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September 2, 2012

Naming Names

Filed under: Minneapolis Star Tribune — baseball91 @ 8:22 PM
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Standards of care. Standards of journalism. Nancy Barnes as editor of the Minneapolis StarTrib today writes of the violations off the standards of care. To edit her piece today:

“The case of the arrest of Todd Hoffner, the Mankato-State football coach, with charges filed against thim for child pornography, has produced some difficult choices for media organizations in this era of viral news. Hoffner was initially arrested before the county attorney could file charges.

“Whether to name him was the first question of the evening. Like that of many organizations, the Star Tribune’s policy is, unless in extenuating circumstances or in a high-profile case where the facts are widely known, not to name names – until somone is charged. When a suspect is held for a period of time without charges, the Star Tribune faces the question of whether to name a suspect. Concerning the reputation of an innocent person which can be irreparably marred if never charged, that decision to name names must be made by a top editor.” (Like the top editor has the best judgment.)

“Given his position, as well as the fact of his arrest was widely known, his arrested was made in public, the Startrib chose to name him in the first story about his arrest. Upon examining the details, we knew that he had been publicly escorted off his practice field.” (How?) “An initial Internet search produced half a dozen news stories, including the details of his arrest.” (And the veracity of others people’s stories came from what sources?)

“A far more difficult decision came with the Star Tribune’s policy not to name the victims of alleged sexual abuse (or pornography) if withholding their names would protect the identity of the victim. When the legal documents were released to the public, and actiually reviewed, Hoffner had his three children dancing naked on his cell phone (based upon the nature of the videos per the counts in the criminal complaint.)

“The first story relating to the two counts alleged in the criminal complaint against Hoffner were posted on the Startrib website without including the fact that it was his own children in the videos on his phone. Then the debate began.”

“The two counts alleged in the criminal complaint which WE read described the activity depicted in the three videos. The editor in charge of the story argued that it would be impossible to cover the case without citing that fact that these were family videos which would be the heart of this case. (And the veracity that these were his own kids came from the district attorney prosecuting the case?)

“”I want to know,’ the editor said, ‘what the wife has to say.’ Even the condition of Hoffner’s release hinged on whether Hoffner would have supervised or unsupervised visits with his own children. On the other hand, we wondered how the children would fare if this information was made public. (So why didn’t a reporter call the wife before running the story? And what group of people were wondering along with Nancy Barnes?)

“Once again, I did an Internet search to see what details were already public, and received a stark reminder that the viral nature of news in this era often takes these decisions out of our hands. Many news organizations in the Mankato area already had noted that the videos in question were of Hoffner’s children, and a person could easily find several Internet links with that information.” (So the journalistic standards are now based upon what the editor finds in other people’s stories, and the veracity in these Startribune article is like the Saint Paul Crime Lab.)

“We did not think readers could understand this story without knowing that the videos were of Hoffner’s children, but most important, we did not believe that the Star Tribune could protect Hoffner’s children in this instance. (So the duty to protect the Hoffner chidren had fallen to the Startribune?)

“At the same time, we knew readers would be upset if we didn’t treat the children with great care. Consequently, we instructed our editors that they could include this information in our story — but low in the story, not in the headline or lead.” (So the standard of journalism now include a concern about upsetting readers? And the placement of information low in the story somehow protected what were one-time standards of carer?)

“I share this with you because, as we anticipated, a number of readers called and wrote, worried about the impact of these stories on Hoffner’s children. I want readers to understand that we share your concerns and do not make these decisions without a great deal of thought and discussion, knowing that not everyone will agree with our call.”

This case poses some lasting questions for the Startrib concerning how it intends to be competing in the era of viral news, or when you lower your standards to the lowest common denominator. When you no longer had thoughtful people on your staff to ask the kind of questions which I have, before you go to press.

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May 1, 2010

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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January 28, 2010

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.

April 13, 2009

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.”

February 28, 2009

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. 

February 2, 2009

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.  

January 16, 2009

Star Tribune Files for Bankrupcy

 

You can try to have someone do the translating.  What it means.  From Minneapolis-St.Paul to Denver to Seattle.  The Minneapolis Star Tribune filed for chapter 11 in a New York court late yesterday while the local media covered the story of the lives saved on the Hudson River. 

 

The news.  What story to go after?  Today?  Why today?  The manufactured news versus the stories that had to be worked at….with sources.  With interviews.  Notice how there are fewer stories these days.  Everywhere.  The year 2009 was now all about economic news.  It did not cost as much to cover statistics. 

by Mark Fitzgerald is editor-at-large at editorandpublisher.com)

 

January 16, 2009 ….. It wasn’t the economy, but Avista’s own business decisions that brought the Minneapolis Star Tribune to bankruptcy, Picard argues. In his blog “The Media Business,” Robert Picard writes that newspapers’ traditional influence in communities was based on a perception of financial probity.  A well-known academic expert on media economics who is editor of the Journal of Media Business Studies, Picard said “traditional” newspaper companies will continue to try to avoid bankruptcy.  Longtime newspaper companies also are in better shape than Tribune and the Star-Tribune, even those that have substantial debt such as McClatchy, Picard said. “Private equity is the most expensive debt,” he said.  The Avista Capital Management partners private equity investors and real estate businessman Sam Zell of the Chicago Tribune are operated by chief executives new to the newspaper business.  “For any of the traditional newspaper companies, (bankruptcy) would be the absolute last resort,” he said. “But, you know, once the dam breaks, sometimes it’s easy to just kind of wash your hands and go along with it. A lot of the old rules are out, but I hope the old rule of reputation stands.”


