Remember to register by October 8.The daily sessions at Bryant Park are more successful than ever and there will be a lot of new faces.
Don't miss it!
Tuesday, September 30, 2008
New York Open - Oct 11 &12
Remember to register by October 8.The daily sessions at Bryant Park are more successful than ever and there will be a lot of new faces.
Don't miss it!
New York Open - Oct 11 &12
Remember to register by October 8.The daily sessions at Bryant Park are more successful than ever and there will be a lot of new faces.
Don't miss it!
Julius Caeser on the UK economy
"The immortal gods are wont to allow those persons who they wish to punish for their guilt sometimes a greater prosperity and longer impunity, in order that they may suffer more from a reverse of circumstances"
Julius Caeser, The Gallic Wars
That is us....
Julius Caeser, The Gallic Wars
That is us....
Petanque at Microsoft
So good to see a corporation - and not just any - discovering petanque: instead of sitting in front of your screen at lunch, or hanging around at the cafeteria, why not get out of the building and play a couple of rounds of pétanque?Next to the brand new # 99 building on the company's West Campus in Redmond there is... a petanque court!
Around 650 people work in the building, from countries all around the world. Here you see Juan (China), Mike & Ross (USA), Francesco (Italy) and Manuel (Switzerland) during a recent lunch break.
Thanks a lot to Mike for the pics! And hoping you guys start a league: electronic scorekeeping and algorithmically random team draws should be no problem ;-)
By the way, I recently heard - from a different source - that Bill Gates himself likes to play as well.
Petanque at Microsoft
So good to see a corporation - and not just any - discovering petanque: instead of sitting in front of your screen at lunch, or hanging around at the cafeteria, why not get out of the building and play a couple of rounds of pétanque?Next to the brand new # 99 building on the company's West Campus in Redmond there is... a petanque court!
Around 650 people work in the building, from countries all around the world. Here you see Juan (China), Mike & Ross (USA), Francesco (Italy) and Manuel (Switzerland) during a recent lunch break.
Thanks a lot to Mike for the pics! And hoping you guys start a league: electronic scorekeeping and algorithmically random team draws should be no problem ;-)
By the way, I recently heard - from a different source - that Bill Gates himself likes to play as well.
Waiting for Gas in Atlanta
The music is not good, but you can turn it off.
The Long Emergency has begun.
(written when gas was $55 dollars a barrel!)
The Long Emergency has begun.
(written when gas was $55 dollars a barrel!)
Waiting for Gas in Atlanta
The music is not good, but you can turn it off.
The Long Emergency has begun.
(written when gas was $55 dollars a barrel!)
The Long Emergency has begun.
(written when gas was $55 dollars a barrel!)
Some Want To Believe Blacks Caused The Financial Crisis
Evidently the Black poor bought so many homes that all of Wall Street collapsed under the forclosures. Yeah. And we have a bridge we want to sell you too.
Let us set the record straight: Black subprime mortgage purchases could NOT have caused the collapse of Wall Street. Not enough Blacks. Not enough Black mortgage purchases to do it. Nice try though if people who don't like Blacks anyway want just another excuse to scapegoat the Negro. You know who you are. Actually it is political too. Some want to tie this image to Barack Obama so he will lose the election. That is why ACORN (Association of Community Organizations for Reform Now) is being highlighted, particularly ACORN-Chicago. Racialists are also vilifying the Community Reinvestment Act (CRA) of 1977 as the tool used to blackmail banks into just shoveling bad loans out to black poor. Please. And lastly, it is all brought together by tying Franklin Raines reign at Fannie Mae to Barack Obama to ACORN and CRA pimping and you have the black cause of the collapse of American capitalism. The lengths some go to to fuel bias against Blacks.
Let's look at the numbers. According to the U.S. Census Bureau, Black homeownership rates went up from 44% in 1996 to 47% in 2007. This compares to a homeowner rate of 72% by Whites. Blacks make up 13% of the U.S. population and these stats show that about half of those households have mortgages. The 3% increase in homeownership among Black households from 1996 to 2007 simply does not have the numbers to serve as the stimulus for the foreclosure meltdown. In 2006 there were 8.4 million Black family households compared to approximately 116,011,000 total households in the U.S., according the the U.S. Census Bureau. Half of this total would equal 4.2 million mortgage-holding households. Even if half of those defaulted on their loans, it would still represent less than 2% of all mortgages. There is no way even this overestimated number of foreclosures could bring down even Fannie Mae, which routinely expected default rates of 1% in its annual portfolio.
Plus, one would have to ignore many other obvious reasons for the financial crisis before picking on the Blacks, including: mark-to-market, short selling, book cooking, speculators, and white household mortgage foreclosures.
Of course, numbers, facts and reality do not matter if one is determined to find a reason to hate African Americans.
The Chicago Tribune Decries "Chicago's Toxic Air"
According to a Chicago Tribune article entitled, "Chicago's Toxic Air:"
One factory behind Cook County's high risk score is the A. Finkl and Sons steel mill just west of Lincoln Park. Finkl plans to close the mill near Lincoln Park, where the population is 84 percent white, and move to another site on East 93rd Street on the Southeast Side, a neighborhood that is 96 percent black.
According to the article by reporters Michael Hawthorne and Darnell Little:
"People living in Chicago and nearby suburbs face some of the highest risks in the nation for cancer, lung disease and other health problems linked to toxic chemicals pouring from industry smokestacks..."Cook County is ranked worst in the nation for dangerous air pollution and Chicago was among the 10 worst cities in the U.S. based on 2005 data from an Environmental Protection Agency report. In Will and DuPage Counties, six factories rank in the region's worst 50. Two large visible pollution sources include the Mittal Steel plant in Riverdale and the Corn Products refinery in Bedford Park. An Avery Dennison plant in Niles had the third highest risk score in Cook County. No-Sag Foam Products in West Chicago ranking as DuPage County's third-highest risk score. The polluter ranked as the worst in Cook County— Chicago Castings Co. in Cicero closed this year.
One factory behind Cook County's high risk score is the A. Finkl and Sons steel mill just west of Lincoln Park. Finkl plans to close the mill near Lincoln Park, where the population is 84 percent white, and move to another site on East 93rd Street on the Southeast Side, a neighborhood that is 96 percent black.
According to the article by reporters Michael Hawthorne and Darnell Little:
"Minority neighborhoods have been hit hardest, from the mostly Latino enclave of Pilsen to mostly black communities on the city's South and West Sides. Of the Top 50 polluters in Cook County in 2005, 60 percent are where black or Latino residents outnumber whites. Nearly two dozen of the region's top polluters are within 8 miles of the Altgeld Gardens public housing project off 130th Street on the Far South Side, where nearly all residents are African-American. The two-story brick apartments are surrounded by steel mills, abandoned factories, landfills and a sewage treatment plant."
AAEA was contacted and briefed by Anielle Lipe with a referral by Cheryl Johnson to look into this issue. Cheryl Johnson has worked on pollution issues in South Chicago for decades and is the daughter of long time activist Hazel Johnson. Source: The Chicago Tribune, 9/28/08
Additional Information:
EPA Risk Screening Environmental Indicators (RSEI)
Pilsen Environmental Rights and Reform Organization (PERRO)
EPA Toxics Release Inventory Of Illinois (TRI-Illinois)
Google Positioned in Leaders Quadrant
In their recently released Magic Quadrant for Email Security Boundaries (published September 11, 2008), Gartner Inc., an information technology research and advisory company, placed Google in the "Leaders Quadrant." Quadrant leaders, as Gartner defines them, are "performing well today, have a clear vision of market direction, and are actively building competencies to sustain their leadership position in the market." Quadrant leaders also "offer a comprehensive and proficient range of email security functionality, and show evidence of superior vision and execution for current and anticipated customer requirements.
Leaders typically have relatively high market share and/or strong revenue growth, own a good portion of their threat or content-filtering capabilities, and demonstrate positive customer feedback for anti-spam efficacy, and related service and support." The report goes on to say that "The email security market is rapidly maturing, yet continues to show strong growth and remains a 'must have' security purchase."
We're pleased to be included in this report and recognized in the leaders quadrant, as it underlines, in our opinion, the importance we attach to protecting against email-based threats and the ways we're helping our customers do so. Since the integration of the Postini email security product line in 2007 into Google's Enterprise Apps, Google has continued to innovate these products with functionality for our customers, including a new early detection quarantine that uses our own heuristics to detect new virus strains before virus signatures are available. We have also added new content filter types, policy prioritization for messages that trigger more than one policy, and new policy engine interface features.
The Gartner Magic Quadrant is copyrighted 2008 by Gartner, Inc., and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Leaders typically have relatively high market share and/or strong revenue growth, own a good portion of their threat or content-filtering capabilities, and demonstrate positive customer feedback for anti-spam efficacy, and related service and support." The report goes on to say that "The email security market is rapidly maturing, yet continues to show strong growth and remains a 'must have' security purchase."
We're pleased to be included in this report and recognized in the leaders quadrant, as it underlines, in our opinion, the importance we attach to protecting against email-based threats and the ways we're helping our customers do so. Since the integration of the Postini email security product line in 2007 into Google's Enterprise Apps, Google has continued to innovate these products with functionality for our customers, including a new early detection quarantine that uses our own heuristics to detect new virus strains before virus signatures are available. We have also added new content filter types, policy prioritization for messages that trigger more than one policy, and new policy engine interface features.
Petanque in Las Vegas
Latest news from Lisette of Las Vegas Petanque:
We finally have a petanque park! It was hard work but worth it. Before the city of Las Vegas makes our courts, we will start playing there since all the gravel has been laid and the play structures are up for the kids. By December, it will officially become a "petanque park!" Actually, a local volunteer youth organization will be creating the borders of the courts using large stones. Great way to get community involvement.
Presently, it is a petanque player's dream --- gravel, gravel, gravel!!!! Several of our players have tested it and loved it. We begin playing there next week.
Bill Briare Park on Google maps
We finally have a petanque park! It was hard work but worth it. Before the city of Las Vegas makes our courts, we will start playing there since all the gravel has been laid and the play structures are up for the kids. By December, it will officially become a "petanque park!" Actually, a local volunteer youth organization will be creating the borders of the courts using large stones. Great way to get community involvement.Presently, it is a petanque player's dream --- gravel, gravel, gravel!!!! Several of our players have tested it and loved it. We begin playing there next week.
Bill Briare Park on Google maps
Petanque in Las Vegas
Latest news from Lisette of Las Vegas Petanque:
We finally have a petanque park! It was hard work but worth it. Before the city of Las Vegas makes our courts, we will start playing there since all the gravel has been laid and the play structures are up for the kids. By December, it will officially become a "petanque park!" Actually, a local volunteer youth organization will be creating the borders of the courts using large stones. Great way to get community involvement.
Presently, it is a petanque player's dream --- gravel, gravel, gravel!!!! Several of our players have tested it and loved it. We begin playing there next week.
