Wednesday, November 25, 2009
Climate change scandal deepens as BBC expert claims he was sent 'cover-up' emails a month before they went public
Public Interest Group to File Chicago 2016 FOIA Lawsuit
Chicagoist reports:
Judicial Watch, a "conservative, non-partisan educational foundation, [that] promotes transparency, accountability and integrity in government, politics and the law," is preparing to file a lawsuit against the city of Chicago to force them to comply with a Freedom of Information Act request they filed in September of this year. The group had filed the request in order to obtain records involving Chicago's failed Olympic bid, specifically looking at the role President Obama and the White House played in the bid.
The group wants to review all correspondence between Mayor Daley and President Obama and others in Washington regarding the Olympic bid; any notes and memos regarding the Olympics rally in Daley Plaza in 2008; all correspondence between Daley and the Chicago 2016 Committee that references President Obama, Michelle Obama, Rahm Emanuel, or Valerie Jarrett; and any memos or reports prepared by the Chicago 2016 Committee that references the Obamas, Emanuel, or Jarrett. Judicial Watch President Tom Fitton calls the Chicago Olympic bid a "scandal," and thinks there are dubious reasons for the city ignoring the FOIA request
Vitamins increase strength
Sydney Morning Herald reports:
In a study in older adults, dietary intake of vitamins C and E was linked with muscle strength, leading the researchers to suggest at a meeting in Atlanta this past weekend that a diet high in antioxidants could play an important role in preserving muscle function in older adults
"Muscle strength is really a marker of ageing," one of the investigators, Dr Anne Newman of the University of Pittsburgh, told Reuters Health. "Muscle strength starts declining when people are in their 40s, but it decreases dramatically after age 60."
Chicago loses out to Dallas for new 2010 trade show
Crain's Chicago Business reports:
Chicago has been shut out of a chance to host a new trade show next year after a group that was part of a decade-long event at McCormick Place decided to strike out on its own.
The International Dairy Foods Assn. recently announced that it will meet every year instead of every other year and that its 2010 show will be held in Dallas instead of Chicago’s McCormick Place.
Northeastern calls an end to football: Becoming successful is deemed too costly
The Boston Globe reports:
Northeastern University plans to announce today that it is ending its football program after 74 seasons, saying it is unwilling to invest the millions of dollars needed to improve the team to meet the school’s ambitions.
Public-sector unions have brought California to its knees
Steve Greenhut in City Journal reports:
When I recently appeared on Glenn Beck’s TV show to discuss California’s dreadful fiscal situation, I mentioned that in Orange County, where I had been a columnist for the Orange County Register, the average pay and benefits package for firefighters was $175,000 per year. After the show, I heard from viewers who couldn’t believe the figure, but it’s true. Firefighters, like all public-safety officials in California, also receive a gold-plated retirement plan: a defined-benefit annual pension that offers 90 percent or more of the worker’s final year’s pay, guaranteed for the rest of his life (and the life of his spouse).They sure are special.
Source: Gambler claims 13 referees involved in NBA betting scandal
WHDH reports:
A source tells 7Sports that the gambler at the center of the 2008 NBA betting scandal says 13 referees were involved.
Jimmy "The Sheep" Battista pleaded guilty to conspiracy to transmit wagering information in connection with disgraced NBA official Tim Donaghy and served 15 months in federal prison.
The source also tells 7Sports that Battista claims he has the phone records to prove his contact with these 13 referees.
Donaghy served 15 months in federal prison for providing inside tips on NBA games to a professional gambler in exchange for money.
Health bills would raise taxes well before changes roll out
McClatchy reports:
Americans could pay billions of dollars more in new taxes for a few years before they're likely to see significant change in the nation's health care system under legislation that Congress is considering.Do you like that quote about "time to get things right"? If McClatchy keeps this up they might get TARP money that's been in reserve.
Some analysts said that's not necessarily bad. Delaying major health care changes until at least 2013, as the pending Senate and House of Representatives bills would do, would give the government sufficient money and time to get things right.
Is the Swaps Market Too Big to Ban?
The New York Times reports:
Is the market for credit-default swaps in for a renaissance? George Soros, for one, reckons credit derivatives should be banned. But trading in swaps has so far survived the crisis and market reforms are on the way. Barring unexpectedly draconian regulatory changes, a comeback looks likely, Breakingviews says.
In a credit-default swap, the buyer pays the seller a fee to protect against default on a notional amount of a borrower’s debt, typically in increments of $10 million. If the borrower defaults, the seller pays up. Losses on an oversize book of particularly wacky versions of these derivatives forced the American International Group to take a gigantic government bailout.
Banks' H1N1 Flu Vaccines Stir Outrage
Business Week reports:
Protests mount that Goldman and Citi have the H1N1 flu vaccine amid a shortage. The banks note that only at-risk people can receive doses
Tuesday, November 24, 2009
Price War Brews Between Amazon and Wal-Mart
The New York Times reports:
Ali had Frazier. Coke has Pepsi. The Yankees have the Red Sox.Deflation of prices is good!
Now Wal-Mart, the mightiest retail giant in history, may have met its own worthy adversary: Amazon.com.
