Obama said today as he began a meeting with nine Democratic and Republican leaders at the White House, his first such session with lawmakers since taking office on Jan. 20. He also called for greater oversight of spending by financial institutions that get bailout money.

Obama is confronting a weakening economy and eroding investment values. Average home prices in November dropped 8.7 percent from a year earlier, the most in at least 18 years, the government said yesterday. Housing starts fell 16 percent last month, the number of Americans filing first-time claims for jobless benefits climbed to a 26-year high, and the Standard & Poor’s 500 Index has lost 7.9 percent since the start of the year.

There is “undeniably grim news” in the UK, as the Economy Shrinks Most Since 1980, in Recession.

The U.K. economy shrank more than economists forecast during the fourth quarter in the biggest contraction since 1980 as the financial crisis crippled the banking industry and mired Britain deeper in the recession.

Gross domestic product fell 1.5 percent from the previous quarter, the Office for National Statistics said in London today. Economists had predicted a 1.2 percent drop, according to a Bloomberg News survey. The economy has now shrunk in two quarters, the conventional definition of a recession.

The pound dropped against the dollar and U.K. stocks fell after the report. Prime Minister Gordon Brown said that the government is using “every weapon at our disposal” to fight the crisis. Bank of England Governor Mervyn King says officials may start buying up securities soon as interest rates lose their potency to aid the economy.

“This is undeniably grim,” said Stewart Robertson, an economist at Aviva Investors in London, which manages about $230 billion in assets. “Two or three quarters more like this and you’re talking about depression, not recession. This should hasten activity to address the credit and money market issues.”

Service industries shrank by 1 percent on the quarter, manufacturing dropped 4.6 percent and construction fell 1.1 percent, the statistics office said. Business services and finance, accounting for 30 percent of the economy, contracted 0.5 percent and also slipped into a recession.

A quick check of my calender shows this is Friday. And as often happens on Fridays, Regulators close 1st Centennial Bank in California

Regulators have shut down 1st Centennial Bank in California, the third U.S. bank to fail this year. California regulators closed the Redlands-based bank on Friday and appointed the Federal Deposit Insurance Corp. as receiver. 1st Centennial had assets of $803.3 million and deposits of $676.9 million as of Jan. 9.

The FDIC says 1st Centennial’s insured deposits will be assumed by First California Bank, based in Westlake Village, Calif. Its six branches will reopen Monday as offices of First California.

Australia’s treasurer Wayne Swan says Australia Won’t ‘Hesitate’ to Boost Economy.

Australia’s government won’t hesitate to stimulate the economy further should the need arise amid the global recession, Treasurer Wayne Swan said. Swan, speaking to the New York investment community, said the government could add to some A$45 billion ($29 billion) in stimulus already announced should economic conditions worsen.

“We will not hesitate to take whatever further action is necessary to support growth and jobs,” Swan, 54, said in speech notes received via e-mail. “Major financial institutions, some of which have withstood world wars and the Great Depression, have either collapsed or been bailed out.”

The GSEs are running out of cash as expected (at least as readers of this blog expected), so it id no surprise that Freddie Mac asks the government for more help

Freddie Mac plans to ask the government for up to $35 billion in extra support as the housing slump continues to hammer the mortgage giant.

The Federal Housing Finance Agency, Freddie Mac’s conservator, will ask the Treasury Department for additional funds of between $30 billion and $35 billion, the mortgage giant said in a regulatory filing Friday.

Based on a preliminary evaluation of its fourth-quarter operations, Freddie Mac’s management believes that it will need the extra support to offset the impact of operating losses as well as other items that could affect the company’s net worth.

Freddie Mac (FRE) has already drawn $13.8 billion under the $100 billion agreement. That happened in November, after Freddie reported very weak third-quarter results.

Let’s do the math: $35 billion + $13.8 billion = $48.8 billion. Freddie Mac is nearly halfway towards burning up $100 billion in taxpayer money. I predict Freddie will be out of money by the end of the year.

Capital One massive $1.4 billion writeoff yesterday suggests the Credit card industry faces tough 2009

Capital One (COF) , one of the largest card issuers, reported a $1.4 billion fourth-quarter net loss late Thursday as it set aside another $1 billion to cover higher charge-offs this year.

Capital One said it expects the U.S. unemployment rate to reach 8.7% by the end of 2009 from 7.2% currently and that, on average, home prices will fall another 10% this year.

Richard Shane is thinking clearly, a rare happenstance these days.

Struggling to save the bank, Citigroup Raises $12 Billion in FDIC-Backed Bond Sale

Citigroup Inc. sold $12 billion of notes guaranteed by the Federal Deposit Insurance Corp. as Chief Executive Officer Vikram Pandit tries to bolster capital and save the bank from insolvency.

The sale is the biggest offering of debt backed by the FDIC since banks began using the government’s Temporary Liquidity Guarantee Program on Nov. 25, according to data compiled by Bloomberg. The offering by Citigroup and its Citigroup Funding unit surpasses GE Capital Corp.’s $10 billion sale on Jan. 5.

Dwindling capital and a sinking stock price have already forced Pandit to take $45 billion in cash from the U.S. government and abandon the bank’s decade-old strategy of selling multiple financial services under one roof.

Citigroup cannot be saved from insolvency, Citigroup was insolvent a year or more ago. The effort now is to save Citibank, as every other part of the “group” is for sale. Of course Citibank itself is insolvent, but no one wants to come out and say it.

The party is nearly over for the owners of Manhattan’s largest apartment complex. Tishman’s Stuyvesant Town Fund May Run Dry This Year

Tishman Speyer Properties LP and BlackRock Realty, owner of Manhattan’s largest apartment complex, are relying on a reserve fund to pay debt on the property and have only six months of money left before it runs out, Fitch Ratings said in a report.

The fund for the Stuyvesant Town and Peter Cooper Village apartments has declined to $127.7 million as of Jan. 15, from $400 million when it was established. Property cash flow is not expected to improve from 2008 based on the borrower’s restated budget for 2009, the ratings company said.

‘Although the property’s performance remains consistent, the cash flow generated from the property continues to require significant reserves to cover debt service obligations,” Fitch analysts Sue Ann Butera and Adam Fox in New York said.

Tishman Speyer and BlackRock paid $5.4 billion for the properties in 2006 with plans to convert rent-regulated units to market rates. A $3 billion loan to finance the acquisition was bundled with commercial mortgages and sold as bonds.

A general reserve fund for the property has also been “completely depleted,” the Fitch analysts said today.

Kiss this baby goodbye. There is no hope of survival. Some bank is going to become the proud owner of Stuyvesant Town and Peter Cooper Village.

On fears of massive supply, U.S. Treasury 30-Year Bonds Post Biggest Weekly Loss Since 1987

Treasuries fell, with 30-year bonds posting the biggest weekly loss in almost 22 years, on concern that debt sales will increase as the government boosts spending to ease the deepening economic slump.

Ten-year yields touched a six-week high amid speculation President Barack Obama’s administration will join governments around the world in selling record amounts of bonds to rescue banking systems and battle a global recession. Goldman Sachs Group Inc. yesterday raised its 2009 Treasury borrowing estimate to $2.5 trillion.

“Supply is a concern for this year,” said Michael Pond, interest-rate strategist in New York at Barclays Capital Inc., one of 17 primary dealers required to bid at U.S. debt auctions. “We are approaching the refunding period where we will get long-dated issuance, so it’s not surprising that it is weighing on investors’ minds.”

Thirty-year yields increased six basis points, or 0.06 percentage point, to 3.32 percent at 4:04 p.m. in New York, according to BGCantor Market Data. For the week, the bond’s yields were up 43 basis points, the most since the five days ended April 24, 1987.

It is possible bond bears are finally right and the low in yields is in. But even if it is, a retest is likely.

In Europe, French and Flemish government capital infusions failed to stop the markets from falling. European stocks fall to near six-year low

European shares hit their lowest level for almost six years on Friday after a dismal week that saw heavy selling of bank and insurance shares. Any hopes that bank stocks might rally during the week, after a rout the previous Friday, were swiftly crushed on Monday when sentiment was soured by a record loss from Royal Bank of Scotland.

The FTSE Eurofirst 300 index of blue-chip shares Friday fell 0.3 per cent to 760.54, its lowest level since April 2003, after touching a low of 741.37. The pan-European index has fallen in 12 of the past 13 sessions. Over the week it fell 5.4 per cent and it is down 43 per cent over the past year.

Intervention from the French and Flemish governments provided some relief. France’s three largest banks, BNP Paribas, Société Générale and Credit Agricole, all gained after the government said it would provide a further €10.5bn to its banks in return for their executives’ forgoing bonuses. SocGen added cheer by announcing that it expected to break even for the fourth quarter of 2008 and earn a net profit of €2bn for the year.

The bounce, however, was brief. BNP Paribas ended the week 26 per cent lower at €21.38 and SocGen fell 14 per cent to €27.25. Credit Agricole was a relative success, posting a weekly fall of just 8.5 per cent to close Friday at €7.58.

Shares in Belgium’s KBC were crushed in the first three days of trading. They lost losing 55 per cent as investors panicked over the banking and insurance group’s exposure to toxic structured credit products.

By Thursday the savageness of the sell-off forced the Flemish government to act. It injected €2bn of extra capital into KBC as the bank seized the opportunity to announce a provisional 2008 loss of €2.5bn. Its shares rallied 50 per cent, as traders who had sold the shares short were forced to buy them back to limit their losses. KBC closed 40 per cent lower for the week at €12.24.

Gullible

A Pool of Nectar

It was July and the monsoon was late. The plains of North India were transformed into one vast shimmer of heat haze. Day after day the sun pressed down through a sky of beaten bronze. The heat assaulted you the second you stepped out of the shade – heavy, oven-hot, airless. The nights, now almost as hot as the days, provided little relief. A drought was developing in Rajasthan and water shortages were spreading across northern India. Everyone agreed – as, I am told, they do every year – that this had to be the hottest summer in living memory.

The day we visited Humayun’s Tomb - wandering bareheaded through immense, sun-baked, dusty courtyards - the temperature reached 57oC (134.6oF). We hadn’t realised the ferocity of the Indian sun until, somewhere in the middle of about ten blistered acres of beaten earth, we both ‘came over all peculiar’. We had enough sense to head at once for the nearest patch of shade, but at one point, dizzy and disoriented, I actually didn’t think we could make it. Nauseous and dehydrated, with heads splitting and muscles cramping, we staggered into the shade of a Pepsi-walla’s umbrella just outside the gate, and collapsed onto a patch of frizzled grass. Swilling tepid fizzy drinks and mopping our brows with damp cloths, it took more than an hour to restore ourselves. Our symptoms, we later found out, were consistent with those of mild sunstroke.

We decided that it was probably time to head for cooler climes - to do as the British had done every summer for a hundred years - to head for the hills. We had two choices – the famous hill station of Simla or the Vale of Kashmir. We opted for Kashmir.

Getting from Delhi to Kashmir wasn’t quite as straightforward as we’d thought. Neither of us had expected Amritsar to be enroute - nor, according to the map, was it. The railhead nearest Kashmir was at a place called Jullundar. Jullundar was on the line between Delhi and Amritsar, about fifty miles short of Amritsar. So all we had to do was catch a train to Jullundar, and travel from there to Srinagar, via Jammu, by bus. It seemed simple enough. But it wasn’t.

Leaning forward against the weight of our backpacks, we queued up at a little kiosk outside Delhi Railway Station to buy platform tickets. Everybody, whether travelling or not, had to have one of these. They cost two annas (about US$0.02) each, and permitted the bearer to wander freely inside the station and out on the platforms. The idea, I guess, was to restrict the numbers of beggars and panhandlers inside - which was pretty frantic and chaotic at the best of times – while still permitting access to legitimate travelers, well-wishers and those greeting people off the trains. We were careful to keep these tickets. We would need them wherever we got off the train. Ticket-checking guards manned all entrances/exits to/from railway stations. When leaving a station some sort of ticket had to be produced. Luckily they would accept either a train ticket or a platform ticket.

It was intended – indeed it was the law - that, platform ticket in hand, the prospective traveler should then proceed to the ticket windows in the ‘Ticket Hall’ and purchase a ticket to his destination. This was something Dave and I never – well, almost never - did. We’d learned early on that lots of travelers in India seldom actually bought tickets, but managed to reach their destinations anyway. I don’t know how the Indians managed to do this, but for us ‘whiteness’ was everything. Our ploy’s success depended on the lingering inferiority complex – a legacy of the British Raj - that made it nearly impossible for any Indian to query the bona fides of any white man. The pukka sahib had been an object of fear and respect in India for nearly two hundred years. Even in 1958, a full decade after independence, Indians – even those who didn’t even like Europeans much - were psychologically unable to suspect them of skullduggery. Nothing we told them – no matter how outrageous – was ever questioned. We played on this unashamedly.

Once inside the Ticket Hall, we proceeded to the information window to check on the logistics of catching the ‘down-train’ to Amritsar and disembarking at Jullundar. “Oh, ’down-trains’ to Amritsar don’t stop at Jullundar,” the ticket-wallah informed us with a grin, “Only ‘up-trains’ stop there.

What that meant in practice was that we would have to take the ‘down-train’, which didn’t stop in Jullundar – all the way to Amritsar, then catch the ‘up-train’ back toward Delhi. From the ‘up-train’ we would be able to disembark in Jullundar. If this sounds stupid, it was. It also turned out to be pure bullshit, but we didn’t know that at the time. However, since we’d intended to visit Amritsar anyway, to see the Golden Temple of the Sikhs – and since, in any event, we didn’t intend to actually pay for our tickets - we didn’t let it worry us too much.

The hullabaloo of an Indian Railway station has to be experienced to be believed. Delhi Station – like every other station we ever used in India - was jammed. On a series of platforms thousands of white-cottoned travelers spilled in and out of steaming trains. Crowds seethed back and forth amongst heaps of luggage, hand-carts, kiosks selling snacks and trolleys heaped with luggage. New arrivals elbowed their way single-file through the shoulder-to-shoulder crowds, following in the slip-stream of their porters. Their passage was marked by the skeins of suitcases - held overhead by the bearers – seeming to float above the crowd.

Every new train set off a sort of circus. As the train pulled in, the platform sprang into a frenzy. Roving vendors accosted the trains, yelling and scampering up and down the carriages. Porters in red turbans and grubby dhotis staggered toward the first-class carriages under mountains of smart suitcases, valises and trunks. Farther down the platform, near third-class, solitary peasant women sat stranded amidst seas of less ‘gainly’ luggage, ambiguous parcels done up with rope, lumpy sacks, bits of porcelain, the arm of a chair and huge, amorphous bales of bedding. Vendors trawled the platform selling trays of brightly-coloured sweetmeats, nuts, hot tea in red clay cups, or the latest film magazine.

Soot and coal dust, exhaled by panting locomotives, sifted down on all this; dust boiled up from underfoot; horizontal jets of boiler-exhaust steam swooshed amongst the feet of the crowd; and layers of gauzy smoke, smelling strongly of kebab and marinade, eddied across the platform. Other odours, too, assailed our nostrils – sweat, feces and urine and the sharp tang of powdered coal. The noise was incredible – everything and everybody at full volume - bearers importuning new arrivals, passengers shouting to bearers, radios blaring pop music, greeters shouting at friends (and friends shouting back), regiments of cripples and runny-nosed children whining for alms (it is considered a propitious act for travelers to give alms to beggars – and bad luck not to do so – something of which the beggars of India are all too aware), stall-holders hawking their wares, stationmasters’ whistles and conductors’ bells. Above all this, Tannoys blared muzzily – their bursts of static and feedback shrieks like fingernails on a blackboard.

Multiple queues converged on the doors to every carriage. Relatively calm at the back, the queues became increasingly agitated as they merged near the train. Around the steps to each carriage door was what looked – and sounded – like a small riot. The actual process of boarding was a full-on exercise in pushing and shoving - elbows, knees and fists flailing. Forward progress was paralytically slow – the stairwells seemed to be stuffed with human body parts. Quite a lot of people simply gave up and threw their luggage in through the windows, then clambered in after it. This, curiously, seemed to work. When embarkation and disembarkation were going on at the same time there were free-for-alls at both doors, and a lively two-way traffic in and out the windows.

The stations were inhabited by whole villages of people washing and cooking in the ticket halls, arriving days early for a train and building encampments on the platforms. Quite a lot of people actually lived on the platforms, sometimes marking out their territory with chalk lines. Privacy was unknown to them, they ate, mated and slept on the platforms, washing under hose taps, defecating and urinating on the tracks. There were sleeping bodies everywhere, scattered randomly across the platform. We stepped over at least thirty or forty, some laid out on their backs like corpses with their heads covered, others simply sprawled face-downward as if shot in the back. How they managed to sleep through all this I cannot imagine.

So, still ticketless, Dave and I pushed and shoved our way to the platform from which the Amritsar Express (the ‘down-train’) was to leave. We always tried to be at least half-an-hour early, because third class – by which we travelled - was always incredibly overcrowded. If we came late – as sometimes we did - and found both seats and luggage racks occupied, we had learned what to do. We would hire the strongest-looking bearer (porter) we could find, sometimes offering to overpay him outrageously (one rupee – about US$0.20). For this pittance he would physically create enough space on the overhead racks for our baggage by simply taking down some of the luggage that was already there. Then he would evict a couple of seated passengers – more-or-less at random, as far as we could tell - so that we could sit down. Finally, accepting his tip, he would salaam his way outside. Curiously, none of the travelers whose luggage - and, indeed, whose persons – our bearers mishandled ever seemed to bear us any ill-will. We certainly weren’t the only passengers who’d hired goondas (thugs) for that purpose, but we felt – indeed, I still feel – considerable guilt over it. Considerable, but not enough to make me give up the use of ‘hired muscle’. Actually, at the time, my main worry was whether our sadly-depleted exchequer was up to the extra rupee we’d had to pay.

Eventually, the characteristic sequential jerks fore and aft indicated that the train was actually pulling out of the station, and the platform began to slide past the windows. We left Delhi half-an-hour late, a neighbour explaining with a shrug, “The train is not in the mood for travel.”

Once settled, Dave on the right and I on the left would carefully scan the outside of the train for ticket-checker (known, in local ‘Hinglish’ as the ‘ticketer’). There were no internal connections between carriages, so the ‘ticketer’ could only check tickets in one carriage between stations. Not until the train stopped – which it did with great frequency – could he disembark from the carriage he had checked and proceed to the next one. On a longish train, it could take a couple of hours for him to complete his rounds. By then, of course, a lot of embarking and disembarking would have taken place behind him and he would have to make the entire round again.

Since we had no tickets, it was important that he never caught up to us – that we always knew exactly where he was. So we checked his progress up and down the train more-or-less continuously. By the time he was checking the carriage next to ours, we were ready. As the train pulled into the next station, we would disembark, and proceed along the platform to the carriage the ‘ticketer’ had just inspected. It would, we knew, take him an hour or more to complete his rounds. So we were safe until he came back to check for recent arrivals. Then, of course we had to go through the process of finding seats and luggage racks again. Sometimes we had to do this four or five times per journey. But, over the course of a long trip, it was a small price to pay (or, rather, a largish price not to pay) for getting to travel hundreds of miles for nothing.

Despite our best endeavours, we were caught at this several times by ticket-collectors during our four months in India. But we had our cover story ready – that we’d not had time to purchase tickets on the platform, intending to purchase them from him – a perfectly normal procedure. We always told him we’d come aboard at the most recent station, and no ticket-collector ever questioned our honesty. This, too, was a function of our white skins. But we still had to purchase tickets on the spot. When your entire travel budget is US$1 per day, this hurts considerably.

We weren’t the only ones to do this. There was a sort of continuous rolling pilgrimage - from the cars the ‘ticketer’ was about to check to the cars he’d just finished checking - along the tracks whenever the train stopped. It progressed, station-by-station, from just ahead of the ticket taker as he moved up the train, to just behind him. By the time our journey was half-completed, everyone on our car knew what we were about, and clearly they were all on our side. More than once we were warned of the approach of a ticket taker by a hissed warning of “Sahib! Sahib! Beware yourself! The ‘dick-eater’ is coming!”

Dave and I shared our bench with a thin, tall girl of about twelve, with gold teeth and hair pulled back so severely her face had a sharp, ferret-like look. She spent most of the night eating some sort of gooey sweet – gulab jamun I think - from a large tin in her lap. Dave, who drew the short straw that night, got to sleep on the floor, more-or-less under her seat. Next morning the back of his sleeping bag was enameled in dried sugar syrup – presumably hers. He didn’t much mind this at the time, but later it was to make him so attractive to ants that he had to resort to a professional cleaner – something he could ill-afford.

Next to her was a young couple, the wife extremely pretty, as was their two-year-old daughter, whose eyes were blackened with kohl to ward off evil spirits. The husband, who was barefooted, wore a Western navy suit jacket over his white dhoti. They quarreled in vigorous Punjabi for the whole journey. Two fat baniyas, a very thin woman in a crimson sari and a very small boy wearing very large shorts occupied the bench facing us. The little boy had no undies on. I know this because he would periodically pull up the leg of his shorts and expose his genitals, which he would inspect carefully, then scratch vigourously. I suppose he had parents somewhere aboard, but as far as I could tell, nobody ever paid him the slightest attention, and I never found out who he belonged to.

We picked up people at every stop along the way. They squeezed aboard with their woven baskets and bales of what looked like bedding. Mainly they looked to me like field labourers, as grey and tattered as the ragged clothing they wore. They squatted wearily on the floor; the ones who had the corridor space fell instantly asleep. Their dark brown legs looked as functional as pistons - hard, thin tools locked in at the knees.

When we flipped to see who got to sleep in the luggage rack, I won. After manhandling our luggage down, I had to cram myself into the volume the backpacks had occupied – a space about eighteen inches square and four-and-a-half feet long. It was every bit as uncomfortable as it sounds, but I slept surprisingly well. Dave, on the floor, had more room to move, but he also got puddles of betel-nut spittle, wads of used chewing gum, cigarette butts and cockroaches shuttling between the debris of many snacks that littered the floor – not to mention the sugar syrup. Then, too, being underfoot in a crowded railway carriage has its own occupational hazards. He was heavily trodden on at least three times during the night.

***

I had always liked nighttime train journeys. The monotonous clacking of the wheels and the swaying of the carriage usually lulled me to sleep. But not tonight. There wasn’t enough monotony - no constancy of either sound or motion. The train seemed always to be accelerating or decelerating – or hissing and panting in noisy stations, doors banging, whistles blowing and bells clanging. People shouldered their way up and down the aisle, stumbling over luggage and recumbent bodies, and swearing at each other in Punjabi, Hindi or Urdu.

Bladder-pressure woke me in the middle of the night, so I clambered down from my perch and struggled through the mass of sleeping bodies to the noisome toilet at the end of the car. Afterwards, I stepped through into the entrance hall, where steps led down to exit doors on either side. A group of youngish men were lounging there, sharing a thermos flask of tea, smoking bidis and chatting. I made my way down the steps and leaned out the open top half of one of the doors. A flat, silver landscape lit by a crescent moon was streaming by. The warm, humid air smelled of sage and dust and coal smoke. Some of the sweat on my face evaporated in our slip-stream, and the effect was marvelously cooling.

I yawned hugely. This turned out to be a mistake. Hardly had I opened my mouth when something struck me violently in the face. No, I realised almost immediately, not the face. I’d been struck in the mouth. Even that wasn’t quite right. It took me a few seconds to figure out exactly what had happened. Something large and hard had entered my gaping mouth at great speed and had lodged in the back of my throat near my epiglottis. Not only was it painful, but I found I couldn’t swallow. The thing – whatever it was - had completely blocked my throat. I doubled over, gagging and retching, trying – and failing - to breathe.

The bidi-smokers gathered anxiously around me, thumping my back and conferring volubly in Punjabi. Finally when one of them grabbed me around midriff and squeezed violently (had the Heimlick Manoeuvre even been invented in 1958?) the object was, at last, expelled into my open hand. It turned out to be a large and very indignant beetle about the size of a marble. It was black, with a hard carapace and very prickly legs. Apparently even less damaged than I was, the thing promptly rolled over in my palm and stood up. Waggling its antennae at me, it unfurled a pair of gauzy wings, leapt off my outstretched hand and disappeared into the night.

One of the youths offered me a thermos cap full of sweet, tepid tea, which I swigged gratefully. It soothed the scratchiness at the back of my mouth and helped to get rid of the taste of beetle. I should have known better than to stick my head outside the window at all. Weeks previously I had done almost the same thing travelling between Allahabad and Nagpur. In that instance, I was hit right in the mouth by a huge gobbet of betel-stained saliva from somebody up forward.

The trip took all night, the train alternately hurtling or creeping across the hot, flat plains of the Punjab, hooting mournfully at unseen level crossings; untended stations, bright as rockets, flashing past the dark windows. We reached Amritsar just at sunrise under a sky as pink as Turkish delight, the city’s pale, whitewashed suburbs sliding by like phantoms in the early morning mists.

By the time we reached Amritsar Station, we were exhausted; we were hungry, dirty and we itched. We were in desperate need of the old ‘shit, shine shave, shower and shampoo’ routine – in other words, we needed a toilet and a place to clean up. As with the tickets, we had a ploy for this, too – pretending to be somebody we weren’t. Looking as nonchalant as possible, we sauntered over to the ‘First Class Retiring Room’. We knew what was inside – a Spartan lounge with leatherette sofas and chairs, clean toilets and bathrooms with showers. For holders of First Class tickets, these facilities were free – all part of the service, you might say.

There was an attendant at the door, and the chowkidar (guard) was still on duty. Both men wore grubby white uniforms which had clearly been designed for smaller men (there was a lot of wrist and ankle on show). The attendant made a half-hearted attempt to see our tickets, but backed away hurriedly – hand still outstretched - when we strode haughtily past him. The chowkidar just grinned and gave us a surprisingly smart salute.