Bill Briare Park on Google maps
We finally have a petanque park! It was hard work but worth it. Before the city of Las Vegas makes our courts, we will start playing there since all the gravel has been laid and the play structures are up for the kids. By December, it will officially become a "petanque park!" Actually, a local volunteer youth organization will be creating the borders of the courts using large stones. Great way to get community involvement.Presently, it is a petanque player's dream --- gravel, gravel, gravel!!!! Several of our players have tested it and loved it. We begin playing there next week.
Bill Briare Park on Google maps
HOLY MORIARTY’S
The Lord is back… on draft in the city of brotherly love. The Yuengling sales team and our Philadelphia distributor held a kick off party at one of the first accounts to put Lord Chesterfield Ale on tap, Moriarty’s Pub. More than 50 people were in attendance for the pouring of delicious Chetty draft. This makes me thirsty just thinking about it!Send us comments and share your Ale celebration stories. We know they’re going on everywhere!
Alice's bubble wrap
I have to tell you; I am having a hard time keeping up. There is so much going on right now, and none of it is good. I have this terrible sense of foreboding; this crisis is about to turn our whole way of life upside down.
With that dire warning out of the way, lets review the day's events.
Buy-to-let mortgage deals nosedive
With the B&B gone, the BTL market has finally capitulated.
"One in 10 mortgages has been pulled during the past 24 hours following the nationalisation of Bradford & Bingley, figures showed. The number of buy-to-let loans has nosedived, with just 481 different deals now available, a 27% fall on Monday's figure of 662, financial information group Moneyfacts said."
Lloyds-HBOS deal in doubt
Can the UK financial system survive the collapse of this deal? I think not.
Ireland guarantees six banks’ deposits
Very generous, I must say. With a government guaranteee behind you, it is easy to make money.
"Allied Irish Banks climbed 20 per cent to €5.95 in early Dublin trading, Anglo Irish Bank jumped 41.3 per cent to €3.25 and Bank of Ireland gained 19.3 per cent to €3.90."
Analysts say U.K. may follow Irish on bank guarantee
And why not....
Dollar borrrowing costs soar
It is as if Bernanke had never cut rates to 2 percent.
"The British Bankers' Association said the London interbank offered rate (Libor) for dollar funds, the rate at which banks charge each others for loans, saw its biggest ever one-day jump of 431 basis points, taking it to 6.88%, the highest level in more than seven years."
Why The Bailout Bill Will Not Solve the Credit Crunch (And What Could)
From nakedcapitalism.com; pushing the Swedish model of bank bailouts.
The Credit Crunch: Where Is It Happening?
"Why, you may be asking yourself, does everyone think there's such a big a problem when you're still being offered credit cards in the mail and 0% financing at the car dealership?"
A loan shark, a ninja and the sub-prime market
A great title; a pity the article doesn't quite do it.
US company bond sales fall near recession levels
"U.S. corporate bond sales fell in the third quarter to the lowest levels since before the last U.S. recession in 2001, and some companies are delaying bond sales until 2009, a senior Thomson Reuters analyst said on Tuesday."
Among Bailout Supporters, Wall St. Donations Ran High
Really?? I would never have thought that.
With that dire warning out of the way, lets review the day's events.
Buy-to-let mortgage deals nosedive
With the B&B gone, the BTL market has finally capitulated.
"One in 10 mortgages has been pulled during the past 24 hours following the nationalisation of Bradford & Bingley, figures showed. The number of buy-to-let loans has nosedived, with just 481 different deals now available, a 27% fall on Monday's figure of 662, financial information group Moneyfacts said."
Lloyds-HBOS deal in doubt
Can the UK financial system survive the collapse of this deal? I think not.
Ireland guarantees six banks’ deposits
Very generous, I must say. With a government guaranteee behind you, it is easy to make money.
"Allied Irish Banks climbed 20 per cent to €5.95 in early Dublin trading, Anglo Irish Bank jumped 41.3 per cent to €3.25 and Bank of Ireland gained 19.3 per cent to €3.90."
Analysts say U.K. may follow Irish on bank guarantee
And why not....
Dollar borrrowing costs soar
It is as if Bernanke had never cut rates to 2 percent.
"The British Bankers' Association said the London interbank offered rate (Libor) for dollar funds, the rate at which banks charge each others for loans, saw its biggest ever one-day jump of 431 basis points, taking it to 6.88%, the highest level in more than seven years."
Why The Bailout Bill Will Not Solve the Credit Crunch (And What Could)
From nakedcapitalism.com; pushing the Swedish model of bank bailouts.
The Credit Crunch: Where Is It Happening?
"Why, you may be asking yourself, does everyone think there's such a big a problem when you're still being offered credit cards in the mail and 0% financing at the car dealership?"
A loan shark, a ninja and the sub-prime market
A great title; a pity the article doesn't quite do it.
US company bond sales fall near recession levels
"U.S. corporate bond sales fell in the third quarter to the lowest levels since before the last U.S. recession in 2001, and some companies are delaying bond sales until 2009, a senior Thomson Reuters analyst said on Tuesday."
Among Bailout Supporters, Wall St. Donations Ran High
Really?? I would never have thought that.
The UK current account - another huge deficit
With economic growth flat, sterling crashing and import prices rising, you would think that UK households would hold back a little on spending. I am afraid not; the UK ran up yet another huge current account deficit.Some commentators will probably point to higher oil prices as the main underlying cause. However, I don't find that explanation all that convincing. If the price of something goes up, and incomes are stagnant, the sensible thing would be to cut back expenditure.
That isn't how we do things here in the UK. If we want something, we must have it now.
Isn't that what debt is for?
UK growth flat in the second quarter
The ONS has just confirmed zero economic growth for the second quarter, strongly suggesting that the UK is well on its way to an outright recession. Manufacturing took the biggest hit, falling 3.6 percent on an annualized basis.
Nothing unusual there. Manufacturing has been in recession for at least two decades.
New Mexico Senator Pete Domenici Retiring
Senator Pete Domenici (R-NM) served as Chairman of the powerful Senate Energy and Natural Resources Committee from 2003-2007. Although he received low ratings for his environmental voting record from the League of Conservation Voters, and even Republicans for Environmental Protection, he leaves a great environmental accomplishment by shepherding the passage of the Energy Policy Act of 2005. Although not generally recognized as such, EPAct of 2005 is probably the signal most important climate change mitigation legislation passed to date because of the provisions to support nuclear power. These plants emit no carbon dioxide, the main greenhouse gas.
Senator Domenici is retiring because of health reasons; he suffers from frontotemporal lobar degeneration, a degenerative brain ailment. We salute Senator Domenici for his dedication to energy security in the United States. We also wish him well on his journey into retirement. We also offer an invitation: feel free to volunteer with us to continue promoting the Global Nuclear Energy Partnership (GNEP) and our other international energy activities. We could use your help.
AAEA President Norris McDonald is pictured above right with Senator Domenici at Sandia National Laboratory in Albuquerque, New Mexico at the signing of the EPAct of 2005.
Mortgage lending shrinks in August
At last, there is some hope. In August, the total stock of mortgages fell slightly - some ₤400 million - fractionally reducing the level of household indebtedness.
Mervyn, I need you to cut rates
So much for an independent Bank of England; Brown calls King, "I need to see you about rates". King comes running...
"Gordon Brown today met Mervyn King, Governor of the Bank of England and Alistair Darling, the Chancellor, to discuss the current financial turmoil as it emerged that UK economic growth ground to a halt during the second quarter.
The early morning meeting went ahead as hopes heightened that the Bank of England's Monetary Policy Committee (MPC) will vote to cut the interest rate by a quarter point to 4.75 per cent when it convenes in nine days' time. "
"Gordon Brown today met Mervyn King, Governor of the Bank of England and Alistair Darling, the Chancellor, to discuss the current financial turmoil as it emerged that UK economic growth ground to a halt during the second quarter.
The early morning meeting went ahead as hopes heightened that the Bank of England's Monetary Policy Committee (MPC) will vote to cut the interest rate by a quarter point to 4.75 per cent when it convenes in nine days' time. "
1,000 FOI Stories from 2006 and 2007
A new report by the Campaign for Freedom of Information summarises more than 1,000 press stories based on disclosures under the UK and Scottish FOI acts in 2006 and 2007. The stories demonstrate the enormous range of information being released under FOI and reveal the substantial contribution to accountability made by the acts.
In 2006, the government proposed to restrict the UK FOI Act, partly because of what it said was excessive use of the Act being made by journalists. The report shows how valuable the press's use of FOI has been. The proposals were dropped by Gordon Brown after he became prime minister in 2007.
Download 1,000 FOI Stories from 2006 and 2007.
(Note: the report is 250 pages and may take a little while to download).�
A new report by the Campaign for Freedom of Information summarises more than 1,000 press stories based on disclosures under the UK and Scottish FOI acts in 2006 and 2007. The stories demonstrate the enormous range of information being released under FOI and reveal the substantial contribution to accountability made by the acts.
In 2006, the government proposed to restrict the UK FOI Act, partly because of what it said was excessive use of the Act being made by journalists. The report shows how valuable the press's use of FOI has been. The proposals were dropped by Gordon Brown after he became prime minister in 2007.
Download 1,000 FOI Stories from 2006 and 2007.
(Note: the report is 250 pages and may take a little while to download).�
Monday, September 29, 2008
Some Further Resources on the "Emerging Church"
I found the following entries in the Apologetics Index particularly useful and commend them to you. I thought that the Glossary was quite amusing.
1) Postmodernism and the Emerging Church Movement
2) Emerging Church - Distinctive Teachings and Goals
3) Emerging Church - Methods
4) Emerging Church - Standard Communication Strategies
5) Emerging Church - The Church’s Proper Role in Postmodern Culture – Light of the World
6) Emerging Church - Some Leading Figures in the Emerging Church movement
7) Emerging Church - Some Leading Voices Opposing the Emerging Church movement
8) Emerging Church - Glossary of Emergent Terms For Those New to the Conversation
9) Emerging Church - Conversation versus the Bible And Non-“Emerging” Christians: Truth
10) Emerging Church - Conversation versus... : Scripture
11) Emerging Church - Conversation versus... : Faith
12) Emerging Church - Conversation versus... : Doctrine
13) Emerging Church - Conversation versus... : Lifestyle
14) Emerging Church - Conversation... : Ministry
15) Emerging Church - Web Sites
16) Emerging Church - Recommended Books
17) Emerging Church - Footnotes
1) Postmodernism and the Emerging Church Movement
2) Emerging Church - Distinctive Teachings and Goals
3) Emerging Church - Methods
4) Emerging Church - Standard Communication Strategies
5) Emerging Church - The Church’s Proper Role in Postmodern Culture – Light of the World
6) Emerging Church - Some Leading Figures in the Emerging Church movement
7) Emerging Church - Some Leading Voices Opposing the Emerging Church movement
8) Emerging Church - Glossary of Emergent Terms For Those New to the Conversation
9) Emerging Church - Conversation versus the Bible And Non-“Emerging” Christians: Truth
10) Emerging Church - Conversation versus... : Scripture
11) Emerging Church - Conversation versus... : Faith
12) Emerging Church - Conversation versus... : Doctrine
13) Emerging Church - Conversation versus... : Lifestyle
14) Emerging Church - Conversation... : Ministry
15) Emerging Church - Web Sites
16) Emerging Church - Recommended Books
17) Emerging Church - Footnotes
Comments are welcome, as are suggestions for further reading.