In what is emerging as one of the main story lines of the 2009 post-recession shopping season, the two heavyweight retailers are waging an online price war that is spreading through product areas like books, movies, toys and electronics.
The tussle began last month as a relatively trivial but highly public back-and-forth over which company had the lowest prices on the most anticipated new books and DVDs this fall. By last week, it had spread to select video game consoles, mobile phones, even to the humble Easy-Bake Oven, a 45-year-old toy from Hasbro that usually heats up small cakes, not tensions between billion-dollar corporations.
Chicago's Convention Meltdown
Crain's Chicago Business reports:
The chief executive officer won his post after raising campaign cash for disgraced Gov. Rod Blagojevich. The just-departed human resources director owed her job to a powerful state senator. Other top executives have long ties to Mayor Richard M. Daley's political machine.You'll want to read the whole article. Can Chicago compete in the modern age?
That's what clout looks like at the Metropolitan Pier and Exposition Authority, known as McPier, a little-understood government entity that operates the city's primary convention venue, the vast McCormick Place complex; the adjacent McCormick Hyatt Regency Hotel, and the lakefront tourist center Navy Pier.
But the defection of two major trade shows this month and a deepening financial crisis raise questions about how well an agency run the Chicago Way can compete with more-efficient, warm-weather convention centers such as Orlando, Fla., and Las Vegas.
Despite the high prices it charges trade groups to stage conventions at McCormick Place, McPier doesn't make enough money to cover its operating expenses or payments on its debt. Agency officials project operating losses will grow eightfold to $28.8 million in the fiscal year that started July 1. And the state of Illinois will have to fork over hundreds of millions of dollars in the years ahead to make up shortfalls in tourism taxes that were supposed to cover McPier bond payments.
N.Y. Supreme Court Rules Private Land Can Be Seized for NBA Arena
The Wall Street Journal reports:
New York's highest court ruled Tuesday that it's lawful for a state economic development agency to seize private land to build an arena for a professional basketball team.Big government in action.
The 6-1 ruling by the New York State Court of Appeals allows the contentious $4.9 billion, 22-acre Atlantic Yards project in Brooklyn, N.Y., to proceed. The proposed development includes office towers, apartments and a new arena for the NBA's New Jersey Nets.
It's a victory for developers and government entities in New York that have sought to boost local economies with new development. But it is a blow to private-property owners
Chicago Mob Linked Alexi Giannoulias wants bank crackdown, but faces own questions
Crain's Chicago Business reports:
Senate hopeful Alexi Giannoulias on Tuesday released his plan to crack down on financial speculators and big banks that have driven the country into its worst financial crisis since the Depression.No word yet from Chicago Mob associate John D'Arco Jr. on this one.
But in the process, he faced tough questions about perhaps risky decisions made by the Giannoulias family-owned Broadway Bank, where Mr. Giannoulias was a senior official until becoming state treasurer three years ago and which now faces very severe $$$ problems.
At a press conference, Mr. Giannoulias said non-bank lending institutions should face the same oversight rules that govern banks, with all over-the-counter derivative transactions taking place only on new public exchanges.
Banks themselves should have to raise more capital, and large banks should have to contribute $150 billion to $200 billion over the next decade to create a federal bail-out fund for future financial emergencies, the Chicago Democrat said. And a new consumer agency should regulate home loans, credit card fees and payday loans, he said.
Democrats push $150B stock tax on Wall Street
The Hill reports:
A House bill still being drafted aims to raise $150 billion each year to pay for new jobs.Raising the transaction costs of trading.
Under a bill being drafted by Democratic Reps. Peter DeFazio (Ore.) and Ed Perlmutter (Colo.), the sale and purchase of financial instruments such as stocks, options, derivatives and futures would face a 0.25 percent tax.
The bill, a copy of which was obtained by The Hill, is titled the “Let Wall Street Pay for the Restoration of Main Street Act of 2009.”
Homeless Organization Is Called a Fraud
The New York Times reports:
They are a familiar sight on street corners across the five boroughs: Men and women standing behind folding card tables, urging passers-by to throw a little change into the empty plastic water jug marked “U.H.O.”
But an investigation by Attorney General Andrew M. Cuomo appears to have confirmed what many New Yorkers secretly (if somewhat guiltily) suspected all along: The United Homeless Organization, supposedly a nonprofit group set up to help feed and house the homeless, was actually an elaborate fraud.
SEIU Protest of S.F. layoffs earns arrests for 18
The San Francisco Chronicle reports:
Police arrested 18 members of the Service Employees International Union on Monday night after they blocked rush hour traffic on Market Street about a block from Civic Center Plaza to protest job cuts in the face of San Francisco's budget deficit.No word yet from Andrew Stern's "friend" Barack Obama on this one.
FDIC Fund Sinks Into the Red
The Wall Street Journal reports:
The government insurance fund that protects more than $4.5 trillion of U.S. bank deposits slipped into the red at the end of September, after fifty banks collapsed during the third quarter.No surprise here.
The deposit insurance fund dropped by $18.6 billion during the third quarter of 2009 to negative $8.2 billion, as the Federal Deposit Insurance Corp. set aside $21.7 billion in provisions for additional bank failures. This is the second time in the agency's history that the balance has fallen into negative territory.