***

Amritsar was founded in 1577 by Ram Das, the fourth guru of the Sikhs. It is both the centre of the Sikh religion and the major city of Punjab state. Mostly we found it to be just another dusty Indian town. Inside the old city - enclosed by a roughly circular road where the city walls used to be - are several mosques (all but one of them abandoned) and a couple of very ordinary Hindu temples.

A tout picked us up on the platform just outside the retiring room, and badgered us into following him to the Mata Temple, in the new city near the station. “Very fine temple, it is,” he effused, “Too holy! Much beautiful painting statue there!” Well, maybe. But in my opinion there are some ‘sights’ you just aren’t meant to see. Mata Temple was definitely one of those.

Mata was a twentieth-century female saint called Lal Devi - who, judging from her statues, wore spectacles - and her temple is a sort of monument to bad taste. Apparently, women who wish to become pregnant come here to pray. I can’t imagine why. The statues – and there are lots of them - are grotesque enough to bring on a miscarriage. Representing Hindu deities, they occupy a series of Disney-esque grottoes and shrines around the periphery of the temple. A circumambulation involves crawling through a tunnel (which, we were told, represents a fallopian tube) and wading through a stream (semen). Almost the entire temple – walls, ceilings, statues and even parts of the floor – is done out in what looks like high-gloss acrylic paint, in unimaginably vivid colours. Incredible as it may seem, there is actually a branch of this temple near Jammu. That’s overkill. In my opinion, one of it should have been enough.

***

At independence and partition in 1947, the problem of where to draw the boundary between India and Pakistan was particularly difficult in Punjab, a state with large communities of Moslems, Hindus and Sikhs. The Sikhs had already campaigned unsuccessfully for their own state (which they would have called ‘Khalistan’) and now saw their homeland divided down the middle. The new border ran straight between Punjab’s two major cities – Lahore and Amritsar. Amritsar, in India, is only twenty-six kilometres from the border: Lahore, on the other side, only about fifteen.

The division of Punjab was always likely to release religious hatreds that had been held in check for generations only by the British presence. Everyone (except, arguably, the British) knew that it contained all the ingredients for an epic disaster, but the resulting bloodshed was worse than anyone could have imagined. Huge exchanges of population took place. Trains full of Moslems fleeing westward were held up and slaughtered by Hindu and Sikh mobs. Hindus and Sikhs fleeing to the east suffered the same fate at the hands of Moslems. The army that was sent to maintain order was hopelessly inadequate and, at times, only too ready to join the partisan carnage. By the time the Punjab chaos had run its course, twelve million people had fled their homes, and more than a million had been slain.

Lahore and Amritsar had - in a sense - had their religious minorities forcibly exchanged. Prior to independence, Lahore’s population included about 500,000 Hindus and 100,000 Sikhs. When the dust had settled, only about a thousand remained. Those who had fled were almost immediately replaced by Moslems fleeing from India. A third of Amritsar’s inhabitants – the Moslem minority – fled west to Pakistan, but hundreds of thousands of displaced Sikhs and Hindus flooded in. Many of these settled in Amritsar, some occupying the abandoned homes and shops in the Moslem quarter of the city.

A decade later memories of the horrors of partition had hardly begun to fade. Although Amritsar looked, at first glance, much like many other Indian cities – big and noisy and dusty and crowded - there was something wrong with the atmosphere – as though the city was still trying to come to terms with what it had become. There was a sense of ‘dislocation’ – that people were living in the wrong houses, wearing the wrong clothes, eating the wrong food, even speaking the wrong language and praying at the wrong shrines. And this was likely true. After all, about a third of Amritsar’s inhabitants had been there for less than a decade, and there was still a sense that they were ‘squatting’ – squatting in the homes and shops abandoned by their Moslem neighbours.

***

The holiest shrine of the Sikh religion - the ‘Hari Mandir’ - is in the centre of the old city. The temple itself – known to tourists as the ‘Golden Temple” - is surrounded by a large square tank (pool) about a hundred metres on a side. It was the tank, called Amrit Sarovar (‘Pool of Nectar’) that gave the town its name. The square, two-storey marble temple is reached by a causeway known as the Gurus’ Bridge. The lowest parts of the marble walls are decorated with inlaid flower and animal motifs in the pietra dura style of the Taj Mahal. Its dome is gilded with what is said to be 250 pounds of pure gold. We had to remove our shoes, wash our feet and cover our heads before entering the precincts.

A marble-paved walkway – the Parkarma – surrounds the tank. Other buildings – the ‘business district’ of the shrine, you might say – clustered around the back and sides of Amrit Sarovar. There was a clock tower containing a Sikh museum and a baggage store, a bathing ghat, a post-office, a railway agency, the Ramgarhia Minars, a garden, the Akal Takht (Sikh Parliament building), the Manju Sahib (assembly hall), a kitchen and the Guru ka Langar (dining hall), where volunteers prepared free meals which were served to up to 30,000 people every day. Nearby were the gurdwaras offering free accommodation to all. Actually they offered free accommodation only to pilgrims, but…..well….since nobody ever asked whether we were or not……..

Never ones to look charity in the mouth, Dave and I had a free meal in the Guru ka Langar, sharing chapattis and lentils with (I assume) 29,998 others. We spent our first night in Amritsar in the gurdwara as though we belonged there, spreading our sleeping bags on a cold marble floor amongst dozens of pilgrims. Nobody ever bothered to turn off the brilliant overhead lights, and there were several world-class snorers among us. So, despite my exhaustion after our all-night journey from Delhi, I slept badly.

***

We met Manmool as we were leaving the Akal Takht. He was both tall and very ample – a bit taller than I, and at least half again as broad. He offered to treat us to a cup of tea – “tea and a bit of a chat,” he’d called it, in the sort of crisp British accent that can only be learned in an upper-class English-medium school. We were soon chatting around a table at a tatty kerbside stall, and dipping crunchy samosas in bowls of spicy dhal.

Manmool Singh was a Sikh – one of those who had been displaced by partition, having been born near Multan in what is now Pakistan. Fourteen years old at the time of partition, he was attending the prestigious Cliffden College in Murree - a hill-station north of Rawalpindi. That explained his posh accent. He was actually at the college, four or five hundred miles from home, when the killing began. He couldn’t even go home. Together with about forty other Sikh and Hindu students, he was evacuated directly from the college by a prescient British headmaster, who took the boys north through the mountains to Kashmir in the school bus. It took him more than a year to find the rest of his family – all of whom survived to reach Amritsar. But they had lost their home and their business.

He was one of the many Indians who offered to share their homes with us. He was some sort of administrator for the Shiromani Gurdwara Parbanhak Committee (the Sikh parliament). Judging by his accommodation, his job couldn’t have paid too much – at least by our standards. He had a third-floor walk-up flat in a crumbling six-storey postwar block just off Bazaar Shardha Nand in the old city. His flat had a smallish lounge with peeling rose-coloured wall-paper, a double bedroom and a hall with a wash-basin in it. He shared a primitive kitchen and a bathroom with three other flats on his floor. He offered us his bed – the only one in the flat – but we couldn’t accept. So we dossed down on the floor in our sleeping bags – Dave in the lounge and I beside Manmool’s bed. We talked late into the night.

***

On our last day in Amritsar, the weather suddenly changed. The sky became strangely overcast and heavy. Sulphurous yellow thunderheads rose up in the southeast. A brief dust storm swept across the city. Then the sky darkened even further to turn almost the colour of ripe plums.

A breeze rose, the trees shivered and, for the first time in weeks, it began to rain: the first of the pre-monsoon showers. Nannies rushed out onto roof terraces to rescue their laundry. Children playing hopscotch in the road gave up their game as raindrops wiped clean the dust they had carefully marked out into squares. There was a distant peal of thunder. But in the event, it turned out to be only a brief shower. The first of the rainy season clouds floated on northwards, the sun came out and the streets shimmered and steamed. It left behind it the wonderful odour of freshly damp earth.

Manmool dragged us along to Jallianwala Bagh (known in English history as ‘Chillianwalla Bagh’). It was, he said, something we simply had to see. At the time I wasn’t much interested, but, in the event I was to be glad I went. It was – and is – a poignant reminder of the evils inherent in ‘empire – anybody’s empire’. The tree- and flower-filled park commemorates the 2,000 Indians who were killed or wounded here, shot indiscriminately by the British in 1919. This appalling massacre was one of the major events in India’s struggle for independence. There’s a lot of propaganda there – most of it, unfortunately, true. According to one plaque the British killed “337 men, 41 boys and one baby” in the space of only six minutes. Fifteen hundred others were wounded.

General Dyer, who gave the order to fire on the peaceful crowd, was found ‘not culpable’ by the British, as was his superior, the governor of Punjab Province, Sir Michael O’Dwyer. It was in response to the Jallianwala Bagh massacre that Gandhi instigated his programme of ‘satyagraha’ (peaceful civil disobedience) and announced that “Co-operation….. with this satanic government is sinful.”

Today the lawns of the garden are filled with little boys playing cricket in the dry water channels; goatherds with their flocks; picnicking Punjabi families with their tiffin tins; loving couples reclining against trees; saffron-robed Hindu ascetics sitting cross-legged on the grass, and elderly men with walking sticks. It seemed a most unlikely place for a massacre.

***

When we finally figured out what he was trying to tell us, we were ashamed of ourselves. The problem was absurdly simple. It was a language problem, pure and simple. In “Hinglish” an ‘up-train’, was a train coming to wherever you were (in this case, any train coming toward Amritsar). A ‘down-train’, on the other hand, was one leaving wherever you were (in this case, leaving Amritsar). So the train to Delhi, since it originated in Amritsar, was known as the ‘down-train’ to Delhi. Although it left Amritsar as the ‘down-train’, it would, of course, arrive in Delhi as the ‘up-train’. It also worked in reverse. We’d left Delhi on the ‘down-train’ to Amritsar, but had arrived on the ‘up-train’ from Delhi.

The ticket-wallah in Delhi had been either stupid or mischievous. In Jullundar we found out that, not only had our original ‘down-train’ actually stopped in Jullundar (while we were both blissfully asleep) but that all ‘down-trains’ (or, of course, ‘up-trains’, depending on the perspective from which they are viewed) stopped in Jullundar, which turned out to be a major railway centre.

Anyway, the ‘down-train’ to Delhi took only a couple of hours to reach Jullundar. And from Jullundar, the two hundred kilometre bus journey to Jammu was uneventful. At least I assume it was. To be perfectly honest, I have absolutely no memory of it.

No, that’s not quite true. I have one memory. About two hours out of Jammu, both Dave and I came down with violent doses of the ‘squitters’ – from something we’d eaten in Amritsar, we assumed. Dave decided to call our afflictions the “Sick Sikh Shrine Shits”.

Banihal

Our target was to ‘do’ India on US$1 per day. And we succeeded. After four months in India and Pakistan, we had spent just under $120 each on food, accommodation and travel. In order to do this, we accepted every meal and drink offered, no matter where or by whom. We knew a lot of them weren’t actually fit for western stomachs, but if we were to meet our budget, it was a risk we more-or-less had to take.

As a result, I’d had gut problems for five or six weeks. Like every other poor traveler in India who has to – or chooses to – eat local food, I’d had periodic attacks of various kinds of diarrhoea – the “Calcutta Craps”, “Bombay Belly”, “Seringapatam Shits”, “Poona Poops”, “Delhi Belly” – things like that. I’d had all those and several more besides – things we’d called “the squirts” at home when I was a kid. Toilet paper was in desperately short supply throughout India. So Dave and I had learned to ‘visit’ toilets in upmarket hotels (the sort frequented by Westerners) periodically, and rip off as much toilet paper as we could carry. We often had two – sometimes even three – pockets stuffed with the stuff.

Mostly the squirts weren’t serious, but they were debilitating and a real pain in the arse (pun intended) – especially in a country where toilet paper was hard to come by. Public toilets were few and far between in India, and most of them were loathsome almost beyond description. They were usually ankle-deep in crap, and quite a lot of them were surrounded by so many little seeping piles of shit we couldn’t even reach the door – if, indeed, they actually had a door. And the stench was appalling. It attracted lots of enormous winged cockroaches and clouds of flies, which swarmed over both shit – which was so thick with maggots it seemed almost to be alive - and us. Given the already-delicate condition of my digestive track, I often found myself involuntarily unloading the wrong end, or sometimes both ends simultaneously. This – while squatting on tiptoe in an acre of shit - was no mean trick. It’s also not a whole lot of fun.

We’d managed to keep our diarrhoea more-or-less in check by liberal doses of a readily available drug called Entero-vioform. Entero-vioform wasn’t a wonder drug, and it didn’t actually cure the diarrhoea. What it did do was form an impenetrable plug to seal off the lower end of your digestive system – rather like stuffing quick-drying cement up your arse - so that for a couple of days you couldn’t shit even if you wanted to. After that, peristalsis would take over again, and for a few hours you were likely to blow your bum off. Then, of course, if your diarrhoea hadn’t cured itself, it was time for another dose. But in the meantime – and this was the whole idea - you’d had a couple of shit-free days.

The way Entero-vioform was administered in India those days scarcely caused me to raise an eyebrow at the time. Now just remembering it sends shivers down my spine. The drill was simple. I had only to enter a pharmacy and say the magic word “Entero-vioform”. No further conversation was necessary. The pharmacist would issue instructions to his ‘bearer’, who would promptly disappear down the street. In a few minutes he would reappear, loping along the footpath carrying a syringe. As far as I can recall, all of the bearers carried the syringe as a runner would carry the Olympic flame – high on an extended arm – with the exposed needle pointing up. I suppose that was meant to keep the needle clean – I certainly never saw any other sign of prophylaxis - and maybe also to avoid accidentally stabbing passers-by in the crowded streets. After taking the syringe from his bearer, the pharmacist would sometimes pat my arm with a wad of grimy damp cotton before he poked the needle into me, but more often he just stuck it straight in, dirt and all.

Of course, nobody had even heard of AIDS in 1958, but I still worried some about the dirty needles and occasionally it occurred to me to wonder just where it was the bearers disappeared to and what was actually in the syringe. But a couple of hours after administration of every dose, my arsehole would pucker up right on cue and the “runs” would stop. What more, I asked myself, could I want?

***

The road from Jammu to Srinagar was famously awful – mostly because of the incredible gradients up Banihal Pass - not the sort of road a reputable bus company would want to run its buses on. So, of course, no reputable bus company did. This left travelers at the mercy of a lot of entrepreneurial Doghri-speaking tribesmen who had set out to make and run their own transport. That they had more imagination than knowledge or skill deterred them not at all. By cutting, welding and cannibalizing they eventually produced something – or, rather, some ‘things’ – which fit their only two criteria: the vehicles had to be able to make it up the hill, and they had to hold a lot of paying customers. There were half a dozen of these ‘creations’ – parti-coloured and grotesque - waiting at the bus station in Jammu - all run by a company called ‘Banihal Transport’.

Dave and I hadn’t intended to stop in Jammu. But we’d both caught the squirts – again - in Amritsar. We were blowing off at one end or the other every ten or fifteen minutes, and neither of us was in a fit state to face an all-day bus trip up into the Himalayas. So we’d over-nighted in Jammu just to get another shot of Entero-vioform and to give it time to work. Next morning, arseholes at ‘full pucker’, we arrived at the bus terminus early so that we could pick our own seats. We deliberately chose opposite ends of the rearmost bench - a place we knew to be unpopular with locals – and piled our luggage on the bench between us, hoping that nobody would ask us to move it. Experience had taught us that these would be good places for us to sit. We were about a foot taller than any of our fellow passengers (for whom the bus had been designed) and only these seats had any leg-room to speak of. So we felt quite pleased with ourselves as we swept out of Jammu town and headed north.

In an earlier incarnation, our ‘bus’ had probably been a Bedford 4X4 truck. A very long roofed-in plywood cage had been erected on the truck bed, with eight or ten hard wooden benches. The cage was a lot longer than the truck had been, and there was an incredible overhang – ten or twelve feet – at the stern, where we sat.

The metamorphosis hadn’t been entirely successful. Although they’d more-or-less doubled the vehicle’s capacity, they’d kept the same old engine. It was never intended to haul large loads up Banihal Pass. Wheezing and roaring, it could barely manage a walking pace on any serious gradient. In the event, that hardly mattered. It may even have been a good thing. There was so much weight behind the rear axle of the bus that the front wheels only occasionally touched the road, so the driver was only actually steering about half the time.

Baggage and freight were carried on the roof. Every traveller between Burma and Turkey seems to have a large blue-and-white-striped plastic bag in which he/she carries his/her bedding. They are even carried by air-travelers and are a common sight on the luggage carousels throughout the Middle East. There were fifteen or twenty of these huge blue-and-white-striped plastic-covered bales of bedding up there, together with a lot of assorted bags, several battered cardboard boxes tied up with rope, and half-a-dozen largish wooden crates, at least one of which contained some sort of livestock. The driver and his assistant clambered over and around this great heap of luggage – it was five or six feet high, and overhung the chassis on all four sides - weaving a sort of complicated web of ropes around it. By the time they were finished, I was seriously worried about the bus. It wasn’t just top-heavy: asymmetrical loading had given it had a distinct list to port.

About a third of our fellow-travelers chewed betel nut. Since betel activates the salivary glands, chewers spit often and copiously. It also thickens the saliva and colours it blood-red The ubiquitous use of betel nut has made spitting socially acceptable everywhere in India, and streets, footpaths, walls – even the floors of buses and trains - are widely spattered with dark gobbets of indelible red spittle. The first time my mother saw this phenomenon – when a Bangkok taxi half-opened his door and hawked an oyster of betel juice into the street – she thought he was having a haemorrhage.

Most of our betel chewers – all of whom were clearly old hands at bus travel - had positioned themselves next to windows, through which they regularly expectorated streams of cherry-coloured liquid. This worked fine for them, but not so well for Dave and me sitting way at the back. From time to time a gobbet of saliva, caught in our slipstream, would be sucked back inside through the glassless rear windows to spatter over us passengers at the back of the bus.

Otherwise, the 200-km trip from Jammu to Banihal was OK. The road wound around the Siwaliks - pretty pine-covered hills - then headed north into the foothills of the Himalayas. As we progressed, the countryside gradually grew drier and less hospitable. The road eventually see-sawed its way across barren slopes of scree and rock along the south face of the Pir Panjal Range to the village of Banihal. Banihal was a little green oasis in the midst of a grim, grey landscape – hard and steep and bare – below an immense ramp of rock rising up to Banihal Pass

The Banihal Pass road is of great military importance to India. The only natural access to Kashmir is from Pakistan – from Lahore or Rawalpindi via Murree and Muzzafarabad - entering the province from the west up the Jhelum River valley. At independence in 1947, the rulers of more than two hundred independent states (of which Jammu and Kashmir were among the largest) were allowed to choose whether to join Muslim Pakistan or Hindu India. Although the population of Kashmir was predominantly Moslem – and despite the natural access from Pakistan – the Hindu Maharajah of Jammu and Kashmir opted for union with India. Almost immediately upon its accession to India, Kashmir was invaded along the natural route by so-called ‘freedom-fighters’ from Pakistan who quickly over-ran the western half of the province. A vigorous – and ultimately successful - defence was mounted by Indian troops, most of whom – because India had no overland routes into Kashmir - had to be air-lifted in. An access road across Banihal Pass became a sort of national priority for the Indian government. And it was quickly done – at least by Indian standards. But access was still awful. The pass – at an elevation of 2,832 metres (9,200 ft) – was often blocked by snow and impassable for half of each year. To rectify this, construction of the Jawahar Tunnel began almost immediately. The twin 2,500 metre tunnels – at an elevation of 2,200 metres (7,216 feet) were opened for traffic in 1956, permitting year-round access to Kashmir for the first time.

Nobody seemed to know whether the tunnel would be open or not – it was, after all

Wesley Gray

Wesley Gray, who occasionally drops by here to provide some high quality commentary, has launched his maiden hedge fund, “Empirical Search Strategies.”

The fund follows a “long-biased micro-cap equity strategy,” which means it invests in “special situations opportunities such as liquidations and companies selling for less than cash value.” Sounds like a good strategy to us.

The fund is down 12.56% since its September launch, which compares favorably with the performance of the Russell 2000 Index (down more than 39% during the same period).

Gray is completing his Ph.D. at the University of Chicago Booth School of Business.

You can read more about Gray’s strategy in the FinAlternatives article Ten Hut! Ex-Marine Launches Long/Short Hedge Fund or Gray’s own website Empirical Finance Research Blog.

Congratulations, Wes. We hope to see you here more often.

Neoliberalism

France, apparently always the final bulwark against total neoliberalism and globalisation in Europe has seen large scale general strikes (well, huge for countries like the US and UK, but probably just sizeable in continental Europe’s terms) today, mostly effecting the transport sector. These strikes follow on from those witnessed in Greece at the end of last year (and ongoing), sparked by the police shooting of a teenager and gaining further support from people badly affected by the current economic crisis, and the Greek governments regressive neoliberal reforms which have hit the public sector badly.

I assume it’s only a matter of time until these kinds of strikes spread over to the UK, as well as other major European nations such as Germany and Italy. Although the authorities in the UK make it as difficult to strike as possible nowadays, and trade unions have been neutered since the 80s, the more ordinary people are affected by this crisis, the more likely average workers will make their way onto the streets. 69% of the French population supported the strike’s of the last couple of days, even if many in Paris have been inconvenienced. As happened during the initial reaction to the TARP in the US last Autumn, people are outraged by their government’s behaviour in bailing out banks and other private organisations with public money, to the detriment of ‘Main Street’. The difference in France is that there is still a trade union movement that can capitalise on these events and organise protest. Below are some pictures from various news sites I felt were worth sharing.

“A few months before the credit crunch struck, Mr Sarkozy snapped at grumbling journalists, who were complaining about low wages and poor spending power, that there was no money left in the till for handouts.

So where, the French people are now asking, did the 360bn euro shore-up fund to guarantee banks come from? This, at a time when the government was busy slashing thousands of public sector jobs, trimming pension benefits and planning massive cuts to the education budget.

And why, despite receiving such a generous support plan, are the French banks still refusing to pass on loans to desperate businesses - especially when many of those banks have announced sizeable profits this year?”

In recent years, when the economy was seemingly ‘good’ class warfare has been somewhat easier to cloak by allowing ordinary workers higher levels of credit, high property values (in the UK especially) and cheap consumer goods (connected to the first and near slave labour in East Asia etc). People’s real wages have stagnated since the 70s, so living on credit and taking out second mortgage’s has been allowed as the only means for people to consume and maintain what is at it’s core a hollow system. We’ve allowed finance and the banks to redistribute public wealth upwards, as we believed things were getting better for ourselves, even when they weren’t. In other words;

“According to the calculations of the Census Bureau the average “real weekly wage” [i.e. wage adjusted for inflation using the "consumer price index"] has fallen by 14 percent between 1970 and 1996. Meanwhile real G.D.P. has increased from $3.771 trillion in 1970 to $9.817 trillion in 2000.”

So in the US specifically, there is greater wealth, but those at the bottom have not gained it or benefited from it (unless you count being able to buy a cheap plasma screen tv to put in your sub-prime mortgaged house). Anyway, to me, we are now seeing class warfare out in the open. Government’s are literally taking money from the public and giving it finance and banking capital when prompted, with no redress for their actions and no benefit to the public (lowering mortgage interests rates in the UK for example). The banks are pretty much bust, but our government’s in the west, mainly made up of the parties of business are ensuring that the wealthiest individuals maintain the position they won from the 1970s to the presnt. I’m not entirely sure how to reverse that, but large scale protests may help in some way as government’s panic that ignoring their secondary constituents after business (the people), may be too costly.

DIVA editor attacks Peter Tatchell

Even though Summerskill already has his own regular column in the same newspaper, in which he often makes similar attacks on Peter Tatchell and grassroots campaigning this week Stonewall’s highest paid member of staff was given another opportunity to dismiss the work of pretty much anyone who isn’t in the gay rights game for the money. As Jane Czyzelska’s article starts off it quickly descends into appearing to be a platform for Stonewall’s work and yet another outlet for Summerskill and his gay mafia friends to make false claims about the success of their work.

Recession Keeps Lid On Employment Costs In 2008

WASHINGTON (AP) — Employment costs edged up in the final three months of the year at the smallest pace in nearly a decade while the gain for the entire year was the weakest showing in more than a quarter century.

According to the AP.

The Labor Department reported Friday that its employment cost index was up 0.5 percent for the three months ending in December, weaker than the 0.7 percent rise that economists had expected.

For the whole year, employment costs, including wages and benefits, showed an increase of 2.6 percent, an all-time low for this data series, which goes back to 1982.

The previous low had been a 2.8 percent gain in 1996. Employment costs had risen by 3.3 percent in both 2007 and 2006.

The slowdown in wages and benefits paid to workers is a reflection of the country’s economic hard times. The economy has been in a recession since December 2007, a downturn marked by plunging home prices, the most severe financial crisis since the Great Depression and 2.6 million job cuts last year, the worst showing in six decades.

Since the financial crisis struck with force in September, the downturn has intensified. In a separate report Friday, the Commerce Department said that the overall economy was shrinking at an annual rate of 3.8 percent in the October-December quarter, the worst performanc ein a quarter century.

The 0.5 percent rise in compensation costs for civilian workers in the October-December period was the weakest showing since employment costs edged up by 0.4 percent in the first quarter of 1999.

Wages and salaries, the biggest component of compensation, rose by 0.5 percent for the fourth quarter, compared to a 0.7 percent gain in the third quarter, while benefit costs were up by 0.4 percent, compared to a 0.6 percent rise in the first quarter.

The economy has been jolted this week with a wave of new layoff announcements as the economic downturn has forced companies to make even sharper reductions in payrolls.

Ford Motor Co. said Thursday it had suffered a fourth-quarter loss of $5.9 billion and its credit arm would be cutting 20 percent of its work force, or 1,200 jobs. Eastman Kodak Co. said it was cutting 3,500 to 4,500 jobs, and power tool company Black & Decker Corp. announced 1,200 job cuts.