Plans For 3rd Nuclear Plant at Calvert Cliffs Probably Dead
As much as we support building a new nuclear power plant at Calvert Cliffs, we have to realistically conclude that the project is dead because of Warren Buffet's recently announced plan to buy Constellation. We say this for several reasons:
1) Constellation's failed attempt to merge with Florida Power and Light a couple years ago.
2) Warren Buffet will not spend the money [plant would cost him as much as the company].
3) Electricite de France (EdF) outbid Buffet for Constellation but was still rejected by Constellation.
4) EdF is buying British Energy for $23.2 billion.
5) The Wall Street meltdown and Congress' refusal to bail them out.
EdF is in partnership with Constellation to build a new type of nuclear power plant called an EPR (Evolutionary Power Reactor). The design has yet to be approved by the Nuclear Regulatory Commission (NRC). The cancellation of this plant would be a huge problem for the nuclear industry. This is also a very serious situation for future electricity reliability for our nation's capital and the region.
This situation definitely puts more pressure on Dominion to add a second reactor to its plans to build a new nuclear power plant at its North Anna facility in Louisa County, Virginia. Dominion has an application pending for NRC design certification approval of the Economic Simplified Boiling Water Reactor(s) it wants to build at the site.
Renewable Energy Tax Credits Probably Dead In 110th Congress
Update: We were wrong. Congress rallied. The renewables package was placed in the financial system bailout bill and was passed by both chambers and signed into law by President Bush.
-----------------------------------------------------------------------------------------------
Unless Congress comes back after the elections for a lame duck session, the tax extensions for wind, solar and other renewables are dead. The House and Senate are passing bills 'at' each other instead of 'with' each other. The result during this session is that offshore oil drilling prohibitions expired, allowing exploration with 3 miles of all shores, which AAEA opposes and expiration of renewables tax credits for wind and solar at the end of this year.
The House passed an energy bill (H.R. 6049) the Senate did not like and the Senate passed an amended bill that the House ignored. The House then passed (Sept 26) a Blue Dog bill (H.R. 7060) that included provisions (tax hikes in other areas to offset) that are unacceptable to President Bush and the Senate.
-----------------------------------------------------------------------------------------------
Unless Congress comes back after the elections for a lame duck session, the tax extensions for wind, solar and other renewables are dead. The House and Senate are passing bills 'at' each other instead of 'with' each other. The result during this session is that offshore oil drilling prohibitions expired, allowing exploration with 3 miles of all shores, which AAEA opposes and expiration of renewables tax credits for wind and solar at the end of this year.
The House passed an energy bill (H.R. 6049) the Senate did not like and the Senate passed an amended bill that the House ignored. The House then passed (Sept 26) a Blue Dog bill (H.R. 7060) that included provisions (tax hikes in other areas to offset) that are unacceptable to President Bush and the Senate.
what $620 billion????
From the Federal Reserve Press Release:
In response to continued strains in short-term funding markets, central banks today are announcing further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity. Central banks will continue to work together closely and are prepared to take appropriate steps as needed to address funding pressures.
Federal Reserve Actions
The Federal Reserve announced today several initiatives to support financial stability and to maintain a stable flow of credit to the economy during this period of significant strain in global markets.
We will continue to adapt these liquidity facilities as necessary and will keep them in place as long as circumstances require.
Actions by the Federal Reserve include: (1) an increase in the size of the 84-day maturity Term Auction Facility (TAF) auctions to $75 billion per auction from $25 billion beginning with the October 6 auction, (2) two forward TAF auctions totaling $150 billion that will be conducted in November to provide term funding over year-end, and (3) an increase in swap authorization limits with the Bank of Canada, Bank of England, Bank of Japan, Danmarks Nationalbank (National Bank of Denmark), European Central Bank (ECB), Norges Bank (Bank of Norway), Reserve Bank of Australia, Sveriges Riksbank (Bank of Sweden), and Swiss National Bank to a total of $620 billion, from $290 billion previously.
These steps are being undertaken to mitigate pressures evident in the term funding markets both in the United States and abroad. By committing to provide a very large quantity of term funding, the Federal Reserve actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk.
What? Liquidity operations have just increased to $620 million, up from $290 million? How did things get so bad?
In response to continued strains in short-term funding markets, central banks today are announcing further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity. Central banks will continue to work together closely and are prepared to take appropriate steps as needed to address funding pressures.
Federal Reserve Actions
The Federal Reserve announced today several initiatives to support financial stability and to maintain a stable flow of credit to the economy during this period of significant strain in global markets.
We will continue to adapt these liquidity facilities as necessary and will keep them in place as long as circumstances require.
Actions by the Federal Reserve include: (1) an increase in the size of the 84-day maturity Term Auction Facility (TAF) auctions to $75 billion per auction from $25 billion beginning with the October 6 auction, (2) two forward TAF auctions totaling $150 billion that will be conducted in November to provide term funding over year-end, and (3) an increase in swap authorization limits with the Bank of Canada, Bank of England, Bank of Japan, Danmarks Nationalbank (National Bank of Denmark), European Central Bank (ECB), Norges Bank (Bank of Norway), Reserve Bank of Australia, Sveriges Riksbank (Bank of Sweden), and Swiss National Bank to a total of $620 billion, from $290 billion previously.
These steps are being undertaken to mitigate pressures evident in the term funding markets both in the United States and abroad. By committing to provide a very large quantity of term funding, the Federal Reserve actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk.
What? Liquidity operations have just increased to $620 million, up from $290 million? How did things get so bad?
The banks are on their own
We have reached the moment of truth.
The US House of Representatives have just voted down the revised Paulson bail out bill. This means only one thing; the banks are left holding their toxic debt. The US government isn't going to take anything off their hands, at least not this week.
So what happens next? There are two extreme scenarios and any combination in between.
Either a 1930s style bank run......
The bail out was based on a single assumption; the level of toxic debt was so large that much of the US banking system could no longer function. Stripped to its core, this amounts to saying that many banks were effectively insolvent.
It then follows that if anyone has any uninsured deposits in a US bank, then it would be prudent to take them out. This simple logic means a widespread run on banks, a collapse of the financial system, which in turn will be followed by a huge contraction of economic activity.
However, there is an ironic twist to this scenario. As banks go bust, the Federal Deposit Insurance Corporation comes in and takes on the assets of failed banks. The government may end up with much of this toxic debt anyway.
...Banks write off the debt and move on....
Perhaps, Wall Street was exaggerating about toxic debt. It really was an attempt by banks to push their losses onto the public sector. In reality, banks could have absorbed these losses all along.
The Republicans saw through this scam and voted it down. With today's vote, banks will now get serious about writing off toxic debt and within a few weeks, the worst will be over.
...and anywhere in between
Those are the two end points of the spectrum of possible outcomes. My feeling is that we are closer to the first point.
The US House of Representatives have just voted down the revised Paulson bail out bill. This means only one thing; the banks are left holding their toxic debt. The US government isn't going to take anything off their hands, at least not this week.
So what happens next? There are two extreme scenarios and any combination in between.
Either a 1930s style bank run......
The bail out was based on a single assumption; the level of toxic debt was so large that much of the US banking system could no longer function. Stripped to its core, this amounts to saying that many banks were effectively insolvent.
It then follows that if anyone has any uninsured deposits in a US bank, then it would be prudent to take them out. This simple logic means a widespread run on banks, a collapse of the financial system, which in turn will be followed by a huge contraction of economic activity.
However, there is an ironic twist to this scenario. As banks go bust, the Federal Deposit Insurance Corporation comes in and takes on the assets of failed banks. The government may end up with much of this toxic debt anyway.
...Banks write off the debt and move on....
Perhaps, Wall Street was exaggerating about toxic debt. It really was an attempt by banks to push their losses onto the public sector. In reality, banks could have absorbed these losses all along.
The Republicans saw through this scam and voted it down. With today's vote, banks will now get serious about writing off toxic debt and within a few weeks, the worst will be over.
...and anywhere in between
Those are the two end points of the spectrum of possible outcomes. My feeling is that we are closer to the first point.
How to solve this crisis
I am more than a little tired of seeing statements like this from the Bank of England:
"In response to continued strains in short-term funding markets, central banks today are announcing further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity. Central banks will continue to work together closely and are prepared to take appropriate steps as needed to address funding pressures."
This announcement was published today and at least nine other banks produced something similar, shouting to the world their involvement in yet another short term emergency liquidity operation.
The Fed, the BoE and the ECB have been at this lark for well over a year. Each time a bank wobbles, the world's central banks flood the market with short term cash. Somehow, it never seems to calm things down. So what is going wrong?
Problem No. 1 - Inconsistency - The world understands that the rules of the game in the world of finance have changed. However, no one can figure out the new rules. The Fed, along with the other central banks and financial supervisors are destabilising markets.
Their attempts to rescue the financial system are far too ad hoc; Lehman is wiped out; but Bear Stearns is bailed out. AIG gets a loan, but the treasury demands an equity stake and a crippling interest rate. Freddie and Fannie first get some credit guarantees, and then nationalized. An appallingly conceived bail out plan is announced and then renegotiated by politicians. There is no pattern, no predictability and huge uncertainty.
The FSA isn't much better. It has pursued a slightly less publicity driven strategy of quietly pressurizing weak banks to take over insolvent ones. It hasn't done much to calm the interbank market and it has left problem banks like the B&B dangling in the wind for far too long. They should have moved against the B&B once it was clear that the rights issue had failed. Instead, it waited until there were incontrovertible signs of a run on retail deposits.
Problem No. 2 - Panic dressed up as action - There is however one pattern that has emerged. Central bank policies are "event" driven. There is very little strategic thinking or long term planning. Here are two examples.
February this year, the Fed woke up to find stock markets falling. It feared a global financial meltdown and dramatically cuts interest rates. Later, we found out that Société Générale was unwinding an unauthorized derivative position, which had been putting temporary downward pressure on equity prices. The rate cuts were largely unnecessary at the time and ultimately limited the Fed's policy options going forward. It was a costly mistake.
Here is another example, the BoE and the FSA woke up one morning and foundthat there was a bank run on Northern Rock. They then discovered that UK deposit insurance was totally inadequate. In a fit of panic, the Treasury gave a blanket guarantee on just NRK deposits, leaving the status of other banks ambiguous. Eventually, this ambiguity weakened other banks, notably the Bradford and Bingley. Even after that second failure, UK deposit insurance policy is totally unclear.
