Where Are You When We Need You, Paul Revere?

Did you notice that Zygi Wilf was, after his purchase of the Minnesota Vikings, as lucky now as Prince Charles? Except for the issue of waiting, with so little hostility directed at the overall process of royalty. “If you got a bill in the mail every year for seven bucks — that’s the cost of a beer at new Target Field — would you consider that a worthwhile contribution for keeping your pro football team?” writes David DeLand in the St. Cloud Times.

Would they ever put the question to the voters in England. About the cost of Buckingham Palace? Or a new house every thirty years? Or about just continued public subsidies to The Royals? In a nation that never believed in royalty, would they ever put the question to Minnesotans?

Where, by the way, had the Kansas City Royals come up with the money to refurbish their stadium, Mr. DeLand of the sports department?

Did you have to be in the souvenir business to notice that licensing fees in the NFL went to the NFL. The NFL that never paid for new stadiums, like was required in Europe. MLB was late to the game over this concept of licensing fees, by about five or ten years. When, beginning in the 1970s and ever since, it was all about the cost of the official logos on your purchases.

Licenses and licensing fees. Driver’s licenses. Fishing licenses. The revenue always went to a government body. Except when it came to sports authorities. In these parts, the local NFL franchises never paid for new stadiums. The one that was demanded in the late 1970s, with a dome. The father of the mayor of Saint Paul spent a lot of time seeing that the bill was passed. Yeah, in a day before there seemed to be franchise rights sold for elected office, which too many politicians somehow had passed along. Since the days of the Kennedys. The Cuomos. The Bayhs in Indiana. All those bleeding hearts. And the Bushes. And the Clintons. Now with their organized ways to show up at every car crash. Or hurricane. Like they cared.

When public service was now something else. About only power. Too many thoughtless if not clueless sons and daughters of politicians. Jock sniffing for votes. Trying to run a show that a Prince Charles could only envy. With real power.

The NFL that never paid for new stadiums, like was required in Europe. Or out east. With too many politicians seeking autographs instead of tax revenue from these athletes. There should be a national tax on MLB and the NFL, for revenues raised to pay for the next sports stadium they felt they needed. And yes on the Player’s Association and the NFL Players’ Union, who got something like 55% or more of the revenue.

Prince Charles could envision himself in the picture, as the role model for local baseball people as they made trips to other fiefdoms in the kingdom of MLB, to view their new palaces. Though Prince Charles had been able once to send his wife, when he was married to a blonde, when he tired of it all.

There was a day when kings and queens gave everything away for free. For loyalty. Before the politicians and manufacture’s reps entered the picture, with blackout rights. Did you notice all the hostility directed at the Goldman Sachs who, like all the reptile oil salesmen at the reptile oil emporium, were making so much? And the ensuing jealousies there. Over money and good looking blondes.

Note all the ambivalence of the audience, the ones watching for free, about these thugs who had no investment in the game. Or the carpetbaggers, with only manufacture’s reps working for them as reptile oil salesmen at the reptile oil emporium, until they acquired the local NFL franchise, and entered the picture.

”There’s a critical mass of legislators, fans and business leaders,” said Lester Bagley, the Vikings’ Vice President of Public Affairs and Stadium Development. “Who believe this is the year.” Were they the ones on the bicycles at rush hour, tying up traffic? Mostly on Fridays?

“We know that this is a tough discussion, and the economy is tough,” Bagley said. “But we think we have a good story to tell: What we bring to the community.”

His current neighbor across the street is Hennepin County Medical Center, a hospital in the community that was really bleeding, where they seemed to think 2010 was the year for them. Or hope. Like a lot of Viking fans. With bleeding hearts, over politics and sport. This was finally the year? But at HCMC, those fans would die, actually die, unless something was done about the budget issues. This year.

Just as the Prince’s Foundation for Integrated Health, yeah under Prince Charles, was being shut down for fraud, the Redcoats were coming. One if by land. Two if by sea. Or maybe by bike. Or ambulance. Camouflaged in purple.

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The State of the Union

When credit card companies gave you zero percent rates….giving away product, charging nothing. Now the government is doing the same. For banks,getting zero percent rates so they could keep operating. As the banks were not extending anyone credit.

