It seems that everyday there are many new products, new companies and new things being added to our lives that require money, as well. The ways to make money have a lot of different methods, products and processes but basically, if you’re trying to think of the various ways to make money for yourself or for your household right this very minute – this list is for you (and me) – to use for getting some money making ideas started.
Find what people want and sell it to them.
Be paid for your time and skills.
Produce something that advertisers support.
Build an audience for some specific focus or theme.
Teach classes and give seminars and workshops.
Fix, build or prepare the things people need to have done.
Give tours or host an event people like and want.
Produce something fun, funny, informative, entertaining.
Build a platform or way for people to connect with one another.
Buy or manufacture something people need and sell for more than cost.
Create or express something people can relate to.
Provide a service that makes life easier or better for people.
Make your money make money by loaning it or investing it.
Become a celebrity, performer, expert, entertainer or spokesperson for.
Build a business that makes money for you where others’ time and talents build it.
The March for Science is going to be on April 14 this year. It is important this year more than ever to stand up for Science and for STEM in the United States as it is all under attack daily throughout our government in its current iteration.
At a time when America needs science and technology to make significant leaps forward to catch up with the rest of the world who has been supporting education, higher education, science, math, technology and engineering with massive efforts, our nation’s leaders have chosen to make war on science at every opportunity and in every agency, every policy, every possible way.
We need education to support STEM now more than ever and to support education for our children and adults to be competitive in a global playing field where we have fallen behind. Now, rather than supporting our nation to be in a leadership role in science, technology, innovation and education, it is being de-funded, demeaned, derided, discredited, dismantled and destroyed.
These actions will set our nation behind by years upon years against other nations’ efforts supporting STEM, higher education and science, in particular. Please join the March for Science – whether you are a scientist or not to show America’s business leaders and political decision-makers that we stand together supporting fact-based and evidence-based decision making, scientific reason and educated thinking.
includes closing around 180 stores. That’s about one in five stores.
The large debts, including roughly $400 million that came due by the end of the year, mostly stem from “a $7.5 billion leveraged buyout in 2005 in which Bain Capital, KKR & Co. and Vornado Realty Trust loaded the company with debt to take it private,” according to Bloomberg.
Now in bankruptcy proceedings after paying massive bonuses of millions of dollars to top execs – didn’t include numbers of employees being laid off, but noted that massive layoffs had occurred early in 2017 as well.
This article listed the bonuses paid out to executives allowed by the bankruptcy court and those made before entering bankruptcy proceedings – despite huge layoffs, store closings and defaulting on some percentage of every debt.
Macy’s alone is responsible for more than 10,000 job cuts as the company finds itself displaced by online shopping. The Macy’s layoffs are coupled with massive Macy’s store closures, with 68 shuttering in 2017.
J C Penney has also become the victim of poor sales and has therefore added to the growing number of retail layoffs.
The company cut about 5,000 jobs and shuttered 138 stores across the U.S
HHGREGG FILES FOR BANKRUPTCY, CUTS 5,000 WORKERS NATIONWIDE AND CLOSES ALL STORES
STATE FARM TO CLOSE 11 OFFICES, MORE THAN 4,000 FACE JOB LOSS, DISPLACEMENT
L Brands Inc (NYSE:LB), owner of women’s apparel chain The Limited, shut down all of its 250 stores across the U.S. and slashing 4,000 jobs.
The Wet Seal closing will encompass the remaining 171 stores after it a had closed two-thirds of its locations and laid off 3,700 workers two years ago as it filed for Chapter 11 bankruptcy protection. The company is now defunct, with 3,000 workers without jobs.
Lowe’s Companies, Inc. (NYSE:LOW) found itself having to cut 2,400 workers as it struggles to keep up with the leader in the market,
HERSHEY LAYS OFF 2,700 AS A PART OF 2017 RESTRUCTURING PROGRAM
One of the largest mass U.S. IT layoffs in 2017, the 5,000 cuts coming out of HP amount to about 10% of the company’s total staff.
Eli Lilly and Co (NYSE:LLY) will be shedding 2,000 jobs in the U.S. as it seeks to save about $500.0 million annually.
Lots more great information in this article – worth reading. Explains why they had to layoff in these companies. Looking for numbers right now.
The telecom layoffs at AT&T are also hardly the only ones to be announced this year, with other telecommunication giants looking to make cuts in the new year.
About 332 people will be cut in the AT&T layoffs in 2018. About 245 will be cut from Michigan.