Problem no.3 Liquidity is not enough, the banks are broken - There is no easy way of saying this, but many of our banks are insolvent. Pumping in huge amounts of liquidity doesn't change that fact, it merely hides the problem. What we need is a comprehensive solution for rescuing bankrupt banks and transforming them into solvent ones.
This requires public intervention. However, this intervention must follow some simple principles. The British people will accept a bank bailout plan so long as it is fair, transparent and minimizes the total cost to the taxpayer.
The first principle simply requires that as much of the losses as feasible are borne by current participants in the industry. Shareholders must be wiped out and existing management thoroughly purged.
The second principle requires the government to announce a comprehensive plan as soon as possible. Moreover, it needs to be one that ordinary people understand. This means clearly defined thresholds for nationalization. Decisions need to be quick and resolute. Above, clarity and not discretion is needed.
Finally, the last principle needs to ensure that the taxpayer receives the full benefit of the bailout. This means that all rescue plans go through a nationalization process and a subsequent sale. There can not be any sneaky deals with insiders where assets of one distressed bank are handed over on the cheap to another marginally more healthy one.
The JP Morgan and Fed stitch up of Bear Stearns might seem like a good idea at the time, but it only served to undermine confidence in the Fed's ability to solve this problem fairly and transparently. Similarly, the futile attempts to hand over NRK to private equity firms just served to drain public confidence in the Treasury, the BoE and the FSA. So, no more of these dubious private market solutions. The new rule should be nationalise and then, when the moment is right, privatize.
We are in a mess and we need a plan
The crisis is getting worse, and I get the feeling that yet another announcement of more liquidity just isn't going to do the trick. We are running out of time; the financial system could totally collapse in much the same way as the East Asian systems collapsed back in 1997-8.
At this late stage, we don't need any more half baked, "we will make it up as we go along" strategies. Instead, we need a comprehensive, principles-based resolution strategy that makes our bankrupted banks solvent again.
"In response to continued strains in short-term funding markets, central banks today are announcing further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity. Central banks will continue to work together closely and are prepared to take appropriate steps as needed to address funding pressures."
This announcement was published today and at least nine other banks produced something similar, shouting to the world their involvement in yet another short term emergency liquidity operation.
The Fed, the BoE and the ECB have been at this lark for well over a year. Each time a bank wobbles, the world's central banks flood the market with short term cash. Somehow, it never seems to calm things down. So what is going wrong?
Problem No. 1 - Inconsistency - The world understands that the rules of the game in the world of finance have changed. However, no one can figure out the new rules. The Fed, along with the other central banks and financial supervisors are destabilising markets.
Their attempts to rescue the financial system are far too ad hoc; Lehman is wiped out; but Bear Stearns is bailed out. AIG gets a loan, but the treasury demands an equity stake and a crippling interest rate. Freddie and Fannie first get some credit guarantees, and then nationalized. An appallingly conceived bail out plan is announced and then renegotiated by politicians. There is no pattern, no predictability and huge uncertainty.
The FSA isn't much better. It has pursued a slightly less publicity driven strategy of quietly pressurizing weak banks to take over insolvent ones. It hasn't done much to calm the interbank market and it has left problem banks like the B&B dangling in the wind for far too long. They should have moved against the B&B once it was clear that the rights issue had failed. Instead, it waited until there were incontrovertible signs of a run on retail deposits.
Problem No. 2 - Panic dressed up as action - There is however one pattern that has emerged. Central bank policies are "event" driven. There is very little strategic thinking or long term planning. Here are two examples.
February this year, the Fed woke up to find stock markets falling. It feared a global financial meltdown and dramatically cuts interest rates. Later, we found out that Société Générale was unwinding an unauthorized derivative position, which had been putting temporary downward pressure on equity prices. The rate cuts were largely unnecessary at the time and ultimately limited the Fed's policy options going forward. It was a costly mistake.
Here is another example, the BoE and the FSA woke up one morning and foundthat there was a bank run on Northern Rock. They then discovered that UK deposit insurance was totally inadequate. In a fit of panic, the Treasury gave a blanket guarantee on just NRK deposits, leaving the status of other banks ambiguous. Eventually, this ambiguity weakened other banks, notably the Bradford and Bingley. Even after that second failure, UK deposit insurance policy is totally unclear.
Problem no.3 Liquidity is not enough, the banks are broken - There is no easy way of saying this, but many of our banks are insolvent. Pumping in huge amounts of liquidity doesn't change that fact, it merely hides the problem. What we need is a comprehensive solution for rescuing bankrupt banks and transforming them into solvent ones.
This requires public intervention. However, this intervention must follow some simple principles. The British people will accept a bank bailout plan so long as it is fair, transparent and minimizes the total cost to the taxpayer.
The first principle simply requires that as much of the losses as feasible are borne by current participants in the industry. Shareholders must be wiped out and existing management thoroughly purged.
The second principle requires the government to announce a comprehensive plan as soon as possible. Moreover, it needs to be one that ordinary people understand. This means clearly defined thresholds for nationalization. Decisions need to be quick and resolute. Above, clarity and not discretion is needed.
Finally, the last principle needs to ensure that the taxpayer receives the full benefit of the bailout. This means that all rescue plans go through a nationalization process and a subsequent sale. There can not be any sneaky deals with insiders where assets of one distressed bank are handed over on the cheap to another marginally more healthy one.
The JP Morgan and Fed stitch up of Bear Stearns might seem like a good idea at the time, but it only served to undermine confidence in the Fed's ability to solve this problem fairly and transparently. Similarly, the futile attempts to hand over NRK to private equity firms just served to drain public confidence in the Treasury, the BoE and the FSA. So, no more of these dubious private market solutions. The new rule should be nationalise and then, when the moment is right, privatize.
We are in a mess and we need a plan
The crisis is getting worse, and I get the feeling that yet another announcement of more liquidity just isn't going to do the trick. We are running out of time; the financial system could totally collapse in much the same way as the East Asian systems collapsed back in 1997-8.
At this late stage, we don't need any more half baked, "we will make it up as we go along" strategies. Instead, we need a comprehensive, principles-based resolution strategy that makes our bankrupted banks solvent again.
FOI statistics April-June 2008
The quarterly monitoring statistics on FOI implementation within central government for April-June 2008 have been published:
The quarterly monitoring statistics on FOI implementation within central government for April-June 2008 have been published:
Executive summaryDownload the full statistics bulletin
Departments of State reported receiving 4,879 “non-routine” information requests during the second quarter of 2008 (Q2). Other monitored bodies received 3,986 requests. Across all monitored bodies, a total of 8,865 requests were received, of which 92 per cent had been processed at the time of monitoring. This includes 183 requests handled under the amended
Environmental Information Regulations (EIRs) which came into force on 1 January 2005. [see Table 1]
The 8,865 requests across all monitored bodies received in the second quarter of 2008 is 11 per cent greater than the 7,988 received during the corresponding quarter of 2007, and is the highest quarterly total since Q1 of 2007. [see Table A]
During Q2 of 2008, 87 per cent of all monitored bodies’ requests (excluding those “on hold” or lapsed) were “in time”, in that they were processed within the statutory deadline* or were subject to a permitted deadline extension. This figure is two percentage points lower than in the previous quarter, and four percentage points lower than in the corresponding quarter of 2007. [see Table 2 and Table B]
Of all “resolvable” requests received during Q2 of 2008 (i.e. requests where it was possible to make a substantive decision on whether to release the information being sought), 59 per cent were granted in full, a small increase compared to the previous quarter. [see Table 3 and Table C]
Information rights awareness survey
The Ministry of Justice has released the latest tracker survey carried out with members of the public to discover levels of awareness and attitudes towards information rights legislation.
The fieldwork for the latest survey was carried out in June 2008.
Key results include:
1. Factual awareness of information rights
"People have the legal right to get hold of information about the work of a public authority"
True 83%
False 14%
Don't know 4%
2. Attitudes to information rights issues - Freedom of Information
"Public authorities are becoming more open about what they do and how they are run"
Agree strongly 13%
Agree slightly 37%
Neither agree nor disagree 20%
Disagree slightly 17%
Disagree strongly 12%
Don't know 1%
Download full survey.
The Ministry of Justice has released the latest tracker survey carried out with members of the public to discover levels of awareness and attitudes towards information rights legislation.
The fieldwork for the latest survey was carried out in June 2008.
Key results include:
1. Factual awareness of information rights
"People have the legal right to get hold of information about the work of a public authority"
True 83%
False 14%
Don't know 4%
2. Attitudes to information rights issues - Freedom of Information
"Public authorities are becoming more open about what they do and how they are run"
Agree strongly 13%
Agree slightly 37%
Neither agree nor disagree 20%
Disagree slightly 17%
Disagree strongly 12%
Don't know 1%
Download full survey.
Sunday, September 28, 2008
It’s ‘Yesterday’ Once More – McCartney in Tel Aviv
Hillel Schenker informs us of his latest posting at the UK Guardian blog, indicating that they changed his title from the above to: "A warmish welcome for Paul in Tel Aviv," along with this subhead: "My uncle was part of the committee that banned the Beatles from Israel. Last night, I made amends."
The taxi driver asked me - "where to?" - and I said, "the Yarkon Park for the Paul McCartney concert." But he's 900 years old!" exclaimed the driver. "He's so pompous and full of himself, and those prices – 490 shekels to sit on the grass, and 1,500 shekels for a seat - no way! But, if it was John Lennon, I'd pay $1,000 to see him!".
Since I'm a contemporary of McCartney I let the age issue pass. But I have to admit that when it was announced that McCartney was coming, I told friends that if it was Lennon, I wouldn't hesitate. But McCartney? I wasn't sure, but after long deliberation, decided to go.
After all, in a way it was poetic justice. My uncle Dov Barnir was the youngest member of the first Knesset, a member of the Mapam/United Workers party, the leftwing party that had 19 seats, making it the second strongest faction in the Knesset after Ben-Gurion's Mapai. In 1965, he was appointed to a committee headed by then IDF chief education officer Mordechai (Morele) Bar-On, to decide whether to issue a permit for the Beatles to perform in Israel. They resolved that a visit by John, Paul, George and Ringo would "corrupt Israeli youth," so a permit was denied the impresario who had been negotiating to bring them.
Bar-On, who had been an aide to legendary general Moshe Dayan, went on to become a leading spokesperson for the Peace Now movement. He later apologized for his attitude towards the Beatles, and on a desert-island-discs-like radio program he said that he would take a Beatles record. I don't know if my uncle ever apologized for his part in the decision, but I decided to make amends for him by going to the concert.
Although I originally considered the Beatles a pale imitation of the real thing, they eventually became part of the soundtrack of my life, as for so many others of my generation.