By Congressional Act, the Federal Reserve was founded in 1913 specifically to combat financial panics, including runs on banks. Since the Fed, when the economy was overheated during the subprime mortgage boom, did not regulate interest rates to dampen the ardor of member banks for mortgages as it could have, Ron Paul was calling for greater Congressional control of this private entity.

When would the banks get hit by the government by the over the limit fees, like those banks charged their customers on their credit cards?

The system….when the affluent paid the least, and the poor paid the most. For free checking accounts. Unless you had less than $800 in your account, and the bank charged you a monthly fee of $12. At banks, or at your dental clinic, it was all the same. The poor were charged the most. Unless you paid Delta Dental who got a special discount, and the rest were left to pick up the slack. At the banks, U S Bank in Minneapolis, the poor were paying for the rich.

And there were no more free toasters. Nor free checking. Ending TCF’s long-time “totally free” checking account, the regional bank TCF Financial Corporation plans to begin charging maintenance fees to customers with checking accounts, CEO Bill Cooper said in a conference call with investors on Thursday. The rationale was prompted by new federal regulations which likely will reduce revenue from overdraft fees.

Milton Friedman’s fundamental flaw was his fixation on the business cycle as expressed by the stock market, rather than looking at the whole economy with its wide range of meta-finance concerns such as agricultural economics, labor economics, population economics, and the economics of war, pollution, and development. The current administration did not seem to recognize the ongoing fundamental flaw. There was little real difference between the Republican and the Democratic leadership, under the influence of the lobbyists who paid both parties.

Remembrance Day

On Remembrance Day, there is still a poignant remembering overseas of the cost to Europe. War had a way to bring home the present day cost of risk appetites.

Social mood. Political campaigns. Financial fate. Markets go up and they go down, even in the age of austerity, as in the age of conspicuous consumption. By understanding history, humanity has the power to change history. War, and the way we live our lives.

We live in a world that has perverted the concept of remembering people. The media had a cheap story to fill the airwaves now on each September 11th and November 11th. In Europe they still called it Remembrance Day, where the people remembered the war dead and not the military. I was in London on this day in 2000. “Flanders Field.” Armistice Day was not a promotion for the armed services or to be used by the National Guard to recruit the mostly local youth, a lot like those pro football players and their fans in town who “root for laundry,” as Jerry Seinfeld reminds his audience. The living athletes of combat. Cannon fodder. The human cannon fodder, used too often in the name of nationalism. The “National Guard” that had been perverted by public policy to become an invading army in Iraq, and maybe one day in Afghanistan? Today was supposed to be a day about the individual people lost to war, not about the uniform worn. At the end of the Great War, in 1919, because of the missing bodies to bury, the November 11th observance was introduced, with a two minute silence. Unbearable mourning continued long after a war was over. Today was supposed to be a day about peace. About real people gone.

Reusse & Company this morning. How does an interview of Major General Larry Shellito of the Minnesota National Guard relate to November 11th and Armistice Day? A day about peace!. Armistice Day was about turning swords into plowshares. November 11th in Europe was Memorial Day, not for the military industrial complex, as Dwight Eisenhower called it, but about individuals compelled to go to war in the name of government and nationalism who died in service. And the people who went, that the world would one day be a better place.

The“National Guard” that had been perverted by public policy to become an invading army in Iraq and in Afghanistan? How had it happened? The “National Guard” that had replaced the all volunteer army. And why? Since September 11, 2001, the U .S. has deployed troops in 33 countries, according to Major General Larry Shellito. Why? And about the expense of all this? Was the Department of Defense any different than that vote on health care. Which was not at all about health care but health care insurance, and paying for all of this. Without much discussion at all about the real issue of health care. How many MRI machines were needed in a community. Without a discussion of preventative medicine. Why did local kids need to be dispatched to 33 countries in the last 8 years? And where was the discussion on all of this? About the use of “The National Guard?”

No one asked why. Elections have been spun to be one long drone of an argument between two sides. The two sides that had long ago quit communicating, in a world that was unable to find much in the way of meaning. If you thought that television and radio were sounding boards on the issues of the day, then your moderators had become nothing more than game show hosts.