AT&T Layoffs in 2017: Hundreds of Job Cuts at Call Centers
The AT&T layoffs in 2018 follow hundreds of cuts made to the workforce this year.
Kimberly-Clark plans to cut up to 5,500 jobs — about 13 percent of its workforce — and get rid of 10 manufacturing plants, releasing a restructuring plan along with its year-end results that showed net sales rose to $18.3 billion, up slightly from 2016.
The maker of popular brands such as Kleenex, Huggies and Kotex, Kimberly-Clark says its operating profit for the fourth quarter of 2017 was $812 million — a drop from $839 million in 2016. For all of 2017, the company is reporting nearly $3.3 billion in operating profit, down slightly from 2016.
As it announced financial results and layoff plans, Kimberly-Clark’s board of directors also approved a 3.1 percent increase in the company’s quarterly dividend for 2018, which it says is the 46th consecutive annual dividend increase for shareholders.
Falk noted that in 2017, Kimberly-Clark “returned $2.3 billion to shareholders through dividends and share repurchases.”
In the wake of Republican-backed changes to the U.S. tax code, several large corporations have given employees raises and increased benefits. But there has also been bad news. For instance, Walmart announced better pay for new employees on the same day that it said it would close 63 stores.
Providing some details about its taxes, Kimberly-Clark says, “The fourth quarter effective tax rate was 19.2 percent in 2017 and 35.7 percent in 2016. The rate in 2017 included a net benefit as a result of U.S. tax reform and related activities.”
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Trump Promised to Protect Steel. Layoffs Are Coming Instead.
In September, ArcelorMittal, which owns the mill, announced that it would lay off 150 of the plant’s 207 workers next year.
Foreign steel makers have rushed to get their product into the United States before tariffs start. According to the American Iron and Steel Institute, which tracks shipments, steel imports were 19.4 percent higher in the first 10 months of 2017 than in the same period last year.
In 2008, before the financial crisis struck, the plant ran around the clock. Now, the mill coughs to life just five days a week, for eight hours at a time.
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Toys ‘R’ Us Has Laid Off Up To 15% Of HQ Employees
This Friday, the company announced they had laid off between 10-15% of their home office employees out of Wayne, New Jersey — approximately 250 jobs were eliminated.
Toys “R” Us has been struggling financially for some time. In 2005, investors led by KKR & Co., Bain Capital and Vornado Realty Trust bought out the company for $6.6 billion. In 2016, the business refinanced its remaining $850 million debt load, allowing investors holding bonds maturing in 2017 and 2018 to swap their holdings for those maturing in 2021.
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Harley-Davidson closing Kansas City plant as motorcycle sales fall
The Milwaukee-based company said its net income fell 82% in its fiscal fourth quarter to $8.3 million, compared with a year earlier. Earnings per share were 5 cents, down from 27 cents a year earlier. Revenue was $1.23 billion, up from $1.11 billion.
The earnings drop came in part because of a charge associated with President Trump’s tax cut and a $29.4 million charge for a voluntary product recall.
Harley-Davidson worldwide retail motorcycle sales fell 6.7% in 2017 compared to 2016. The company’s U.S. sales fell 8.5% and international sales were down 3.9%.
The company’s manufacturing consolidation includes plans to shift production from Kansas City, Mo. into its plant in York, Pa. About 800 jobs in Kansas City will be cut.
Harley’s foreign competitors have benefited from a strong U.S. dollar, as their overseas operations have made it more profitable to sell bikes in the U.S. at lower prices.
In some cases, Diedrich said, prices of Japanese motorcycles have come down 25% and discounts ranged up to $3,000 per bike.
Lots more in this article including what is expected to happen with other plants.
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What’s Happening to U.S. Companies? A Look at 2017’s Mass Layoffs
Mass Layoffs in 2017 No. 2, Sears Holdings Corp. (Nasdaq: SHLD): After reporting dismal sales earnings, Sears announced on Jan. 6 it expects to shutter 180 stores by April – 108 Kmart locations and 42 Sears stores.
Mass Layoffs in 2017 No. 3, Wal-Mart Stores Inc. (NYSE: WMT): The “everyday low-price” store will be slashing over 1,000 jobs in January, as reported by USA Today on Jan. 11.
Mass Layoffs in 2017 No. 5, General Motors Co. (NYSE: GM): The car manufacturer told Fortune that it would be shutting down five of its plants in 2017 – eliminating some 1,300 jobs – primarily to cut oversupply of sedans, which have fallen out of favor among U.S. consumers.
These cuts are in addition to the 2,000 workers GM announced would be let go in November 2016, also to take place in January.