With layoffs intensifying, employees have even less bargaining power to get higher salaries or increased benefits.

With wage pressures dormant, the Federal Reserve has the leeway to keep interest rates low in an effort to jump-start the economy.

After a two-day meeting, the Fed announced on Wednesday that it was keeping its federal funds rate at a record low near zero, where it has been since December. Fed officials said they anticipated keeping rates low “for some time” to come.

OREO For 01 30 09

OREO For 01 30 09

Sensex down 148 pts in early trade - Times of India


By Mark KinverScience and environment reporter, BBC NewsThe UK government is failing to support its own measures designed to deliver energy savings, an expert has warned.Philip Sellwood, chief executive of the Energy Saving Trust (EST), said local authorities needed more funds in order to ensure savings were being made.While ministers were quick to promote new policies such as “zero carbon homes”, existing building regulations were not being upheld, he added.Under EU commitments, the UK has to deliver 20% energy savings by 2020.”To me, this highlights a real gap between the aspiration to do something appropriate and the actual delivery on the ground,” Mr Sellwood told BBC News.”If it were just a matter of policy announcements, the UK would be up among the leading countries.”Our building regulations in the UK are among some of the toughest in Europe, but they are extremely poorly enforced as far as energy efficiency goes.”Simple fixesHe said research showed that, in some cases, up to 30% of properties being built would fail existing building regulations.”When you think that we are putting a lot of reliance on meeting our CO2 reduction targets by increasing the toughness of our building regulations, this is a real concern.”Concern over ‘zero carbon’ homesThe Climate Change Act, which became law late last year, requires future governments to cut carbon dioxide by 80% from 1990 levels by 2050.Households in the UK are estimated to be responsible for almost 20% of the nation’s greenhouse gas emissions, meaning that failure to cut CO2 emitted by homes will threaten any attempt to achieve the legally binding target.Mr Sellwood said the failings were occurring in areas that did not require technical expertise.”It is simple things like people not fitting windows or doors correctly. Instead of getting energy efficiency, we are getting energy inefficiencies.”He added that there were too few inspections being carried out in order to spot the shortfalls.He warned that the current situation on the ground did not bode well for the government’s commitment that all new homes from 2016 had to be “zero carbon”.”If there is no proper enforcement of the building regulations, we won’t know if what has been built is the same as what was promised.”To overcome the shortfall in building inspectors, Mr Sellwood said that it was important for local authorities to receive the necessary resources in order to uphold the regulations. Acting smartAnother policy area he said that was failing to live up to expectations involved “smart meters”.”A short while ago, the government announced that it was going to implement a programme of installing smart meters in people’s homes,” he explained.Studies have shown that smart meters can cut bills by up to 10%Bringing meters out of the closet”This would allow the household to indentify their energy use and obviously take measures to reduce it.”Since then, there has been silence from the government. “It could be as long as five to 10 years before we see any tangible change in the number of smart meters in people’s homes.”He added that studies in other countries had shown that smart meters had helped cut energy consumption by up to 10%.The technology, he suggested, would have a number of benefits. Firstly, it would help people save money in a time of financial uncertainty and high energy prices.Secondly, it would help reduce the demand for energy and cut carbon emissions.As well as criticising the UK government, the EST has also voiced concerns about possible plans to change the EU’s energy efficiency labelling scheme for household goods and appliances.Mr Sellwood said the current A-G rating system could be replaced by another scheme, even though research suggested that most people recognised it and understood how the A-G format worked.”We think that the EU has enough on its plate at the moment without trying to change this,” he said.”It is a case of ‘if it isn’t broken, don’t try to fix it’.”
Source: news.bbc.co.uk

Airbus Germany is also leading to a bank aid
… Very interesting news. read more: http://finance.varolmak.com/
Source: finance.varolmak.com

Algeria: three new gas fields
… Very interesting news. read more: http://finance.varolmak.com/
Source: finance.varolmak.com


MUMBAI: The Bombay Stock Exchange benchmark Sensex fell by over 148 points in early trade on Friday on heavy selling by funds following a weak global trend. The 30-share index, which had lost 21.19 points in Thursday’s choppy trade, fell further by
Source: timesofindia.indiatimes.com

Hungary MOL trade suspended at company’s request - Forbes
BUDAPEST, Jan 29 (Reuters) - Trading in shares of Hungarian oil and gas group MOL on the Budapest Stock Exchange has been suspended at the company’s request, MOL spokeswoman Dora Somlyai told Reuters on Thursday. Local news agency MTI said the
Source: www.forbes.com

Banks, miners drag shares down - The Age
The Australian share market is lower after a night of heavy falls on overseas markets. In noon trade, the benchmark S&P/ASX200 index was down 1%, or 36.7 points, at 3489.5, while the broader All Ordinaries index was down 0.9%, or 32.9 points, at 3428
Source: business.theage.com.au

Greens call for ASX probe into Gunns statement - Tasmanian Examiner
THE Australian Greens have called for an investigation into whether timber company Gunns misled the Australian Stock Exchange regarding its controversial $2 billion pulp mill. The timber company has rejected any suggestion it has misled the Stock
Source: www.examiner.com.au

End of post .

The true cost of debt

Have you cast your vote yet?

Deal or No Deal … YOU DECIDE

Click here to vote!

_______________________________

In my post about debt, I said that it is not always correct to simply pay down old debt … in this post, you will see that it’s rarely ever correct.

First, let’s look at Jeff’s comments, which summarize the traditional view that it’s all about interest rate comparisons:

My opinion is to still compare your debt interest to prevailing debt rates (is it cheap money compared to what else is available?), how does inflation affect the rate (cheaper future dollars point again) and can I out perform the debt rates with the investment opportunity that is competing for this money.

Without the tax advantage, I’m more inclined to pay off the debt, i.e. lower tolerance for high debt interest.

I haven’t done any math on it…yet, but my gut feel is that 6% or higher on the debt and I’d be giving serious thought to paying off the loans.

This may be true, Jeff, if all else is equal

… but in the ‘real world’ of investing, you will find that all else is rarely equal!

You see, I don’t look at interest rate and cost anywhere near as much as I look at utility - a concept that I introduced in this post: if I am serious about investing, I am struggling to find a scenario where putting my money INTO reducing leverage (by paying down existing loans) returns more than taking on new ‘good’ debt …

…. or, leaving old ‘bad’ debt in place, as long as it is cheap’ish and, much more importantly, available!

I’m sure that our resident real-estate experts (e.g. Shafer Financial) could point you to 1,000 examples where it is still viable to maintain debt of 8% - 15%+ as long as you could find cash-flow positive real-estate that appreciates at not much more than inflation.

It doesn’t even need to be real-estate, but it does depend on what you are prepared to invest into; e.g. assuming Michael Masterson’s numbers:

Besides the obvious tax implications (e.g. CD’s and Index Funds - depending upon whether they are inside or outside a 401k - could become ‘line ball’ with paying off the 6%+ debt (IF it were pretty close to the 6% mark) …

BUT, you have highlighted a more important flaw in my argument: this table only looks at the use of the money; what if I could get a cheaper source of funds by paying down the old debt then acquiring new?

Great argument, in theory, but let’s see how it stacks up in the ‘real world’ … the simple question is: can we refinance or otherwise acquire cheap, new debt (thus allowing us to pay down the expensive, old debt) as Jeff suggests?

Let’s see:

CD’s: I don’t see any easy way to finance except with personal loans, credit cards, a refi or HELOC over our home, so I would say let the debt ride. But, the list above suggests that this would a recipe for losing money, anyway, because of the low returns.

Index Funds: possible to borrow on margin (i.e. finance) through a brokerage account (but, not in your 401k) but only to a max. of approx. 50% so you would still need to come up with the other 50% elsewhere.

Individual Stocks: same as with Index Funds (e.g. I am 100% financed in the US market through a combination of HELOC and margin loans).

Real-Estate: usually able to refinance, so I would agree with you to “compare your debt interest to prevailing debt rates”; other than right now, 6% is extraordinarily low historically … 8% - 10% would be closer to my refinance decision-point.

Small Businesses: very hard to finance except with personal loans and credit cards, so I would say let the debt ride if you were highly enthused and confident of success.

In other words, finance is simply not readily available on most investment choices available to us.

So, the questions that you need to answer - probably in this order, Jeff - are these:

1. Do I want to get rich(er) quick(er)?

2. If so, am I prepared to increase - or, at least maintain - leverage by borrowing for investments?

3. If so, am I prepared to make the mental leap of moving to the concept of ‘pools of debt’ and ‘pools of equity’ by not actually having the debt entirely on the asset that I am acquiring?

And, more importantly:

4. Is new debt available to make the investment/purchase (if so, is it cheaper than my current debt)?

5. Does the investment/asset that I am considering acquiring return more than my current (or new) debt?

Japan heads for worst recession since second world war

The global recession has sent shock waves through Japan’s economy, forcing once-powerful exporters to rein in production, slash jobs and close factories in response to plummeting demand for cars and consumer electronics.

NEC, the computer chip maker, announced it would make 20,000 workers redundant worldwide as it struggles to cope with falling demand, while carmakers Toyota and Honda said their losses would worsen this year.

Today’s figures, however, offered evidence that the malaise had spread to the domestic economy.

Unemployment rose to 4.4% in December, its biggest monthly rise for 42 years, from 3.9% a month earlier. The jobless total has risen over the last year by 390,000 to 2.7 million, as the spectre of deflation and flat consumer spending returned to haunt companies and their employees.

Household spending fell by 4.6% in December, the 10th consecutive monthly fall, while core consumer inflation edged up a mere 0.2%.

“Companies are not only cutting production but also cutting employment, which is deeply unsettling for households,” Martin Schulz, senior economist at the Fujitsu Research Institute, told guardian.co.uk.

“We are now looking at a domestically driven recession. The domestic economy is at risk of falling apart, and if that happens we are looking at a really deep, long recession. Even if that doesn’t happen, things are already bad enough.”

With Japan’s non-regular employees, who now comprise a third of the workforce, at increasing risk of being laid off, families are refusing to spend, and analysts say the government’s much-derided handout of ¥12,000 (£94) for every individual is unlikely to have any impact.

Predictions of further falls in production in the coming months are making prime minister Taro Aso’s boast that Japan will be the first to emerge from the recession look increasingly hollow.

The economics minister, Kaoru Yosano, admitted the economy was “in a very grave situation”.

“Japan is being hit by a wave of weakening global demand,” he said.

The plight of Japan’s exporters was underlined yesterday when Toshiba forecast record annual losses. Toyota, meanwhile, could be heading for an operating loss - its first for more than 70 years - of about ¥400bn for the year to the end of March, reports said today, while Sony is bracing itself for record losses this year.

Although factory production is at its lowest level for 20 years, cuts in output have barely dented bloated inventories, prompting speculation there could be more reductions.

Exporters’ desperate attempts to climb out of the crisis are being hampered by the strength of the yen, which gained 23% against the dollar and 29% against the euro last year.

Economists predict that fourth-quarter GDP figures, due out next month, would show the world’s second biggest economy shrinking at a double-digit annual rate.

In addition, the International Monetary Fund warned that Japan’s GDP would contract by 2.6% this year, the gloomiest prediction of all the G7 countries except Britain. If the IMF forecast is correct, it would be the worst contraction since the end of the second world war.

“As output adjustments continue, weakness in the overall economy will persist from January to March, and the degree of worsening depends on how exports turn out,” said Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities.

“It is already a consensus view that core consumer inflation will turn negative soon, but we must watch if a worsening of the economy pushes Japan into a deflationary spiral, even though the Bank of Japan sees no signs of that happening right now.”

The gloomy data stopped in its tracks a three-day rally by the Nikkei, sending the benchmark index tumbling 3.1% in Tokyo.

Nintendo shares sank 12% after the video game maker cuts its earnings and sales forecasts. The company, which had enjoyed huge sales of its DS and Wii game consoles, said yesterday that annual operating profit would fall by 16%. Honda, Toyota, Sony and Toshiba were also down.

The Nikkei has lost more than 10% this year after shedding more than 40% last year.

The Bank of Japan is buying up corporate debt and recently brought interest rates down to just above zero, while the government this week passed a $53bn stimulus package and launched a $16.7bn fund to buy shares in struggling firms.

But Schulz said Japan’s financial authorities were running out of options to save the economy from a deeply damaging recession.

“The government has few tools left to deal with this. Japan managed to shield failing companies during the last recession – the so-called zombie firms – but you cannot protect companies from a breakdown in demand in the domestic economy.”

Spread betting

Last month, There are advertisement disappeard into my eye when I read the news on FT.COM, CMC Markets promoting the Spread Betting to investor.

I never trade stock  before. It’s my first time to hear the concept, which took 3 days for me to learn how to trade spread betting.

As the sales of CMC Markets promised that I can withdraw my fund anytime as well as there is no constraint to keep minimum fund in your account. Therefore, I fund 200 sterling in order to open a new account.

At beginning, I try to trade FT 100 index. It impressed me that the first day I earn 30 pounds with just 50 pounds margin. The second day was fantastic day in my life as well, I earn about 50 pounds within 1 hour. However, the result really threaten me. why I can earn so much money comparing with the initial amount of money?  In the following days, I lost most of the profits I earn, I try to practice the trade strategies and still try to make more profits instead of lossing money.

Today, I am reading the book writen by Larry Williams, “Long-term secrets to short-term Trading”.

Is there anyone who trade in CMC markets or any experience can be shared with me?

Bad Government Intervention Requires Bad Government Bank-The Road Map Out Of The World Economic Crisis

Pronk Palisades

Thoughts and Solutions for the US and Global Economic crisis - continued -

While one drop of water added to an ocean does not seem to change the overall system, it inherently does in some respects, much as any small draft of air changes the atmosphere of a place and influences the system in some way. Macro-economic systems are most like dimensional fluid system models given to be influenced by flow rates, thermodynamics, fluctuations of pressure and degrees of change within event horizons of elapsed time, constraints of environment, among other things. So too, are macro-economic systems inclined to be influenced, to maintain a non-ordinary type of equilibrium and to vary from mean (absolute) stability by extraordinary amounts within the tolerance of internal (good, healthy) balance. They are really quite remarkable.

So, to the questions -

* What would create stability in the world economies as efficiently and effectively as possible, in the most natural, and non-obstructive, non-obtrusive manner?

1. Tell everybody in America to take $10 and using basic skills of business (as an applied science) - make it into $20 in less than a week without spending $500 to do it. That’s first because if they can figure out how to do that they can probably get their own financial house in order in some measure.

2. Second, is to put in place the proper and appropriate legislation to correct and regulate the financial sectors including re-creating any and all mortgage instruments (in place) that exist as an ARM or any similar type thereof. And, make it illegal to create such mortgages as ARM and “Interest Only” in the future.

3. Next, or simultaneously, pay the money directly to the foreign investors that are behind the scenes hounding us for it at ½ of 1% face value as an intermediate stopgap measure and explain it for “what is actually being done and why,” in an honest manner.

4. Re-regulate as should have been done or should have been left in place all along to force prudent lending / borrowing practices regardless of the industry. This would go farther to create stability and restore “trust” than any one other thing.

5. Drop hindrances in the marketplace as mentioned from startup filings and fees to visa and passport and patent fees / licensing fees. Add capital flows to regional, community and local banks specified to help grow businesses in the communities. And, fix this mess that some call, government inaction, ineptitude and dismal performance “business-as-usual.”

6. Well, sixth would be a couple of things and they go hand-in-hand. Since government bailouts are the order of the day, use some of those trillions to buy lined paper and pencils to give (free of charge and not by mail) to each and every American individual. This includes a set for every member of every family. And, a simple one-page synopsis to inspire its appropriate use such that they can help themselves and show their children how to do the same.

7. Get off the dime - because the same old song and dance isn’t going to get it anymore. Excluding some in the name of whatever the benefit to a few, isn’t based in the principles and foundations of democracy and equal opportunity for all.

Either, a.) facilitate it, or b.) get out of the way.

Written by Cricket Diane C “Sparky” Phillips, 09-27-08, USA

The Best of Zambia Newsletter - January Newsletter

 

New Lusaka Office for the Best of Zambia

We are happy to announce that our new office is open at 202 Alick Nkhata Road, Kabulonga, Lusaka. All enterprises interested in promotion through our online directory www.thebestofzambia.com are most welcome to drop by. We believe that we will be better able to serve our clients by having this local contact point.

Daily Telegraph UK features Zambia safari spots

2. Royal Zambezi Lodge (Lower Zambezi National Park)

3. Shumba Camp (Kafue National Park)

Julia Rosamund Brown 

Hennion and Walsh News: For Many US Funds, Only Back In Brazil In Mid-2009

SAO PAULO (Dow Jones)–It used to be that Brazil was the darling of emerging markets in the Americas, but the global financial market maelstrom and economic slowdown have now prompted investors to turn their back on the country.

Brazil’s Ibovespa stock index has lost more than 40,000 points since May 28, when it reached an historic intraday high of 73,920 points. That’s when foreign investors rewarded the country with a fresh infusion of capital after Fitch and Standard & Poor’s gave the country its much sought-after title of investment grade.

Most investors still love the Brazil story, although for now they prefer to sit on the sidelines.

Brazil is energy self-sufficient in both ethanol and petroleum. It’s a huge commodities producer, but also boasts significant manufacturing and services sectors, including a sophisticated banking industry that’s free of the “toxic assets” that have sunk many financials in the U.S. and Western Europe. It also sports a large and growing consumer base.

Nevertheless, its attraction has waned, and U.S. asset managers that don’t have to invest in Latin America’s biggest economies have no plans to come back for several months.

“As late as the third quarter we still had some emerging market assets … but we sold them all,” said Kevin Mahn, chief investment officer at Hennion & Walsh Asset Management, Inc. owners of the $170 million SmarthGrowth fund of funds.

“We have no emerging market allocations and won’t consider them, including Brazil, until the first quarter of 2009.”

Whether investors are exposed to Brazil through exchange traded funds, American Depositary receipts, or investing directly in the Bovespa, Brazilian equities have suffered net outflows of foreign capital since June.

The Bovespa suspended trading six times this year. Mostly in the last two months. The Bovespa had net outflows of 3.3 billion Brazilian reals ($1.4 billion) so far in October, and BRL21.7 billion so far this year, compared with BRL12.3 billion in 2007 and BRL6.1 billion in 2006, according to the Bovespa.

Commodity prices have fallen sharply, with benchmark crude prices down more than half since their July highs, and base metals prices also down significantly.

The global dollar liquidity squeeze and outlook for slower growth have undercut prices for Brazilian commodities - whether it’s ethanol, soybeans or beef. And slower economic growth in Asia - particularlyChina - means less demand, for example, for Brazilian steel and iron-ore from major companies like Vale do Rio Doce (RIO), whose shares have lost 56% of their value over the last 12 months. Brazil’s key Ibovespa stock index is down 51% over the same stretch.

Brazil’s economy might be fundamentally sound, and bolstered by just more than $200 billion in foreign exchange reserves - but a recession in Europe and the U.S. and slower growth in China, are prompting analysts to reckon with Brazilian economic growth of 2.5% in 2009, half of the 5% expected this year.

That’s not much for dedicated emerging market funds to lean on, no matter how much they like Brazil’s long term prospects, says Ed Kuczma, investment analyst for the $77 million Van Eck Emerging Markets Fund (EMRCX).

“It’s been a very rough year for us. We get calls everyday from clients asking us if we can reposition the portfolio, but unless you’re in cash, it’s tough to position an equity fund defensively, especially an emerging markets one,” Kuczma said.

Around 14% of the fund is allocated to Brazilian assets, either directly into small companies, or through ETFs. The fund’s down 48% year-to-date as of September 30, 2008.

“We are neutral on Brazil at this point and only looking at smaller names that are cash rich and have no short term debt,” Kuczma said.

“We have the cash, but Brazil is a moving target and with risk aversion like this around the globe, emerging markets are the first thing to go,” he said.

The fund holds small names like clothing retailer Hering (HGTX3.BR) and medical supply company Cremer SA (CREM3.BR), both underperforming the index year-to-date.

Joe Clark, director at the Indiana based $200 million asset management firm, Financial Enhancement LLC, said he is actively trading a dwindling number of Brazilian assets through holdings in the iShares MSCI Brazil Index ETF (EWZ).

“We sold out of all emerging markets in November and bailed out of Brazil in early September once Lehman Brothers went bankrupt,” said Clark.

The $2.7 billion Brazil iShares ETF is down to $29.94, from a 52-week high of $102.21.

“We are sitting on at least 40% cash for our clients and we will wade in and out of Brazil if EWZ looks like it can go to $34 a share. We’d be buyers at that level,” Clark said, “but that doesn’t mean we won’t wade out fast.”

-By Kenneth Rapoza, Dow Jones Newswires; 5511-2847-4541; kenneth.rapoza@dowjones.com

Hennion and Walsh News: Investors Take To T-Bonds Amid Uncertainty

American investors worried about the outlook fortheir own country after economic data released Monday showed that Japan, the second-largest economy, slipped into a recession as its economy shrank 0.1% in the third quarter, for an annualized contraction of 0.4%. (See “G20 Speeches Fail To Convince Asian Investors.”)

Meanwhile, data from the Federal Reserve Bank of Philadelphia indicated the United States may be headed in the same direction. According to the Philly Fed’s Survey of Professional Forecasters, the U.S. economy has been in a recession since last spring, and the downturn is expected to last 14 months, economists surveyed said. The survey forecast a sharp contraction in the fourth quarter, with gross domestic product expected to shrink by 2.9%, compared with previous projections for growth of 0.7%.

Adding to Monday’s gloom was the Empire State Manufacturing Survey, conducted by the Federal Reserve Bank of New York, showing that business conditions in the state fell the lowest level–negative 25.43–since the index started in 2001.

Also spurring investors’ flight to safe-haven investments was an announcement from Chief Executive Vikram Pandit of Citigroup that 53,000 jobs would be cut by the end of 2009’s first quarter. (See “Another Ax Swings At Citi.”) The company has been reducing its workforce to cut costs amid a global credit crisis that has forced Citi to post four consecutive quarterly losses with a combined deficit of more than $20.0 billion. (See “The Global Financial Crisis.”)

Yields fell across the maturity spectrum as money tumbled into the market, some of it apparently fleeing declining stocks. (See “Red Finish For Sagging Street.”) The yield on the bellwether 10- year note was down to 3.65% at Monday’s close, from 3.75% late on Friday, and the 30-year bond’s yield slipped to 4.18%, from 4.23%. Among shorter-dated maturities, the two-year note was returning 1.20%, down from 1.24%, and the three-month bill offered just 0.10%, down from 0.14%.

From a historical perspective, however, Walsh said the yield curve was pretty steep as a result of the usual pressures such as supply and demand and the flight to quality–bond markets are considered a safe place to park money. “The two-year note at 1.20% is really indicative that people are afraid of the equity market,” he remarked. “People are still buying quality, but they like the short-term maturity because they’re worried about all the uncertainty.”

Investment-grade corporate bonds found favor as well. The iShares IBoxx $ Investment Grade Corporate Bond Fund (nyse: LQD - news - people ) added 0.7%, or 65 cents, to close Monday at $90.55. But an aversion to risk kept investors away from junk bonds: the SPDR Lehman High Yield Bond (nyse: JNK - news - people ) fund fell 1.2%, or 37 cents, to $30.43.

–Reuters contributed to this article

Hennion and Walsh: Investors Running Out Of Places To Hide

They’re for the risk-averse. And who wouldn’t want a little steadiness in this wind-blown market?

They’re for the quiet, steady side of your portfolio, the portion that lets you sleep well at night.

They’re bonds — and they usually don’t give you much bang for the buck. But lately — low-priced and with decent yields — they have been returning far more than their riskier cousins: stocks.

“You can get equity-like returns in the corporate bond market for the first time in decades,” said Gary Cloud, portfolio manager of the AFBA 5Star Balanced Fund in Kansas City, Mo.

Lately, bond prices have dropped so much and their yields, or expected returns, have spiked so high that bonds are looking attractive as something other than a safe haven. Some municipal and corporate bonds are yielding substantially more than U.S. Treasurys.

So what’s behind this state of affairs? On one level, it’s the bond market rule of thumb at work: As prices fall, bond yields rise. Prices have tumbled for municipal bonds as stressed hedge funds have unloaded lots of debt. Prices of corporate bonds have sunk along with companies’ weakening earnings and the economy’s dim prospects.

The higher yields, while attractive, do signal a higher degree of risk. Munis and corporates will never be as safe as Treasurys, which are backed by the U.S. government. With munis and corporates, there is always the chance of default as city budgets stumble or companies collapse.

The same has been true, though not to the same degree, of municipal bonds, which state and local governments issue to pay for projects such as school construction. Municipal bonds tend to have lower yields than Treasurys because they are exempt from federal and sometimes even local taxes. But lately, some have had higher yields than Treasurys.

In recent days, the yields on municipal and corporate bonds have come down a little, narrowing the gap with Treasurys, suggesting that investors see risks declining. Still, the yields remain high by historic standards, analysts said. “We’re seeing yields we haven’t seen in nine or 10 years,” said Philip G. Condon, head of municipal bond portfolio management for retail and tax-exempt advisory clients at DWS Investments.

Richard Bernstein, chief investment strategist for Merrill Lynch, points out that Treasurys are this year’s best performing asset class. “I think there comes a point when people will begin to realize that the certainty of the return, even though it’s low, may be worthwhile,” he said. For individual investors, bonds can provide diversification for a portfolio.

Moreover, remember the long-term performance of most bonds. You will be hard-pressed to find an analyst or strategist who advises you to dump your stocks in favor of bonds. The recommended portfolio has a mix of stocks and bonds. “Bonds will normally not give you a big amount of growth over time,” said Bill Walsh, president of Hennion & Walsh, a Parsippany, N.J., securities firm specializing in municipal bonds. “I know the last few weeks have scared people and made them nervous [about stocks], but over time, history has proven the equities market will give you growth.”