In a current world without conscription, in a world of voluntary service, somehow the message was getting across about the glamor of swords. And now a word from the sponsors.

I am not sure why Major General Larry Shellito of the Minnesota National Guard was invited on Armistice Day of all days to be a guest. On morning radio, on Reusse and Company. I did not listen long to the remainder of the show. I don’t think there was a discussion of what happened when you take the young and place their lives in peril, in places where they are seen as the enemy. In some of the 33 places. Thirty-three places. Invading armies? An invitation to the major general as a guest by the same guy who wrote today on his blog:

“Pro football players were merely mercenaries moving through a city for the purpose of collecting a large paycheck. There would be replaced by a different group of mercenaries in a few years, and the foolish fans would cheer for them for no reason other than the appearance of their jerseys.” So wrote Pat Reusse today.

In the civilian world, leadership has to be re-earned in each generation. By sons who followed fathers and grandfathers. In attempts to try to see the future through the past. My grandfather won a purple heart in World War I. He paid a price for his medal every day for the rest of his life. It was more than what combat had done to his hearing. The life expectancy of those Woodrow Wilsons was always so much shorter than the soldier.

“Be careful when you break horses that you don’t break their spirit too.”

If sons and daughters took the time to try to understand history, humanity had the power to change history. In Minnesota, people spent more time contemplating the NFL than they did the deployment since September 11, 2001 of U .S. troops in 33 countries. We thought more about the people there than we about the dollars it had also cost for them to be there. And not many folks were asking why. Or why this was done under the auspices of “The National Guard.”

There was a cost to all of this. In a world of voluntary and involuntary thrift, with personal savings and public policy focused on taxing. In a world where voluntary service could fast become involuntary, as government officials induced borrowing rather than pay now these out of pocket expense. The single greatest risk as the equilibrium between asset classes remains a seismic shift in currency markets. What was this defense policy doing to the U.S. dollar? When a currency holds a nation together, and “the economy — perhaps society at large — assumes more, not less, risk as a function of the path of our attempted fix,” writes Todd Harrison. A Congressman from Tennessee cited Albert Einstein’s belief, in a joint hearing chaired by Senator Kent Konrad from North Dakota, that the greatest power on earth was not atomic energy but compound interest, in this case as a threat to the future of America.

Counting the cost. On Remembrance Day, there is a perversion to discuss the engines of financing as much as there is to discuss the success of recruitment as Major General Larry Shellito of the Minnesota National Guard was asked. In a nation that just no longer discussed war.

On Remembrance Day, there is still a poignant remembering overseas of the cost of war. It is seen in the streets of London. In America, Armistice Day was politicized, used as a photo opportunity by politicians hoping to remain an elected official for an entire career, and calling it Veterans’ Day. It was not longer remembered to commemorate the War To End All Wars. About the real people gone. Except in a Europe, which continues to manifest the loss of one generation, of its best and brightest. Watching the scenes this week at the Brandenburg Gate, and seeing the difference in the caliber of leaders 4 generations later, wondering if Europe had ever recovered from void of the War to End All War. Counting the cost.

It must have seemed really heroic to fight in The War To End All Wars.

Blog Networking in Real-time

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Elections & Tailgating at TCF Stadium

It can happen in Minneapolis. It will happen here. In October in Madison, Wisconsin Mayor Dave Cieslewicz had proposed city budget cuts that would have closed five of the city’s eight ice skating rinks this winter. It was the system.

The system. As on display with the parking system at the new TCF Stadium. When only parking lots sanctioned by the Minneapolis City Council with their zoning laws, open to tail-gating. Local parking lots were shut down on game day, as part of the system, as designed and enforced by the Minneapolis City Council. When elected politicians lost touch with the real world.

The system. The system, with mayors like in Madison. In Madison, where Mayor Cieslewicz was forced to back off his proposal to close those five city ice skating rinks this winter. Only after the uproar. It can happen in Minneapolis. In Minneapolis, where it actually has been proposed to have the Minneapolis City Council take over the sovereignty of the parks.