As for the concert itself, it could have been a reflection of a tension between "Give Peace a Chance" - which he sang with gusto together with the crowd with a big peace symbol filling the screen - the only time he mentioned John - and "Live and Let Die," filled with images of fire, brimstone with dramatic fireworks rising above the stage. But it wasn't. This was Paul McCartney after all, and thus it was mainly love songs, his forte. He also shouted to the crowd that "we're really gonna rock tonight in Tel Aviv," mainly via lively versions of "Back in the USSR," "Get Back," and a delightful pounding version of "She was Just 17." ...
He [McCartney] could have said, "make love, not war," but all he said in Tel Aviv was "make love, but not here, not now."
To his credit, he did make a point of being inclusive – wishing the crowd both a Shana Tova and a Ramadan Karim. ... [Greetings which we wish to share with our readers as well-- ed.]
Click here to read the rest at the Guardian’s Website.
The taxi driver asked me - "where to?" - and I said, "the Yarkon Park for the Paul McCartney concert." But he's 900 years old!" exclaimed the driver. "He's so pompous and full of himself, and those prices – 490 shekels to sit on the grass, and 1,500 shekels for a seat - no way! But, if it was John Lennon, I'd pay $1,000 to see him!".
Since I'm a contemporary of McCartney I let the age issue pass. But I have to admit that when it was announced that McCartney was coming, I told friends that if it was Lennon, I wouldn't hesitate. But McCartney? I wasn't sure, but after long deliberation, decided to go.
After all, in a way it was poetic justice. My uncle Dov Barnir was the youngest member of the first Knesset, a member of the Mapam/United Workers party, the leftwing party that had 19 seats, making it the second strongest faction in the Knesset after Ben-Gurion's Mapai. In 1965, he was appointed to a committee headed by then IDF chief education officer Mordechai (Morele) Bar-On, to decide whether to issue a permit for the Beatles to perform in Israel. They resolved that a visit by John, Paul, George and Ringo would "corrupt Israeli youth," so a permit was denied the impresario who had been negotiating to bring them.
Bar-On, who had been an aide to legendary general Moshe Dayan, went on to become a leading spokesperson for the Peace Now movement. He later apologized for his attitude towards the Beatles, and on a desert-island-discs-like radio program he said that he would take a Beatles record. I don't know if my uncle ever apologized for his part in the decision, but I decided to make amends for him by going to the concert.
Although I originally considered the Beatles a pale imitation of the real thing, they eventually became part of the soundtrack of my life, as for so many others of my generation.
As for the concert itself, it could have been a reflection of a tension between "Give Peace a Chance" - which he sang with gusto together with the crowd with a big peace symbol filling the screen - the only time he mentioned John - and "Live and Let Die," filled with images of fire, brimstone with dramatic fireworks rising above the stage. But it wasn't. This was Paul McCartney after all, and thus it was mainly love songs, his forte. He also shouted to the crowd that "we're really gonna rock tonight in Tel Aviv," mainly via lively versions of "Back in the USSR," "Get Back," and a delightful pounding version of "She was Just 17." ...
He [McCartney] could have said, "make love, not war," but all he said in Tel Aviv was "make love, but not here, not now."
To his credit, he did make a point of being inclusive – wishing the crowd both a Shana Tova and a Ramadan Karim. ... [Greetings which we wish to share with our readers as well-- ed.]
Click here to read the rest at the Guardian’s Website.
A Show About Nothing
Dear Friends,
As I mentioned a while back, I'm the "columnista internacional" for a quarterly cultural journal in Mexico. Theme of next issue is humor. Below, my contribution (English version). Enjoy!--mb
One of the most successful sitcoms in the history of American television was the show Seinfeld, which debuted in 1989 and ran continuously through 1998. The principal scriptwriters, Jerry Seinfeld and Larry David, originally pitched it to NBC as “a show about nothing,” because their idea was that the individual episodes would have no plot and instead focus on the trivia of everyday life. For the most part, they stuck to the plan, and the show proved to be hysterically funny. It was also, I’m proud to say, very much a case of Jewish humor, which some might argue is humor at its best. As Freud pointed out in his famous book Jokes and Their Relation to the Unconscious, a joke is never just a joke; it masks a subtext, an intention that is typically very different from what is being overtly expressed. And in the case of Jewish humor, that subtext is almost always sad, depressing, or even tragic. The function of the joke is to ease the pain.
My maternal grandfather, who virtually raised me, told lots of jokes of this sort. He even compiled a book of aphorisms, based on the east European oral tradition, ones that had this kind of twist to them. (It was published in Wilno, Poland, in Yiddish in 1930.) One of his favorite jokes–it may have even been a true story, for all I know–was about a man who went to his doctor for his annual checkup. The doctor examined him, took blood, etc., but was unable to collect a urine specimen because the man did not have the urge to go at that particular moment. “Drop it off tomorrow,” the doctor told him. The man went home, got up the next morning, peed in a jar, and then had a bright idea: the family was too poor for everyone to have a medical exam; why not have them all pee in the same jar, so that unbeknownst to the doctor, the entire family could get analyzed at the same time? So the wife and children were added to the mix, and as the man was leaving his house to go to the doctor’s he decided he might as well throw in a sample from the family horse, which was tethered to a tree in the front yard. He then brought the jar to the doctor’s office. “Come back next week,” the doctor said, “and I’ll give you the results.” The man left and returned in seven days. “Everything seems to be fine,” said the doctor; “the only thing I would recommend is that you cut down on your intake of oats.”
Funny, yes? But the humor masks a situation that was daily fare for the Jews of eastern Europe: extreme poverty. In fact, my grandfather told me that at one point the family managed to survive by eating the plaster off the door jambs of the house they were living in. Nothing funny about that.
In the case of the Seinfeld scripts, Jerry provided the upbeat, overt aspect of the show’s humor, while Larry David supplied the subtext. Larry’s vision, especially about America, was quite dark. As a result, there is an undercurrent in the episodes, one which says that the United States is a country in which friendship is pretty much a sham and community nonexistent; a society where nobody gives a damn about anybody else. This is true not only in the way that the four central characters–Jerry, Elaine, George, and Kramer–relate to those outside their little circle, but also in the way they relate to each other. They often talk simultaneously, “through” each other, as though the other person weren’t even present. All four of them appear to have only one motive: advancement of their own personal and immediate goals. In a word, the show is actually about the callousness, the almost autistic indifference, of daily life in America; and this is revealed in episode after episode. Just off the top of my head, the following vignettes come to mind:
-Elaine and Jerry are sitting in a coffee shop when they are approached by a man who explains that his son is a big fan of Jerry’s, and loves watching him when he appears on TV. It turns out that the boy has some rare immune-deficiency disease that requires him to live in a hermetically sealed plastic bubble. As he talks about his little “bubble boy,” the man begins to weep. Elaine, also crying, reaches for the napkin holder and hands napkins to the man and Jerry. She and the man wipe their eyes; Jerry, who is calmly munching on a sandwich, matter-of-factly wipes his mouth.
-George and his girlfriend Susan drive north from New York City for a holiday weekend at her grandfather’s cabin. George gives Susan money to pay the tolls en route. It turns out that Kramer visited the cabin a bit earlier and accidentally left a lit cigar behind–one that Susan’s father had given to George, who in turn had given to Kramer. By the time George and Susan arrive at the cabin, the place is engulfed in flames. Susan screams, “Oh my God, the cabin ” George turns to her and says, “I just remembered: I don’t think you gave me the change from the money I gave you for the tolls.”
-A scene at a funeral, being held for an acquaintance of Jerry’s and Elaine’s who was killed in an auto accident. They are sitting in church (or synagogue), waiting for the service to begin. In the background, we hear the periodic sobbing of the family members. Elaine turns to Jerry and says, “I really have to get some new clothes. I’m bored with everything I have.” Pause; more sobbing, which is now much louder. “Really,” she continues, “I have absolutely nothing to wear.”
-Another funeral, this time for one of Jerry’s relatives. Elaine is hell-bent on getting the deceased’s rent-controlled apartment. As she moves forward in the receiving line to express her condolences, she finally shakes the hand of an elderly relative of the deceased, who happens to be hard of hearing, and yells in his ear, “So what about the apartment?”
-George is attending the birthday party of his current girlfriend’s little boy. At some point, someone burns a hamburger in the kitchen, and smoke starts pouring out the kitchen door. “Fire ” yells George, “Fire ”, as he makes for the front door of the house, knocking over old women and little children in his path.
-As if to deliberately mock the notion of community (or lack thereof), there is an episode in which Kramer takes photos of everyone in the building and posts them, along with the corresponding name of each person, on the wall of the foyer, just inside the entrance. The idea is that the residents will now be able to greet each other by name. The whole thing is too phony to be believed, especially when the tenants begin kissing one another when they meet–a common practice in Mexico and other countries, but totally inappropriate in the United States. Jerry, who can’t stand the bullshit involved, opts out, refusing to kiss and hug, and thereby becomes the target of much public hostility.
All of this reaches a kind of climax in the very last episode of the show, in which the Larry David and Jerry make their opinion of the nature of American social life quite clear. In this ninety-minute finale, the Fab Four are arrested in Massachusetts for ignoring a (nonexistent, in real life) “Good Samaritan Law,” whereby one is supposedly required to come to the aid of other people in distress. They are put on trial, and practically everyone from the show’s nine years of episodes flies into this small New England town to watch the proceedings or actually take the witness stand and describe to the judge and jury how abusively they had been treated by the gang. It is at this point that the Seinfeld episodes are revealed for what they were: all of these jokes had something very ugly underneath them. Other people were merely pawns in (or obstacles to) Jerry’s, Elaine’s, George’s, or Kramer’s personal agenda. Humor aside, the scriptwriters leave no doubt that their vision of American life is quite bleak. When Jerry phones his lawyer, “Jackie Chiles” (a Johnnie Cochran look-alike), to explain that they were arrested for not coming to someone’s aid, Jackie explodes with indignation: “Why, that’s ridiculous!” he barks. “You don’t have to help anybody. That’s what this country is all about!” As the popular American expression has it, He got that one right.
The trial over, the judge sentences our heroes to a year in jail, commenting that “your callous disregard for other human beings threatens to rock the very foundations of society.” But which society? Larry and Jerry make it quite clear that in their view, callous disregard for other human beings is the foundation of society–American society, that is. And so the subtext finally breaks through in no uncertain terms: Seinfeld was A Show About Something, after all.
As I mentioned a while back, I'm the "columnista internacional" for a quarterly cultural journal in Mexico. Theme of next issue is humor. Below, my contribution (English version). Enjoy!--mb
One of the most successful sitcoms in the history of American television was the show Seinfeld, which debuted in 1989 and ran continuously through 1998. The principal scriptwriters, Jerry Seinfeld and Larry David, originally pitched it to NBC as “a show about nothing,” because their idea was that the individual episodes would have no plot and instead focus on the trivia of everyday life. For the most part, they stuck to the plan, and the show proved to be hysterically funny. It was also, I’m proud to say, very much a case of Jewish humor, which some might argue is humor at its best. As Freud pointed out in his famous book Jokes and Their Relation to the Unconscious, a joke is never just a joke; it masks a subtext, an intention that is typically very different from what is being overtly expressed. And in the case of Jewish humor, that subtext is almost always sad, depressing, or even tragic. The function of the joke is to ease the pain.