If you’re looking for more of a return on your bond investment, then munis or corporates may be for you, analysts said. But stick with high-quality ones. The credit quality of governments and companies is monitored by the ratings agencies: Standard & Poor’s, Moody’s and Fitch Ratings.

Keep in mind that the lower the credit quality, the higher the interest rate you will get for buying that bond. But analysts said you don’t have to take a chance on so-called “junk bonds” and all the risks they come with because the yields on high-quality bonds are high enough to make them worthwhile. “Err on the side of caution from the credit perspective,” said Bob Nelson, managing analyst for Thomson Reuters. “For the individual, the real concern in this market environment should be on credit quality.”

Japan heads for worst recession since second world war - Honda shuts UK factory for four months - Toyota set to post first net loss since 1963 - US-EU trade war looms as Barack Obama bill urges

Décryptage, Analyses, Veille - Downside The World News

January 30, 2009 at 8:53 pm

Walking a Very Thin Line

They say it’s a fine line between brilliant and stupid. State Street Global Investors stepped out onto that tightwire with the launch of two new bond ETFs on Tuesday.

The SPDR Barclays Capital Mortgage Backed Bond ETF (MBG) and the SPDR Barclays Capital Short Term International Treasury Bond ETF (BWZ) both launched on the NYSE Arca on Tuesday. The SPDR Barclays Capital Mortgage Backed Bond tracks the mortgage pass-through sector of the U.S. investment grade bond market. SPDR Barclays Capital Short Term International Treasury Bond ETF seeks to provide the return of an index that measures the short-term (1-3 year) fixed rate, investment grade debt issued by foreign governments of investment grade countries.

The most interesting facet of these ETFs is that they carry the name of its prime competitor, Barclays. Late last year, Barclays bought the Lehman Brothers Bond Indexes division after that investment bank declared bankruptcy in September. This blog wondered if SSGA would actually put the name of its competitor into its ETFs when it tracked a former Lehman index. Well, the answer is yes.

Even funnier, is the fact that they are going head-to-head with similar bond funds out of Barclays Global Investors iShares division. Just last week, BGI launched the iShares S&P/Citigroup 1-3 Year International Treasury Bond Fund (ISHG) on the Nasdaq. Heather Bell of Index Universe breaks down the minor differences between the two. The iShares Barclays MBS Bond Fund (MBB) launched in 2007. The big difference here is the SPDR fund charges only 0.2% vs. the MBB’s 0.36%.

The question now is, is this a stupid or brilliant move? On the one hand, why would anyone give free publicity to a competitor if they didn’t have to? There are plenty of ETFs that don’t have the name of the index in the name of the corresponding ETF. However, I’m leaning toward brilliant.

As the creator of the first ETF, the Standard & Poor’s Depositary Receipts, which has been renamed the SPDR (Spider or Spyder, which is a play on its ticker symbol, SPY), SSGA has a well-respected reputation in the ETF space. Recently SSGA renamed its entire ETF family the SPDRs.

However, BGI became the market leader when it launched its iShares brand in 2000, and hasn’t let go since. SSGA is currently the second largest ETF firm in terms of assets. By launching ETFs with the SPDR Barclays name, there is bound to be confusion among investors. I’m sure there will be a sizeable number of people who buy the new SPDR bond funds assuming they were created by Barclays Global Investors. While SSGA has done a good job branding the SPDRs with the recent campaign for the Select Sector SPDRs, I’m sure there are still many people who don’t realize SPDRs and Barclays are two different companies and will by the SPDR funds with the assumption they are getting a Barclays product.

This becomes more than just inside baseball. In November, this blog reported that in the third quarter, BGI’s market share had fallen to 47.3% of the market from 50.9% in the second quarter, while SSGA’s market share grew to 26.5% from 23%. In addition, SSGA’s third-quarter cash inflows were the largest in the industry, at $41.8 billion, with $28.6 billion going solely into the SPDR (SPY) vs. iShares’ cash inflows of $23.9 billion.

Obviously, State Street is nowhere near grabbing the market leader position, still, this should get very interesting.

STOCKS STUMBLE AS INVESTORS FEAR WORSENING ECONOMY

Have a good weekend

The LPX50: a proxy to the listed private equity market

A vignette into the aberrant theories of a private equiteer

Following on from my post about listed private equity (LPE), the LPX50 is an index that is commonly referred to in the LPE industry. From the LPX website:

The LPX50 is a global index that consists of the 50 largest liquid LPE companies covered by LPX.

The LPX50 has been absolutely smashed over the past year or so. Some attribute this to the public nature of LPE, some attribute it to the state of all private equity, and some attribute it to the size of these funds (and hence relating the LPX50 performance to that of mega-buyout funds). Either way, you could do a lot worse than buying the LPX50 right now (such as buying it in mid-2007).

MICHIGAN NEWS

 

 

 

Narrative Fallacies Are Kind of Like Porn

In his book The Black Swan, Nassim Taleb heavily references the narrative fallacy which represents the human tendency to construct stories around facts, regardless of how the story changes the interpretation of the facts, and regardless of whether the final story is true.  In some cases the story actually distorts the facts.  For more information, I strongly suggest reading the book, its worth it.

I suppose I can thank (or curse) Nassim for explaining the narrative fallacy to me because now it appears in my everyday life.  I don’t generally look for it, but my awareness of it makes it stand out like porn: you know it when you see it.

Now I don’t claim to be perfect when it comes to my economic and financial blogging, and I am sure I have made mistakes.  I am also sure that I have misinterpreted facts, and maybe even misquoted them on occasion.  But after all, I’m one guy with a day job, no editor and a wife who’d prefer I spend less time doing this anyway.   And I don’t get paid to do this, ergo read what I write with a grain of salt.  However, when I read stories from paid writers on mainstream financial news services I expect a basic level of understanding economics and finance and at least a strong editing process.  Lord knows I could use a good editor!

In any event all this brings me to an excerpt from a Bloomberg article I just read, an article written by Eric Martin, poor Eric.  The problems I have with the article are in the passages below.  For the record while I am only pasting a section, I am not contextualizing this just to pick on Eric, I don’t know him at all, and nothing prior to this passage or after this passage serves to correct these errors or narrative fallacies.

The S&P 500 slipped 2.3 percent to 825.88 to complete a fourth straight weekly drop, its longest losing streak since July. The Dow Jones Industrial Average fell 148.15 points, or 1.8 percent, to 8,000.86. The Russell 2000 Index of small U.S. companies declined 2.1 percent.

Benchmark indexes opened higher after the Commerce Department said gross domestic product contracted at a 3.8 percent annual pace in the fourth quarter, less than the 5.5 percent estimated by economists in a survey. Still, the report showed that a buildup of unsold goods helped pare the decrease in gross domestic product.

‘Poor Report’

Yeah, and if you had proofread your own comments I wouldn’t be blogging about it.  So sure, yes, here Eric is quoting a narrative fallacy from Jeffrey Kleintop, so this empty statement is not his own.  Regardless, reading that passage invoked the old expression: “if my aunt had balls she’d be my uncle”.  The facts are that 1. prices fell and that 2. the economy slowed less than expected. Right?  Those are the facts, nothing more, nothing less.  Reorder them if you like, make sentences out of them if need be, but please avoid linking them, and definitely avoid adding an arbitrary narrative or causation.

The narrative fallacy here is simply filler for a guy who really has nothing to say, or maybe two guys who have nothing to say.  I’m sorry, I don’t know Jeffrey at all either, which probably makes me the ignorant one here since his current employer, LPL Financial, describes him as “‘Wall Street’s Best and Brightest’ and his market commentary is regularly sought out by national print media and business television and radio.” However I just can’t believe that this was a quote worth passing along. And if that gem was not enough to set me off, it was back to back with this piece of pure frontier gibberish.

Unadjusted for inflation, GDP shrank at a 4.1 percent pace, the most since the first three months of 1958. The drop in so- called nominal growth explains why corporate profits slumped as the year ended.

Please, please, just take a moment before I highlight this one.  Read it again, and if that don’t work, read it another time.  Have you spotted what’s wrong with this one?  Ok there are two, but one is silly.

The real problem I have with this statement is the implication that the “drop in so-called nominal growth” is cited as causation for why corporate earnings (profits) slumped. !@#$^&*!!!

Dude, I am pretty sure that this is Econ 101.  The fall in GDP did not cause profits to slump.  Slumping profits were ultimately a component of the final GDP calculation.  Apparently Eric now thinks GDP is a leading indicator of economic activity.  Man, if this is the trash that gets you to become an acclaimed financial author then please sign me up.  Really, if we have to sift through shit like this to get the news then we are all going to die young.

Ok, and I promised a small bone to pick too.  Why the use of “so-called”?  It makes it sound like we should doubt the use of the word nominal. It’s kind of like a so-called friend who wrecks your car but never offers to pay for the damage.  To be fair to young Eric (I have no idea how old he is, but if he is asking us to question the use of the word nominal next to GDP, then I am just going to assume he is still in his 20’s) “so-called” does have two distinct definitions:

Sure we can question the mortgage market, the investment banks, the regulators, the Bush administration, greedy homebuyers, hedge funds, Bernie Madoff and even economists, but should we really question that pesky term “nominal GDP”?

But I digress.

Rene Stulz: 01-29-09 Economist of the Day

We choose Rene Stulz as the Economist of the Day. Rene is the Everett Reese Chair of Banking and Monetary Economics at Ohio State University and Director of The Dice Center for Financial Economics.

Contact Information

Short Biography

René M. Stulz is the Everett D. Reese Chair of Banking and Monetary Economics and the Director of the Dice Center for Research in Financial Economics at the Ohio State University. He has also taught at the Massachusetts Institute of Technology, the University of Chicago, and the University of Rochester. He received his Ph.D. from the Massachusetts Institute of Technology. He was awarded a Marvin Bower Fellowship from the Harvard Business School, a Doctorat Honoris Causa from the University of Neuchâtel, and the 1999 Eastern Finance Association Distinguished Scholar Award. In 2004, the magazine Treasury and Risk Management named him one of the 100 most influential people in finance. He is a past president of the American Finance Association and of the Western Finance Association, and a fellow of the American Finance Association, of the Financial Management Association, and of the European Corporate Governance Institute.

René M. Stulz was the editor of the Journal of Finance, the leading academic publication in the field of finance, for twelve years. He is on the editorial board of more than ten academic and practitioner journals. Further, he is a member of the Asset Pricing and Corporate Finance Programs and the director of the Risk of Financial Institutions Group of the National Bureau of Economic Research.

He has published more than sixty papers in finance and economics journals, including the Journal of Political Economy, the Journal of Financial Economics, the Journal of Finance, and the Review of Financial Studies. His published research deals with topics such as the valuation discount of conglomerates, the gains from acquisitions, the benefits and costs of leverage, spinoffs and asset sales, the determinants of liquid asset holdings of firms, secured debt, bank loans, the pricing of exotic options, credit risks, the cost of capital, managerial ownership, the market for corporate control, corporate governance, the performance of firms issuing debt and equity, the determinants of firm capital structures and liquid asset holdings, the use of derivatives in risk management, capital flows, and financial globalization. He is the author of a textbook titled Risk Management and Derivatives and has edited several books, including the Handbook of the Economics of Finance.

René M. Stulz has taught in executive development programs in the U.S., Europe, and Asia. He has consulted for major corporations, law firms, the New York Stock Exchange, the IMF, and the World Bank. He is a director of several companies, the president of the Gamma Foundation, and a trustee of the Global Association of Risk Professionals.

Selected Reseach in Progress and Working Papers

Risk Management Failures: What Are They and When Do They Happen? 2008-18.

Why Do Foreign Firms Leave U.S. Equity Markets? An Analysis of Deregistrations Under SEC Exchange Act Rule 12h-6 (with Craig Doidge and G. Andrew Karolyi) 2008-14.

Securities Laws, Disclosure, and National Capital Markets in the Age of Financial Globalization 2008-13.

How Much do Banks use Credit Derivatives to Hedge Loans? (with Bernadette Minton and Rohan Williamson) 2008-1.

Differences in Governance Practice between U.S. and Foreign Firms: Measurement, Causes, and Consequences (with Reena Aggarwal, Isil Erel, and Rohan Williamson) 2007-14.

Fundamentals, Market Timing, and Seasoned Equity Offerings (with Harry DeAngelo and Linda DeAngelo) 2007-13.

Managerial Ownership Dynamics and Firm Value (with Rüdiger Fahlenbrach) 2007-12.

Has New York become less competitive in global markets? Evaluating foreign listing choices over time (with Craig Doidge and G. Andrew Karolyi) 2007-9.

Why do private acquirers pay so little compared to public acquirers? (with Leonce Bargeron, Frederik Schlingemann, and Chad Zutter) 2007-8.

Hedge Funds: Past, Present, and Future 2007-3.

Do U.S. Firms Have the Best Corporate Governance? A Cross-Country Examination of the Relation between Corporate Governance and Shareholder Wealth (with Reena Aggarwal, Isil Erel, and Rohan Williamson) 2006-25.

The Economics of Conflicts of Interest in Financial Institutions (with Hamid Mehran) 2006-21.

Why do U.S. firms hold so much more cash than they used to? (with Thomas W. Bates and Kathleen M. Kahle) 2006-17.

Financial globalization, governance, and the evolution of the home bias (with Bong-Chan Kho and Francis E. Warnock) 2006-12.

Merton Miller 2006-4.

Is there hedge fund contagion? (with Nicole Boyson and Christof Stahel) 2006-1.

Financial Globalization, Corporate Governance, and Eastern Europe 2005-27.

Do local analysts know more? A cross-country study of the performance of local analysts and foreign analysts (with Kee-Hong Bae and Hongping Tan) 2005-18.

How much do banks use credit derivatives to reduce risk? (with Bernadette Minton and Rohan Williamson) 2005-17.

Do investors trade more when stocks have performed well? Evidence from 46 countries (with John M. Griffin and Federico Nardari) 2005-12.

Private benefits of control, ownership, and the cross-listing decision (with Craig Doidge, G. Andrew Karolyi, Karl V. Lins, Darius P. Miller) 2005-2.

Do Acquirers With More Uncertain Growth Prospects Gain Less From Acquisitions? (with Sara Moeller and Frederik Schlingemann) 2004-19.

Why do countries matter so much for corporate governance? (with Craig Doidge and G. Andrew Karolyi) 2004-16.

Shareholder Wealth and Firm Risk ( >with Hyun-Han Shin), Dice Center >WP 2000-19.

>Firm value, risk, and growth opportunities (with Hyun-Han Shin), Dice Center WP 2000-8.

>Globalization of Equity Markets and the Cost of Capital, Dice Center >WP 99-1 >.

Publications

“On the Effects of Barriers to International Investment,” Journal of Finance, 1981, v36(4), 923-934; reprinted in Emerging Markets, Geert Bekaert and Campbell R. Harvey, ed., Edward Elgar Publishing, 2004, 1-36.

“A Model of International Asset Pricing,” Journal of Financial Economics, 1981, v9(4), 383-406.

“The Forward Exchange Rate and Macroeconomics,” Journal of International Economics, 1982, v12(3/4), 285-299.

“Options on the Minimum or the Maximum of Two Risky Assets: Analysis and Applications,” Journal of Financial Economics, 1982, v10(2), 161-185, reprinted in Options Markets, vol. 2, George Constantinides and A. G. Malliaris, eds., Edward Elgar Publishing, 2001.

“On the Determinants of Net Foreign Investment,” Journal of Finance, 1983, v38(2), 459-468.

“The Demand for Foreign Bonds,” Journal of International Economics, 1983, v15(3/4), 225-238.

“Optimal Hedging Policies,” Journal of Financial and Quantitative Analysis, 1984, v19(2), 127-140.

“Currency Preferences, Purchasing Power Risks and the Determination of Exchange Rates in an Optimizing Model,” Journal of Money, Credit and Banking, 1984, v16(3), 302-316; reprinted in Monetary Policy and Uncertainty, Manfred J. M. Neumann, ed., Nomos, 1986.

“Pricing Capital Assets in an International Setting: An Introduction,” Journal of International Business Studies (Winter 1984), 55-73; reprinted in International Financial Management: Theory and Applications, Donald R. Lessard, ed., John Wiley & Sons, 1985.

“Macroeconomic Time-Series, Business Cycles and Macroeconomic Policies,” with Walter Wasserfallen, Carnegie-Rochester Conference Series on Public Policy (Spring 1985), 9-55.

“An Analysis of Secured Debt,” with Herb Johnson, Journal of Financial Economics, 1985, v14(4), 501-522, reprinted in The Debt Market, vol. 3, Steve A. Ross, editor, Edward Elgar, 2000.

“The Determinants of Firm’s Hedging Policies,” with Clifford W. Smith, Journal of Financial and Quantitative Analysis, 1985, v20(4), 391-406; reprinted in Studies in Financial Institutions: Commercial Banks, C. James and C.W. Smith, eds., McGrawHill, 1993, and in Corporate Hedging in Theory and Practice: Lessons from Metallgesellschaft, Christopher L. Culp and Merton H. Miller, eds, Risk Publications, London, 1999.

“Asset Pricing and Expected Inflation,” Journal of Finance, 1986, v41(1), 209-224.

“Risk Bearing, Labor Contracts and Capital Markets,” with Patricia B. Reagan, Research in Finance, 1986, v6, 217-232.

“Interest Rates and Monetary Policy Uncertainty,” Journal of Monetary Economics, 1986, v17(3), 331-348.

“Time-Varying Risk Premia, Imperfect Information and the Forward Exchange Rate,” International Journal of Forecasting, 1987, v3(1), 171-178.

“The Pricing of Options with Default Risk,” with Herb Johnson, Journal of Finance, 1987, v42(2), 267-280.

“An Equilibrium Model of Exchange Rate Determination and Asset Pricing with Non-Traded Goods and Imperfect Information,” Journal of Political Economy, 1987, v95(5), 1024-1040.

“Managerial Control of Voting Rights: Financing Policies and the Market for Corporate Control”, Journal of Financial Economics, 1988, v20(1/2), 25-54, reprinted in M.C. Jensen and C.W. Smith, eds., The Modern Theory of Corporate Finance, McGraw-Hill, 1989 (second edition).

“Risk and the Economy: A Finance Perspective,” with K.C. Chan, Risk and the Economy, in C.C. Stone, ed., Financial Risk: Theory, Evidence and Implications, Proceedings of the Eleventh Annual Economic Conference of the Federal Reserve Bank of St. Louis, Kluwer Academic Publishers, 1988.

“Capital Mobility and the Current Account,” Journal of International Finance and Money, 1988, v7(2), 167-180.

“The Eurobond Market and Corporate Financial Policy: A Test of the Clientele Hypothesis,” with Yong Cheol Kim, Journal of Financial Economics, 1988, v22(2), 189-205.

“Contracts, Delivery Lags, and Currency Risks,” with Patricia Reagan, Journal of International Money and Finance, 1989, v8(1), 89-104.

“The Pricing of Stock Index Options in General Equilibrium,” with Warren Bailey, Journal of Financial and Quantitative Analysis, 1989, v24(1), 1-12.

“Managerial Performance, Tobin’s q, and the Gains from Successful Tender Offers,” with Larry Lang and Ralph Walkling, Journal of Financial Economics, 1989, v24(1), 137-154.

“Real Exchange Rate Dynamics and the Financial Theory of the Trading Firm,” in Recent Developments in International Banking and Finance, S. Khoury and A. Ghosh, eds., Probus Publishing Company, 1989, v3, 247-262.

“Properties of Daily Stock Returns from the Pacific Rim Stock Markets: Evidence and Implications,” with Warren Bailey and Edward Ng, in S.G. Rhee and R. Chang, eds., Pacific-Basin Capital Markets Research, North Holland, 1990, 155-171.

“The Pricing of Currency Options: A Review,” in R. E. Schwartz and C. W. Smith, eds., Handbook of Currency and Interest Rate Risk Management, Simon & Schuster, 1990, 5/1-5/20.

“Stock Index Futures in Switzerland: Pricing and Hedging Performance,” with Walter Wasserfallen and Thomas Stucki, Review of Futures Markets, 1990, v9(3), 576-592.

“The Distribution of Target Ownership and the Division of Gains in Successful Takeovers,” with Ralph A. Walkling and Moon H. Song, Journal of Finance, 1990, v45(3), 817-834.

“Managerial Discretion and Optimal Financing Policies,” Journal of Financial Economics, 1990, v26(1), 3-26, reprinted in The Theory of Corporate Finance, M.J. Brennan, ed., Edward Elgar, 1995.

“Benefits of International Diversification: The Case of Pacific Basin Stock Markets,” with Warren Bailey, Journal of Portfolio Management, 1990, v16(4), 57-61.

“A Test of the Free Cash Flow Hypothesis: The Case of Bidder Returns,” with Ralph A. Walkling and Larry H. Lang, Journal of Financial Economics, 1991, v29(2), 315-335.

“Is There a Global Market for Convertible Bonds?,” with Yong-Cheol Kim, Journal of Business, 1992, v65(1), 75-92.

“Industry Contagion Effects of Bankruptcy and Firm Size,” with Larry Lang, in Ed Altman, ed., Bankruptcy and Distressed Restructurings, Business One Irwin, 1992, 215-221.

Contagion and Competitive Intra-Industry Effects of Bankruptcy Announcements,” with Larry Lang, Journal of Financial Economics, 1992, v32(1), 45-60.

“Global Financial Markets and the Risk Premium on U.S. Equity,” with K.C. Chan and Andrew Karolyi, Journal of Financial Economics, 1992, v32(2), 137-168.

“Portfolio Management and Exchange Rate Risks: New Theoretical and Empirical Perspectives,” with Warren Bailey and Edward Ng, S. Khoury and A. Ghosh, eds., Recent Developments in International Banking and Finance, 1992, v6, 230-248.

“Optimal Hedging of Stock Portfolios Against Foreign Exchange Risks: The Case of the Nikkei 225,” with Warren Bailey and Edward Ng, Global Finance Journal, 1992, v3(2), 97-114.

“Contracting Costs, Inflation and Relative Price Volatility,” with Patricia Reagan, Journal of Money, Credit and Banking, 1993, v25(3), Part 2, 585-601.

“Tobin’s q, Diversification, and Firm Performance,” with Larry Lang, Journal of Political Economy, 1994, v102(6), 1248-1280, reprinted in Empirical Corporate Finance, vol. IV, Michael Brennan, ed., Edward Elgar, 2001.

“International Asset Pricing: An Integrative Survey,” Handbook of Modern Finance, R. Jarrow, M. Maksimovic and W. Ziemba, eds., North Holland-Elsevier, 1995, 201-223.

“Asset Sales, Firm Performance and the Agency Costs of Managerial Discretion,” with Larry Lang and Annette Poulsen, Journal of Financial Economics, 1994, v37(1), 3-37, reprinted in Empirical Corporate Finance, vol. III, Michael J. Brennan, ed., Edward Elgar, 2001.

“The Cost of Capital in Internationally Integrated Markets,” European Financial Management, European Financial Management, 1995, 11-22.

“An Analysis of the Wealth Effects of Japanese Offshore Dollar-Denominated Convertible and Warrant Bond Issues,” with Jun-Koo Kang, Yong-Cheol Kim and Kyung-Joo Park, Journal of Financial and Quantitative Analysis, 1995, v30(2), 257-270.

“Globalization of Capital Markets and the Cost of Capital: The Case of Nestlé,” Journal of Applied Corporate Finance, 1995, v8(3,Fall), 30-38.

“Foreign Equity Investment Restrictions, Capital Flight, and Shareholder Wealth Maximization,” with Walter Wasserfallen, Review of Financial Studies,1995, v8(4), 1019-1057.

“Leverage, Investment and Firm Growth,” with Larry Lang and Eli Ofek, Journal of Financial Economics, 1996, v40(1), 3-29.

“How Different is Japanese Corporate Finance?”, with Jun-Koo Kang, Review of Financial Studies, 1996, v9(1), 109-139.

“Information, Trading and Stock Returns: Lessons from Dually-Listed Securities,” with K.C. Chan, Wai-Ming Fong, and Bong-Chan Kho, Journal of Banking and Finance,1996, v20(7), 1161-1187.

“Timing, Investment Opportunities, Managerial Discretion, and the Security Issue Decision,” with Kooyul Jung and Yong-Cheol Kim, Journal of Financial Economics, 1996, v42(2), 159-185,reprinted in Empirical Corporate Finance, vol. III, Michael J. Brennan, ed., Edward Elgar, 2001.

“Why Do Markets Move Together? An Investigation of U.S.-Japan Stock Return Comovements,” with G. Andrew Karolyi, Journal of Finance, 1996, v51(3), 951-986.

“Rethinking Risk Management,” Journal of Applied Corporate Finance, 1996 (Fall), 8-24. Reprinted in Corporate Hedging in Theory and Practice: Lessons from Metallgesellschaft, Christopher L Culp and Merton H. Miller, eds, Risk Publications, London, 1999, and in Corporate Risk: Strategies and Management, Gregory W. Brown and Donald H. Chew, eds, Risk Publications, London, 1999.

“Why Is There a Home Bias? An Analysis of Foreign Portfolio Equity Ownership in Japan,” with Jun-Koo Kang, Journal of Financial Economics, 1997, v46(1), 3-28.

“Are Internal Capital Market Efficient?,” with Hyun-Han Shin, Quarterly Journal of Economics, 1998, v113(2), 531-552.

“The Determinants and Implications of Corporate Cash Holdings,” with Tim Opler, Lee Pinkowitz, and Rohan Williamson, Journal of Financial Economics, 1999, v52(1), 3-46. Pre-publication Working Paper. A shortened version of this paper appeared as “Corporate Cash Holdings,” Journal of Applied Corporate Finance, 2001 v14(1), 55-79.

“Do Foreign Investors Destabilize Stock Markets? The Korean Experience in 1997,” with Hyuk Choe and Bong-Chan Kho, Journal of Financial Economics, 1999, v54(2), 227-264.