Steve BARLAND, dedicated to preserving the independent park board model to protect what has been offered at the parks in the past. Leaving the cornerstone in Minneapolis intact in hard times. As center of neighborhoods, with day care, music for pre-schoolers, youth development, and senior card clubs. The parks.

With green spaces left long ago within a city. These markers to ensure the parks would long endure. For the people. Parks. Those set asides with active use. BARLAND. Of the people, and for parks dedicated to the proposition that all men, all women, are created equal. BARLAND, who was running, who had come to dedicate his time that a portion of those fields would long endure. In the upcoming era which will be all about closings. And budgets.

BARLAND, dedicated to the proposition that the heart of our community is the recreation center as a gathering place to meet and play. Places to take classes or to play.

Steve Barland, championing the form follows function philosophy, after witnessing the power of recreational activities in lives. Life-long learning places about what really counts in a community, and then teaching the next generation. Learning at rec centers the lessons from your neighbors.

It is altogether fitting and proper that you should vote. And vote BARLAND. With his vow to vote to never close a single recreation center. Here was the Park Board Commissioner candidate whose well stated belief was to leave parks open as always, promoting increased participation in youth sports, as well as adult and senior programs. When difficult decisions about budget cuts arrive, Steve Barland as the 5th District Park Board Commissioner means a referee making calls to not only keep rec centers open.

The new world order and that system of the new world order. Politicians and the good old endorsement system, which prevented real people from wanting to get involved in the system. The new world order when regular working stiffs quit seeking public office. In a world with those political endorsements and connections. Until politicians lost touch with the real world. Like in Madison, Wisconsin. With candidates who did not quite understand quality of life came from having parks open. Or in St. Paul where city-run youth centers were expected to be reduced from 41 to a 25 in 2010. It can happen in Minneapolis. If you want a park board to resemble the Minneapolis City Council and their system, as demonstrated by the way the parking situation is handled at the new TCF stadium….well, it all started on election day.

For the next Board Commissioners dealing with budgets, the unfinished work of the parks begins. I want a commissioner with a direct connection with park and recreation leagues, and to the people who participated. I want a commissioner who remembered. Someone who was real. Someone who was of the people, for the people. Steve Barland as the 5th District Park Board Commissioner.
The system. It all started on election day. Now. It all started with simple park board elections.

BARLAND.

Networking

Over the past 6 months the world has seen the Achilles’ heal of Wall Street that has been populated by the new Ivy League graduates of the last decade. What it is that has been passed along to the next generation. It was not just the professional athlete and his/her agent that are money grubbers:

From Frank Rich of the New York Times:

“In the bubble decade, making money as an end in itself boomed as a calling among students at elite universities like Harvard, siphoning off gifted undergraduates who might otherwise have been scientists, teachers, doctors, entrepreneurs, artists or inventors. The Harvard Crimson reported that in the class of 2007, 58 percent of the men and 43 percent of the women entering the work force took jobs in the finance and consulting industries. The figures were similar everywhere, from Duke to the University of Pennsylvania. Dan Rather, on his HDNet television program in December, reported that at Penn this was even true of “over half the students who graduated with engineering degrees — not a field commonly associated with Wall Street.”

Currency

                                               c

Government and bank protection were always synonymous.  Universally.  It was the order part in Law & Order.  These two entities had always been wed.  Or  paralyzed together. 

The graph shows that total gross domestic product (GDP) now totals the total amount of debt in America. 

 

Those concerns about deflation come true as 2008 came to a close.  Look at the return in your 401K.  The opposite of appreciation was depreciation.  The S&P’s finish on February 27, 2009 was its worst since the 731.54 hit at the close of Dec. 18, 1996, with its percentage decline in February proving to be the second-worst on record following the 18.4% hit that came in 1933. The world certainly looked to be a lot more precarious than it did in December 1996, so the performance in 2009 has come as no surprised to me.  My only surprised was that it took so long to reach 735.   

 

Feb. 27, 2009

HONG KONG (MarketWatch) — Japan‘s industrial output contracted by a record 10% and consumer spending fell in the first month of the year, data released Friday showed, adding to the growing perception that the No. 2 global economy this year will undergo the worst recession in more than half a century.  Output is expected to decline a further 8.3% in February and increase 2.8% in March, according to survey data compiled by the trade ministry and published and released Friday. Consumer demand is likely to undergo further setbacks in coming months as corporate earnings come under pressure and as companies reduce staff numbers, Bank of Japan policy board member Tadao Noda was cited as saying in a speech Thursday. Market watchers expect the economy to decline by double-digits in the first quarter of 2009.