The FDIC has already called on the industry to prepay $45 billion in assessments at the end of the year that will be set aside to cover the cost of bank failures in 2010.
Got a Lehman signing bonus? Probably not for long
The Housing Wire reports:
If it wasn’t bad enough that the 2008 class of associates at Lehman Brothers worked a mere six weeks before the financial services firm collapsed, a year later, many of those same employees may be on the hook for repaying their $40,000 signing bonuses.
According to a report on a British financial employment Web site, a number of 2008 associates received letters demanding the former employees pay back their signing bonuses.
PriceWaterhouseCoopers, who is administering Lehman’s UK estate, sent the letters, not just asking for repayment of the bonuses, but also accrued interest and an increment for the depreciation of the British pound.
Billions in stimulus cash for Illinois, but jobs harder to quantify
The Chicago Tribune reports:
The first financial report detailing federal stimulus spending for Illinois is in, detailing more than $6.4 billion given to 6,100-plus recipients.
The beneficiaries include major research universities and public housing, cities with worn-out roads and unincorporated towns seeking cleaner water.
The money overhauled CTA stations and underwrote a study of artificial hips. It let a Peoria health clinic keep a bilingual receptionist and hire a medical records clerk.
And it kept three actors working at the Chicago Shakespeare Theater at Navy Pier.
Economy Is Forcing Young Adults Back Home in Big Numbers, Survey Finds
The New York Times reports:
For more young adults, there is no place like home for the holidays, and for the rest of the year, too. Ten percent of adults younger than 35 told the Pew Research Center that they had moved back in with their parents because of the recession.
They also blamed the economy for other lifestyle decisions. Twelve percent had gotten a roommate to share expenses. Fifteen percent said they had postponed getting married, and 14 percent said they had delayed having a baby.
In the Pew study, 13 percent of parents with grown children said one of their adult sons or daughters had moved back home in the past year. According to Pew, of all grown children who lived with their parents, 2 in 10 were full-time students, one-quarter were unemployed and about one-third said they had lived on their own before returning home.
According to the census, 56 percent of men 18 to 24 years old and 48 percent of women were either still under the same roof as their parents or had moved back home.
1 in 4 Borrowers Under Water
The Wall Street Journal reports:
The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.A great article from the Journal.
Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif.
These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Economists from J.P. Morgan Chase & Co. said Monday they didn't expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply.
Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home's value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American.
Ventures a drain on states, localities : For government-run businesses, $3.5B loss
USA Today reports:
Government-owned businesses that generate revenue for states and cities have taken a sharp turn downward and now are draining money from many struggling governments, a USA TODAY analysis found.Great moments in government.
States and cities operate hundreds of such enterprises — power companies, sewer systems, betting parlors, subways and more — that earned more than $120 billion in profits during the 1990s.
These businesses started losing money in 2006 and are on track to lose $3.5 billion nationwide this year, according to an analysis of data from the Bureau of Economic Analysis (BEA).
This reversal is adding to the financial squeeze state and local governments are suffering because of a 6.7% drop in tax collections during 2009. Governments are raising taxes, hiking utility rates or cutting budgets to cope.
Monday, November 23, 2009
Freddie Mac says TBW losses 'could be significant'
Business Week reports:
Mortgage finance company Freddie Mac on Monday put its initial loss estimate related to the bankruptcy of Taylor, Bean & Whitaker Mortgage Corp. at $500 million, and noted the figure could be much higher.
Ex-U.S. prosecutor faces murder, other charges
The Philadelphia Inquirer reports:
He used a restaurant in Newark, N.J., as a front for a cocaine-distribution network.There's more, much more:
He traveled to New York City to oversee a $1,000-an-hour call-girl ring.
He had a witness killed in one drug case and hired a hit man to rub out another.
And he did it all out of his law office.
That's the picture federal authorities have painted in a 39-count racketeering indictment charging prominent New Jersey defense lawyer Paul Bergrin with being the leader of a criminal enterprise that used violence, intimidation, and deceit to generate millions of dollars.
Bergrin, a former federal prosecutor, is to be arraigned today with seven codefendants in U.S. District Court in Newark.
Authorities also allege that over the last two years Bergrin met repeatedly with a hit man from Chicago to set up the murder of a witness against another of his clients, Vincent Esteves.An article well worth your time.
Cook County workers among 10 charged in marriage scams
The Chicago Sun-Times reports:
Ten people – including five current or former Cook County Traffic Court workers -- have been indicted in an alleged scam to arrange sham marriages for recent immigrants.Stylish.
The indictment, handed up last week and revealed this morning
Gun opponents up in arms as Jerry Brown aids NRA
The San Francisco Chronicle reports:
It may come as a surprise to many of his Democratic supporters, but Attorney General and gubernatorial hopeful Jerry Brown has gone to bat for the National Rifle Association.Jerry Brown decides to come out against this unusual piece of legislation.
The NRA's cause: urging the U.S. Supreme Court to guarantee the ability of gun owners across the land to keep and bear arms.
Last year, the high court struck down a ban on handguns in Washington, D.C., ruling for the first time that the Second Amendment's right to bear arms applies to individuals who keep a gun at home for self-defense. But the court made it clear the ruling applied only to the District of Columbia, a federal enclave.