“They’re blaming the changes in the industry, they’re blaming the economy, they’re blaming the unions — when clearly the blame belongs in
New York with the managers of Avista,” Picard told E&P today.

 

World GDP                        $47 trillion

World stock valuation     $121 trillion

Bond market                      $85 trillion

Credit derivatives             $473 trillion

 

Stock and bonds.  Herds.  Speed.  Information.  Changing direction.  Panics.

 

China-America.  American consumption had started to build a new China.  22 times richer…we need a loan…cheap Chinese labor. American consumption of Chinese goods.

 

Plentiful Chinese saving.  Lower interest rates due to Chinese savings.    50% of all global growth, and 33% of the world economy.   When the Chinese lose money on us.  Will there be Chinese anger at us?  Or when will they turn on the loans?  Escalating political risk.

 

(MarketWatch) by John Friedman

 

“December 22, 2008

….Print journalist of the year — Allan Sloan, senior editor at large of Time Warner’s Fortune magazine.  Sloan, the premier business journalist of his generation, doesn’t write on a 24/7 basis. He may seem woefully out of step in the age of the blogosphere, where spewing ill-informed opinions often count for more than old-fashioned reporting.

 

But Sloan stands out because his pieces always include all of the finest qualities of journalism — in any age — analysis, clarity, curiosity, depth, empathy and a point of view.

 

The financial meltdown has been the story of the year because it has had an impact on so many people.   The story has been ongoing, beginning with the subprime disaster, and extending to the woes of Bear Stearns, Merrill Lynch, AIG, Lehman Brothers and other once-glittering kings of finance. All the while, the stock market has crumbled.

 

The crisis has brought out the best in Sloan and his The Deal musings in the magazine.Main Street more than Wall Street in his simple, straight-forward imagery:

 

One of Sloan’s best pieces was published back in March and entitled “Don’t expect another bull market.”

 

Journalists everywhere should note that Sloan doesn’t get his points across with fancy writing. If anything, he reflects:

 

“Hello? Eight years of dead money in the broad stock market? How can that be, given that Ibbotson Associates says the S&P has returned an average of 10.3% a year, compounded, since 1926? Think of it as a six-foot man drowning in a pond with an average water level of six inches — if you step in at the wrong place, the water can be eight feet deep.”

 

Sloan reminds me of a veteran baseball pitcher who gets the batters out by drawing on his ample knowledge and experience, not because he has the best fastball in the league.”

               

More and more we will become a society that reads about the importance of statistics, instead of following the game.  Just as more and more the computer has made us all geeks.  A lot of old rules are out, but I hope the old rule of reputation stands.  If it doesn’t, there will be no place to discover who of your friends had died.  There will be no obituary page.  The obituary writer at the Star Tribune just took a buyout last week.  

December 3, 2008

Waiting Room

 

Newspapers on the brink.  Devalued currency.  Writing.  Ever since the introduction of the internet, writing and the value of the local newspaper was devalued.  It was worth so little, it was given away free.  Never before have opinions been worth less.  There was an anger in the writer, the columnist, who depended upon the survival of the paper for his survival. How could this be happening?  Would his self worth follow his net worth, downward?  The written word had become devalued. 

In a world of distractions, of ideas, there have never been more.  And never have fewer books been bought.  There was a downward cycle coming to Barnes and Nobles, in the 120,000 books published each year.  The newspapers business was compared to that of selling telephone booths in an age of the cell phone.  Even Superman was struggling to jump into the action.

Ironically, the world of ideas was challenged by the changing business model that threatened real freedom.  Never before has it been easy to pull a plug, to censor ideas.  The written word had always been sacred.  The radio and television airways were regulated bu government that granted licenses, showing favoritism to the recipient.

Where was God in all of this?   In this change?  In a world with a diminishing number of Catholic priests.  In a Protestant world of diminishing numbers of denominations supported by fewer and fewer.  Where was God in the world of devalued currency, of downward markets?   

He was, as always, just waiting.  Perhaps for more attention soon.  It was the Advent season.    

Star Tribune To Go After $30 Million in Cuts

 

The  Minneapolis Star Tribune announced today the immediate need for $30 million in cuts, in a newspaper that has made a number of reductions throughout the year.  Its survival was on the line.  