Mass Layoffs in 2017 No. 6, Pandora Media Inc. (NYSE: P): Today (Jan. 13) Pandora announced that it would be eliminating 7% of its workforce in a move to save nearly $40 million in operating costs. The music-streaming company had 2,219 employees as of Dec. 31, according to Benchmark Monitor.
Mass Layoffs in 2017 No. 7, Fitbit Inc. (NYSE: FIT): The wearable fitness tracker company announced in a press release on Jan. 30 it would be slashing 6% of its workforce, or 110 employees,
(and Hershey’s, Lowe’s, etc. mentioned elsewhere in this blog post.)
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General Electric to cut 12,000 jobs in power business revamp
General Electric announced on Thursday it was axing 12,000 jobs at its global power business as the struggling industrial conglomerate responds to dwindling demand for fossil fuel power plants.
Demand for new thermal power plants dramatically dropped in all rich countries, GE said, while traditional utility customers have reduced their investments due to market deterioration and uncertainty about future climate policy measures.
Hardly any new power station projects had been commissioned in Germany in recent years, GE said. Heightened Asian competition had also increased price pressures.
GE rival Siemens is cutting about 6,900 jobs, or close to 2 percent of its global workforce, mainly at its power and gas division, which has been hit by the rapid growth of renewables.
(Reuters) – Union Pacific Corp (UNP.N) said on Wednesday it will cut roughly 500 management jobs and 250 railroad workers by mid-September as the No. 1 U.S. railroad continues broader cost-cutting.
The layoffs come as Union Pacific, like other major U.S. railroads, saw a resurgence in coal volumes this year but has been hit over the past two years by precipitous declines as utilities switched to burning cheaper natural gas and the strong U.S. dollar hurt coal exports.
(*(
SEOUL (Reuters) – When South Korea’s Samsung Electronics and LG Electronics last year announced plans to build home appliance factories in the United States, they hoped to sidestep any fallout from President Donald Trump’s “America First” manufacturing and jobs mantra.
Last week’s decision by the U.S. government to impose tariffs of up to 50 percent on imports of washing machines and key components showed that wasn’t to be.
The inclusion of hefty tariffs on components in particular had moved the goal posts in a long-running trade dispute, upending supply chains and threatening investment across other industries, officials from the companies and the South Korean government said.
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Carrier plans final layoffs at plant Trump vowed to protect: report
More than 200 employees will lose their jobs in January, Fox News reported.
Earlier this year, the air conditioning company laid off 300 workers at the Indianapolis factory.
“This week, approximately 300 employees will leave Carrier as part of the previously announced plan to relocate fan coil manufacturing production lines,” Carrier said in a statement in July.
BAKERSFIELD, Calif. – On Wednesday, Chevron announced to employees with the San Joaquin Valley Business Unit that it will implement a 26% reduction in the unit, applying across all field and office locations.
The layoffs, expected to take place in 2018, will affect locations in Kern, Fresno and Monterey Counties.
(Didn’t give numbers)
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More Layoffs Hit National Geographic
Another wave of reductions since Fox bought the media properties.
WASHINGTON — Citing a long-term drought in satellite orders, Space Systems Loral has laid off a number of employees at its California satellite manufacturing facility, the company confirmed June 22.
In a statement to SpaceNews, SSL President John Celli said an “extended slowdown” in orders for geostationary orbit communications satellites led the company to this round of layoffs.
Company spokesperson Wendy Lewis said SSL was not disclosing the number of people laid off. A source familiar with the layoffs said about eight percent of the company’s workforce was affected, which would be on the order of 200 employees.
Other satellite manufacturers have also reported weak demand for commercial GEO satellites. “Last year, there were 14 new geosynchronous satellites purchased,” Dave Thompson, president and chief executive of Orbital ATK, said in a May 11 earnings call about the company’s quarterly financial results. “And at this point, my crystal ball for 2017 is somewhere in the 12 to 14 satellites, so not better than last year.” He added he hoped for a rebound in orders in 2018 or 2019.
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As U.S. military budget soars, Boeing workers face layoffs
Even with an extra $52 billion for the world’s largest military in President Trump’s new budget — or the $60 billion Sen. John McCain, R-Ariz., is lobbying for — workers at Boeing Corp.’s war helicopter factory and division headquarters in Ridley Park, Delaware County aren’t sure they’ll all still be on the job next year.
“We’re hoping we get some money for the V-22 (Osprey) and the Chinook, our products here. But right now we’re in a little bit of a downturn,” said Mike Tolassi, president of United Aerospace Workers Local 1069, which represents around 1,370 of Boeing’s 4,500 workers at the complex, the largest industrial plant in the Philadelphia area.