Now, gun advocates are challenging Chicago's handgun ban, asking the Supreme Court to rule that the Second Amendment equally applies to the states. And there was no shortage of states - 34 in all - jumping on the bandwagon in support of the court hearing the case.
In July, before the court agreed to take the case, Brown went so far as to file his own friend-of-the-court brief asking that Chicago's gun ban be overturned - arguing that if the court doesn't act, "California citizens could be deprived of the constitutional right to possess handguns in their homes."
Disney Studios drama might alter the industry
The L.A. Times reports:
If you thought President Obama moved quickly, that's nothing compared with the first 50 days of the Ross administration.
In less than eight weeks, Rich Ross has swiftly stamped his imprimatur on Walt Disney Studios. The novice movie chairman and his boss, Walt Disney Co. Chief Executive Bob Iger, want to create a new business model for Hollywood to address the sweeping changes that are roiling the entertainment industry, including slumping DVD sales and the growing role the Internet plays in movie marketing.
Migration: Geographies In Conflict
New Geography reports:
It's an interesting puzzle. The “cool cities”, the ones that are supposedly doing the best, the ones with the hottest downtowns, the biggest buzz, leading-edge new companies, smart shops, swank restaurants and hip hotels – the ones that are supposed to be magnets for talent – are often among those with the highest levels of net domestic outmigration. New York City, Los Angeles, San Francisco, Boston, Miami and Chicago – all were big losers in the 2000s. Seattle, Denver, and Minneapolis more or less broke even. Portland is the only proverbially cool city with a regional population over two million that gained any significant number of migrants.
Bankruptcy an Option for San Diego, Says Mayor's Fiscal Task Force
Voice of San Diego reports:
A private task force of prominent local business leaders formed by San Diego Mayor Jerry Sanders is recommending the city file for bankruptcy unless it undergoes a series of urgent and drastic fiscal reforms, according to a draft of the group's report.
Policy, portfolios and the investor lawmaker
The Washington Post reports:
growing investments on Capitol Hill, such as those in the medical-device industry, raise questions about appearances of conflict. Even if lawmakers have done nothing wrong, ethics specialists said, such apparent conflicts are troubling because it is often impossible to know whether the lawmaker is acting in the interest of citizens or their own portfolios. On Wall Street and in federal agencies, the suggestion of a conflict is often the basis for an investigation.
Late payments on credit cards drop in 3rd quarter
The AP reports:
For the first time in a decade, more people paid their credit card bills on time in the third quarter this year than in the second quarter.
Lending To Subprime Sovereigns
Forbes reports:
When I started trading emerging market sovereign debt in the early 1980s, the big risk was non-payment. The danger of default always loomed over a deal. It was like buying a Japanese car or a transistor radio made in Taiwan in the early 1970s: cheap, substandard goods that would likely fail early and often. However, some countries we still label "emerging markets" have become economic powerhouses: China, India, Brazil and Russia for example, holding foreign exchange reserves respectively of $2,300 billion, $284 billion, $235 billion and $433 billion.
Housing Recovery Built on Sand
Barron's reports:
prospective buyers have an array of houses available to them in most regions at knock-down prices. But there's no reason for them to hurry while apartment rents are tumbling. Builders, meanwhile, would be loath to build new houses on spec, even if their banker would provide the financing.Anyone interested in the housing market should read this one.
All of which points to an extended period of depressed housing activity after the excess supply from the boom built on absurdly easy credit is worked off. This is an example of what economists of the Austrian school call "malinvestments," which are the inevitable result of a credit inflation. The boom results in an inevitable bust, during which past excesses have to be corrected, however painfully.
Sunday, November 22, 2009
Fears over tough US anti-fraud legislation
The Financial Times reports:
Foreign companies could be sued more easily in US courts under legislation working through Congress that has led to concerns in the European Commission.
The Investor Protection Act (IPA), approved by the House financial services committee this month, contains a provision to make it easier for investors to sue public companies in the US even if they are based abroad and listed on overseas exchanges.
Treasury Bills Yielding Zero as Stocks Soar Make Bernanke’s 1938 Moment
Bloomberg reports:
For the first time in seven decades, Treasury bills are paying no interest while stocks continue to appreciate -- a divergence in U.S. financial markets that might be perilous if Federal Reserve Chairman Ben S. Bernanke didn’t know all about 1938.
S.F. commercial properties seek tax relief
The San Francisco Chronicle reports:
Landmark skyscrapers, signature hotels and upscale retailers glitter in the San Francisco skyline and enhance its cachet. But with commercial real estate slumping, they soon may subtract badly needed cash from the city's coffers.
Trophy buildings, including One Market Plaza, Bank of America Center, Crocker Galleria, the Marriott Marquis, the Westin St. Francis and One Sansome Street, lead the list of more than 1,000 commercial properties in San Francisco asking to have their property taxes slashed.
Collectively, those office towers, hotels, shopping centers and apartment buildings have an assessed value of $21.25 billion - but their owners say they're worth about half that amount. If those claims stand, that could wipe $115.78 million off the property taxes the city collects. Residential appeals could erase another $13.47 million in property tax revenue.