“The Underreaction Hypothesis and the New Issue Puzzle: Evidence from Japan,” with Yong-Cheol Kim and Jun-Koo Kang, Review of Financial Studies, 1999, v12(3), 519-534.

“International Portfolio Flows and Security Markets”, in International Capital Flows, edited by Martin Feldstein, University Chicago Press, 1999 , 257-293, reprinted in Emerging Markets, Geert Bekaert and Campbell R. Harvey, ed., Edward Elgar Publishing, 2004, 387-423. Pre-publication Working Paper

“Globalization, Corporate Finance and the Cost of Capital,” Journal of Applied Corporate Finance, 1999, v12(3), 8-25. Pre-publication Working Paper

“Do Banking Shocks Affect Firm Performance? An Analysis of the Japanese Experience,” with Jun-Koo Kang, Journal of Business, 2000, v73(1),1-23.

“Banks, the IMF, and the Asian crisis,” with Bong-Chan Kho, Pacific Basin Finance Journal, 2000, v8(2),177-216.

“U.S. Banks, Crises, and Bailouts: From Mexico to LTCM,” with Bong-Chan Kho and Dong Lee, American Economic Review, 2000, v90(2), 28-31.

“Financial Structure, Corporate Finance and Economic Growth,” International Review of Finance, 2000, v1(1), 11-38.

“Merton Miller and Modern Finance,” Financial Management, 2000, v29(4), 119-131. Pre-publication Working Paper. Reprinted in the Journal of Applied Corporate Finance, 2001(Winter), 8-20.

“International Competition and Exchange Rate Shocks: A Cross-Country Industry and Analysis of Stock Returns,” with John Griffin, Review of Financial Studies, 2001, v14(1), 215-241.

“Divestitures and the Liquidity of the Market for Corporate Assets,” with Frederick Schlingemann and Ralph A. Walkling, Journal of Financial Economics, 2002, v64(1), 117-144, reprinted in Corporate Restructuring, vol. 2, John Campbell and David J. Denis, ed., Edward Elgar Publishing, 2005.

“Should we Fear Capital Flows?,” in International Financial Markets: The Challenge of Globalization, Leonardo Auernheimer (Editor), University of Chicago Press, 2003, Chicago, Ill.

“Corporate Governance, Investor Protection, and the Home Bias,” with Magnus Dahlquist, Lee Pinkowitz, and Rohan Williamson, Journal of Financial and Quantitative Analysis, 2003, v38(1), 87-110.

“Equity Market Liberalizations as Country IPOs,” with Rodolfo Martell, American Economic Review, Papers and Proceedings, 2003, v93(2), 97-101. Pre-publication Working Paper

“Culture, Openness, and Finance,” with Rohan Williamson, Journal of Financial Economics, 2003, v70(3), 313-349.

“A New Approach to Measuring Financial Contagion,” with Kee-Hong Bae and Andrew Karolyi, Review of Financial Studies, 2003,v16, 717-763. Pre-publication Working Paper

“Are Assets Priced Locally or Globally?” with Andrew Karolyi, in Constantinides, George, Milton Harris and René Stulz (eds.), The Handbook of the Economics of Finance, North Holland, 2003.

“Firm Size and the Gains from Acquisitions” with Sara Moeller and Frederick Schlingemann, Journal of Financial Economics, 2004, v73, 201-228.

“Should we fear derivatives?,” Journal of Economic Perspectives, 2004, v18(3), 173-192; reprinted in The ICFAI Journal of Derivatives Markets, 2005, v2(1), 42-53. Pre-publication Working Paper

“ Wealth destruction on a massive scale? A study of acquiring-firm returns in the recent merger wave,” with Sara Moeller and Frederick Schlingemann, Journal of Finance, 2005, v 60(2), 757-782.

“Do domestic investors have an edge? The trading experience of foreign investors in Korea,” with Hyuk Choe and Bong-Chan Kho, Review of Financial Studies, 2005, v18(3),795-829. Pre-publication Working Paper

“The limits of financial globalization,” Journal of Finance, 2005, v60(4), 1595-1638; reprinted in Journal of Applied Corporate Finance, 2007, v19(1), 8-15.

“Does the Contribution of Corporate Cash Holdings and Dividends to Firm Value Depend on Governance? A Cross-Country Analysis,” with Lee Pinkowitz and Rohan Williamson, Journal of Finance, 2006, v61(6) 2725-2751; reprinted in Journal of Applied Corporate Finance, 2007, v19(1), 81-87.

“Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory,” with Harry DeAngelo and Linda DeAngelo, Journal of Financial Economics, 2006, v81(2) 227-254.

“Enterprise Risk Management: Theory and Practice”, with Brian W. Nocco, Journal of Applied Corporate Finance, Fall 2006, v18(8), 8-20.

“Do investors trade more when stocks have performed well? Evidence from 46 countries,” with John M. Griffin and Federico Nardari, Review of Financial Studies, 2007, v20 (3) 905-951.

“Why do firms become widely held? An analysis of the dynamics of corporate ownership,” with Jean Helwege and Christo Pirinsky, Journal of Finance, 2007, 62 (3) 995-1028.

“Hedge Funds: Past, Present, and Future,” Journal of Economic Perspectives, 2007, v21 (2), 175-194.

“The economics of conflicts of interests in financial institutions,” with Hamid Mehran, Journal of Financial Economics, 2007, v85 (2) 267-296.

“Why do countries matter so much for corporate governance?,” with Craig Doidge and Andrew Karolyi, Journal of Financial Economics, 2007, v86, 1-39.

“How do diversity of opinion and information asymmetry affect acquirer returns?,” with Sara B. Moeller and Frederik P. Schlingemann, Review of Financial Studies, forthcoming.

“Do local analysts know more? A cross-country study of performance of local analysts and foreign analysts,” with Kee-Hong Bae and Hongping Tan, Journal of Financial Economics, 2008, v88 (3), 581-606.

“Why do private acquirers pay so little compared to public acquirers?,” with Leonce L. Bargeron, Frederik P. Schlingemann, and Chad J. Zutter, Journal of Financial Economics, 2008, v89 (3), 375-390.

“Risk management failures: What are they and when do they happen?,” Journal of Applied Corporate Finance, 2008, vol. 20, No. 4, 39-48.

“Private benefits of control, ownership, and the cross-listing decision,” with Craig Doidge, G. Andrew Karolyi, Karl V. Lins, and Darius P. Miller, Journal of Finance, forthcoming.

“Differences in governance practices between U.S. and foreign firms: Measurement, causes, and consequences,” with Reena Aggarwal, Isil Erel, and Rohan Williamson, Review of Financial Studies, forthcoming.

“Managerial ownership dynamics and firm value,” with Rüdiger Fahlenbrach, Journal of Financial Economics, forthcoming.

“How much do banks use credit derivatives to hedge loans?,” with Bernadette Minton and Rohan Williamson, Journal of Financial Services Research, forthcoming.

“Securities laws, disclosure, and national capital markets in the age of financial globalization,” Journal of Accounting Research, forthcoming.

“Why do U.S. firms hold so much more cash than they used to?,” with Thomas W. Bates, and Kathleen M. Kahle, Journal of Finance, forthcoming.

“Has New York become less competitive than London in global markets? Evaluating foreign listing choices over time,” with Craig Doidge, G. and G. Andrew Karolyi, Journal of Financial Economics, forthcoming.

“Financial globalization, governance, and the evolution of the home bias,” Journal of Accounting Research, forthcoming.

Professional Journal Articles, Book Reviews, Notes and Comments

Review of “Managing Foreign Exchange Risk,” Richard J. Herring, ed., Journal of Money, Credit and Banking (February 1985), 124-125.

“On Capital Mobility in the World Economy,” Carnegie-Rochester Conference Series on Public Policy (Spring, 1986), 105-114.

“Portfolio Management in International Capital Markets,” Financial Markets and Portfolio Management (1, 1986), 18-23.

“Portfolio Insurance, Program Trading and the Crash of 1987,” Financial Markets and Portfolio Management (1, 1988), 11-22.

“SMI Futures,” with T. Stucki and W. Wasserfallen, Financial Markets and Portfolio Management (4, 1989), 288-300.

“Benefits of International Diversification with Daily Data: The Case of Pacific-Basin Stock Markets,” with Warren Bailey, Journal of Portfolio Management (4, 1990), 57-61.

“Portfolio Insurance with Options and Futures on the SMI,” with T. Stucki and W. Wasserfallen, Financial Markets and Portfolio Management (2,1990), 99-115.

“Securities Transaction Taxes: Lessons from the International Experience,” in The Globalization of Equity Markets, Jeffrey Frankel, ed., University of Chicago Press, 1994.

“Identifying and Quantifying Exposures,” with Rohan Williamson, in Financial Risk and the Corporate Treasury: New Developments in Strategy and Control,” Robert Jameson, ed., Risk Publications, London, 1997, 33-51. Reprinted in Corporate Risk: Strategies and Management, Gregory W. Brown and Donald H. Chew, eds, Risk Publications, London, 1999. Pre-publication Working Paper

“What’s Wrong with Modern Capital Budgeting?,” Financial Practice and Education, Fall/Winter 1999, p. 5-9. Pre-publication Working Paper

Diminishing the Threats to Shareholder Wealth,” Financial Times, Mastering Risk Series, April 25,2000.

Why Risk Management is not Rocket Science,” Financial Times, Mastering Risk Series, June 27, 2000.

“An Emotional High for Stocks?,” a review of “Irrational Exuberance” by Robert J. Shiller, Science (June 30, 2000), 2323.

Demystifying Financial Derivatives” The Milken Institute Review, Third Quarter 2005, 20-31.

“Merton Miller,” New Palgrave Dictionary, 2006.

Financial Derivatives: Lessons from the Subprime Crisis,” The Milken Institute Review, forthcoming.

“Six Ways Companies Mismanage Risk,” Harvard Business Review, February 2009.

Editorial and Refereeing Activities

Acted as an ad hoc referee for AER, JIE, JAE, JFE, JME, JMCB, JFQA, QJE, JF, JB, JPE, Canadian Journal of Economics, Management Science, Marketing Science, Journal of International Money and Finance, Journal of International Business Studies, the Canadian NSF and the NSF.

Books

Honors, Scholarships and Fellowships

Keynote speaker, Asia-Pacific Finance Association, Eastern Finance Association, European Corporate Finance Institute, European Finance Association, European Financial Management Association, FDIC Annual Conference, Financial Management Association, French Finance Association, German Finance Association, Northern Finance Association.

Education

Academic Appointments

Other Relevant Positions Held

Trustee, Global Association of Risk Professionals, 2002 to present; Executive Committee, 2004 to present.

Chairman, Financial Risk Management Examination Certification Committee, Global Association of Risk Professionals, 2002 to present.

International Advisory Committee, NCCR, 2002 to present.

External Reviewer, London Business School Finance Department, 2005.

Financial Advisory Roundtable (FAR), Federal Reserve Bank of New York, 2006 to present.

Best paper, First Asian-Pacific Capital Markets Conference, Seoul, 2006.

BASIC FACTS ABOUT ZIMBABWE

Capital City: Harare

Languages: English, Shona, Ndebele

Homicides (per 100,000): 6.3

Per Capita GDP (in U.S. Currency): $786

Population: 11,682,000 people

Population Density: 29 people per square kilometer

Urban Population: 31.78%

Population Growth (1950-2030): 2.54%

Infant Mortality (per 1,000): 70

Unemployment Rate: 45%

Created by: Mike S.

Bonds slump in January, hedge funds buy gold

Hedge funds that previously ignored precious metals have become converts, with hedge fund star Greenlight Capital buying the yellow metal for the first time.

Another money manager Osmium Capital Management is offering a hedge fund priced in ounces of gold to protect it from exchange rate fluctuations. Subscriptions are in dollars, euros or pounds and then converted into gold.

The conversion of the hedge funds to gold comes as they appear to be exiting US Treasuries. In January the Barclay’s Capital treasury index fell 2.8 per cent compared with a gain of 13.7 per cent in 2008.

There is a growing fear among hedge fund managers that treasury bonds will be the next shoe to drop in the global financial crisis. Government stimulus packages are going to massively increase the supply of bonds and the market has every sign of being in a bubble phase.

Hedge funds are therefore quietly heading for the side door before the mass panic to exit the bond market starts. Then, almost by default, the only safe haven remaining will be precious metals.

Prices of gold and silver will rocket to unheard of levels under such a scenario, predict gold experts. They point to the fixed and relatively small supply of gold, and especially silver, relative to the probable demand.

In a world where multi-billion dollar stimulus packages are announced on an almost daily basis, this prediction has an air of inevitability about it.

Governments have seemingly lost all concern for monetary prudence in the face of a financial system in crisis, and inflation is the only logical outcome, although it is probably going to fire up gold and silver prices far more quickly than the global economy.

RP budget process: Less and less transparent

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JASPER JOTTINGS Week 05 - 2009 Feb 02

*** begin quote ***

British inventor Josh Silver, a former professor of physics at Oxford University, has come up with a game-changer of a product design with his water-lensed glasses.

Silver has devised a pair of glasses which rely on the principle that the fatter a lens the more powerful it becomes. Inside the device’s tough plastic lenses are two clear circular sacs filled with fluid, each of which is connected to a small syringe attached to either arm of the spectacles.

The wearer adjusts a dial on the syringe to add or reduce amount of fluid in the membrane, thus changing the power of the lens. When the wearer is happy with the strength of each lens the membrane is sealed by twisting a small screw, and the syringes removed. The principle is so simple, the team has discovered, that with very little guidance people are perfectly capable of creating glasses to their own prescription.

You can mass-produce millions of these, rather than manufacturing myriad individual lenses each tuned to a user’s specific vision deficiencies. And while the one-size-fits-all mentality may not fly in developed nations, Silver’s goal is to help the hundreds of millions of people in developing countries who suffer from poor eyesight.

*** end quote ***

[JR: Wow! Silver calls his flash of insight a “tremendous glimpse of the obvious”—namely that opticians weren’t necessary to provide glasses. How esle can we serve our fellow man? This is a challenge to every Jasper. What’s so obvious that we’ve been missing?]

>JFound: McBride, Michael [MC????] Business Development Manager Safeguards Technology LLC

Dear John,

We have at least 4 Michael McBride’s in our records, I suspect Michael P. from the Class of 1980 is the one in this article.

Mike

[JR: Thanks, Mike. Much appreciated. Your guess is better than mine.]

Dear John,

My classmate Dan Capozzi ‘53 sent the following Obituary from the Gannet Newspaper:

“McMahon, John J. passed away on January 15th, 2009 at the age of 77 years old. Mr. McMahon was a school teacher working for the NYC Board of Ed. Mr. McMahon is survived by his wife Doris. He is the father of Deborah Fromer, Doreen Greaney, Ellen Cooke, John McMahon, Dermot McMahon and Jennifer DeVito. Also surviving are twelve grandchildren. Mass of Christian Burial on Monday 11:00 AM at Our Lady of Fatima Church, Scarsdale, Arrangements by EDWIN J. BENNETT FUNERAL HOMES, 824 Scarsdale Ave. NY 10853 (914) 725-1137. Visiting Hours, Sunday 2-5 & 7-9 P.M.”

Dan adds that John was a 1949 graduate of All Hallows High School, and while in the Liberal Arts School at Manhattan, was on the staff of the QUADRANGLE all 4 years, and for 2 years, had a weekly column “Words and Music” dealing mostly with contemporary music. He also worked on the Manhattan Quarterly for 2 years, with poetry as his forte. He was a member of Sigma Beta Kappa, as well. He was also an avid collector of Recordings of Pop music and had an enormous collection.

John had a Master degree in Education and taught for 35 years as a Junior High School English teacher, Reading Specialist and Administrative assistant. He also spent 16 years teach graduate students at CUNY night division and was principal at the night school Adult Education Program.

John was a devoted teacher, a wonderful family man and a proud Jasper.

May He Rest In Peace.

Mike

[JR: Thanks, Mike. Much appreciated. ]

[JR: Here's an example that demonstrates the 'needle in the haystack' of internet searching. Even knowing what I'm looking for, I can't find it. So the readership has to be the eyes and ears. Internet searching isn't very good or very complete. Argh!]

>Edward Buch, MD, of Somerville, filled the position of secretary/treasurer.

I believe Edward Buch, MD was a graduate of the Class of 1976. As we were on different sides in student government politics, I knew him fairly well as a tough, hard-working, and honorable opponent: a good friend to have, a hard man to beat. I don’t believe he ever lost an election as a candidate.

[JR: Thanks, William. You beat Mike in. :-) Much appreciated. ]

My fellow Jaspers,

Carolyn Predmore invited me to participate in a panel discussion. I’m humbled at the invite. And, forgetting that I’m an Myers-Briggs ISTJ like 11.6% of the population, I agreed. So if you have nothing better to do, drop around to the Capalbo room and grab one of the fifty seats. Maybe you can teach me something?

# - # - #

On Jan 9, 2009, at 12:04 PM, Carolyn E. Predmore wrote:

Hi John,

Happy New Year. I got the Capalbo room for Wed Feb 4 from 3:30 to 5 for a pannel discussion on the economy - how it got here and where you see it going from here and the effects on MC students - those who are graduating and those who have a few years more.

{Extraneous Deleted}

– Gerry Lo (MC1979)

[JR: I found this funny! "digital dirt"?]

*** begin quote ***

(New York, NY) - Five from Section 22 (Brendan, James O, John, James K, and Tom) along with a number of guests (Jen and Evan, Mike and Courtney, Pat and Katie, and Ellen) made the annual trek to see Manhattan College basketball. This year it was a doubleheader at Madison Square Garden where St. John’s (11-8 ) defeated Rutgers (9-11) in the opener by a score of 71-59. Iona (10-10) prevailed in the MAAC nightcap with a 71-51 win over the Jaspers (10-9) who struggled with field goal accuracy.

Most of the crew met in Riverdale near Manhattan College and ventured to the Garden via the #1 train. The adventure continued with some refreshments in Penn Station before the games. The return ride had its share of adventures when the best defensive play of the night came from Tom’s right arm as he caught the closing train door from shutting out and leaving Mike on the platform at 42nd street. The spirited discussion with NYC inhabitants on the train regarding the state of the economy and politics was memorable as well.

*** end quote ***

[JR: Who's who?]

Good Afternoon F. John,

*** begin quote ***

[JR: Thanks, Rich. Not much I can do about it. Yahoo sends them out and, if IEEE doesn't recognize them as a "trusted sender", the messages are going to score high on the routine spam tests. Argh! Thanks for letting me know. What would be an interesting experiment, is for you to sign up for the RSSFWD on the weekly distribution and compare the "pass rate". I could start a group that just sends a URL to the weekly issue, but that seems unnecessary. Comments?]

*** end quote ***

OK, I subscribed to the RSS feed for JJ; my feed reader is Sharpreader 0.9.7.0. This will totally bypass the IEEE aliasing service and SPAM scoring.

I will keep the RSS feed; I am trying to isolate the “font” problem previously described by our esteemed classmate, Vince Alline, as follows: “I’m looking for an apostrophe (’) and I find ’”. I am seeing this problem and variations of it in e-mails from multiple sources including LinkedIn Updates <updates@linkedin.com> which shows a bullet majuscule A caret preceeding FJohn Reinke has joined Exit 8 . I also see the problem in e-mail from FAASafety.gov <announce@faasafety.gov>. I have two subscriptions to FAASafety.gov. One subscription is text/plain and the other is text/html. The problem occurs for both Content-types. I have enabled detailed logging in my e-mail client to capture the raw data streams and intend to post the data on my web site if anyone is interested.

http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20090125/SUB/301259997/0/TOC

Colleges tested by grim reality

Crain’s New York Business - New York,NY,USA

Manhattan College, with about 3000 students, is setting aside a contingency fund for financial aid, something the school has never done before. …

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[JR: Subscription required. Any subscribers out there?]

Dear John,

Today, Sunday, while paging through the sport section of the New York Times to see if they had any comment on Manhattan’s lose to Iona at the Garden, (they did not), I came across the following in the Sports Briefing column:

“TRACK AND FIELD

From Beijing to Armory

Aliann Pompey, a former N.C.A.A. champion at Manhattan College, won the women’s 400 meters in 51.85 seconds at the New Balance Games at the Armory track in upper Manhattan. Clayton Parros, a senior at Seton Hall Prep, won the men’s 400 meters in 47.58. Parros and Pompey, who reached the semifinal round in the 400 while competing for Guyana at the Beijing Olympics, will run the 600 yards Friday at the Milrose Games at Madison Square Garden. . . . (extra deleted)

Bill Miller”

While all of the other 5 items were attributed to (AP), this one was attributed to Bill Miller. Bill is a member of the Class of 1948, and was the first Sports Information Officer at Manhattan. Bill who was on the track team at Manhattan before he went into the service in W.W.II, is a member of the Manhattan College Athletic Hall of Fame. He has been associated with the NY Times for more years tan can be remembered.. It is nice to see that he is still at it!

Best,

Mike

[JR: Thanks, Mike. Much appreciated. Nice way to sneak in a "sports" story. :-) I think we have to revisit the ban on sports stories. Espeially as the pertain to other Jaspers. But I don't know how much our fellow Jaspers will tolerate "sports" in Jottings. Not to dupe the GOJASPERS site or YUKU, but where it makes sense? Opinions?]

*** begin quote ***

For the past eight decades, the world-famous Harlem Globetrotters have entertained basketball fans with their exhilarating combination of eye-opening talent and side-splitting, hilarious antics.

The Globetrotters almost always win their games, and their most common opponent, the Washington Generals, almost always lose.

But it’s not by design that the Generals - a talented outfit in their own right - have come up short in all but a few of the thousands of games they’ve played against the Globetrotters over the course of nearly a century.

Not at all, maintain former Generals player Bill Campion - who has been living in Altoona for the past 17 years - and the legendary Generals founder and team owner Louis “Red” Klotz, who also spent many years as a player/coach with the organization.

*** and ***

“Red Klotz said that he would never tolerate anybody purposely trying to lose a game,” said Campion, 56, a retired federal corrections employee who lives in the Greenwood section of Altoona. “I always felt that the harder the Washington Generals played, you could see the best come out of the Globetrotters as well.”

*** and ***

But so did the Generals. The 6-foot-9 Campion - who hails from the Bronx, N.Y. and played high school basketball against former Pittsburgh Pirates pitching standout John Candelaria - shined on the basketball court during his collegiate days at Manhattan College, scoring 1,223 career points in two and a half seasons. He set the career school rebound record with 1,070, the single-season school rebound record with 419, and the single-game rebound record with 30 in a game against Hofstra.

*** end quote ***

Campion, Bill [MC1975]

# - # - #

Dear John,

I believe that Bill is a member of the Class of 1975.

Mike

[JR: Thanks, Mike. Much appreciated. ]

Manhattan Softball Hosting Wine Tasting This Weekend

Release: 01/26/2009

RIVERDALE, N.Y. � The Manhattan College softball team is hosting a wine tasting on Saturday, January 31, from 5:30-7 p.m. in Smith Auditorium. Tickets to the event, which immediately precedes the men’s basketball contest against Niagara, cost $30. For more information or to purchase tickets, contact Head Coach Meaghan Asselta via e-mail at meaghan.asselta@manhattan.edu or by phone at (718) 862-7835.

As a ‘68 Jasper I remember the words of Bob Dylan, “You don’t need a weather man to know which way the wind blows.” In ‘09, everyone knows: “You don’t need an economist to know that our future is blowing in the wind.” Credit markets frozen, planes in the Hudson River, and Downsizing galore! Weren’t the college days easier? Some of my fellow Jaspers are corporate executives guiding their firms through treacherous winds. Others are in sales and marketing positions seeing their income decline, and fearing a job loss. Regrettably, some have lost their jobs and are looking for employment. Or even a new career.

For each of them, there is a solution.

OurSaleRep Inc. created an innovative sales paradigm (For injineers, like my classmate fjohn, that’s a pair of dimes) to meet the challenges they face. Corporate executives can create a large and effective sales organization - at the lowest cost of sales. Sales and marketing professionals can increase their customer value and create a lucrative career.

My fellow Jaspers, and their firms, will receive substantial discounts for utilizing the capabilities of OurSalesRep and its ever-expanding network of corporations and sales professionals.

I am always open to feedback, networking, and — of course — giving / receiving help.

ON THE MCALUM YAHOO GROUP

Gorman, Tim (MC1980)

*** begin quote ***

I am a 1980 graduate of Manhattan College, with a BS in Business. I would like to reach out to other Manhattan Alumni and get back in contact with old friends.

*** begin quote ***

The prestigious Calvert Hall College High School is getting a new president.

Brother Thomas Zoppo, 51, principal since 2003 of Christian Brothers Academy in Syracuse, N.Y., will become the fourth leader of Towson’s private, Catholic, all-male school in July. A committee of Calvert Hall’s Board of Trustees selected Zoppo after a nationwide search, the school announced Monday.

Zoppo has been director of curriculum and instruction at De La Salle High School in Concord, Calif., academic adviser and lecturer in mathematics at Manhattan College in N.Y. and vice principal for student affairs at La Salle Institute in Troy, N.Y. He has a bachelor’s degree in business administration from Villanova University and a master’s in school administration from Manhattan College.

“We lucked out with Brother Thomas,” Brother Benedict Oliver, who has served as Calvert Hall’s interim president for more than three years, said Monday. “He comes with a great deal of experience and we’re very excited that someone of his caliber is available.”

# - # - #

Zoppo, Brother Thomas [MC1985]

# - # - #

Dear John,

I believe that Brother received his Masters in 1985.

Mike

[JR: Thanks, Mike. Much appreciated. ]

RIVERDALE, N.Y. � The Manhattan College women’s basketball team is joining in the celebration of the 23rd annual National Girls and Women in Sport Day. All girls and women will receive free admission and a free poster at the Lady Jaspers’ regionally televised game against Iona at Draddy Gymnasium on Monday, February 9.