 

 

 

NEW YORK (MarketWatch) – Banks insured by the FDIC posted a collective loss of $26.2 billion in the fourth quarter of 2008, the agency said Thursday, as the percentage of charged off loans tied a quarterly record 1.91%. The compared to a $575 million profit during the fourth quarter of 2007. “Rising loan-loss provisions, losses from trading activities and goodwill write-downs all contributed to the quarterly net loss as banks continue to repair their balance sheets in order to return to profitability in future periods,” the FDIC said in a press release. Sheila Bair, the agencies chief, said in a press conference that there will be no quick fix to the banking crisis and that troubled loans will keep rising. She said the number of “problem” banks identified by the FDIC rose to 252 in the fourth quarter, compared to 171 banks at the end of the last quarter. 

 

The dollar was 110 yen in September, but the dollar slipped to 97.53 yen from 98.34 yen late Thursday, but was still up 5.5% for the week and 9.6% for the month of February after creeping down below 90, as Japan‘s economic picture darkened. 

 

WASHINGTON (MarketWatch) – The Federal Deposit Insurance Corp. on Friday voted to charge banks a one time “emergency special” fee to refill its insurance fund to protect depositors, increasing costs to troubled financial institutions by $27 billion.

 

“Deposit insurance remains a good value,” said FDIC chairwoman Sheila Bair, in a statement. “Public confidence in the FDIC guarantee has helped assure a stable source of funding for banks in these troubled times.”  The one-time assessment will cost insured banks $12 billion on Sept. 30, on top of the $15 billion they own in periodic fees. The combined $27 billion will add funds to the FDIC’s Deposit Insurance Fund, which bank regulators believe could be depleted significantly due to bank failures. The fund is used to reimburse customers for deposits of as much as $250,000 when a bank fails.   

 

Banks are being assessed a one time 20 cents fee for every $100 in insured deposits. The FDIC will collect the fee in the third quarter of 2009. A bank with $1 billion in deposits would pay $2 million in fees, according to the agency.  

 

LONDON (MarketWatch) — Hard times are apparently getting even harder in the airline industry.  Taking discount travel to a new all-time low, Ryanair Holdings is considering charging passengers to use the toilet in flight, the Irish airline on Friday acknowledged in a statement. “Not everyone uses the toilet on board one of our flights but those that do could help to reduce airfares for all passengers,” the airline said. The seriousness of the statement was hard to ascertain — it said perhaps that CEO Michael O’Leary “was just taking a piss this morning,” referring to a radio interview the controversial executive had.  

 

SAN FRANCISCO (MarketWatch) — A wave of corporate bankruptcies triggered by the credit crunch and deepening global recession has pushed the number of credit-defaults swaps auctions to record highs, testing the system as it faces increased pressure to establish structures similar to other trading markets. Banks and institutional investors in February participated in 13 credit-default swap auctions on the defaulted debt of eight companies. 

 

NEW YORK (MarketWatch) — The World Bank and two other multinational institutions issued a joint pledge Friday to provide up to 24.5 billion euros ($31.2 billion) to support the banking sector in Eastern Europe and fund lending to businesses. Analysts, however, were skeptical that the size of the announced support would be enough to address the region’s vast economic woes. Investors have grown increasingly concerned in recent days about the exposure of Western European corporations, including banks, to fragile Eastern European economies. The vulnerability of Western banks, particularly those based in Austria and Sweden, was spotlighted by ratings agency Moody’s Investors Service last week.  Total European bank exposure to Emerging Europe runs in excess of $1.5 trillion, he said. 