The Dodd-Frank bills for unlimited bailout authority
The Wall Street Journal reports:
We won't have a real market-based financial system until it is safe to let a financial firm fail," Federal Reserve Chairman Ben Bernanke said last week. He's certainly right, though you wouldn't know it from Mr. Bernanke's own actions the last two years. Meanwhile, the politicians are preparing to give the Fed and Treasury more power to bail out all and sundry companies on an unprecedented scale, and so far without any objection from the Fed chairman.Creeping socialism
Reading the pending bills to "resolve" failing financial houses from Representative Barney Frank and Senator Chris Dodd, the challenge is to conceive of someone who is not eligible for unlimited taxpayer funds. The list of potential bailout recipients under both bills runs from bank holding companies to hedge funds to auto makers, consumer retail chains and just about anyone else engaging in finance of one kind or another.
While most scholarly investigations of the too-big-to-fail phenomenon start from the premise that it's a problem, Messrs. Dodd and Frank appear to view it as the cornerstone of our financial system. This may not be surprising given their history. Mr. Frank is famous for saying he wanted to "roll the dice" with Fannie Mae and Freddie Mac.
Federal Government Faces Balloon in Debt Payments
The New York Times reports:
With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.Can America really afford government run health care?
In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.
The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.
Armed Pols: A Chicago Tradition
Steve Chapman looks at the rather strange situation in Chicago concerning handguns:
U.S. Sen. Roland Burris, another Chicagoan, has endorsed a nationwide ban on handguns and, in 1993, organized Chicago's first Gun Turn-in Day. But the following year, while running unsuccessfully for governor, he admitted he owned a handgun -- "for protection," he explained -- and hadn't seen fit to turn it in along with those other firearms. Lesser mortals apparently can protect themselves with forks and spoons.For a look at Chicago's handgun ban as a racketeering enterprise.
Most (and least) affordable cities to buy a house
CNN Money rates Indianapolis at number 1:
America's most affordable housing market is the 33rd largest metro area in the United States, with 1.7 million people.You'll want to read this one.
The median family income is fairly high -- $68,100 -- and home prices are a very reasonable median $107,000, according to the National Association of Homebuilders and Wells Fargo Housing Opportunity Index.
Chicago's City Council Puts Family Members on Secret Payroll
The Chicago Tribune has an interesting editorial on the Chicago Way:
The quote of the week comes from Ald. Isaac Carothers, 29th, who shrugged off a report about the City Council's incestuous hiring practices just as Mayor Richard Daley announced that illegal patronage in Chicago is dead.For a look at Alderman Burke putting a Chicago Mob associate on Chicago's payroll. For more on the real boss of Chicago.
"All of us have family members on the payroll," Carothers said. "That's nothing new."
Carothers, who is facing federal bribery charges, won't even say whether the William Carothers on his payroll is his father or his brother. It's none of your business who he hires with your tax dollars.
Tribune reporters found dozens of questionable employees -- relatives, campaign workers, friends and friends of friends -- who were being paid out of a $1.3 million fund designated for miscellaneous office duties.
The guidelines are conveniently vague: The money can be used to hire people for "secretarial, clerical, stenographic, research or other functions related to the office of aldermen."
And oversight is virtually nonexistent. Payments have to be approved by Finance Committee Chairman Ed Burke.
Five cities that will rise in the New Economy
Christian Science Monitor reports:
In Houston, the Texas Medical Center is expanding so quickly that it will soon become the seventh largest downtown in the US. By itself. The hospital complex brims with restaurants, shops, and hotels, and employs 100,000 people – the population of Billings, Mont.An interesting article.
In Seattle, the erector-set cranes along the waterfront and big forklifts at the airport are loading exports into containers with the constancy of a piston: plywood to Beijing, halibut and crab to Tokyo, Granny Smith apples to Moscow. Last year, Washington was the only state to ship more goods to China than it receives.
In Fort Collins, Colo., town fathers are aggressively transforming the heart of the city into a zone that generates as much electricity as it consumes – making it a showcase for the city’s quest to become the Silicon Valley of clean energy.
As the United States emerges from the worst recession in 80 years, a new economy is taking root that will help create the next tier of powerhouse cities in America. Just as the Industrial Revolution of the late 1800s and the Information Age of the past 40 years helped shift the urban and regional balance of power in the US, forces are now at work that will shape who prospers in the economy of tomorrow.
Saturday, November 21, 2009
56% in New York Say State Likely To Be Bankrupt By Year’s End
Rasmussen reports:
New York voters aren’t very optimistic about the financial solvency of their state, but they're also sending their elected representatives mixed signals. They oppose budget cuts in a couple key areas but are against tax hikes even more.
A new Rasmussen Reports telephone survey in the state finds that 56% of voters say it is at least somewhat likely that New York will be bankrupt by the end of the year. Twenty-one percent (21%) say it is very likely.
The Fate of Commercial Real Estate
New Geography reports:
A year from now, the landscape of America will be forever changed. The office and retail markets will be vastly different than they look today. Not much of it will be good. Five years from now, will empty shopping centers and auto dealerships remain shuttered or will they be rebuilt or torn down and their use converted to something more productive? Will our politicians cease their meddling in the market and allow the market to heal itself? These are questions that will haunt our economy for the next decade.