The 6 p.m. contest is Manhattan’s only televised home game of the season and will air regionally on MSG Network as a part of the MAAC-TV package. It is also the opener of a doubleheader. Following the women’s game, the Manhattan and Iona men’s teams square off in a contest that will also be televised by MAAC-TV.

The first National Girls and Women in Sport Day was held in 1987 in memory of Olympic volleyball player Flo Hyman, who died of Marfan’s Syndrome during a tournament in Japan in 1986. NGWSD is celebrated in all 50 states and honors the achievements of girls and women in sports, while also encouraging participation. This year’s theme, “Look Who’s Playing,” recognizes female athletes who’ve made a difference or broken records despite difficult circumstances.

Contact assistant coach Christine Catalanotto at christine.catalanotto@manhattan.edu or (718) 862-7890 for more information. To find out more about National Girls and Women in Sport Day, go to www.ngwsdcentral.com.

Obituary

Warren F. Donahue of North Ft. Myers, Florida and Armonk, New York passed away on January 26, 2009.

Mr. Donahue, 87, has lived in North Ft. Myers for more than twenty-five years. In his working years he was a writer and advertising executive. He wrote feature articles for the New York Daily News in the 1950s and then moved into advertising, working in several major agencies. Finally, he established Donahue and Associates and for a number of years handled all of the advertising related to the art shows and theater presentations around the country sponsored by the Phillip Morris Company.

A New Yorker, he was born in the Bronx, the second of four children of Thomas R. Donahue, Sr. and Mary E Purcell. He graduated from Manhattan College in 1942. He served in WWII as a gunnery officer on a submarine chaser on Atlantic convoys and as executive officer of LST 559 through eleven first-day invasions in the Pacific theater. After the war, he earned his J.D. at New York University Law School.

For more than ten years he taught English-as-a-Second Language for adults in Ft. Myers. His late wife, Mildred, served for many years as the assistant director of Senior Services of St. Francis Xavier Catholic Church.

A scholar of history, last year he published a treatise on the rise and fall of democracies in the Western world, ” The Remarkable Pattern of Western History “, which plotted the course of democratic development over the past 2,000 years.

He is survived by a brother, Thomas R., of Washington, D.C., 12 nieces and nephews and thirty-one grandnieces and grandnephews. Condolences may be viewed and offered at

www.harvey-engelhardt-metz.com

# - # - #

Donahue, Warren F. [MC1942]

Guestbook: http://tinyurl.com/c388u7

To one and all: John Updike died the other day of lung cancer at age 76. Although he’s primarily remembered as a prolific novelist and essayist, he was also one of the 20th Century’s leading poets. Here’s the drawing of Updike that I did just last year for the International Society of Poets in Owings Mills. You can also view it on their website (the world’s most popular poetry website) at www.poetry.com . Sincerely, Jerry Breen http://www.newbreen.com

James Brady is the brother of my local pastor, Msgr. Thomas Brady and was a fellow Jasper

—–Original Message—–

James Brady, long-time author of PARADE’s celebrity profile column “In Step With”, died Monday at his Manhattan home. He was 80.

He is survived by his wife, Florence; two daughters, Fiona Brady and Susan Konig; four grandchildren, Sarah, Joseph, Nichola s and Matthew, and one brother, Monsignor Tom Brady. Sons-in-law are David Konig and Carl Mehling.

For nearly 25 years, Brady provided a glimpse into the lives of some of the nation’s most beloved celebrities, and some up-and-comers who are relatively new to the national spotlight. His last PARADE column, featuring Kevin Bacon, will appear on February 15, 2009. 9 CJim was a friend to the 73 million Americans who looked forward to his column each week, and he was a friend to all of use here at PARADE,” said CEO and Chairman Walter Anderson. “He was also a decorated war hero and a towering figure in American journalism. He will be extraordinarily missed.”

A prolific author and a Marine, Brady’s book “The Scariest Place in the World”, published by St. Martin’s Press in 2005, is a non-fiction account of his return to North Korea for a PARADE magazine article. He is also the author of “Why Marines Fight”(2007) and “The Marine”(2003), a novel of the Korean War. “The Coldest War”, published in 1990, was nominated for a Pulitzer Prize and was hailed by The New York Times as “a superb personal memoir of the way it was.”

Brady just finished the final edits on his new book: “Hero of the Pacific: The Life of Legendary Marine John Basilone”. Basilone was a World War II hero, one of three who’ll be featured players in the forthcoming Steven Spielberg-Tom Hanks HBO miniseries, The Pacific (October, 2009), a sequel to their highly acclaimed Band of Brothers. Jim’s book will be published by Wiley to coincide with the release of the series.

As a “baby-faced” Marine lieutenant, Brady fought as a rifle platoon leader and later rifle company executive officer of Dog Company in the 7th Marines in the Taebaek Mountains of North Korea in the fall and winter of 1951-52. He was promoted to first lieutenant and battalion intelligence officer, and, in November 2001, he was a warded the Bronze Star with Combat V for a firefight against the Chinese army on Hill Yoke near Panmunjom on May 31, 1952.

Brady had worked his way through college as a copyboy for the New York Daily News, then the largest circulation daily in the country. After graduation he returned from the war (and was offered not a reporting job but only his old copyboy gig), he wrote advertising copy for Macy’s and in 1953 was hired as a business news reporter by Women’s Wear Daily. In 1956-58 he covered Capitol Hill for Fairchild Publications, a period when Ike was in the White House, Nixon was Vice-President, Lyndon Johnson ran the Senate (and some said, the country), Sam Rayburn was Speaker of the House, and Jack and Bobby Kennedy were making their bones as a junior Senator and investigating committee counsel.

Brady became London bureau chief for Fairchild in 1959 and two years later succeeded John Fairchild as bureau chief and European director in Paris, where he learned about fashion at the knee of the legendary Coco Chanel, who fondly and invariably referred to Brady as “mon petit indien..my little Indian,” conveniently ignoring the fact he was not a Native American and was a head taller than the fashion designer.

In 1964 Brady returned to New York to become publisher of Women’s Wear Daily, helping turn that reliable old trade paper into something unique, a sort of media phenomenon, and crafting its successful consumer spinoff W magazine as the company’s editorial director. In 1971 he was hired away by Hearst Magazines as VP/editor & publisher of Harper’s Bazaar, with a mandate to bring the grand old monthly (for which Winston Churchill’s mother was a contributor) into the 20th century. Modernizing too swiftly, Brady disturbed Bazaar’s elegantly aging readership and alarmed the Hearst brass, which panicked, and Brady was abruptly sacked.

He wrote his first book, “Superchic,” an account of his publishing adventures and misadventures, and was hired by New York magazine editor Clay Felker to create and write the “Intelligencer” column. His first novel, “Paris One,” became a best-seller and was optioned several times by Hollywood, though never made.

Brady wrote and hosted a TV talk show spinoff for New York magazine, which became the first cable show nominated for and to win=2 0several Emmys, including one for Brady personally.

In 1974, Rupert Murdoch recruited Brady to edit his new tabloid weekly, Star. For the next nine years, Brady worked for the press baron in various roles, as vice-chairman of his American company, as associate publisher of the New York Post, and as editor of New York, succeeding Clay Felker. Brady also created and for seve ral years wrote the popular “Page Six” gossip column for the Post. And by now he was back on television, first on WABC News and then for six years doing live ce lebrity interviews over WCBS-TV News in New York, earning additional Emmy nominations. And in 1997 when demonstrably far too old for such nonsense, he was hired by Roger Ailes, then of CNBC, to do “Power Lunch” interviews with movers & shakers over a table at the Four Seasons restaurant in Manhattan.

In recent years Brady worked in two very disparate fictional genres. His quartet of best-selling Hamptons romances, starting with “Further Lane,” are comedies of manners set in East Hampton, where he lived. Actual real life people and purely fictional characters were woven together and seen through the eyes of Brady’s protagonist and alter ego, the terminal WASP Beecher Stowe, himself like Brady a PARADE magazine correspondent, and his dazzling if spacey paramour, Lady Alix Dunraven, an Oxford graduate with a penchant for becoming engaged to aristocratic chinless wonders, who writes intermittently for Mr. Murdoch’s Times of London.

At the same time, his quartet of Marine Corps books, historical yarns that are darker, brooding, and more weighty, blending martial adventure with fact, have become critically acclaimed best-sellers that appeal to an entirely different but devoted readership. As Publishers Weekly wrote in a starred review, “(Brady) has stormed publishing high ground to become, arguably, our foremo st novelist current writing on the subject of Marines at war…” And of his “Marines of Autumn,” Kurt Vonnegut Jr. wrote, “The Korean War now has its ‘Il iad.’”

In the spring of 2003, as tensions rose along the demilitarized zone and North Korea rattled nuclear swords, Brady returned to Korea for the first time in half a century, on assignment for PARADE magazine, to revisit the North Korean ridgelines where he first fought, and to interview the young GIs manning those same positions today. His cover story ran on May 25, on the Sunday of Memorial Day weekend, precisely 51 years since the firefight for which he won his medal.

Until his death, Brady continued to write his weekly column for PARADE and his column on media on Forbes.com, which debuted on January 19, 2006. Prior to that, Brady had written for Advertising Age and its savvy audience of media and Madison Avenue decision makers, and for Crain’s New York Business.

# - # - #

Brady, James [MC1950]

# - # - #

http://www.legacy.com/Obituaries.asp?Page=LifeStory&PersonID=123426215

NEW YORK (AP) — James Brady, the Parade magazine celebrity columnist whose wide-ranging career also included novels, a memoir on his Korean War service and a stint as publisher of the fashion bible Women’s Wear Daily, has died at 80.

Brady’s death was announced Tuesday by Parade magazine, where he wrote the celebrity profile column “In Step With” for nearly 25 years. He died Monday at his Manhattan home.

Brady also was credited with initiating the New York Post’s popular Page Six gossip section when he worked for publisher Rupert Murdoch in the 1970s. During that time, he also succeeded Clay Felker as editor of New York magazine when Murdoch acquired it in 1977

His varied interests were alluded to in a 1997 New York Times profile. At Brady’s home in East Hampton, it said, “photos from years gone by paper the walls. Mr. Brady with (designer Coco) Chanel in Paris, Mr. Brady with a young Brooke Shields in New York, Mr. Brady in combat fatigues in Korea, Mr. Brady with President Bush in Washington.”

The Times praised his 1990 memoir on Korea, “The Coldest War,” as “a superb personal memoir of the way it was. … What distinguishes Mr. Brady’s book is its clarity and modesty; there is no heroic flag-waving here.”

He followed it up with a 2000 novel, “The Marines of Autumn,” and his 2005 “The Scariest Place in the World: A Marine Returns to North Korea.”

He had gone back in 2003 for Parade magazine, and in the book he shared his experiences and emotions on seeing the place 50 years after the war ended in a stalemate. In “The Scariest Place,” he wrote that none of the many later events of his life “matched the intensity, the gravitas and sheer excitement” of combat as leader of a rifle platoon.

Among his other books was “Further Lane,” a 1997 murder mystery set in East Hampton; and two novels drawing on his years in the women’s wear field: “Designs” and “Fashion Show.”

He had become Women’s Wear Daily’s publisher in 1964. Working with Fairchild Publications chief John Fairchild, he helped make the daily into a publication popular with 1960s fashionistas as well as professionals in the clothing trade.

He jumped to Hearst Corp. in 1971 and was publisher of its fashion magazine Harper’s Bazaar.

But many readers knew him best for his contributions at Parade. CEO Walter Anderson said Brady “was a friend to the 73 million Americans who looked forward to his column each week … He will be extraordinarily missed.”

His last column will appear Feb. 15. It will feature actor Kevin Bacon.

Born in 1928, Brady started as a copyboy for the New York Daily News, where he worked while attending Manhattan College. Shortly after returning from Korea, he joined Fairchild Publications. Among other posts, he covered Washington for Fairchild and later reported from London and Paris.

He was hired by Murdoch in 1974 to edit the then-new weekly Star magazine. He later was an associate publisher at the New York Post.

Brady is survived by his wife, two daughters, a brother and other relatives.

Guestbook: http://tinyurl.com/d62cjg

# - # - #

FROM GOOGLE ALERT

James Brady dies at 80; Parade magazine columnist, prolific author

Los Angeles Times - CA,USA

15, 1928, in Brooklyn, NY, James Winston Brady graduated from Manhattan College in 1950. After serving in the Marine Corps, he attended New York University …

See all stories on this topic

# - # - #

Dear John,

I believe that Jim is a member of the Class of 1950.

May He Rest In Peace.

Mike

[JR: Thanks, Mike. Much appreciated. ]

John,

When Jim Brady wrote a column for Crains New York Business, he mentioned Manhattan College a number of times. I sent you the link and you included the columns in Jasper Jottings.

Ken Jablon ‘62

[JR: Thanks for the reminder. I'm away from my home base so I can't do much other than collect and report. But, I honestly wouldn't have remember that connection. I'm just a very bad clerk. Thanks for the memory jog.]

Michelle joined the NY1 team in February of 2005. A native New Yorker, she grew up in the Bronx and graduated from Manhattan College with a degree in Communications.

Prior to NY1, she began her journalism career in print, writing for Gannett Newspaper’s ‘The Journal News’ and Sports Illustrated For Kids magazine. In 2003, Michelle made the transition from print to television when she joined College Sports Television. She also served as a sports reporter on Time Warner Cable’s ‘Sportstime’ show in Bergen County.

A resident of Manhattan, the Bronx native is an avid tennis fan and enjoys writing and traveling.

GO ahead, put 1891.

And keep up the good work

Rich DiGirolamo

# - # - #

DiGirolamo, Lori (MC1981)

# - # - #

[JR: Sounds like someone is playing a joke on your poor old Collector-In-Chief!]

Obama Inauguration Rocks MC

We are living history. Yesterday the first ever African American President-elect, Barack Obama, was sworn into office. Such a momentous occasion deserved special attention, and the Inauguration got just that. Not only did our country celebrate his Inauguration with special events so did MC.

NEWS Residence Life Prepares for Twelve Month Housing in OV

Residence Life is planning to introduce a new residence contract that will make Overlook Manor available year round to students who choose the option. “Now that we have East Hill, we have the opportunity to provide students with a 12 month contract,” says Brother Robert Berger, Vice President of Student Life.

OP ED From The Hills to The City

Drama is the main component of reality shows on MTV. The City is no exception. As Whitney and Jay’s relationship seems to be growing, other high-fashioned, stiletto wearing girls are finding out the hard way that their significant others might not be completely trustworthy.

FEATURES Off the Beaten Path

Although the semester is just beginning, it is time to start thinking of ways to relieve stress. The bus Bx7 or Bx10 leads to a place to take a time out. All day Tuesday or Saturday morning from 9 a.m. to noon, the retreat will be free. On the other days of the week, the discounted student rate is $3.

ARTS & ENTERTAINMENT “Gran Torino” Eastwood’s Answer to American Racism

Very seldom does a film come along that makes you question yourself more than any psychedelic drug could ever twist your brain. “Gran Torino” reminds you that Asians only ride around in Japanese-made cars with automatic guns and bad tattoos, that the stereotypical black American has less respect for a female than terrorists do for innocent life, and that chewing tobacco is the dirtiest habit of any bigoted white man.

SPORTS MAAC Student-Athletes Perform Well Academically

Charron Fisher hurried through the corridors at Niagara University to make the first day of his 9 a.m. philosophy class. Slipping into the nearest seat, he listened as the professor reinforced a strict attendance policy of three absences and no exceptions. Full Story

http://wgamthegame.com/?p=115

Oh Basketball, How I’ve missed thee

Let me begin with a casual introduction of myself. My name is Sean Sendall I am a graduate of Manhattan College, and I can be heard mostly on Saturday mornings into early afternoon. Every Saturday you can hear me on any of the local sports reports as well as producing and keeping Dave Long up to date with modern happenings (since he does enjoy living below the “Tarrier Line” as he has dubbed it). I am also a part of the Weekend Warriors heard Saturdays on this very station, WGAM. I’d consider myself a sports enthusiast as well as a sports student, learning what I can from my elders (again Dave Long). My favorite sport would have to be basketball, it is the one I enjoy watching the most at all levels and, not so coincidently, it is the one I personally enjoy playing the most. I’ve also dabbled in the usual sports that we as Americans tend to play, baseball, football, soccer, tennis, golf (which I am still trying to pick up) and I also played a year of rugby in college. Admittedly I am not the biggest hockey fan, it was always basketball in the winter for me, but as of the past few years I’m beginning to pay more and more attention to it.

Rugby is by far the sport I miss playing the most, it combined aspects of many sports that I’ve played over the years and is not a regularly played athletic event in this area. I try and keep up with the international rugby news, a year and a half ago they held their world cup in France where South Africa was victorious over the surprise English team in the final match.

However, I digress, as this first blog of mine is not meant to strictly talk about myself, nor rugby for that matter, but to begin the year long discussion (for me at least it’s year long) about college basketball. College basketball…in my eyes there is no greater event than the Thursday and Friday of the first round of the NCAA tournament. With football season at an end this coming Sunday it is time for the rest of America to turn its eyes toward college hoops.

{Extraneous Deleted}

LITTLE MATCH GIRLS DYING IN THE SNOW

YouTube - The Little Matchgirl

The Little Match Girl was written by Hans Christian Anderson during a great depression that gripped the entire planet 164 years ago.  Extreme poverty, starvation and disease are three of the four horsemen of global depressions and the final horse is, of course, wars.  The US is the actual agent causing this global collapse but Japan led the way, starting in 1990.  As I keep saying, we can’t have the world’s #1 and #2 economies running at an anemic growth rate while both try to run 0% banking systems.  It is just impossible and this is due to them both being too deep in debt to afford even a 1% interest rate.  

AP Investigation: Banks sought foreign workers - Yahoo! News

After sucking down epic amounts of future debt, the bankers turned around and stab the US public in the back.  This is because the guys running these international scams are creatures from the Darkness.  They spend all of their time in this moral night of the Cave of Wealth and Death. They need epic amounts of money for themselves and only themselves. They compete with each other, groping around in the dark, trying to get an elusive profit in a zero system.  They want desperately for this zero system to flip to an infinity system since they have immense appetites for power and money.

 

The above news story happened because no one running the bankrupt banks have been arrested for reckless banking or drunk banking or bank heisting or whatever.  They should and must be not only removed from running these things but all their goods and chattels confiscated by the state.  They must be stripped of everything down to the last silver spoon.  This sounds harsh but it was done in the past.  My own great-grandfather lost everything and my grandmother, a small child, was left with only her dolly, which the sheriff kindly let her keep, and some clothes.  She didn’t even know how to take off her high-button shoes by herself.  

 

She had to fend for herself.  She learned how to swim and became a famed as a woman swimmer 100 years ago.  She worked hard in fields in summer and hard at school and became one of the first women to earn a degree in a men’s university.  Her life was transformed…for the better!  I can’t emphasize this enough!  Out of the wreckage, a phoenix rises.  We don’t have to fear wealth destruction if we keep our souls intact and have faith in the future and have love in our hearts!  

 

The moral rot of great wealth is obvious: the people who will commit any crimes, do anything to get money, are evil incarnate.  I know personally, that if we get a chance to enter the Cave of Wealth and Death, falling to the temptations there is nearly irresistible.  This temptation has been recognized since the very first cities were founded 9,000 years ago.  

 

Obama’s dream team of tax dodgers should read this news story and yell, ‘Oh my god!  We have to punish them!’ But of course, this is hard to do if no one in the Obama administration are willing to punish themselves.  And they should, of course.  And they won’t, of course.

 

Octuplets’ mother wants Oprah to turn her into a $2m TV star - Times Online

This woman on state welfare watched the stupid Learning Channel’s show of a family who used artificial insemination to turn the female into a literal bitch, having a huge litter.  Interesting, the word ‘litter’ refers to a big mess as well as lots of baby animals like piglets or puppies.  Sheep and horses and cows don’t have litters.  Anyway, the mania for voyeurism when viewing women who turn themselves, via artificial means, into pigs rather than humans, gets lots and lots of money for the media. 

 

I bet the poor, unwed mother was turned on by these shows as she sat idle at home, watching TV in between perpetual classes in school [which take up very little time, really---I was a student once and recall how much free time my classmates had...I had to support myself so my time was limited].  My own children worked while going to school, too.  So their free time was also very limited.  But not this female who had a litter of 8.  

 

She wanted to find a way to get rich quick and didn’t have the intelligence to even get herself married and then, have these several litters.  Since Palin’s big brood is breeding out of wedlock, the impulse to sell her body as a freak show quickened.  But she was stupid.  She did this stunt, at the cost of the state of California to the tune of millions of wasted tax dollars, when the state is rapidly going bankrupt.

 

One person online noted that the mass murder-suicide of a family in her region was due to the parents losing their jobs with the very same health care company that delivered all those grossly-premature babies.  Most of these babies, from a previous multiple birth as well as the present one, have very serious physical and mental problems.  On top of being raised by a total lunatic.  

 

These children can be protected by the state only if the state is solvent.  Otherwise, they will be 14 Little Match Girls, begging for someone to buy their matches in winter.  The Catholic Church forbids contraception and I remember all the little Chiclets sellers on the streets in Mexico.  I hated Chiclets gum but always bought it so I could give my saved pennies to these ragged children in the streets.

 

John Paulson Defies Market and Posts Huge Gains - DealBook Blog - NYTimes.com

While his counterparts at other big hedge funds are trying to figure out whether they can stay in business, the fund manager John Paulson continues to rack up enormous profits. DealBook has obtained Mr. Paulson’s confidential year-end letter to his undoubtedly gleeful investors.

The 20-page report details how Mr. Paulson’s firm, Paulson & Company, which manages nearly $29 billion in assets, avoided the huge losses plaguing other funds, and it gives his firm’s outlook for this year.

Instead, the fund essentially bet against the debt of several financial institutions by purchasing credit-default swaps.

Now we skip from a lower class woman who used her access to IVOs because she once worked at such a clinic and go to guys who give birth to litters of money.  The hero of this story, the guy with the profits, is a short-seller.  Note that his biggest money making machine uses loans.  He is gambling with borrowed money!  This is bad. This is very bad.

 

One aspect of depressions is this: the first year eats up all the wild bull market guys.  The second year eats up all the bargain hunters.  The third year eats all the bears.  Only after all three are devoured and lose their money—if they are playing with borrowed funds—does the depression begin to lift.  Right now, we are at the beginning.  The bears who are borrowing money are getting richer and richer.  They think, they do this forever, they will be zillionaires! 

 

Then, the bear market lifts. It always does this, it lifts in a faux recovery. Then continues to decline until most of the debt is annihilated.  The fact that this particular deep in debt bear is making the news, is an ominous sign, we are no where near the bottom.  He still has access to credit.  And of course, the bank bail bills are all designed to hand out loans to people like this guy, so they can speculate in either real estate, stock markets or bond markets.  Trying to get this ball rolling before the true end of the wealth destruction cycle only makes the downslope worse.

 

Japan’s markets prepare for horror week | The Australian

Japan had a record ‘up’ run, greater than any time since WWII.  During that time, only exports grew rapidly.  And in the end, thanks to crushing the work force and bringing down wages and internal commerce, the profits of Fortress Japan became the greatest on earth while the domestic condition fell totally apart.  Now, the exports are collapsing and the domestic economy is dead, Japan itself, dies.

 

Japan capitalized the US lending spree.  Now, the US isn’t borrowing, the Japanese carry trade is unwinding with increasing violence.  The rebound of all this is amazing to watch but it makes total sense: all things have to be in balance, some day and evidently, this day is now at hand.

 

When debts of the world are more than the property, we get a depression.  To encourage trade, the gold standard was dumped by one empire after another until none were on it.  With fiat money, debts can grow to supposed infinity.  Every 20 years, we try this.  So there was this tenacious 20 year depression cycle.  The European and American empires decided to break this cycle of growing debts then shrinking them by devising the floating currency system.  The hope was, if money itself is kept always fluid via constantly printing it, there might never be a contraction and therefore, lending can go on forever and ever and if money is destroyed, the central bankers simply write up more and more as money is destroyed.

 

The only danger they saw was the possibility of inflation, the bane of all paper money systems.  So the interest rates were supposed to slow down debt creation.  Only the Bank of Japan decided to run a ZIRP system.  This flooded the planet with lending, of course.  The, speculators used the Japanese Carry Trade to borrow money for speculating and thus, driving up all markets from real estates, etc.  As we saw in the past global bubble mess.

 

Instead of understanding the need to restrict lending so we don’t get bubbles, it got stood on its head and now, all systems are set to try to create bubbles!  This is why, as the world’s debts were as large or larger than world property, the politicians and bankers were all screaming for even more lending!

 

Then there is the awful Derivatives Beast: at $600+trillion, it is much bigger than all world wealth.  By many times.  This hideous creation is less than 20 years old.  Getting rid of it means we must first kill off our entire banking/stock market systems.  Not reduce it in size.  It will die.  Right now, everyone thinks, if the world’s tax payers pony up for paying for this for the next 100 years, it will go away slowly.

 

This is insane.  It will only grow. The attempts at killing it off are trying to be passed by corrupt, tax evading politicians.  They can’t do it since it involves going RETRO and confiscating all the faux wealth of the Derivatives Beast’s owners and creators.  

 

FT.com / Global Economy - IMF confident in ability to aid crisis victims

The IMF is bankrupt.  The loans it holds will be rendered worthless as revolutions sweep the planet and everyone refuses to pay IMF loans.  Not only that, Japan is lending to the IMF?  HAHAHA.  Japan, the country that caused the debt bubble?  Incredible.  This is what happens when people refuse to connect the dots, to examine under a microscope, what is really going on.  I sometimes sound insane as I explain what is, to me, utterly obvious.

 

Japan is, next to the US, one of the deepest in debt countries on earth!  And they are lending to the IMF?  Insane.