 

NEW YORK (MarketWatch) – Two Federal Reserve bank presidents squared off Friday at the University of Chicago Booth School of Business and Brandeis International Business School, over the central bank’s new credit easing policy, with one describing it as essential and the other saying the jury is still out.  Federal Reserve Board Chairman Ben Bernanke has called for the Fed to be more transparent and Friday’s debate was one that has likely been repeated behind closed-doors.  The Fed’s balance sheet has ballooned by a trillion dollars and is on track to add a second trillion. It has been lending money to banks in return for almost all forms of collateral, including mortgage-backed securities. The goal is to bring down risk premiums that have strangled certain markets. Former Fed governor Frederick Mishkin said he supported the policy, but called it “scary” that the central bank was buying private assets. He said the Fed should adopt a formal inflation target so it can convince the market that it needs to sell them.

 

The danger is that prices keep falling so consumers delay purchases, which leads to lower prices — especially for non-essentials — and deflation takes hold. “Deflation will be a more enduring theme than many realize,” David Rosenberg, Merrill Lynch’s chief North American economist, said in a recent research report. “This deflation cycle may have another two years to go.”

 

The consumer has shut down.   And the Asians need to start buying their own product.  Exports have led growth in

Asia for 50 years.  If yen weakens too much, then American companies will have trouble competing with Honda.  And real deflation sets in.  We should all be praying for the strength of the yen as well as the dollar, in the days of March. 

Earthquake in Denver

                                             

I had this daydream that I woke up to a Beattles song. “I read the news today. Oh Boy…..Woke up. Got out of bed. Ran a comb across my head….”

Tracy Ringolsby was interviewed by Pat Reusse at 7 am from Tucson, where he was when the last edition of the Rocky Mountain News came out. He will be increasing the number of columns for Foxsports.com from one to two per week. He will bedoing a pre-game show for the Rockies broadcast for either 104 broadcasts or 140 (I forget what he said.) And he talked about Scripts Newspapers, which have no debt and only one newspaper losing money. No one there was surprised that ownerships did not tolerate operating a paper at a loss. The Rocky Mountain News was the oldest corporation in Colorado, at 150 years in April. He also said it was the most profitable newpaper operated in Denver. What most impressed him was the quality of his co-workers’ work product to the end, even though they have known for 3 months that the plug was going to be pulled.

Beginnings are not as easy to know as endings, wrote Bernie Lincicome.       

Though they have known for 3 months that the plug was going to be pulled, the writers kept going about their business. In the face of economic death. With the same quality that was there, day in and day out. 

Where was that Sgt. Pepper’s Lonely Heart Club LP?

Confidence Games

 

The CEO of Morgan Stanley was on the Charlie Rose Show talking once again, like so many these days, about the broken confidence in a financial institution:  when the answers of these people are so disingenuous.  Or just dishonest?  There was the usual language of the last 6 months.  Crisis in confidence.  Too big to fail. 

 

“The day’s Wall Street gains are more of a “reflex” than any conscious recovery effort, says Al Goldman of Wachovia Securities.  Goldman would also like to write President Obama’s to accentuate the positive in tonight’s address before Congress. “President Obama has been stressing the extreme negatives in the economy,” Goldman says, “but if you keep frightening the public, the recession is going to get worse, not better.”        

-Marketwatch  

 

These financial wizards created this mess in the first place.  So their life and their lifestyle were threatened and Al Goldman wanted it back.  Any media outlet should have been embarrassed to run his quote.  These financial wizards did what bin Laden and his disciples only dreamed of doing.  There was a revolution in the financial system last September.  Either Al cannot  figure it out or he wants his old world back. 

 

And no one was talking about putting the financial wizards in jail, only limiting their compensation.  The CEOs of the Morgan Stanley should have been fired.  These guys have betrayed the public trust.  So if you actually report the truth, if you keep frightening the public, the recession is going to get worse. 

 

Crisis in confidence occurred when people quit believing in you.  Or maybe when you quit believing in yourself.  Maybe because such great doubt came from the lack of beliefs.  Maybe because there had never been any there, there.  When you sold credit-backed derivatives that actually had no foundation in the evolving system of the last 15 years.

 

The concepts:

 

Too big to fail…To young to die…A new form of immortality.  Over valued.  Overvaluation was part of this too big.  My home was over value in 2007.  And in 2006.  It’s a beautiful day in the neighborhood.  But the neighborhood was over valued.  Who did not recognize it?  Who analyzed a reason for refinancing an over valued home?  