Ohio Sues Rating Firms for Losses in Funds
The New York Times reports:
Already facing a spate of private lawsuits, the legal troubles of the country’s largest credit rating agencies deepened on Friday when the attorney general of Ohio sued Moody’s Investors Service, Standard & Poor’s and Fitch, claiming that they had cost state retirement and pension funds some $457 million by approving high-risk Wall Street securities that went bust in the financial collapse.
Girl accuses Sacramento mayor of offering her hush money
McClatchy reports:
Sacramento Mayor Kevin Johnson offered to pay $1,000 a month to one of three girls who had accused him of inappropriately touching her while she was involved in his St. HOPE Hood Corps program, the girl told federal agents during their investigation of Johnson's nonprofit St. HOPE organization last year.Obama's friend: Mayor Kevin Johnson.
The girl — unnamed in a newly released report by two ranking Congressional Republicans — was interviewed by agents Jeffrey Morales and Wendy Wingers with the Corporation for National and Community Service's Office of Inspector General during an investigation of St. HOPE's misuse of $800,000 in federal AmeriCorps grants. Investigators say the girl alleged Johnson had offered to pay her $1,000 a month while she remained in the St. HOPE program, but she refused.
The details of that federal investigation, not previously released, are outlined in a report released today by Rep. Darrell Issa, R-Vista, and Iowa Republican Sen. Chuck Grassley, ranking Republican members of the House Committee on Oversight and Government Reform and Senate Finance Committee.
Their report is critical of the Obama administration's dismissal of Gerald Walpin, the inspector general who directed the investigation into Johnson and St. HOPE.
Friday, November 20, 2009
Ski resort for super rich files for bankruptcy
Reuters reports:
Exclusive ski and golf community Yellowstone Club, in Montana, has filed for bankruptcy protection, a sign that the financial crisis roiling the real estate and leisure industries is not limited to the low end of the market.
Berkeley Students Occupy Building in Protest Over Fee Increases
The Wall Street Journal reports:
Students occupied a building Friday on the campus of the University of California, Berkeley, in an escalation of protests over large fee increases at UC campuses statewide that echoed the unrest here during the 1960s.Struggles of Blue America.
The takeover by as many as 50 students and their sympathizers took place before dawn Friday, a day after the UC Board of Regents approved a 32% increase in student fees to cope with California's long-running fiscal crisis.
Campus police made three arrests in the occupied Wheeler Hall classroom building after discovering furniture and other items propped up against doors at about 5:30 a.m. Friday, a school spokeswoman said. There were unofficial reports of at least one person arrested outside for allegedly crossing a police line marked by yellow tape.
By Friday afternoon, the standoff continued, as an estimated 500 other students and supporters assembled around the building, despite a driving rain. They banged drums, chanted and cheered as some of the occupants of the building used megaphones from a second-floor window to shout encouragement.
Housing bust halts growing suburbs
USA Today reports:
The recession and housing collapse have halted four decades of double-digit growth for nearly half of the nation's biggest rapidly expanding suburbs.
Twenty-four of the 53 cities of 100,000 or more that grew by at least 10% every decade since 1970 lost population from 2006 to 2008.
Fifteen are likely to end the decade with less than a 10% gain in population, largely because of recent losses. Among them: Bellevue, Wash., near Seattle; Coral Springs, Fla., near Fort Lauderdale; Fullerton, Calif., near Los Angeles; and Lakewood, Colo., near Denver.
"They will drop out of boomburb status," says Robert Lang, professor of sociology at the University of Nevada-Las Vegas. "Some boomburbs have gone bust; some are still thriving."
Chicago Police Sergeant Union President accused of stealing from police sergeants' union
The Chicago Sun-Times reports:
A Chicago Police sergeant was arrested this morning on allegations he stole hundreds of thousands of dollars from the Chicago Police Sergeants Association, sources said.No word from master jewel thief and former Chicago Police Chief of Detectives William Hanhardt on this one.
Sgt. John Pallohusky, president of the association, was the target of a joint investigation by the Chicago Police Department and the Cook County state’s attorney’s office, the sources said.
Officials are expected to reveal more details of their investigation this afternoon.
In 1989, Pallohusky was one of 11 people who pleaded guilty to a misdemeanor fraud charge in connection with a petition drive to put a 1986 nonpartisan mayoral referendum on the ballot, according to newspaper reports.
Calpers Performance Claims Deserve SEC Scrutiny
Forbes reports:
The California Public Employees' Retirement System, Calpers, is sick and tired of "uninformed" critics taking swipes at it recently. The fund, which manages $200 billion in assets for California government employees, has seemingly had little time to grapple with the ongoing financial crisis amid the need to fend off a stream of allegations that its ranks are corrupt and its operations mismanaged.
Among the criticisms thrown at Calpers: Board-member junkets, under-the-table placement fees from outside agents to fund officials, payments by money managers to top investment staff, conflicts of interest involving investment consultants, collapsed real estate deals and multi-year rip-offs of the fund by banks handling its foreign exchange trade.
Goldman Holders Miffed at Bonuses
The Wall Street Journal reports:
Some of the largest shareholders in Goldman Sachs Group Inc. have urged the Wall Street firm to reduce the size of its bonus pool, arguing that it should pass along more of its blockbuster earnings to investors, according to people familiar with the situation.An interesting article.