 

FT.com / Global Economy - Trichet warns on capital hoarding

Dear gold bugs: I keep warning everyone about this!  In all depressions, all governments go after all hoarders.  Even food hoarders!  They want your gold so they can make infinite loans.  Look at the old, old cartoon above: the top set of bubbles are next to the gold and note how tiny the gold is.  It is the differential!  And they need it and will get it via theft.  As always. Confiscation!  Note the words, ‘Low capital ratio’: the rulers want high capital ratios so they can borrow and borrow more money. The desire for more debt is like an addiction.  We want to promise to pay for that hamburger next Tuesday, as Wimpy always tells Popeye.

 

Congressional Oversight Panel: COP Report: Modernizing the American Financial Regulatory System

This is an aggravating business!  The video of ElizabethWarren explaining the history of money is lunacy.  How can anyone fix a system when they refuse, point blank, to understand what is wrong?  The Congressional reforms have nothing about the trade deficit.  Yet, whenever I review past Federal Reserve and Treasury speeches from between 1948-1989, this is the main theme!  All of them keep talking about the trade deficit and inflation!  

 

Suddenly, this stops.  Greenspan decided he can manipulate his way out of the trap we were already trapped in.  And off we went, increasing both trade and budget deficits while expanding consumer lending.  The trick was to avoid ‘inflation’ and to do that, we needed to offshore our jobs and import labor and drive all manufacturing overseas and of course, kill the unions.  And all of this was terribly destructive and here we are: even in the teeth of this nasty depression, they are still following this scheme!  And telling us to retrain ourselves.  To be what?  Produce litters of children to put on TV as freaks?   Or create an army of little match girls, dying in the snow?

 

LITTLE MATCH GIRLS DYING IN THE SNOW

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YouTube - The Little Matchgirl

The Little Match Girl was written by Hans Christian Anderson during a great depression that gripped the entire planet 164 years ago.  Extreme poverty, starvation and disease are three of the four horsemen of global depressions and the final horse is, of course, wars.  The US is the actual agent causing this global collapse but Japan led the way, starting in 1990.  As I keep saying, we can’t have the world’s #1 and #2 economies running at an anemic growth rate while both try to run 0% banking systems.  It is just impossible and this is due to them both being too deep in debt to afford even a 1% interest rate.  

AP Investigation: Banks sought foreign workers - Yahoo! News

After sucking down epic amounts of future debt, the bankers turned around and stab the US public in the back.  This is because the guys running these international scams are creatures from the Darkness.  They spend all of their time in this moral night of the Cave of Wealth and Death. They need epic amounts of money for themselves and only themselves. They compete with each other, groping around in the dark, trying to get an elusive profit in a zero system.  They want desperately for this zero system to flip to an infinity system since they have immense appetites for power and money.

 

The above news story happened because no one running the bankrupt banks have been arrested for reckless banking or drunk banking or bank heisting or whatever.  They should and must be not only removed from running these things but all their goods and chattels confiscated by the state.  They must be stripped of everything down to the last silver spoon.  This sounds harsh but it was done in the past.  My own great-grandfather lost everything and my grandmother, a small child, was left with only her dolly, which the sheriff kindly let her keep, and some clothes.  She didn’t even know how to take off her high-button shoes by herself.  

 

She had to fend for herself.  She learned how to swim and became a famed as a woman swimmer 100 years ago.  She worked hard in fields in summer and hard at school and became one of the first women to earn a degree in a men’s university.  Her life was transformed…for the better!  I can’t emphasize this enough!  Out of the wreckage, a phoenix rises.  We don’t have to fear wealth destruction if we keep our souls intact and have faith in the future and have love in our hearts!  

 

The moral rot of great wealth is obvious: the people who will commit any crimes, do anything to get money, are evil incarnate.  I know personally, that if we get a chance to enter the Cave of Wealth and Death, falling to the temptations there is nearly irresistible.  This temptation has been recognized since the very first cities were founded 9,000 years ago.  

 

Obama’s dream team of tax dodgers should read this news story and yell, ‘Oh my god!  We have to punish them!’ But of course, this is hard to do if no one in the Obama administration are willing to punish themselves.  And they should, of course.  And they won’t, of course.

 

Octuplets’ mother wants Oprah to turn her into a $2m TV star - Times Online

This woman on state welfare watched the stupid Learning Channel’s show of a family who used artificial insemination to turn the female into a literal bitch, having a huge litter.  Interesting, the word ‘litter’ refers to a big mess as well as lots of baby animals like piglets or puppies.  Sheep and horses and cows don’t have litters.  Anyway, the mania for voyeurism when viewing women who turn themselves, via artificial means, into pigs rather than humans, gets lots and lots of money for the media. 

 

I bet the poor, unwed mother was turned on by these shows as she sat idle at home, watching TV in between perpetual classes in school [which take up very little time, really---I was a student once and recall how much free time my classmates had...I had to support myself so my time was limited].  My own children worked while going to school, too.  So their free time was also very limited.  But not this female who had a litter of 8.  

 

She wanted to find a way to get rich quick and didn’t have the intelligence to even get herself married and then, have these several litters.  Since Palin’s big brood is breeding out of wedlock, the impulse to sell her body as a freak show quickened.  But she was stupid.  She did this stunt, at the cost of the state of California to the tune of millions of wasted tax dollars, when the state is rapidly going bankrupt.

 

One person online noted that the mass murder-suicide of a family in her region was due to the parents losing their jobs with the very same health care company that delivered all those grossly-premature babies.  Most of these babies, from a previous multiple birth as well as the present one, have very serious physical and mental problems.  On top of being raised by a total lunatic.  

 

These children can be protected by the state only if the state is solvent.  Otherwise, they will be 14 Little Match Girls, begging for someone to buy their matches in winter.  The Catholic Church forbids contraception and I remember all the little Chiclets sellers on the streets in Mexico.  I hated Chiclets gum but always bought it so I could give my saved pennies to these ragged children in the streets.

 

John Paulson Defies Market and Posts Huge Gains - DealBook Blog - NYTimes.com

While his counterparts at other big hedge funds are trying to figure out whether they can stay in business, the fund manager John Paulson continues to rack up enormous profits. DealBook has obtained Mr. Paulson’s confidential year-end letter to his undoubtedly gleeful investors.

The 20-page report details how Mr. Paulson’s firm, Paulson & Company, which manages nearly $29 billion in assets, avoided the huge losses plaguing other funds, and it gives his firm’s outlook for this year.

Instead, the fund essentially bet against the debt of several financial institutions by purchasing credit-default swaps.

Now we skip from a lower class woman who used her access to IVOs because she once worked at such a clinic and go to guys who give birth to litters of money.  The hero of this story, the guy with the profits, is a short-seller.  Note that his biggest money making machine uses loans.  He is gambling with borrowed money!  This is bad. This is very bad.

 

One aspect of depressions is this: the first year eats up all the wild bull market guys.  The second year eats up all the bargain hunters.  The third year eats all the bears.  Only after all three are devoured and lose their money—if they are playing with borrowed funds—does the depression begin to lift.  Right now, we are at the beginning.  The bears who are borrowing money are getting richer and richer.  They think, they do this forever, they will be zillionaires! 

 

Then, the bear market lifts. It always does this, it lifts in a faux recovery. Then continues to decline until most of the debt is annihilated.  The fact that this particular deep in debt bear is making the news, is an ominous sign, we are no where near the bottom.  He still has access to credit.  And of course, the bank bail bills are all designed to hand out loans to people like this guy, so they can speculate in either real estate, stock markets or bond markets.  Trying to get this ball rolling before the true end of the wealth destruction cycle only makes the downslope worse.

 

Japan’s markets prepare for horror week | The Australian

Japan had a record ‘up’ run, greater than any time since WWII.  During that time, only exports grew rapidly.  And in the end, thanks to crushing the work force and bringing down wages and internal commerce, the profits of Fortress Japan became the greatest on earth while the domestic condition fell totally apart.  Now, the exports are collapsing and the domestic economy is dead, Japan itself, dies.

 

Japan capitalized the US lending spree.  Now, the US isn’t borrowing, the Japanese carry trade is unwinding with increasing violence.  The rebound of all this is amazing to watch but it makes total sense: all things have to be in balance, some day and evidently, this day is now at hand.

 

When debts of the world are more than the property, we get a depression.  To encourage trade, the gold standard was dumped by one empire after another until none were on it.  With fiat money, debts can grow to supposed infinity.  Every 20 years, we try this.  So there was this tenacious 20 year depression cycle.  The European and American empires decided to break this cycle of growing debts then shrinking them by devising the floating currency system.  The hope was, if money itself is kept always fluid via constantly printing it, there might never be a contraction and therefore, lending can go on forever and ever and if money is destroyed, the central bankers simply write up more and more as money is destroyed.

 

The only danger they saw was the possibility of inflation, the bane of all paper money systems.  So the interest rates were supposed to slow down debt creation.  Only the Bank of Japan decided to run a ZIRP system.  This flooded the planet with lending, of course.  The, speculators used the Japanese Carry Trade to borrow money for speculating and thus, driving up all markets from real estates, etc.  As we saw in the past global bubble mess.

 

Instead of understanding the need to restrict lending so we don’t get bubbles, it got stood on its head and now, all systems are set to try to create bubbles!  This is why, as the world’s debts were as large or larger than world property, the politicians and bankers were all screaming for even more lending!

 

Then there is the awful Derivatives Beast: at $600+trillion, it is much bigger than all world wealth.  By many times.  This hideous creation is less than 20 years old.  Getting rid of it means we must first kill off our entire banking/stock market systems.  Not reduce it in size.  It will die.  Right now, everyone thinks, if the world’s tax payers pony up for paying for this for the next 100 years, it will go away slowly.

 

This is insane.  It will only grow. The attempts at killing it off are trying to be passed by corrupt, tax evading politicians.  They can’t do it since it involves going RETRO and confiscating all the faux wealth of the Derivatives Beast’s owners and creators.  

 

FT.com / Global Economy - IMF confident in ability to aid crisis victims

The IMF is bankrupt.  The loans it holds will be rendered worthless as revolutions sweep the planet and everyone refuses to pay IMF loans.  Not only that, Japan is lending to the IMF?  HAHAHA.  Japan, the country that caused the debt bubble?  Incredible.  This is what happens when people refuse to connect the dots, to examine under a microscope, what is really going on.  I sometimes sound insane as I explain what is, to me, utterly obvious.

 

Japan is, next to the US, one of the deepest in debt countries on earth!  And they are lending to the IMF?  Insane.

 

FT.com / Global Economy - Trichet warns on capital hoarding

Dear gold bugs: I keep warning everyone about this!  In all depressions, all governments go after all hoarders.  Even food hoarders!  They want your gold so they can make infinite loans.  Look at the old, old cartoon above: the top set of bubbles are next to the gold and note how tiny the gold is.  It is the differential!  And they need it and will get it via theft.  As always. Confiscation!  Note the words, ‘Low capital ratio’: the rulers want high capital ratios so they can borrow and borrow more money. The desire for more debt is like an addiction.  We want to promise to pay for that hamburger next Tuesday, as Wimpy always tells Popeye.

 

Congressional Oversight Panel: COP Report: Modernizing the American Financial Regulatory System

This is an aggravating business!  The video of ElizabethWarren explaining the history of money is lunacy.  How can anyone fix a system when they refuse, point blank, to understand what is wrong?  The Congressional reforms have nothing about the trade deficit.  Yet, whenever I review past Federal Reserve and Treasury speeches from between 1948-1989, this is the main theme!  All of them keep talking about the trade deficit and inflation!  

 

 

ADMINISTRIVIA: JASPER JOTTINGS Week 05 - 2009 Feb 02

JASPER JOTTINGS Week 05 - 2009 Feb 02

Jasper Jottings - The achievement journal of my fellow Jaspers, the alumni of the Manhattan College

http://www.jasperjottings.com/2009/jasperjottings2009W05.html

INDEX

   * POSITRACTION: Brilliant water-based eyeglasses for the masse

   * JEmail: McEneney, Mike (MC1953) tentatively ids McBride, Michael [MC1980?]

   * JObit: McMahon, John J. [MC1953]

   * JEmail: Bryk, William (MC1977) ids Buch, Dr. Edward [MC1976]

   * JEmail: Reinke, FJohn (MC1968) on a panel discussion 2/4 3:30PM at MC

   * QUOTE: Lo, Gerry (MC1979) on singing pigs

   * JFound: Unidentified Jaspers?

   * JEmail: Lawrence, Richard A. (MC1968) chasing our “strange opportunities”

   * MFound: MC cites as “setting aside a contingency fund for financial aid”

   * JEmail: McEneney, Mike (MC1953) cites Miller, Bill [MC1945] in the NY Times

   * JNews: Campion, Bill [MC1975] remembers his bball career

   * HQ: Manhattan Softball Hosting Wine Tasting This Weekend

   * JEmail: Cramer, Vincent (MC1968) has an offer

   * JUpdate: Gorman, Tim (MC1980) is over at MC ALUM yahoo group

   * JNews: Zoppo, Brother Thomas [MC1985] Calvert Hall College High School president

   * JHQ: Free admit to Women’s bball game on Monday 2/9. Sex discrimintation?

   * JObit: Donahue, Warren F. [MC1942]

   * JEmail: Breen, Jerry (MC1971) remembers John Updike

   * JObit: Martin, Margaret Kelly (MC1998) reports obit Brady, James [MC1950]

   * JEmail: Jablon, Ken (MC1962) reminds me about Brady, James [MC????]

   * JFound: Yu, Michelle [MC????]

   * JEmail: DiGirolamo, Rich (MC1985) reports DiGirolamo, Lori (MC1981) as MC1891

   * QUADRANGLE: Thursday, January 29, 2009

   * JFound: Sendall, Sean (MC????) on WGAM radio

   * JUpdates: Several Jaspers send in updates; all at the same time?

   * JObit: D’Adamo, Br. Anthony [MCatnd]

   * JObit: O’Connell, Philip R. [MC1949]

   * ALUMNI: MC alum email coming sooner rather than later?

   * JEmail: McGrath, Erin M. (MC1992) memorializes Lisa Marie Muccilo ‘92 on 2/28 at halftime

   * JEmail: McEneney, Edward J. (MC1959) cited for job search help

   * JUpdate: O’Connor, John E. Jr. (MC1974)

   * JFound: Martin, Carmel [MC1989] Assistant Secretary Planning and Evaluation

   * JNews: Barry, Peter [MC1951] attended Mass (just) because

   * PRAYERREQUEST: The Jasper’s premie has the RSV virus needs some prayers

   * MFound: Seated in back of empty Manhattan College auditorium, Riverdale, N.Y. Winter, 1950-1951

   * JFound: Arnone, Paul F. (MC1991)

   * JFound: O’Malley, Thomas D. [MC????] buys a Palm Beach condo

   * Comment on JFound: DiGirolamo, Rich (MC1985) DiGirolamo, Lori (MC1981)

   * ENDNOTE: better answers from Treasury

# # # # #

Is the Treasury bubble bursting? Fund managers selling treasury bonds

In an important shift, top bond fund managers are selling some of their treasury bonds and buying corporate debt.

As Market Watch notes:

“Investment-grade credit is very attractive,” said Gregory Davis, head of bond indexing at Vanguard and portfolio manager for its Long-Term Bond Index Fund….

For corporate bonds, “a lot of bad news is priced in, including defaults and downgrades,” Davis said.

Top-performing fund managers are selling or paring their holdings of U.S. Treasurys, one of last year’s best-performing assets….

Meanwhile, other government programs to bail out the credit markets, say by guaranteeing bank debt, will make Treasurys less attractive, managers say.

“As policy maneuvers are implemented and make the way through the system, prudent investment managers are going to be reducing their risk-free exposure and going more towards risk products,” meaning anything besides Treasurys, said Steve Rodosky, manager of PIMCO Long Duration Total Return Fund….

One strategy that successful managers say has some legs is to buy debt that the government is also buying.

That strategy lends itself to holding mortgage-backed securities and debt sold by the big housing finance agencies including Fannie Mae, Ginnie Mae and the Federal Home Loan Banks….

Companies that are explicitly benefiting from policy actions are likely to have the best opportunities, said Rodosky ….

Debt sold by banks that is guaranteed by the Federal Deposit Insurance Corp. should do well, he said.

Also, debt sold by firms that have issued FDIC-backed notes but that trade on their own rating have good potential relative to the risk involved, he said.

Still, “there are going to be some losers in this process, despite the government guarantees,” he said. Several institutions are likely to be consolidated.

“Not every bond out there is money good,” he said.

Bond managers expressed the most distaste for Treasurys, which helped several avoid the market’s pitfalls last year. They expect Treasury bond prices to fall, pushing yields up, by the same policies that help other assets. The government is incurring a lot of debt buying other securities and propping up financial markets, let alone the massive economic stimulus package expected to be approved in the next month or so.

The actions of the top fund managers tend to prove that the treasury bubble is bursting.

Their statements are also in line with Marc Faber’s comments that corporate bonds are oversold, and that not every company will fail in this economic crisis. Faber has said for a couple of months that there are very good deals to be had in buying corporate debt, if you know what you’re doing.

Finally, they appear to be following Bill Gross’s advice to buy early what the government is going to buy later.

Source: http://georgewashington2.blogspot.com/2009/01/top-bond-fund-managers-selling.html

California Pension Funds Close To Bankruptcy.

The two largest pension funds in California, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), have lost billions of dollars in value. Hundreds of thousands of retiring state employees and teachers now face the stark choice of accepting much reduced pension checks or working past their retirement age.

CalPERS is the largest pension fund in the US and the fourth largest in the world. At its height in October 2007 it had $260 billion in assets, comparable to the GDP of Poland, Indonesia or Denmark. At the end of 2008 CalPERS was worth $186 billion, one of its worst annual declines since the fund’s inception in 1932. It is one of the latest casualties of the financial collapse on Wall Street.

After years of gambling in real estate investments, the state workers pension fund has lost more than 41 percent of its value, after peaking last fall. Its real estate holdings have dropped from $9 billion to $5.8 billion, according to the Sacramento Bee.

CalPERS manages pension and health benefits for more than 1.6 million retirees and their families. The pensions are guaranteed by law, but given the current economic malaise employers may be asked to contribute more from their payrolls. The average employer, a taxpayer-funded government agency, contributes 12.7 percent of their payroll to CalPERS, while workers must contribute 5 to 7 percent of their salaries.

For now, a “rainy day fund” is being used to offset the worst in losses. It is likely, however, that CalPERS will ask for additional funds starting in July 2010 from state employers and July 2011 from local employers. The increases could be from 2 to 5 percent. Since the employers are public entities, the money will have to come from taxpayers or from budget cuts to other social programs.

CalPERS’s losses are intimately tied with the collapse of the housing bubble and the economic downturn in general. The Dow Jones Industrial Average has dropped 39.8 percent during the same period that CalPERS fell 31 percent. Because of the fund’s aggressive purchasing of real estate during the property bubble, CalPERS is now the largest owner of undeveloped residential land in America, much of it purchased in Arizona, California and Florida, some of the states hardest hit by the real estate crash. Many of these properties were purchased when their prices were at their peak.

The pension fund is expected to report paper losses of 103 percent on its residential investments in the fiscal year that ended June 30. It is estimated 80 percent of these investments were paid with borrowed money, which means that CalPERS will eventually be obligated to pay them back at the original market price.

The second largest pension fund in the US, CalSTRS, covers 794,812 teachers. Its value has fallen from $162.2 billion to $129.3 billion. CalSTRS’s pension funds are guaranteed just like CalPERS, but unlike CalPERS, it does not have the authority to ask for increased contributions from employers. CalSTRS is funded by school districts contributing 8.25 percent of its payroll. The state general fund pays 2 percent and a further 8 percent comes from the members’ salaries. Any contribution changes would have to be added by the state legislature and approved by the governor.

While CalPERS’ losses are currently being defrayed by the rainy-day fund, state administrators are hoping that the economic situation will improve, otherwise CalPERS and other pension funds will have to ask for further contributions. California Treasurer Bill Lockyer, who sits on the CalPERS board, told the San Francisco Chronicle that the current crisis means “both state and local government employers would be spending more on retirement than on some immediate program needs. Paying the commitments to pension obligation is a high priority, and it would take precedence over many other spendings.”

He added, “You either cut some other program expenditures or you tax something.” In other words, the pension deficit will be placed on the backs of working people who had no control over the investment decisions made by the government, let alone the recklessness and avarice of the banking executives and Wall Street speculators who are responsible for the crisis.

In the midst of a severe recession, this will only add to social anxiety and financial insecurity, particularly since hundreds of thousands of public school teachers and state employees covered by these massive pension funds have seen the value of their personal retirement savings, including 401(k)s and IRAs, reduced by 25 percent or more.

Pacific Grove, a coastal town north of San Francisco, highlights what cities and towns are being forced to do. In fiscal 2002, Pacific Grove paid less than $100,000 to CalPERS, only 1 percent of the town’s general fund revenue. By 2006, this cost shot up to more than $2.2 million, or 15 percent of its revenue.

The city of 15,000 would have to spend $10 million or more to pay its pension obligations if it were to pull out of CalPERS. The recreation department staff has already been reduced from seven to one and budgets for the library and Pacific Grove Museum of Natural History, a 125-year-old institution, were cut in half.

Joanne Nolan Stewart, a 48-year-old with two children, told the Wall Street Journal, “The people who used to run the recreation programs grew up here and sheltered the kids like they were their own.” Joanne is also an account manager for AT&T and said, “If I were to retire, my retirement would be one-quarter of what I make today for the rest of my life.”

California’s pension and budget defaults are not isolated phenomena. All across the US state pension funds have been collapsing due to the broader economic crisis. According to the Center for Retirement Research at Boston College, state governments have run up pension fund losses totaling $865.1 billion. Assets for 109 pension funds dropped 37 percent to $1.46 trillion in the 14-month period ending December 16. By comparison, the S&P 500 fell 41 percent in the same period.

To return to 2007 funding levels by 2010, the 109 funds would need annual returns of 52 percent, the center found. Alicia Munnell, the center’s director, told Bloomberg.com, “Even if markets recover, this will be a one-time loss that will have to be made up in the future by taxpayers.”

State and local governments contributed more than $64.5 billion to pension plans in fiscal 2005-2006, according to the US Census Bureau, which is about 57 percent of the $113.2 billion spent on police and firefighters. A report by the Pew Center on the States did a survey in December 2007 that found that states owed $2.35 trillion in pension payments over 30 years.

Unsurprisingly, state authorities are attempting to cut benefits for new state hires in order to ameliorate the crisis. In Kentucky, lawmakers set the minimum age of retirement at 57 for employees hired after September 1, and required 30 years of service, up from 27, to receive full benefits. They also capped cost-of-living adjustments, tied to the Consumer Price Index, at 1.5 percent. Democratic Governor of New York David Paterson, trying to close a $15.4 billion gap over 15 months, also wants to reduce new workers’ benefits while raising the retirement age from 55 to 62.

Rhode Island state and local governments were scheduled to make contributions to their pension funds equaling 25 percent of their payroll expenses in 2010, and the contributions may increase up to 30 percent in 2011 with a deepening recession. With increasing membership growth in state pension plans, these defaults will be even more exacerbated. State funds have been experiencing 12 percent growth since 2002, with 23.1 million now participating.

Company pension funds, or so-called defined benefit plans, have also been starved by the economic crash, falling to $1.2 trillion as of December 31 compared to $1.6 trillion a year earlier.

Change is Good, Let

Dear Investors,

I thought the market might improve if I took a week off,…but alas it did not.  To reiterate we were stopped out of three positions, DEO, PLPC, and TEF.  

Based on the markets continued weakness we need to raise some sell stops, in order to further reduce risk.

MANT, Raise stop from 47 to 53.

FDS, Raise stop from 37 to 40, or in other words, if you have not yet sold out this position, do so on the market opening on Monday Feb. 2, 2009.

 

And now for some education.  There are basically two strategies I have employed in my career as an investor.  One,  is the traditional, old fashioned, everyone uses it, asset allocation and diversification.  This is that strategy that we are all taught in Business Schools, broker training programs, and in the mainstream financial media.

Set your objectives, time frame, and risk tolerance.  Divide up your assets between cash, fixed income securities, and equities according to a formula that is designed to meet or exceed the historical benchmark index returns, with preferably less risk, usually as measured by standard deviation, and other statistical ratios.  Then, like a recipe for a cake, stir, pour, place in oven at desired temperature and wait, and wait, and wait,..until,…

If the markets go up, and treat you well, re-balance periodically, either on a time schedule, say once per year, or based on some mechanical method, for instance, if a piece of your portfolio, (an asset allocation) moves up or down by 5% of its original weight in the portfolio, adjust back to original percent weights, or allocations.

If the markets go down, just hold on, and don’t forget to keep adding to your portfolio at least on the same schedule in your original plan, or even more if you have excess capital.  Because remember, the best time to buy is when the markets are “low.” 

Never, never, never exit the market, so the story goes, because if you miss just a few of the  up days, you will dramatically reduce your overall returns.  Since we never know when the up days will occur, and cannot simply re-enter the market  just before those up days occur, we must be willing and able to ride out all market declines.

That is the strategy that only works when the markets are going up.   It is the strategy that is directly responsible for the dramatic declines in many portfolios over the last 12 months, it is the strategy that has caused 40% to 80% declines in retirement accounts just during the past 12 months.

It is a better strategy than no strategy at all, and I could see a use for this strategy as one part of a larger strategy.  Maybe a person could further diversify a portfolio by using this traditional buy and hold strategy for a portion of their funds, (not to exceed 50%).  And the other larger portion could use a different, better strategy,…

 So that brings us to the other strategy,  the one I am in the process of introducing to you, my dear investors:  Only buy when the market has a greater probability of going up, and exiting the market, (or selling short), when there is a greater probability the market will go down.

It is not a perfect strategy, but it is better than the traditional ride out all market declines.

Today, there is a greater probability the market will decline, so we are tightening up our stops, reducing risk, and not taking on any additional long positions.

Please forgive me for what I am about to say.  If you are “chomping at the bit,” and need some market action, you could use the traditional strategy by looking for potential bargains, that pay relatively high dividends, so that you “get paid,” to take the risk that the price you pay for these potential bargains may not in fact be a bargain, sometime down the road.