“This past year we’ve been experiencing layoffs. I believe we’re gonna have another in April,” Tolassi added.
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Teva Pharmaceutical set for major layoffs in Israel, U.S.: report
TEL AVIV (Reuters) – Teva Pharmaceutical Industries is expected to cut 20-25 percent of its workforce in Israel, where it employs 6,860 people, and a few thousand more jobs are to go in the United States, financial news website Calcalist said on Thursday.
The world’s largest generic drugmaker will send termination letters to “tens of percents” of its 10,000 employees in the United States in coming weeks, Calcalist said, citing people familiar with the matter.
Teva’s new Chief Executive Kare Schultz is working out the details with regional management in Israel and the United States, Calcalist said, adding that those set to be ousted include its chief scientific officer and president of research and development, Michael Hayden.
Cisco Systems Inc. said Wednesday that it is laying off 1,100 more workers, deepening job losses at the internet gear maker battling declining revenue.
2017 was a record year for both store closings and retail bankruptcies. Dozens of retailers including Macy’s, Sears, and J.C. Penney shuttered an estimated 9,000 stores — far exceeding recessionary levels — and 50 chains filed for bankruptcy.
But there’s still a glut of retail space in the US, and the fallout is far from over.
The number of store closings in the US is expected to jump at least 33% to more than 12,000 in 2018, and another 25 major retailers could file for bankruptcy, according to estimates by the commercial real estate firm Cushman & Wakefield.
Nearly two dozen major chains including Walgreens, Gap, and Gymboree have already announced plans to close more than 3,600 stores this year.
When combined with last year’s record-high store closings, an even higher rate of closings in 2018 would push hundreds of low-performing shopping malls to the brink of death.
The commercial real estate firm CoStar has estimated that nearly a quarter of malls in the US, or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor tenant.
That’s because the malls don’t only lose the income and shopper traffic from that store’s business; such closings often trigger clauses that allow the remaining mall tenants to exercise their right to terminate their leases or renegotiate the terms, typically with a period of lower rents, until another retailer moves into the vacant anchor space.
The mall owner demanded that Starbucks keep running the tea shops located in its malls, arguing in part that their closing would reduce traffic to surrounding stores.
A judge ruled in Simon Property Group’s favor in December and ordered Starbucks to keep operating the Teavana stores in question.
Whole Foods was also recently sued for closing a Seattle-area store, with the owners of the property fighting the company for breaking its long-term lease.
A judge has since ordered Whole Foods to reopen the store, which the grocer had closed in October.
There are also plenty of retailers, mostly discounters, that are growing their physical assets while others shrink.
Dollar General, Dollar Tree, Lidl, Aldi, Ross Stores, and TJ Maxx are planning to open hundreds of new stores next year.
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Chevron announces first set of layoffs will occur in January; employees notified today
The reduction applies across all SJVBU field and office locations, including the field and office locations in Kern County, Fresno County and Monterey County, the company said. The position reductions will occur in a phased approach between now and the end of 2018.
It is estimated that approximately 300 employee positions across the three counties in which SJVBU operates will be eliminated over the course of 2018 as part of this reorganization.
On Thursday, 100 employees of Chevron will be notified of their termination. However, these positions will not be eliminated until January 2018, the company said.
The next round of cutbacks could come down in late November or early December, with 40-60 positions potentially being impacted, according to sources. The layoffs could hit both on-air TV/radio talent and behind-the-scenes production staffers.
Another source expects the flagship “SportsCenter” franchise to lose people in front of and behind the camera. “I see (ESPN) going down a path where they have less staff — and hire more production companies to provide programs and fill air time.”
Through Week 7 of the 2017 season, ESPN’s “Monday Night Football” was the lone NFL TV package up in ratings, according to Austin Karp of SportsBusiness Daily. In September, ESPN’s “First Take” with Stephen A. Smith, Max Kellerman and Molly Qerim tripled the TV audience of FS1’s rival “Undisputed” with Skip Bayless, Shannon Sharpe and Joy Taylor (461,000 vs. 150,000 average viewers). With 96.9 million digital users, ESPN had five times as many unique viewers in September as Fox Sports.
But ESPN is struggling from the triple-whammy of a shrinking subscriber base, expensive billion-dollar TV rights for the NFL, NBA and other sports, and bloated talent costs. The network pays $1.9 billion annually for “Monday Night Football” and another $1.4 billion for the NBA. Don’t forget ESPN is still paying millions of dollars in severance costs to many of the 100 anchors/reporters laid off in late April.