 

“Wachovia is committed to being the best, most trusted and admired financial services company. We carefully consider the impact of our business activities on shareholders, customers, communities, employees, and the environment. We leverage our social, economic, and human assets to deliver business results in a way that supports fair business practices and sustainability.” 

 

Wachovia that had to be acquired by Wells Fargo.  Wachovia Securities and Al Goldman work under the umbrella of Wachovia.  “Wells Fargo and Wachovia are joining forces.  You’ll continue to receive the superb service you’ve always enjoyed, and you will gain the strength and stability of one of America‘s strongest companies.”   

 

According to their website, Wachovia is now “TWICE AS STRONG.”  Well Fargo, actually an admirable bank through these times, is not bragging the same way.  And Al Goldman wants to writes speeches.  For the president of the United States. 

 

It was the health insurance approach to banking.  The healthy ones are paying.  So that the sick ones can recover.  Yet there was no premium paid.  There was no underwriting.  There was no health maintenance going on.  Investment banks living on the edge.  Like that bank Wachovia.  

 

This CEO at Morgan Stanley was over 60.  He had to recognize all of this.  It was another thing if you were 32-years old, had been raised in all of this, and actually believed what people had always told you in your life.  No wonder there was a crisis in confidence. 

 

In 3^rd world nations, the emphasis is not on material possession but on survival.  On spirituality.  And on family.  From Asia to Latin America.

 

Then there was A-Rod.  Too big.  Because of steroids.  Maybe a lot like those 5 investment banks that no longer are investment banks.  He was about 32-years old.  He surely did not believe the press clippings in 2003.  The lack of confidence, the underlying sense that you were not worthy of all this?   The $260 million contract?  And a sense that you might lose all of this. 

 

The news this year seemed to be about liars and cheats.  There were 2 new columnists at the local paper.  A good columnist sets off to get a story but without a good clue what he/she will write about.  The story comes to you.  A good columnist just goes to a place in search of a story. 

 

“You will be my witness.” 

 

 

Game of Shadows

 

Trends.  Business trends are so evident.  About the dollar’s movement in currency markets.  About falling index averages.

 

“Today indirect bidders, a class of investors that includes foreign central banks, bought 44.8% of the sale, the highest proportion since 2004, indicating strong demand from investors.  Treasury Department sold a record $32 billion in three-year notes today to yield 1.419%, the first tranche of the biggest quarterly sales of notes and bonds on record,” reports Marketwatch.

 

This is a financial system crisis, not a sub prime mortgage crisis. It was not just the derivative market. It was the entire system. It was everybody.  Here.  In England.  The crisis is not going to go away.

 

The U.S. dollar strengthened against all but five of the 16 most actively traded currencies today.   If you wondered why, in the UK, Brown and Treasury Minister and Chancellor of the Exchequer, Alistair Darling, on Monday filed a second rescue plan. Willem H. Buiter wrote on January 25, 2009, its impact has been virtually nil in the market, which has continued to punish the banks in the stock market, and among the public, which has failed to find a clear message. And above all, because the market’s reaction suggests that perhaps even the government is able to guarantee the future of British banks. “In the UK there is no bank is solvent. And if there is, I do not know,” also said Rogers.  The crisis in the banking system has been accompanied by the collapse of the pound sterling, which traded at two U.S. dollars a year ago and on Friday paid $ 1350, the lowest change in nearly one quarter of a century. The pound has been paid for years to 1.5 euros and is now on the verge of parity with the European currency.  Its weakness is a combination of several factors: interest rates are on the floor and is expected to fall further, the housing market remains in crisis, the current account deficit is through the roof, economic prospects are very bad, it was have triggered the red in the public accounts and banking turmoil of recent days have come to weaken the currency.” 

 

Saved banks….but banks not fixed.  As a result of big banks in too many businesses, this republic is threatened.  The scale of the problem.  Bloomberg has reported the total bailout and loan guarantees, the stimulus, total $9.7 trillion now – enough to pay 90% of all US home mortgages.   This was not just sub-prime crisis.  A calamity was a lot like fire.  People cannot buy homes and cars from a banking system where half of the banks are on the brink.  And the rest of us cannot sell. 