In the information age, there are a lot of insensitive people who leave their insensitive postings behind.  The age of the internet has revealed a lot of stupidity all around us.  The death of a newspaper, its role in a democracy, its role in a community, is incomprehensible.  If you were not following the story, the Tribune credit rating, the newspaper that serves Chicago and Los Angelos, is about as low as it can go.  This is not a local phenomenon.  It is time to change the business model of this newspaper.  Now.  A business model similar to Minnesota Public Radio with voluntary sustaining memberships, corporate sponsors, should be in the works.   On August 12, 2008, Nordic Capital and Avista Capital Partners paid $4.1 billion for ConvaTec, a company that specializes in advanced wound care management and ostomy (artificial skin opening) barriers.  It is time to put this wound care company to work with a new business model on the Star Tribune.  It is not too late.  These announced cuts are another short sighted solution to ongoing management of a media throughout the country in need of help.  Hopefully the people at Avista, with ConvaTec are, are more now thoughtful than those who read the news for free, those who bite the hands that feed us the news.  For free.  You actually need writers, sales people, staff to put out a product.  Too many good people have already been let go.

November 23, 2008

Money’s Role In The Paperless World

 

Money was the paper I held in money funds, in savings.  Fiat money is the international paper unit that fluctuates through an independent fiat monetary system around the world.  Money was paper.  There is a certain amount of dollar hegemony which is created by the geopolitically constructed peculiarity where, most notably, oil is denominated in dollars.

 

Those products made in China, which 40 years ago were made in Japan were why Americans always felt rich.  It was monetary policy.  Monetary policy was constructed so that the value of currency in China was low to the cost of the product bought in the American store.   I have read that 70% of the economy is based on the American consumer consuming.  And all that now seemed at risk. 

 

“World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy. The world’s interlinked economies compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies.”

–Henry Liu 

 

“The adverse effect of this type of globalization on the US economy is also becoming clear.  In order to act as consumer of last resort for the whole world, the US economy has been pushed into a debt bubble that thrives on conspicuous consumption.”  –Henry Liu 

 

“To prevent speculative and manipulative attacks on their currencies, the world’s central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world’s central banks to acquire and hold more dollar reserves, making it stronger.”  –Henry Liu 

 

Bill Gross, the Pimco’s bond fund king and the best bond fund manager in the world, said “What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending so hard to understand that Federal Reserve Chairman Ben Bernanke required a face-to-face refresher course from hedge fund managers in mid-August 2007.”

 

This market meltdown started in 2007.  Could money all eventually be worthless?  The Treasury Department’s attempts since July 2008 to take hold of, to attempt to fool the market  was to put the value of currency at risk.  There had always been an invisible trust in currency.  It was how society had worked in my lifetime.  Was currency as a medium of exchange now going to be challenged?  “In this way, the Central Banks of the world could inflate together, create a massive system on a global scale and maintain both political and social controls over the various populations of the world without very much restrain or limitations. The problem, of course, is that they appear to actually believe in the system that they created for these purposes ….herding the population into neat, controllable groups for convenience, taxing and at one time regulating to maintain their political controls.” 

 

In an annual economy in the United States of nearly $15 trillion, an article in Forbes this week cited a commitment so far by the Teasury of $5 trillion to resolve this mess.  

 

“The Chicago School was a movement of economic theory which in recent decades had become an aggressive agent of intellectual imperialism applying its economic doctrines to disciplines such as political science, legal theory, history, sociology, and international relations.  Alarmed by the sharply eroding market confidence in the nation’s two GSEs (Fannie Mae and Freddie Mac), the largest mortgage finance companies, the Bush administration announced plans on Sunday, July 13 to ask Congress to approve a sweeping rescue package that would give officials the power to inject unlimited funds into the beleaguered companies through investments and loans.”  –Henry Liu 

 

Companies which were undercapitalized caused this mess.  Like AIG.  Like each of the 5 investment banks on Wall Street which are no more.  When critics cite the sloppiness of rating agencies in helping to create this mess, banks which relied on credit agencies were too busy to do their own home-work?  How difficult was it to see the undercapitalization of AIG, of any investment bank, which was reaping huge profits?  What had changed about the world that all of these profits looked so easy?  Were there many folks in law enforcement, in Homeland Security, who felt that enforcement of laws should be on a voluntary basis on these shores?  The aroma all along on that end of Manhattan had to reek.  The exposes on Henry Paulson’s role at Goldman Sachs in this credit swap scandal apparently will be written after he moves out of Washington.  With the lack of support of newspapers, an industry that no one has mentioned for bailout, Paulson may be hoping there will not be a newspaper left.   

 

How could valuations be false?  In a sense, were we all suffering the effects of the education of the current age, of all those educated in an American public school system where moral relativism was the prevailing philosophy, not supplemented with some kind of belief in an absolute moral authority, and no one actually believed that all men and women were created equal.  Not based on the compensation allowed by boards of directors.  There was complicity everywhere.  Moral relativism was not contained only on these shores, but the entertainment media seemed to send these wisps to the most remote portions of this earth.  Valuations were changing so fast everywhere.   

 

Could American money all eventually be worthless? The dollar is at a 14 year low against the pound, I heard this morning on the radio.  There was a recent 10% change against the Euro.  Downward.  And it is all related to what is happening here.  Soon we will be told what a good thing this is. 

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