The investors hold tens of millions of shares in Goldman Sachs, which is on track to make the biggest employee payout in the firm's 140-year history.
Their complaints in private conversations with the company and at analyst meetings show how anger over its big-money culture is spilling into the ranks of investors who typically shy away from debates over Wall Street pay.
One frustration: Despite record net income and compensation at Goldman as markets rebound and the firm outmuscles weakened rivals for business, analysts expect its 2009 earnings per share to be 22% lower than in 2007 and roughly equal to its 2006 earnings, according to Thomson Financial.
Thursday, November 19, 2009
San Francisco facing $500 million deficit
The San Francisco Chronicle reports:
The mayor's budget chief is expected to announce today that the projected deficit for the next fiscal year teeters near $500 million - a more ominous outlook than had been revealed Monday.
TribCo.-owned Conn. paper sued for plagiarism
Crain's Chicago Business reports:
A small, family-owned Connecticut newspaper sued the state's largest newspaper Thursday, saying it repeatedly plagiarized stories after cutting its own reporting staff to save money.You'll want to read the whole article.
The Journal Inquirer of Manchester accuses the Hartford Courant of "pirating" at least 11 local news stories in August and September, then publishing them as its own work under Courant reporters' bylines.
The Courant is owned by Chicago-based Tribune Co.
The Journal Inquirer's lawsuit, filed Thursday in Hartford Superior Court, alleges the Courant violated the Connecticut Unfair Trade Practices Act and federal copyright law. It seeks at least $15,000 in damages, plus court and attorney fees.
It claims the Courant saved money by cutting back on some local coverage, then took credit for its smaller competitor's work on bread-and-butter stories such as town zoning board actions, school administrator appointments and local political skirmishes.
Teamsters buck Senate health bill over tax
The Washington Times reports:
The powerful Teamsters union on Thursday broke with President Obama over Senate Democrat's health care bill that would slap an excise tax on insurance companies for so-called "Cadillac" health plans, the high-priced and benefit-rich coverage that unions have fought hard to win for their members.
Movie popcorn still a nutritional horror, study finds
The L.A. Times reports:
A medium-sized popcorn and medium soda at the nation's largest movie chain pack the nutritional equivalent of three Quarter Pounders topped with 12 pats of butter, according to a report released today by the advocacy group Center for Science in the Public Interest.
General Growth wins extensions on almost $9 billion
Crain's Chicago Business reports:
General Growth Properties Inc. said Thursday it has tentative deals to extend almost $9 billion in secured mortgages for an average of more than six years.The big shopping mall news of the day.
The agreement means that 170 of the entities that were put under bankruptcy protection in April could emerge by the end of the year. A tentative hearing date for a plan of emergence from bankruptcy was set for Dec. 14.
The agreements cover 70 loans.
Greater Optimism About U.S. Health System Coverage, Costs
Gallup reports:
As Congress debates a possible major expansion of health insurance in the United States, Gallup finds 38% of Americans rating healthcare coverage in this country as excellent or good, the highest (by eight percentage points) in the nine-year history of this question, and 12 points above last year's level.
Microsoft Says Windows 7 Selling Well
The Wall Street Journal reports:
Microsoft Corp.’s Windows 7 has outsold by two times any previous version of the operating system in the same length of time, Chief Executive Steve Ballmer said.
Speaking at the Redmond, Wash., company’s annual shareholder meeting, Mr. Ballmer described the reception to Windows 7 as “fantastic” in the nearly one month since it went on sale.
A company spokeswoman confirmed that the sales figures Mr. Ballmer cited include both boxed copies of Windows 7 and the copies it sells to PC makers for inclusion on their systems.
Fighting a Coercion Clause
George Will has an excellent piece on the limits on government and the U.S. Constitution.
Americans Deserve a Transparent Fed
Ron Paul and Jim Demint have an op-ed piece in the Wall Street Journal:
For nearly a century the Federal Reserve has operated in the shadows, away from the prying eyes of Congress, journalists and the American people. Created in 1913, the Fed was given enormous responsibility to protect the value of our currency. Yet in the last 96 years the U.S. dollar has lost more than 95% of its purchasing power. The Fed's unprecedented actions over the past year in attempting to stabilize the financial system have now forced it into the spotlight, and caused millions of people around the country to question the opacity of the Fed's financial transactions.
While the Fed is more transparent now than it was 20 or 30 years ago, there is still a long way to go. If the Fed were fully transparent, organizations such as Bloomberg and Fox News wouldn't have to sue its board of governors to receive materials that should be available through Freedom of Information Act requests. These include information on which banks and companies received loans and for what amounts after the 2008 financial meltdown.
Wall Street Plays Hardball With Local Governments
Business Week reports:
Detroit Mayor Dave Bing is struggling to save his city from fiscal calamity. Unemployment is at a record 28% and rising, while home prices have plunged 39% since 2007. The 66-year-old Bing, a former NBA all-star with the Detroit Pistons who took office 10 months ago, faces a $300 million budget deficit—and few ways to make up the difference.You'll want to read the whole article.