My maternal grandfather, who virtually raised me, told lots of jokes of this sort. He even compiled a book of aphorisms, based on the east European oral tradition, ones that had this kind of twist to them. (It was published in Wilno, Poland, in Yiddish in 1930.) One of his favorite jokes–it may have even been a true story, for all I know–was about a man who went to his doctor for his annual checkup. The doctor examined him, took blood, etc., but was unable to collect a urine specimen because the man did not have the urge to go at that particular moment. “Drop it off tomorrow,” the doctor told him. The man went home, got up the next morning, peed in a jar, and then had a bright idea: the family was too poor for everyone to have a medical exam; why not have them all pee in the same jar, so that unbeknownst to the doctor, the entire family could get analyzed at the same time? So the wife and children were added to the mix, and as the man was leaving his house to go to the doctor’s he decided he might as well throw in a sample from the family horse, which was tethered to a tree in the front yard. He then brought the jar to the doctor’s office. “Come back next week,” the doctor said, “and I’ll give you the results.” The man left and returned in seven days. “Everything seems to be fine,” said the doctor; “the only thing I would recommend is that you cut down on your intake of oats.”
Funny, yes? But the humor masks a situation that was daily fare for the Jews of eastern Europe: extreme poverty. In fact, my grandfather told me that at one point the family managed to survive by eating the plaster off the door jambs of the house they were living in. Nothing funny about that.
In the case of the Seinfeld scripts, Jerry provided the upbeat, overt aspect of the show’s humor, while Larry David supplied the subtext. Larry’s vision, especially about America, was quite dark. As a result, there is an undercurrent in the episodes, one which says that the United States is a country in which friendship is pretty much a sham and community nonexistent; a society where nobody gives a damn about anybody else. This is true not only in the way that the four central characters–Jerry, Elaine, George, and Kramer–relate to those outside their little circle, but also in the way they relate to each other. They often talk simultaneously, “through” each other, as though the other person weren’t even present. All four of them appear to have only one motive: advancement of their own personal and immediate goals. In a word, the show is actually about the callousness, the almost autistic indifference, of daily life in America; and this is revealed in episode after episode. Just off the top of my head, the following vignettes come to mind:
-Elaine and Jerry are sitting in a coffee shop when they are approached by a man who explains that his son is a big fan of Jerry’s, and loves watching him when he appears on TV. It turns out that the boy has some rare immune-deficiency disease that requires him to live in a hermetically sealed plastic bubble. As he talks about his little “bubble boy,” the man begins to weep. Elaine, also crying, reaches for the napkin holder and hands napkins to the man and Jerry. She and the man wipe their eyes; Jerry, who is calmly munching on a sandwich, matter-of-factly wipes his mouth.
-George and his girlfriend Susan drive north from New York City for a holiday weekend at her grandfather’s cabin. George gives Susan money to pay the tolls en route. It turns out that Kramer visited the cabin a bit earlier and accidentally left a lit cigar behind–one that Susan’s father had given to George, who in turn had given to Kramer. By the time George and Susan arrive at the cabin, the place is engulfed in flames. Susan screams, “Oh my God, the cabin ” George turns to her and says, “I just remembered: I don’t think you gave me the change from the money I gave you for the tolls.”
-A scene at a funeral, being held for an acquaintance of Jerry’s and Elaine’s who was killed in an auto accident. They are sitting in church (or synagogue), waiting for the service to begin. In the background, we hear the periodic sobbing of the family members. Elaine turns to Jerry and says, “I really have to get some new clothes. I’m bored with everything I have.” Pause; more sobbing, which is now much louder. “Really,” she continues, “I have absolutely nothing to wear.”
-Another funeral, this time for one of Jerry’s relatives. Elaine is hell-bent on getting the deceased’s rent-controlled apartment. As she moves forward in the receiving line to express her condolences, she finally shakes the hand of an elderly relative of the deceased, who happens to be hard of hearing, and yells in his ear, “So what about the apartment?”
-George is attending the birthday party of his current girlfriend’s little boy. At some point, someone burns a hamburger in the kitchen, and smoke starts pouring out the kitchen door. “Fire ” yells George, “Fire ”, as he makes for the front door of the house, knocking over old women and little children in his path.
-As if to deliberately mock the notion of community (or lack thereof), there is an episode in which Kramer takes photos of everyone in the building and posts them, along with the corresponding name of each person, on the wall of the foyer, just inside the entrance. The idea is that the residents will now be able to greet each other by name. The whole thing is too phony to be believed, especially when the tenants begin kissing one another when they meet–a common practice in Mexico and other countries, but totally inappropriate in the United States. Jerry, who can’t stand the bullshit involved, opts out, refusing to kiss and hug, and thereby becomes the target of much public hostility.
All of this reaches a kind of climax in the very last episode of the show, in which the Larry David and Jerry make their opinion of the nature of American social life quite clear. In this ninety-minute finale, the Fab Four are arrested in Massachusetts for ignoring a (nonexistent, in real life) “Good Samaritan Law,” whereby one is supposedly required to come to the aid of other people in distress. They are put on trial, and practically everyone from the show’s nine years of episodes flies into this small New England town to watch the proceedings or actually take the witness stand and describe to the judge and jury how abusively they had been treated by the gang. It is at this point that the Seinfeld episodes are revealed for what they were: all of these jokes had something very ugly underneath them. Other people were merely pawns in (or obstacles to) Jerry’s, Elaine’s, George’s, or Kramer’s personal agenda. Humor aside, the scriptwriters leave no doubt that their vision of American life is quite bleak. When Jerry phones his lawyer, “Jackie Chiles” (a Johnnie Cochran look-alike), to explain that they were arrested for not coming to someone’s aid, Jackie explodes with indignation: “Why, that’s ridiculous!” he barks. “You don’t have to help anybody. That’s what this country is all about!” As the popular American expression has it, He got that one right.
The trial over, the judge sentences our heroes to a year in jail, commenting that “your callous disregard for other human beings threatens to rock the very foundations of society.” But which society? Larry and Jerry make it quite clear that in their view, callous disregard for other human beings is the foundation of society–American society, that is. And so the subtext finally breaks through in no uncertain terms: Seinfeld was A Show About Something, after all.
The US bail out - what it really means
An excellent explanation from Dan Roberts of the Telegraph:
"Imagine you took your pay cheque down to the bookies each month and put it all on the 2.15pm at Newmarket. Imagine, too, that you were lucky enough to win - not just occasionally, but every month for several years.
With your income soaring, you might start to behave as if you had secured a permanent pay rise. You would want to reward yourself with treats and bonuses to celebrate your good judgment. You might start to bet on horses with longer odds.
After a while, you would probably cease describing it as gambling and start believing you had invented a new paradigm that others were simply too stupid to notice.
Now, imagine the moment this dream turns sour: the day you start losing not just the monthly flutter but your underlying source of income too. Imagine the humiliation you might feel as the secret of your immense wealth vanishes before your eyes.
Imagine demanding that your less fortunate friends and neighbours bail you out by giving you some of their pay cheque instead."
"Imagine you took your pay cheque down to the bookies each month and put it all on the 2.15pm at Newmarket. Imagine, too, that you were lucky enough to win - not just occasionally, but every month for several years.
With your income soaring, you might start to behave as if you had secured a permanent pay rise. You would want to reward yourself with treats and bonuses to celebrate your good judgment. You might start to bet on horses with longer odds.
After a while, you would probably cease describing it as gambling and start believing you had invented a new paradigm that others were simply too stupid to notice.
Now, imagine the moment this dream turns sour: the day you start losing not just the monthly flutter but your underlying source of income too. Imagine the humiliation you might feel as the secret of your immense wealth vanishes before your eyes.
Imagine demanding that your less fortunate friends and neighbours bail you out by giving you some of their pay cheque instead."
B&B - it has gone
According to the Telegraph, the Treasury minister Yvette Cooper bowed to the inevitable and confirmed that the Government was "stepping in" to nationalize Britain’s eighth biggest mortgage lender.
It is not hard to see why the B&B had to join NRK:
On Friday, its shares were trading at just 20p
Credit default swaps cost 1500 basis points.
On Saturday, the bank was in the early stages of a run, with customer are pulling out millions from the deposits.
The bank had one million shareholders. All are about to be wiped out.
Here is the sorry list of UK mortgage failures so far.
HBOS (bought out by Lloyds)
Alliance and Leicester (bought by Santander)
Northern Rock (nationalised)
Bradford and Bingley (nationalised)
Will the list become longer?
It is not hard to see why the B&B had to join NRK:
The bank had one million shareholders. All are about to be wiped out.
Here is the sorry list of UK mortgage failures so far.
HBOS (bought out by Lloyds)
Alliance and Leicester (bought by Santander)
Northern Rock (nationalised)
Bradford and Bingley (nationalised)
Will the list become longer?
Mama, I'm home
It takes a woman to tell it like it really is. The truth, the whole truth and nothing but the truth.
I love her. Can Mary Kaptur come over here. I would vote her.
The real reason why interbank rates are rising
I thought this was a very telling comment. It is a quote from an anonymous banker talking to a Times reporter about the recent tightening of the credit crunch:
“People keep saying that banks are scared to lend to one another, but that’s not quite it. The money we lend is not ours, but our customers’. With everything going on in the markets, our corporate customers are only willing to deposit it overnight. It’s a corporate equivalent of all our personal customers moving their savings into their current accounts in case they need the money.”
It is an obvious point, but corporate customers aren't covered by deposit insurance. Any corporate entity leaving their money in time deposit in either a US or UK bank is simply asking for trouble.
“People keep saying that banks are scared to lend to one another, but that’s not quite it. The money we lend is not ours, but our customers’. With everything going on in the markets, our corporate customers are only willing to deposit it overnight. It’s a corporate equivalent of all our personal customers moving their savings into their current accounts in case they need the money.”
It is an obvious point, but corporate customers aren't covered by deposit insurance. Any corporate entity leaving their money in time deposit in either a US or UK bank is simply asking for trouble.
How the interbank market tightened
Lately, things have become a little crazy in the interbank markets. The chart above shows how US dollar LIBOR rates changed between September 12-19. On the September 17th, LIBOR went mad. The overnight rate jumped from 2.1 percent to 6.4 percent. Since then, LIBOR has calmed down a little. However, the US dollar LIBOR rate has shifted up at all maturities.
And what about Sterling LIBOR?