Here is one screening tool you could use.  Look for stocks that pay a relatively high dividend yield, (you set the level), that also have a relatively low payout ratio, (you set the level, I like 50% or less).  A lower payout ratio may reduce the risk that the company might cut their dividend.  You could also look at capitalization ratios between debt and equity.  Ideally one might want a company with very low debt, or no debt at all.  Again, you set the level, lower is better.  Although I did not mention this, (I assumed you would know the basics of investing), try to look for companies that have historically made money, and are still making money.  When using any strategy, I like to look for companies with lower price earnings ratios, or ratios that are comparable to their competitors in the same industry.  As a basic rule up thumb I like to select companies with PE ratios less than or equal to the market as a whole or a quick rule is a PE 20 times or less.

I will make my list and then apply my favored strategy, but I am not adding any new long positions at this time.   I am not a buyer today.

Happy investing,

aaainsured

LaunchBox Digital - Ready For Applications For Our 2009 Incubator Program!

Last year, when we launched the business incubator component of LaunchBox Digital, we weren’t sure what to expect.  How many applicants will our first program get?  What will be the quality of the ideas?  How much support will each company require?  It was a bit of a leap of faith, especially because of our decision to base the program in Washington, DC.

Now, looking back over the last eight months since the first program began, we couldn’t be happier.  We got around 250 applicants, ranging all the way from DC to Norway and China.  The ideas we saw were of good, and sometimes great, quality.  We selected a group of finalists to interview, and from there, we chose the nine companies that were our inaugural participants.  12 weeks later (fueled by lots of sweat equity and passion), each of the nine companies got to pitch their businesses to investors, bloggers and angels on the East and West Coasts, with some great early feedback.

But suddenly, right after the end of the program, the US (and subsequently, the global economy) went into the tank.  Here were entrepreneurs, excited and energized, sitting across from potential investors who were watching the book value of their investments decline day after day.  I don’t think there could have been a more daunting challenge for our companies:  Each company really needed to close on a new round of funding, if they were going to take their business to a new level, and they found themselves competing for attention in an incredibly stressful investment environment.

Angels were seeing 30-40% declines in what they considered their low-to-medium risk index and stock investments, and wondering if they were too far out on the efficient frontier with their private equity investing.  Venture funds, even ones in the top quartile of performance, were watching their own fund raising efforts run into a community of LPs who were collectively reeling from their own hedge fund investing.

Now imagine throwing a bunch of early stage companies into this maelstrom, and you might expect a real train wreck.  What we got, however, was the exact opposite.

In really early stage investing, it is all about investing in the people, and, as a collective group, the LaunchBox teams were as creative and dedicated a group as we had ever run across.  They all kept the faith, used the same aggressive cost management that they had operated with all summer, and pressed on with both their fund raising and product development.

Now, sitting here in January, we have six of the nine companies funded, and all are focused on changing the world in their own unique ways.  As people who played a small part in their journey, we couldn’t be happier.

With that as background, we are happy to announce that we are now open for applications for the 2009 incubator program, LaunchBox09.  We are really excited about the new ideas that we’ll see this year.  We think there are a number of new catalysts and opportunities for startups that have emerged over the last year:

With the continued support of both our great group of advisors and our first alumni group, we can help first-time entrepreneurs navigate that crucial first year of existence and succeed.  In spite of what we see each day on TV and the web about the macro-economic picture, too many new opportunities exist for people to play defense here - we are looking for bright, bold, and dedicated folk to help lead the way to a brighter tomorrow.  You can learn more about our program (and apply to participate) at www.launchboxdigital.com.

Qatar considers stakes in three firms

Davos: Qatar may buy stakes in three “blue-chip” companies and increase existing holdings, the prime minister said.

“We cannot build all our reserves on one kind of investment, so we have to spread it,” Hamad Bin Jasem Bin Jaber Al Thani said in a Bloomberg Television interview yesterday at the World Economic Forum in Davos, Switzerland.

“We are talking with two to three companies at the moment. We are looking for the blue-chip companies.”

The country is considering investing in financial services, industrial companies and tourism, said Al Thani, who is also head of the country’s $58 billion (Dh213 billion) sovereign wealth fund.

Qatar is reviewing the targets’ assets and liabilities and is seeking companies with stable dividends. He declined to identify investment candidates.

Sovereign wealth funds have been hurt as oil prices dropped from record highs and the turmoil in the credit markets eroded the value of their existing investments.

The prime minister said the credit crisis had “minimally” affected Qatar’s investments.

“Up to now, we are in a good shape, and still we are making acquisitions,” he said.

With a population of less than 1 million, Qatar owns the world’s third-biggest natural-gas reserves and 1.3 per cent of the world’s crude-oil reserves. The country’s sovereign wealth fund was set up to invest in businesses not linked to oil and gas.

Al Thani said Qatar would “very seriously” consider raising its stake in Barclays Plc, if the London-based bank seeks more capital. Barclays raised £5.3 billion (Dh27.9 billion) in October by selling securities including convertible notes to Middle Eastern investors such as Qatar Holding.

Barclays gained 5.8 per cent to 106.1 pence in London trading, outperforming the Bloomberg Europe Banks and Financial Services Index, which rose about 0.7 per cent.

Barclays lost two-thirds of its market value in the three weeks ended January 23 on speculation it would need to raise more money or be taken over by the UK government to cover toxic assets.

The shares rebounded 96 per cent after the bank said on Monday it won’t need additional capital, even as it takes about £8 billion of writedowns in 2008.

“Right now, we aren’t worried about Barclays,” the prime minister said. “We in fact have a strong belief that Barclays will get over this problem.”

Silicon Valley Green Economic Development

FIND BELOW:

* Research Questions

* Bibliography

* Webography

Contact:

aaronwilcher AT gmail DOT com (Aaron Wilcher, MCP student researcher)

smontero AT berkekey DOT edu (Sergio Montero, MCP student researcher)

Adams, Stephen B. “Regionalism in Stanford’s Contribution to the Rise of Silicon Valley.” Enterprise Soc 4, no. 3 (September 1, 2003): 521-543.

Alarcon, Rafael Guadalupe. “The migrants of the Information Age: Foreign-born engineers and scientists and regional development in Silicon Valley.” Dissertation, Dept. of Anthropology, University of California, Berkeley, 1998.

Arbuckle, Clyde. Clyde Arbuckle’s history of San José : the culmination of a lifetime of research. San José: Smith & McKay Printing Co., 1986.

Beers, D. Blue Sky Dream: A memoir of America’s Fall From Grace. New York: Doubleday, 1996.

Benner, Chris. Staircases or Treadmills?: Labor Market Intermediaries and Economic Opportunity in a Changing Economy. New York: Russell Sage Foundation, 2007.

—. Work in the New Economy: Flexible Labor Markets in Silicon Valley. Malden, MA: Blackwell Pub, 2002.

Berlin, Leslie. The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley. Oxford University Press, USA, 2006.

Brook, James. Resisting the virtual life: the culture and politics of information. San Francisco  ;Monroe  OR: City Lights, 1995.

Brown, John Seely, and Paul Duguid. The Social Life of Information. 1st ed. Harvard Business School Press, 2002.

Canty DJ. “At Home In San-Jose + Architect-Directed Redevelopment Program Transforms The Center Of California 3rd Largest City.” Architectural Record 178, no. 10 (September 1990): 132 -137.

Canty, Donald J. “At Home in San Jose.” Architectural Record 178, no. 10 (September 1990): 132.

Castells, Manuel. The Rise of the Network Society (New Edition). 2nd ed. Wiley-Blackwell, 2000.

Christensen, Terry, and Tom Hogen-esch. Local Politics: A Practical Guide To Governing At The Grassroots. 2nd ed. M.E. Sharpe, 2006.

Claiborne, J. “Rebuilding Downtown San Jose: A Redevelopment Success Story.” Places 15, no. 2 (Winter 2003): 4-11.

Cornford, D. Working People of California. Berkeley, Los Angeles, London: University of California Press, 1995.

Cronon, William. Under an Open Sky: Rethinking America’s Western Past. W. W. Norton & Company, 1994.

Egan, Timothy, and Timothy P. Egan. Lasso the Wind: Away to the New West. Vintage, 1999.

English-Lueck, J. A. “Silicon Valley reinvents the company town.” Futures 32, no. 8 (October 2000): 759-766.

Findlay, Jonathan. Magic Lands: Western Cityscapes and American Culture After 1940. Berkeley; Los Angeles; London: Univeristy of California Press, 1992.

Hackworth, Jason. The Neoliberal City: Governance, Ideology, and Development in American Urbanism. 1st ed. Cornell University Press, 2006.

Hall, Peter. Cities in Civilization. Pantheon, 1998.

Hall, Tim, and Phil Hubbard. “The entrepreneurial city: new urban politics, new urban geographies?.” Progress in Human Geography 20, no. 2 (June 1, 1996): 153-174.

Hansen, D. The New Alchemists.

Hayes, Dennis. Behind the silicon curtain: the seductions of work in a lonely era. Boston  MA: South End Press, 1989.

Hossfeld, K. “Why Arent High-Tech Workers Organized?: Lessons in Gender, Race, and Nationality from Silicon Valley.” In Working People of California, 405-432. Berkeley, Los Angeles, London: University of California Press, 1995.

Jackson, Kenneth T. Crabgrass Frontier: The Suburbanization of the United States. Oxford University Press, USA, 1987.

Jiménez, Francisco. Ethnic community builders: Mexican Americans in search of justice and power : the struggle for citizenship rights in San José, California. Lanham: AltaMira Press, 2007.

Kriken,  J. “Lessons from downtown San Jose.” Places-A Forum Of Environmental Design 15, no. 2 (WIN 2003): 30-31.

Lessig, Lawrence. The Future of Ideas: The Fate of the Commons in a Connected World. Vintage, 2002.

Lewis, Michael. The New New Thing: A Silicon Valley Story. Penguin (Non-Classics), 2001.

Logan, John R. “Logan on Molotch and Molotch on Logan: Notes on the Growth Machine-Toward a Comparative Political Economy of Place.” The American Journal of Sociology 82, no. 2 (September 1976): 349-352.

Markusen, A. The Rise of the Gunbelt.

Matthews, Glenna. Silicon Valley, Women, and the California Dream: Gender, Class, and Opportunity in the Twentieth Century. Stanford, Calif: Stanford University Press, 2003.

Matthews, Glenna Christine. A California Middletown: The Social History of San José in the Depression, Dissertation, Dept. of History, Stanford University, 1976.

Molotch, Harvey. “The City as a Growth Machine: Toward a Political Economy of Place.” The American Journal of Sociology 82, no. 2 (September 1976): 309-332.

Nguyen, Vu-Bang. “Vietnamese-American Community Outreaching: West Evergreen in San Jose, California,” 2004. Berkeley Library Catalog.

O’Mara, Margaret Pugh. Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley. Princeton, N.J: Princeton University Press, 2005.

Park, Lisa Sun-Hee, and David N Pellow. “Racial Formation, Environmental Racism, and the Emergence of Silicon Valley.” Ethnicities 4, no. 3 (September 2004): 403-424.

Pellow, David, and Lisa Park. The Silicon Valley of Dreams: Environmental Injustice, Immigrant Workers, and the High-Tech Global Economy. NYU Press, 2002.

Pincetl, Stephanie Sabine. Transforming California: A Political History of Land Use and Development. Baltimore, Md: Johns Hopkins University Press, 1999.

Pitti, S.J. The Devil in Silicon Valley: Northern California, Race, and Mexican Americans. Princeton; Oxford: Princeton University Press, 2003.

Rawls, James and Walter Bean. California: An Interpretive History. Boston, MA: McGraw Hill, 1998.

Reisner, Marc. Cadillac Desert: The American West and Its Disappearing Water, Revised Edition. Revised. Penguin (Non-Classics), 1993.

Rhee, Nari. “Searching for working class politics: Labor, community and urban power in Silicon Valley.” Dissertation, Dept. of Geography, University of California, Berkeley, 2007.

Saxenian, A. Regional Advantage: Culture and Competition in Silicon Valley. Cambridge, MA; London: Harvard University Press, 1994.

—. The New Argonauts: Regional Advantage in a Global Economy. Harvard University Press, 2007.

Scott, A.J. Technopolis: High-Technology Industry and Regional Development in Southern California. Berkeley; Los Angeles; Oxford: University of California Press, 1993.

Self, Robert O. American Babylon: Race and the Struggle for Postwar Oakland. Princeton University Press, 2005.

Shih, Johanna. “Circumventing Discrimination: Gender and Ethnic Strategies in Silicon Valley.” Gender & Society 20, no. 2 (April 2006): 177-206.

Siegel, Lenny, and John Markoff. The high cost of high tech: The dark side of the chip. New York: Harper & Row, 1985.

Stanford Environmental Law Society. San Jose: Sprawling City; a Report on Land Use Policies and Practices in San Jose, California. Stanford, Calif., 1971.

Trounstine, Philip and Terry Christensen. Movers and shakers : the study of community power. New York: St. Martin’s Press, 1982.

Turner, Fred. From Counterculture to Cyberculture. Stanford University Press, 2006.

Langdon Winner. “Silicon Valley Mystery House.” In Michael Sorkin, ed. Variations on a Theme Park: The New American City and the End of Public Space. 1st ed. New York: Hill and Wang, 1992.

Walker, Richard A. The Country in the City: The Greening of the San Francisco Bay Area. University of Washington Press, 2008.

—. Silicon City: The Evolution of an Electronics Mecca. Unpublished manuscript, 2002.

White, Richard. “It’s Your Misfortune and None of My Own”: A New History of the American West. University of Oklahoma Press, 1993.

Zlolniski, Christian. Janitors, Street Vendors, and Activists: The Lives of Mexican Immigrants in Silicon Valley. 1st ed. University of California Press, 2006.

HOW TO PROTECT YOUR INVESTMENT IN BEARISH MARKET

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The responsibility

General society The responsibility environmental (RSE) constitutes for the General society a real competitive advantage on which she wishes to position like an actor of reference.The stake is to concretely integrate the Social responsibility and Environmental into the strategies of its various trades in order to create value for the Group and its recipients.The title General society appears in all the principal indices of sustainable development and is selected in the majority of the French ethical funds. In 2007, General society integrated Climate Disclosure Leadership Index of the CDP5 (Carbon Disclosure Project), including/understanding 68 best undertaken of the FT 500. The objective of the Group is to maintain and permanently improve its performances in this field.

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Am I a good stock picker?

Four times in my life I have thought: “That would be a good stock to buy.” And all of those times, it turned out I was right. The first time was when Chipotle went public. It was Jon’s idea; we were eating there often at the time, and he mentioned that he thought it would be a hot stock. I agreed, bought it in the high-40s and sold at $67. It was way overvalued, but that didn’t stop it from topping $100 before coming back to earth.

Bed, Bath & Beyond. More than a year later, I had a great experience registering at Bed Bath & Beyond for our wedding. In fact, I found myself going there two or three times a month to pick up something I needed. “What a good company,” I thought, in January of 2008, when the stock was around $24. Based on a quick calculation, I decided it seemed fairly valued–not underpriced, not overpriced. But Jon and his dad convinced me that buying retail was a bad idea; I didn’t pull the trigger, and a few months later it was up to $28. It’s back down now, but still above $23. If I had invested all my money in BBBY, I’d be in great shape right now. 

Visa. In 2008, I thought Visa would be the hot IPO, because MasterCard had done so well. I bought Visa around $62 and sold at $82, because the stock seemed overvalued and a friend of mine told me she thought consumer credit would be the next shoe to drop. Turns out she was right. The stock is now below $50. 

Amazon. Then, a few weeks ago, I said to Jon: “You know, Amazon is a great company.” Over the holidays, I bought many of my gifts there, because it always offered the best deals, even with the additional shipping costs. And Amazon is one of the major providers of cloud computing services to small businesses, a huge market with tremendous growth potential. I thought about buying shares but decided against it, since I’ve been losing so much money in the market. Too bad; Amazon’s shares rose more than 17% after the company announced better-than-expected earnings last week.

On the other hand … regular readers of this blog may have noticed something. These stocks that I’ve “picked” don’t really mirror the ones I actually own. Jon does a lot more research before buying stock, and based on his research, we bought GE and Bank of America shares in 2008. (Yesterday, Jon said, “Owning GE is like owning a mutual fund, because it’s so diversified.” I said: “Yeah, a mutual fund that has lost 60% of its value.”) As long as GE continues paying its dividend, we’ll keep getting a good return, but if it cuts the dividend … well, then the stock will really tank. If you want a brief history of our ownership of GE, you can read about our first purchase, and subsequent debates about whether to buy more. As for Bank of America … well, it’s too traumatic to talk about. 

Also, I once decided that I should buy a solar energy stock, did a bunch of research, and decided on Energy Conversion Devices. I bought it for $30-something, it plodded along for a year until I sold it, and later did very well. Now it’s back down to $25 or so. 

So my point is not that I have any claim to brilliance in picking stocks. Actually, except for two shining moments with Chipotle and Visa, my purchases have done, at best, no better than than the market as a whole. But it seems that I make bad investing decisions when I don’t follow my instincts. And if I followed my instincts, I might do a little better. On the other hand, those instinctual purchases were, at best, good guesses. What do you think? Should I follow my instincts more or less? Or should I chuck it all and invest in index funds?

2009 Outlook: Key Questions for the Director-General of the Nigeria Stock Exchange

Jim Rogers

Jim Rogers  has teamed up with Australia’s Macquarie Funds group to promote two of Rogers’ favorite investment sectors: China and agriculture.

The new commodity index fund named Macquarie and Rogers China Agriculture Index, operates differently than current competitive heavyweights that invest in agriculuture commodities in Asia.

What is different is Rogers’ fund concentrates on current and future actual food consumption, while other funds track the food production side of the commodity sector.

Marcquarie and Rogers are starting to heavily promote the new commodity fund as their performance in December of about 11 percent gives them some history to base their future projections on.

While the grain and overall food markets fell in the latter part of 2008, Rogers still looks at agricultural goods as the one major commodity market that can be counted on to rise significantly over the next 5 to 10 years.

He said that while there’s no way of knowing which way the financial and mortgage markets, among others, will perform, you can be sure people will continue eating, and the emerging large middle class in China will be the bellwhether to track going ahead, as their food consumption habits will determine the price of food in whatever they consume.

So that’s the reasoning behind the introduction of the new fund, and when you consider the extraordinarily successful Quantum Fund Rogers and George Soros ran, where over a decade it returned approximately 4,200 percent, it would be unwise for those interested in the agriculture sector to neglect the possibilities and opportunities in the sector and China over the next decade.

A commodity index fund connected to Jim Rogers should generate interest and profits, and in the hot commodity market of agriculture and China, it should be a winner.

 Commodity Surge

NO UPTICK RULE TIPS MARKETS DOWN

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A funny Ponzi scam story.  Seems that the scammer had an office filled with guys who wore earrings and gangsta clothing!  HAHAHA.  Even so, the investor gave them $20,000 and then, tried to get it back.  Also, news about two things: short sellers and the ‘uptick rule’.  Evidently, this was yet another Great Depression rule the GOP and DNC decided to ditch thanks to all the loot from the gangsta-ponzi guys.  We also visit the gangsta-Bank of America.  Yo, bro!  Give me some blow.’

Bloomberg.com: Worldwide

 JPMorgan’s Staley Calls Money Funds ‘Systemic Risk’ 

 

If these things are ’safe’, then they will have little profit in return. The problem with safety is simple: if you take risks, you can get bigger rewards.  But then you have to take losses. Note that not one of our gnomes want that!  Also note, they are begging for rules. Totally at odds back in 2007, when they were screaming for no rules at all.  It is hilarious that JP Morgan wants to ‘take systematic risk…out of the system.’  HAHAHA.

 

Bloomberg.com: Worldwide

“The people who brought down Lehman and almost Bear Stearns weren’t the banks, they were the money funds,” Staley, 52, said.

The finger pointing continues. It is truly hilarious that mega-pirate crews like JP Morgan, the guys who crashed the systems in 1907, are whining about others doing the same, today.  The Group of 30 are, as I explained in the past, the same criminals who designed, used and ran our systems into the ground.  Now, they want to float the boat they sank.  As a reminder, here is the list:

 

Ponzi scam victims fight back online | Technology | Reuters

During the easy money years of the ZIRP Japanese carry trade, anyone could be a financial advisor.  So of course, a bunch of crooks ran to this particular cookie jar and raided it.  Madoff, for example, began his career with his mother, of all people, a mere housewife, getting sanctioned by the SEC for illegal activities!  Like Madoff, this latest fine example of what is wrong with the US financial system, had a record of failures to back up his credentials. Both Madoff and Cosmo didn’t even bother with projecting the fiction of being good, anyone who visited the satellite offices could see, they were bagmen, not businessmen.

 

I knew one of the J-Mafia guys in Brooklyn, long ago.  Mr. C owned huge parts of Brooklyn and had a finger in many pies.  His office was shabby in the extreme.  He had a Hawaiian belly dancing doll on his desk.  He dressed like the I-Mafioso in Brooklyn only he used a lot of Yiddish rather than Italian.  If anyone crossed him, he had him, ‘Whacked’ which is Mafia-talk for blundering into the PR gang [as he called these thugs] and the victim would have an ‘accident’.  You know, fall in front of cars or fall down the subway stairs.

 

These later-day wannabe Godfathers are so nakedly obvious!  Madoff had to rent an entire floor of a major midtown building.  His ‘accountants’ were the ones in the shabby back room with the Hawaiian hula girls on the desk.  We always have to use our eyes and ears when handing out money.  The flippant way this was done for years and years was due to trust.  Trust in our corrupt, nasty, tax-dodging government.  The SEC failed miserably, in protecting investors and consumers.

 

FT.com / Comment / Analysis - The game changer

 

I forgot to talk about the ‘uptick rule’.  There are so many aspects to these messes, it is easy to overlook some of them.  It is now generally recognized by sane people that all the many rules and regulations set up during the Great Depression were good.  Getting rid of them caused this ongoing Great Depression II.  We can single out any number of old rules that were overturned, some of them very obscure, that allowed the gnomes to go gnuts [sic].  These perfidious little critters worked very hard to undermine all regulations, controls and restraints that prevented wholesale looting.  

 

Since the last of these wise laws were removed by 2007, the inevitable crash happened.  And couldn’t be stopped.  Since half of the rules were broken or removed by 2001, it was a simple matter of removing all of them 6 years later and voila!  We instantly began a major crack up of all the financial systems. In the case of bears tearing up criminal organizations: the uptick rule protected these criminals.  So I am not at all sorry, it is now gone.  It unwound very violently, I would suggest, due to the simple fact, it was long-delayed.  Years after it should have happened, it finally happened.  And of course, with great violence.  What a non-surprise!  But let’s look into this matter some more, OK?

 

FT.com / Comment / Analysis - The game changer

An efficient market would rapidly expose all of the ponzi schemes and goodfellers gobbly-gook faster.  The business of credit default swaps is simple:  it should never be allowed to exist.  The fact that it grew to be bigger than the entire planet’s wealth is good enough sign that it is fundamentally bad.  It is directly from the Cave of Wealth and Death.  Therefore, it can rapidly grow to infinity and equally or even faster, go to zero.  

 

We already know that solemn pledges to obey rules and to be ‘closely regulated’ all flounder and fail due to the con men bribing politicians to look the other way and let things run riot.  This mega-crash makes it painfully obvious, we can’t trust anyone to obey rules, practice sobriety or behave themselves.

 

July, 2008:  The Butterfly Effect and the Uptick Rule — Seeking Alpha

The butterfly effect has always been an interesting concept to me. The notion is rooted in chaos theory, and argues that small variations in initial conditions can cause massive differences in a final event. In other words, in a dynamic system (example: the stock market), any change, no matter how small, can result in completely unpredictable behavior. Thus, a butterfly flapping its wings (a small event) can cause a tornado in some part of the world (a massive event).

This story was written exactly one year after the uptick rule was wrecked by the SEC on orders of the maniacs who believe in ‘free markets’.  It should be painfully obvious at this point, that ‘free markets’, like ‘free trade’, are hoaxes.  They lead directly to fraud, chaos and anarchy as well as total destruction of all existing systems.

 

We have ’systems’ because they ‘control’ things.  Like driving a car: driving at high speeds, with no one at the wheel, leads to a crash!  Duh!  Any juvenile delinquents who think we can run a vast, global banking or trade system with no restrictions and controls should be walloped with a belt.  No sane social system of any sort lasts very long, when people can do whatever they please.  What if it pleases me to take my guns and go terrorize the neighbors so I can steal all their stuff?  Of course not.

 

Now, the uptick rule suspension is what I would call, instant retribution.  Cox, the GOP goon in charge of the SEC, was an infantile man who thought, free markets and free stock markets would lead to vast wealth.  So he decided to finish off the very last SEC rules set up when the SEC was set up in the 1930’s.  In doing so, due entirely to his idiot ideology, this move caused the crash to be even worse than when 99% of the SEC Great Depression rules were eliminated.  Serves the gnomes right!  Indeed, this is always what happens to them!

 

They are so eager to screw around, they ignore obvious danger signs!  If anyone puts up barriers, they kick them down, screaming, ‘I want more!  I want more!’

 

Now, according to the story from last summer, the crash, staring in July, 2007, started in July.  But I have a very good memory and besides, can go look at my own blog for stories.  The global crash [not a bit of which had a thing to do with the 'uptick' rule] began on July 17, 2007 and was, I believe, due to the sudden unwinding of the Japanese carry trade right after China and Japan exchanged very angry comments over the value of currencies.  True, the US stocks fell during late July, 2007.  But that huge drop of nearly 600 pts was immediately erased.  Stocks rose higher in September/October to a crest of nearly 14,000 pts. Then, its decline was very ragged for half a year, then, it plunged off the cliff around the same time frame the Great Crash of 29 plunged off the cliff!  

 

 

The similarity between this and 1929 is very striking.  And like then, global