Against that bleak backdrop, Wall Street is squeezing one of America's weakest cities for every penny it can. A few years ago, Detroit struck a derivatives deal with UBS (UBS) and other banks that allowed it to save more than $2 million a year in interest on $800 million worth of bonds. But the fine print carried a potentially devastating condition. If the city's credit rating dropped, the banks could opt out of the deal and demand a sizable breakup fee. That's precisely what happened in January: After years of fiscal trouble, Detroit saw its credit rating slashed to junk. Suddenly the sputtering Motor City was on the hook for a $400 million tab.
California: The Housing Bubble Returns?
New Geography reports:
To read the periodic house price reports out of California, it would be easy to form the impression that house prices are continuing to decline. Most press reports highlight the fact that house prices are lower this year than they were at the same time last year. This masks the reality of robust house price increases that have been underway for nearly half a year. The state may have forfeited seven years of artificially induced house price escalation in just two years but has recovered about one-fifth of it since March.You'll want to read the whole article. Another great one from Wendell Cox. Check out the table in the article.
California Housing Market Since 2000: In 2000, the average median house price among California markets with more than 1,000,000 population was $291,000. The Median Multiple (median house price divided by median household income) was 4.5, making houses in California approximately 50% more costly relative to incomes than in the rest of the nation.
According to the California Association of Realtors, the average median price peaked at $644,000 between 2005 and 2007, depending upon the particular market. This nearly 140% price increase translated into a more than doubling of the Median Multiple, to 9.2.
Median prices fell rapidly from the peak, dropping at their low point to an average of $315,000. The average Median Multiple fell to 4.4, slightly below the 2000 level, but still well above the national level. All markets reached their low points in the first part of 2009.
MSNBC Blames Recession on a Racist, Wall Street Conspiracy; NAACP President Becomes the Voice of Reason
3rd big trade show may check out of Chicago
The Chicago Tribune reports:
Chicago's standing as a trade show center faces yet another challenge as the National Restaurant Association weighs whether to take its 2012 trade show elsewhere, according to sources close to the negotiations.Great moments in unionized Chicago.
An exit by this McCormick Place star -- a top show here for more than a half-century -- would be a third brutal punch to the city, which in the last week lost two other shows.
The plastics industry trade show, a triennial event, announced Tuesday it will move its 2012 and 2015 shows to Orlando after nearly four decades in Chicago. And the Healthcare Information and Management Systems Society last week said it would move its 2012 annual meeting to Las Vegas. Both cited the cost of doing business in Chicago as the major factor in their decisions.
Though restaurant show attendance fell 24 percent this year, to 54,000 exhibitors and potential buyers, the event still pumped an estimated $86 million into the local economy, the Chicago Convention and Tourism Bureau said. The show is committed to remain here in 2010 and 2011.
Friends & family fund for Chicago aldermen : Shadowy $1.3 million payroll helps them get around ban on patronage hiring
The Chicago Tribune reports:
As City Hall struggles to pay for basic services, a stealth budget account worth millions has allowed Chicago aldermen to put family members, campaign operatives and those with political baggage on yet another taxpayer-funded payroll.The Chicago Way.
Operating without scrutiny, one alderman hired the mother of a former top mayoral aide later convicted of rigging city hiring. Another hired a city worker ousted for sexual harassment allegations. Several others hired relatives.
"All of us (aldermen) have family members on the payroll," said Ald. Isaac Carothers, 29th, who has paid a relative more than $30,000 since January 2008. "That's nothing new."
The revelation comes as Mayor Richard Daley prepares to ask a federal judge to end decades of court supervision over City Hall's clout-heavy hiring practices, arguing that illegal patronage is dead. But the city's hiring compliance officer told the Tribune he didn't know about the payroll of about $1.3 million a year.
A Hedge-Fund King Comes Under Siege
The Wall Street Journal reports:
Hedge-fund titan Kenneth Griffin lost $8 billion of his clients' money last year.
Now, he is trying to persuade investors to trust him with more.
"We showed a level of human fallibility," he told his staff at a late-September lunch in Manhattan.
The price of fallibility: a 55% loss in the big hedge funds at his firm, Citadel Investment Group. His funds' declines far outstripped the 19%, on average, that hedge funds lost as a whole, according to Hedge Fund Research Inc. For the past year, Citadel prevented investors from withdrawing money they wanted to take out from his two main funds, Kensington and Wellington.
Work site arrests of illegals fall dramatically
The Washington Times reports:
Arrests of illegal immigrant workers have dropped precipitously under President Obama, according to figures released Wednesday.
Criminal arrests, administrative arrests, indictments and convictions of illegal immigrants at work sites all fell by more than 50 percent from fiscal 2008 to fiscal 2009.
Fed May Not Increase Rates Until 2012, Bullard Say
Bloomberg reports:
Federal Reserve Bank of St. Louis President James Bullard said past experience suggests policy makers may not start to raise interest rates until early 2012, while concern borrowing costs have stayed “too low for too long” may prompt an earlier move.
“If you look at the last two recessions, in each case the FOMC waited two and a half to three years before we started our tightening campaign,” Bullard said today in a speech in St. Louis. “If we took that as a benchmark, that would put us in the first half of 2012.”