 

Trends. Business trends are so evident.  Deflation was seen in the price of oil.  Deflation was in the news from China this week.  In China, consumer prices were expected to decline further in coming months, Marketwatch wrote yesterday.   Did they edit “deflation” in the headline?  “Merrill Lynch’s Ting Lu said there were few risks of sustained deflation in China this year.  Prices would be supported against a backdrop of loose monetary policy, the removal of some price controls, ramped up government spending, and commodity prices that appear set to rally off lows. The broker defined deflation as a persistent decrease in the general price level of goods and services lasting for a prolonged period.”  China suffered deflation for two years ending in 1999 following the Asian economic crisis and for about a year ending in 2003. 

 

The down side.  Government and banks feared deflation.  For banks, holding cheaper assets, in default.  Government taxing faliing properties.  Banks, not liquid.  With no value.  A little more than half the banks.  The big banks.  

            

So act.  About commercial paper.  Paying off all debt.  Before the next calamity.  This week. 

 

The Great Gatsby was THE great American novel.  Wealth polarizes.  You learned that traveling in a poor 3^rd country.  The rich are afraid of the poor.  It has nothing to do with race, color, or creed.  That September 11^th event.  It was all based on wealth.  Striking at Wall Street.  Striking the Pentagon. 

 

We had lived through times when banks quit playing for the community.  When Citibank arrived.  And put that local banker out of business.  And then put their name on that new stadium replacing Shea Stadium. 

 

We were gettting nothing these days but stories about the economy.  They were cheap stories to cover.  And the rich, because they were worried, were tuning in.  The message was always directed at the rich. People treated those with money differently. 

 

The image of baseball was tarnished again this week.  By the same atmosphere that had tarnished Wall Street.  Executive pay.  And super stars.  Giving limited access to the press,

everyone survived.  People treated those with money differently

 

Saved banks….but banks not fixed.  The scale of the problem.  Bloomberg has reported the total bailout and loan guarantees, the stimulus, total $9.7 trillion now – enough to pay 90% of all US home mortgages.   This was not just sub-prime crisis.  A calamity was when people cannot buy homes and cars with a banking system where half of the banks are on the brink.  And the rest of us cannot sell homes. 

 

As a result of big banks in too many businesses, this republic is threatened.  Our existence.  The system was non-viable when the majority number of banks are insolvent.  The nation’s capital.  It was now about the taxing power in Washington, and not the city. 

 

Behavior modification was to come, in tax policy.  

In the Shadows

 

Fairness.  You expected it in the courts.  With judges.  I expected it with the daily newspapers.

Today it as reported on the Workday Minnesota website that last September when the Twin Cities labor community rallied outside a Wayzata’s office for Wayzata Investment Partners, the Minneapolis Star Tribune did not cover that story.  The rally concerned the attempt of Wayzata Investment Partners, the private equity investment firm, to impose dramatic concessions in workers’ wages and benefits on Cascade Pacific Pulp, a longtime union paper mill in Halsey, Oregon. The rally was in the wake of the Republican National Convention and was an attempt to get visiting protesters in town to support steelworkers from Oregon.  It was not a local story but the “anarchist” website, self-described, had directed their supporters to stick around for an extra day or two to attend the rally.

 

David Brauer of MinnPost has since reported in the last month that Wayzata Investment Partners was the largest creditor of Avista Capital Partners as revealed in documents filed in the bankruptcy procedure of the Minneapolis Star Tribune.  Avista Capital Partners had purchased the Star Tribune in December 2006. 

 

It might be fair to conclude that the Minneapolis Star Tribune will not be fairly covering the story of their own bankruptcy. 

For anyone cheering for the paper to survive, this news does call the question how Avista can declare one business bankrupt yet continue to operate businesses that operate oil rigs and manufacture wound care products.  In the world of investments, it no longer was the doctrine of survival of the fittest and the hunger that goes with the quest, but simply one of money for money’s sake, when the end justifies the means.  

 

Most of the news today was about the ground hog seeing its shadow, without mention what was lurking in the shadows. 

 

Fairness.  I expected it with the daily newspapers.