Sterling interbank rates also went a little wild. However, the madess in the overnight market subsided as the Bank of Englnad pumped in liquidity. The Bank might have overdone it a little at the very short end of the market; the overnight rate on September 19 was a little lower than it was on September 12th.Nonetheless, the sterling LIBOR yield curve has shifted upwards, suggesting that the credit crisis has worsened since the Fed pulled the plug on Lehman.
Saturday, September 27, 2008
So farewell, B&B
This morning's newspapers report that the Treasury is on the verge of nationalizing the Bradford and Bingley. Government intervention is inevitable. On Saturday, the bank experienced significant withdrawals of cash from its branches and online bank. By Monday, withdrawls would have snowballed into a full-scale run.
The bank reached the end of the road on August 29 when it published its half yearly interim results. Few were surprised to hear the bank report losses of ₤26 million. The arrears situation was deteriorating. The share price kept falling. Despite the recent rights issue and management claims of being well capitalized, no one was buying the happy talk from the B&B management. Last week, the credit rating agencies acknowledged that the bank was in trouble and belatedly downgraded the bank.
Thankfully, the B&B isn't in quite the same league as Northern Rock. As of June 30, the bank held about ₤52 billion of assets, of which around ₤39 billion are loans. Most of the loans are to buy-to-let customers. In terms of liabilities, the bank have some ₤20 billion in retail deposits. The Treasury should find this nationalisation less traumatic.
The real difficulty with B&B is the lending book. While the B&B had its own "organic" loans, which it generated through its own branch network, it also had a large amount of acquired lending; loans it bought from other institutions. The arrears numbers on these acquired loans are horrible. The bank also dipped deeper than most into the self-certification loan market. The arrears rate on these loans is high and rising. It is a lending book that will deteriorate further as the economy slows and borrowers run into payments difficulties.
According to media reports; the B&B's loan book is likely to stay on the government books for long time. The Treasury appears to have the good sense to understand that fire sale of bad loans would not be in the best financial interest of taxpayers. As for the retail deposits, the government will auction them off to the highest bidder.
I am curious how this latter transaction will work. Deposits, are of course, liabilities to banks. Presumably, these liabilities will be backed up by some form of government paper. It is just a guess here, but if this is how the Treasury will arrange this sale, then the B&B will add around ₤20 billion to government debt.
A second issue will be the remainder of the B&B's liabilities. Will the creditors receive a government bailout, or will they have to wait until the B&B is liquidated?
The demise of the B&B is a serious blow to the buy-to-let business. In future, investors will need to receive a significant risk premium if they are to be persuaded to invest in specialist BTL investors.
The end of the B&B also rules out any serious possiblity of banks recapitalizing via rights issues. Anyone who invested in the B&B earlier this summer would have literally thrown their money away. Investors won't make the same mistake again.
Like the NRK failure, the end of the B&B marks a major turning point on the road towards deflating the UK's housing bubble. Just as the NRK collapse signaled the end of the high LTV retail mortgage; the B&B signals the end of BTL loans to highly leveraged small time speculators.
The bank reached the end of the road on August 29 when it published its half yearly interim results. Few were surprised to hear the bank report losses of ₤26 million. The arrears situation was deteriorating. The share price kept falling. Despite the recent rights issue and management claims of being well capitalized, no one was buying the happy talk from the B&B management. Last week, the credit rating agencies acknowledged that the bank was in trouble and belatedly downgraded the bank.
Thankfully, the B&B isn't in quite the same league as Northern Rock. As of June 30, the bank held about ₤52 billion of assets, of which around ₤39 billion are loans. Most of the loans are to buy-to-let customers. In terms of liabilities, the bank have some ₤20 billion in retail deposits. The Treasury should find this nationalisation less traumatic.
The real difficulty with B&B is the lending book. While the B&B had its own "organic" loans, which it generated through its own branch network, it also had a large amount of acquired lending; loans it bought from other institutions. The arrears numbers on these acquired loans are horrible. The bank also dipped deeper than most into the self-certification loan market. The arrears rate on these loans is high and rising. It is a lending book that will deteriorate further as the economy slows and borrowers run into payments difficulties.
According to media reports; the B&B's loan book is likely to stay on the government books for long time. The Treasury appears to have the good sense to understand that fire sale of bad loans would not be in the best financial interest of taxpayers. As for the retail deposits, the government will auction them off to the highest bidder.
I am curious how this latter transaction will work. Deposits, are of course, liabilities to banks. Presumably, these liabilities will be backed up by some form of government paper. It is just a guess here, but if this is how the Treasury will arrange this sale, then the B&B will add around ₤20 billion to government debt.
A second issue will be the remainder of the B&B's liabilities. Will the creditors receive a government bailout, or will they have to wait until the B&B is liquidated?
The demise of the B&B is a serious blow to the buy-to-let business. In future, investors will need to receive a significant risk premium if they are to be persuaded to invest in specialist BTL investors.
The end of the B&B also rules out any serious possiblity of banks recapitalizing via rights issues. Anyone who invested in the B&B earlier this summer would have literally thrown their money away. Investors won't make the same mistake again.
Like the NRK failure, the end of the B&B marks a major turning point on the road towards deflating the UK's housing bubble. Just as the NRK collapse signaled the end of the high LTV retail mortgage; the B&B signals the end of BTL loans to highly leveraged small time speculators.
Congresswoman Eddie Bernice Johnson's Tech Braintrust
President's Corner: By Norris McDonald
Congresswoman Eddie Bernice Johnson knows how to put on a forum. She sponsored her 16th forum at the 2008 Annual Congressional Black Caucus Legislative Conference at the Walter E. Washington Convention Center in Washington, D.C. But don't think that she just goes through the motions. Clearly she orchestrated this event like a maestro. Her staff operated like a finely tuned precision team. They produced art. Thank you. See videos below:
Congresswoman Eddie Bernice Johnson knows how to put on a forum. She sponsored her 16th forum at the 2008 Annual Congressional Black Caucus Legislative Conference at the Walter E. Washington Convention Center in Washington, D.C. But don't think that she just goes through the motions. Clearly she orchestrated this event like a maestro. Her staff operated like a finely tuned precision team. They produced art. Thank you. See videos below:
Congresswoman Johnson met us for Breakfast at 7 a.m. at the Grand Cafe at the Grand Hyatt hotel. She got to know each panelist a little by participating in engaging conversation. This was the first conference for some of the panelists and one would have thought that it was the congresswoman's too based on her enthusiam. The buffet breakfast was excellent too. And to top this off she provided exquisite chaffeured transportation for the panelists to the convention center. She made us feel like stars.
The theme of the Science and Technology Braintrust was "Today's Technology for Tomorrow's Environment." Congresswoman's Bernice Johnson's statement:
Thank you for attending the 2008 Congressional Black Caucus Foundation's Science and Technology Braintrust. As a senior member on the House Committee on Science & Technology, I am dedicated to diversifying our domestic workforce in fields such as science, technology, engineering and mathematics (STEM).
Exchanging ideas and engaging in a dialogue is essential in recruiting and developing our next generation of STEM professionals. During this year's S&T Braintrust we will examine the next generation of environmental technology.
It is my hope that today's discussion will inspire our next generation of scientists to pursue careers in the STEM fields.
Your participation is key for a successful Braintrust. I believe that today's discussions will spark imaginations and leave each of us with a new viewpoint.
The panelists included (in order of presentation):
Sheryl Lee Ralph, Actress and education advocate
Norris McDonald, President, African American Environmentalist Association
Miquela Craytor, Executive Director, Sustainable South Bronx
Miranda Anderson, Director of Corporate Affairs for Sustainability, Wal-Mart
Bob Langert, V.P. of Corporate Social Responsibility, McDonald's
Curtis Etherly, V.P. of Public Affairs, Coca-Cola
- Cynné Simpson - Anchor, ABC7/WJLA-TV - Moderator
Congresswoman Johnson recruited about 40 high school students to attend the forum. 
They were bright eyed, enthusiastic and asked interesting questions. Sheryl Lee Ralph provided an inspirational message to them and they responded accordingly. They rushed the stage after the presentation to meet her. She was very accomdating and patiently engaged each and every student who approached her. It is also interesting that Ms. Ralph costarred in "The Distinguished Gentleman" with actor Eddie Murphy, which was based in Washington, D.C. with Mr. Murphy playing a congressman.
The forum was well attended with a standing room only packed house. After the forum, the congresswoman's militarily efficient staff herded us back to our transportation at the front of the convention center and we were wisked to The Willard Hotel for a fabulous lunch sponsored by Texas Instruments and a presentation on, "Dropouts, Diplomas, and Dollars-U.S. High Schools and the Nation's Economy," by former West Virginia Governor Bob Wise.
All-in-all it was a wonderful event. I attended my first CBC conference in 1979 and I organized the first Energy Braintrust for the late Congressman Mickey Leland. But this was far and away the best event I have ever participated in at a CBC conference. Thank you Congresswoman Johnson.
I am pictured with Congresswoman Eddie Bernice Jones, top, and actress Sheryl Lee Ralph, bottom.
We need a UK bailout strategy.
I've been surprised by the UK banks. In contrast to their American cousins, banks here have been noticeably quiet about the need for a generous tax payer financed bail out.
I wonder why? Perhaps, our banks have already quiet received assurances from the government that when the time comes, the taxpayer will be there for them. Both the government and the banking sector have good reason to keep quiet. A bailout will be extremely contentious and won't be an easy sell.
However, silence is the last thing we need right now. Instead, we need a serious debate about the appropriate circumstances when the government should intervene in a failing financial institution. If the Americans have taught us one thing this year, it is that an ad hoc, "take it as it comes" strategy simply doesn't work. The uncertainty about who gets bailed out only makes matters worse.
Nor is it tenable to say "we'll have no bailouts here". The consequences of a full scale bank run is just to horrible to contemplate. Besides, whether we like it or not, governments always come to the rescue of failing banks. The key question is how they bail out the banks.
Since a UK bailout is all but inevitable, here is my simple guidelines for the upcoming financial rescue of our largely insolvent financial system. The overriding idea is that the government should provide financial assistance generously, but brutally punish any bank who dares ask for it.
Principle one - All deposit taking institutions get bailed out. Everything else goes down in flames. So, hedge funds, SIVs, and the rest of the shadow banking system should understand that there are no government guarantees. They are on their own.
Principle two - Any deposit taking institution that asks for emergency liquidity should provide high quality collateral and pay an above market interest rate for any cash. If, in the opinion of the Bank of England, the bank would have difficulty paying the penal rate, the government should immediately nationalize the troubled institution.
Principle three - The shareholders of all nationalized financial institutions get wiped out. The value of shareholder equity goes to zero.
Principle four - The board of directors, the CEO and the CFO of any nationalized firm are fired immediately without compensation.
Principle five - The assets of all nationalized firms are sold only where the maximum value to the taxpayer can be reasonably assured. In some cases, this might mean holding onto assets for a very long time.
Principle six - Banks are nationalized before their net worth is zero. Every bank must keep a minimum capital adequacy ratio of 2 percent. Any bank falling below this threshold is immediately nationalized.
Principle seven - The head of the FSA is automatically fired if any bank fails with assets greater than 0.5 percent of total UK bank assets.
I hate speculating about the future of particular institutions. Bank failure is a nasty business. Judging by press reports this weekend, the UK government might need to think about a coherent bank resolution strategy very quickly.
The failures could start coming thick and fast.
I wonder why? Perhaps, our banks have already quiet received assurances from the government that when the time comes, the taxpayer will be there for them. Both the government and the banking sector have good reason to keep quiet. A bailout will be extremely contentious and won't be an easy sell.
However, silence is the last thing we need right now. Instead, we need a serious debate about the appropriate circumstances when the government should intervene in a failing financial institution. If the Americans have taught us one thing this year, it is that an ad hoc, "take it as it comes" strategy simply doesn't work. The uncertainty about who gets bailed out only makes matters worse.
Nor is it tenable to say "we'll have no bailouts here". The consequences of a full scale bank run is just to horrible to contemplate. Besides, whether we like it or not, governments always come to the rescue of failing banks. The key question is how they bail out the banks.
Since a UK bailout is all but inevitable, here is my simple guidelines for the upcoming financial rescue of our largely insolvent financial system. The overriding idea is that the government should provide financial assistance generously, but brutally punish any bank who dares ask for it.
Principle one - All deposit taking institutions get bailed out. Everything else goes down in flames. So, hedge funds, SIVs, and the rest of the shadow banking system should understand that there are no government guarantees. They are on their own.
Principle two - Any deposit taking institution that asks for emergency liquidity should provide high quality collateral and pay an above market interest rate for any cash. If, in the opinion of the Bank of England, the bank would have difficulty paying the penal rate, the government should immediately nationalize the troubled institution.
Principle three - The shareholders of all nationalized financial institutions get wiped out. The value of shareholder equity goes to zero.
Principle four - The board of directors, the CEO and the CFO of any nationalized firm are fired immediately without compensation.
Principle five - The assets of all nationalized firms are sold only where the maximum value to the taxpayer can be reasonably assured. In some cases, this might mean holding onto assets for a very long time.
Principle six - Banks are nationalized before their net worth is zero. Every bank must keep a minimum capital adequacy ratio of 2 percent. Any bank falling below this threshold is immediately nationalized.
Principle seven - The head of the FSA is automatically fired if any bank fails with assets greater than 0.5 percent of total UK bank assets.
I hate speculating about the future of particular institutions. Bank failure is a nasty business. Judging by press reports this weekend, the UK government might need to think about a coherent bank resolution strategy very quickly.
The failures could start coming thick and fast.
Friday, September 26, 2008
If men were angels
"If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.
In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. "
James Madison, Federalist No. 51
Here in the UK, we could learn much from the discussions that followed American Independence. When creating that great republic, the founding fathers wrestled with two questions. First, how do you create institutions that are robust enough to deal with the ingrained venality of people. Second, how do you ensure that those institutions, controlled by venal individuals, behave themselves.
Here in the UK, how did we fare when it came to the government of our financial institutions? It is not an industry that normally attracts angels. Therefore, there was a need to limit the more destructive activities of bankers.
For at least a century, we had a very competent financial supervisor; the Bank of England. When confronted with anything dubious, the governor would raise an eyebrow a few millimetres, and everyone got the message. While the Bank was in charge the city, there wasn't a single run on a high street bank. When some of the more exotic banks ran into trouble,the BoE effectively and discreetly sorted them out.
In the name of change, New Labour threw into the dustbin all that accumulated regulatory experience. In its place, it established a naive and untested regulator - the FSA. Ten years later, it has proved to be one of the most disastrous decisions during the post war period.
The new agency could not properly control or monitor the banks and their various off-balance sheet shadow activities. The FSA watched helplessly as credit exploded, the housing bubble took off, and bank staff created new value-reducing financial products.
From a very early stage, it must have been obvious to the government that something was terribly wrong at the FSA. The chacellor only needed to look into an estate agent window and see that the financial system was cooking up an almighty crash. Why didn't the government do something to sort out the obvious regulatory failures at the FSA?
New Labour had no interest in controlling the credit boom and didn't want the FSA to crack down on the banks. In the absence of angels, highly unstable industries like finance needs proper government. However, regulation alone is not enough. Politicians needed to ensure that the regulators actually regulated the financial sector.
Here, we come to the deep insight of James Madison. New Labour was unable to "control itself". For ten years, the housing bubble worked for Brown and Blair. Expanding debt levels kept household consumption growing, while wages were stagnating and key sectors of the economy like manufacturing hit one recession after another. The bubble allowed New Labour to spin the myth that the UK economy was thriving when it was in reality drowning in debt. Now that myth is exploding, leaving a terrible financial crisis in its place.
In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. "
James Madison, Federalist No. 51
Here in the UK, we could learn much from the discussions that followed American Independence. When creating that great republic, the founding fathers wrestled with two questions. First, how do you create institutions that are robust enough to deal with the ingrained venality of people. Second, how do you ensure that those institutions, controlled by venal individuals, behave themselves.
Here in the UK, how did we fare when it came to the government of our financial institutions? It is not an industry that normally attracts angels. Therefore, there was a need to limit the more destructive activities of bankers.
For at least a century, we had a very competent financial supervisor; the Bank of England. When confronted with anything dubious, the governor would raise an eyebrow a few millimetres, and everyone got the message. While the Bank was in charge the city, there wasn't a single run on a high street bank. When some of the more exotic banks ran into trouble,the BoE effectively and discreetly sorted them out.
In the name of change, New Labour threw into the dustbin all that accumulated regulatory experience. In its place, it established a naive and untested regulator - the FSA. Ten years later, it has proved to be one of the most disastrous decisions during the post war period.
The new agency could not properly control or monitor the banks and their various off-balance sheet shadow activities. The FSA watched helplessly as credit exploded, the housing bubble took off, and bank staff created new value-reducing financial products.
From a very early stage, it must have been obvious to the government that something was terribly wrong at the FSA. The chacellor only needed to look into an estate agent window and see that the financial system was cooking up an almighty crash. Why didn't the government do something to sort out the obvious regulatory failures at the FSA?
New Labour had no interest in controlling the credit boom and didn't want the FSA to crack down on the banks. In the absence of angels, highly unstable industries like finance needs proper government. However, regulation alone is not enough. Politicians needed to ensure that the regulators actually regulated the financial sector.
Here, we come to the deep insight of James Madison. New Labour was unable to "control itself". For ten years, the housing bubble worked for Brown and Blair. Expanding debt levels kept household consumption growing, while wages were stagnating and key sectors of the economy like manufacturing hit one recession after another. The bubble allowed New Labour to spin the myth that the UK economy was thriving when it was in reality drowning in debt. Now that myth is exploding, leaving a terrible financial crisis in its place.
Credit crunch - it has never been worse
Yesterday, 3-month interbank spreads hit 134 basis points. Prior to the credit crunch, that number was usually around 12 basis points. The spread is at an all time high.The credit crunch has never been more acute than it is tonight. The sterling interbank market appears to have collapsed. Banks are hoarding cash, and they are unwilling to lend to each other without collateral.
Those huge waves of central bank credit, the special liquidity scheme, and the rate cuts; none of it has worked. It has all failed. The financial system is close to meltdown.
How did things get so bad?
Is anyone keeping count.....
Here is a snippet from a Bank of England press release, which was issued earlier today:
"Central banks have been employing co-ordinated measures designed to address the pressures in global money markets. Most recently, central banks have acted together to inject dollars into the overnight markets. Using reciprocal currency arrangements (swap lines) with the Federal Reserve, the Bank of England, the European Central Bank (ECB), and the Swiss National Bank today are announcing the introduction of operations to provide U.S. dollar liquidity with a one-week maturity. These operations are intended to address funding pressures over quarter end. Central banks continue to work together closely and are prepared to take further steps as needed to address the ongoing pressures in funding markets."
Over the last few months, I have seen a lot of these types of press releases. Invariably, they contain lots of phrases like "coordinated measures" and "pressures in the global market". Somewhere, buried deep in the text, is a number. It is always in the billions.
Is anyone keeping count on these liquidity operations? The numbers are getting a little silly. More worryingly, these initiatives to provide emergency help to banks never seem to work.
"Central banks have been employing co-ordinated measures designed to address the pressures in global money markets. Most recently, central banks have acted together to inject dollars into the overnight markets. Using reciprocal currency arrangements (swap lines) with the Federal Reserve, the Bank of England, the European Central Bank (ECB), and the Swiss National Bank today are announcing the introduction of operations to provide U.S. dollar liquidity with a one-week maturity. These operations are intended to address funding pressures over quarter end. Central banks continue to work together closely and are prepared to take further steps as needed to address the ongoing pressures in funding markets."
Over the last few months, I have seen a lot of these types of press releases. Invariably, they contain lots of phrases like "coordinated measures" and "pressures in the global market". Somewhere, buried deep in the text, is a number. It is always in the billions.
Is anyone keeping count on these liquidity operations? The numbers are getting a little silly. More worryingly, these initiatives to provide emergency help to banks never seem to work.
More good news
Well, at least for renters. The times reports that rents in London are falling.
"Savills, the estate agent, has revealed that prices for prime London homes are now 12.1 per cent lower than a year ago, after falling 3.7 per cent in the third quarter. But in a shock reversal — the first fall since the financial downturn after the September 11 attacks — rents are now 1.8 per cent lower than three months ago.
Falling rents will depress yields and further discourage any investors who may have been drawn in by higher relative returns as property values dropped. Lucian Cook, a director of research at Savills, says: “It will be very hard for investors to pin the tail on the donkey while rents are falling.”
Does anyone remember those Paragon inspired stories telling us how London rents were rising at double digit rates. The story went someting like this; as the housing bubble crashed, many potential buyers were sitting it out, waiting for prices to fall further. As a result, demand for rental properties had soared, meaning that there were only good times ahead for the "mature and seasoned buy to let investor".
Yeah right.....
"Savills, the estate agent, has revealed that prices for prime London homes are now 12.1 per cent lower than a year ago, after falling 3.7 per cent in the third quarter. But in a shock reversal — the first fall since the financial downturn after the September 11 attacks — rents are now 1.8 per cent lower than three months ago.
Falling rents will depress yields and further discourage any investors who may have been drawn in by higher relative returns as property values dropped. Lucian Cook, a director of research at Savills, says: “It will be very hard for investors to pin the tail on the donkey while rents are falling.”
Does anyone remember those Paragon inspired stories telling us how London rents were rising at double digit rates. The story went someting like this; as the housing bubble crashed, many potential buyers were sitting it out, waiting for prices to fall further. As a result, demand for rental properties had soared, meaning that there were only good times ahead for the "mature and seasoned buy to let investor".
Yeah right.....
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