Despite promising Madison Avenue at its upfront presentation that Mike Greenberg’s new solo morning show would debut Jan. 1, ESPN has pushed back the start date to the spring because of construction delays at its expensive new studios at South Street Seaport in Manhattan.
The ESPN workforce in Bristol, Conn., and around the country is still recovering from the layoff of 100 colleagues in late April. Unlike the previous downsizing of 300 behind-the-scenes producers, directors and staffers in October 2015, this year’s layoffs took out high-salaried TV talent and reporters, many with multi-year contracts. Many are still looking for their next gig.
Already this year, 14 retailers have declared bankruptcy, including the companies behind Payless, The Limited, and BCBG. That’s not far from 18, the total number of retailers that declared bankruptcy in 2016, according to insights from S&P Global Market Intelligence released last week.
Just days after S&P’s report was released, Bebe, which sells women’s clothing, announced plans to close all 168 of its stores. It is unclear if the company will sell clothes online despite the store closures, but S&P predicts the company has a high chance of filing for bankruptcy.
Here’s S&P’s full list, including the likelihood the companies will default in the next year:
A number of J Crew stores closing by the end of January 2018 won’t make for happy holidays with those employees.
The J Crew stores closing news comes along with a poor third quarter for the retail company. This includes revenue for the period dropping 5% to $566.70 million. Comparable store sales for the quarter were also down 9%, which follows an 8% decline from the same time last year.
The company notes that the third quarter was particularly bad at its J Crew locations. This division saw sales in the quarter drop by 12% to $430.40 million. Comparable store sales were also down 12% after a 9% decrease in the third quarter of 2016.
J Crew also operates the Madewell brand of women’s clothing stores. This segment of its business actually performed well in the third quarter with revenue increasing 22% to $107.50 million. Its comparable stores sales for the third quarter of the year were also up 13% following a 4% increase during the same time last year.
Regardless of the industry, the two main reasons businesses laid off large numbers of employees were companies shutting down or making cost cuts.
Among the companies paring workforces last year were some of the great names in American business — Westinghouse, General Electric, Macy’s, and Hershey.
The public sector also implemented cost cuts that resulted in layoffs in education and government. Private defense contractors such as Boeing trimmed jobs in 2017.
24/7 Wall St. used data provided by Challenger, Gray & Christmas to compile a list of the 25 biggest layoff announcements in 2017. Challenger, Gray & Christmas’ sources for layoff announcements included filings with the Securities and Exchange Commission, WARN notices (Worker Adjustment and Retraining Notification Act), company press releases, and media reports.
These are the 25 employers who trimmed payrolls the most in 2017.
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CHESAPEAKE ENERGY LAYOFFS: 400 JOB CUTS, 330 IN OKLAHOMA CITY, DUE TO $9.9-BILLION DEBT
The Chesapeake Energy job cuts are going to affect workers primarily in Oklahoma City. Of the 400 Chesapeake Energy layoffs, 330 of those cuts will come out of the Oklahoma City workforce.
“Over the last couple years, we have divested approximately 25% of our wells, primarily from non-core areas, as a key part of our strategy to reduce debt, enhance margins, and work within our cash flow.
Chesapeake Energy Stock Fell Nearly 44%, Debt Rises to $9.9 Billion in 3Q17
The recent quarterly result for the third quarter of 2017 showed a company that is taking on an increasing amount of debt, with the total amount having jumped to $9.9 billion in the quarter, compared to $9.7 billion the year before.
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Updated: Banks Closed Record Amount of Branches in 2017
Increased Technology Spending Accelerating Pace of Closures
U.S. banks accelerated their pace of branch consolidation last year, closing a net 2,069 locations, an 18% increase over the net number closed in 2016.
That pace of closures could speed up even more in 2018 as a number of bank holding companies reported plans to deploy a significant portion of expected savings from tax reform legislation enacted last month into increased spending on technology, expected to support increasing reliance on digital and mobile technology by bank customers to conduct more of their banking activity.
Wells Fargo & Co. (NYSE:WFC) is the poster child of the movement. It closed a net of 194 branches last year – the highest among all U.S. banks — and it expects to close 250 branches or more in 2018, plus as many as 500 in each 2019 and 2020.
Banks closing the most branch locations (net) in 2017
Wells Fargo Bank, 194 (net closures)
JPMorgan Chase Bank, 137
The Huntington National Bank, 134
First-Citizens Bank & Trust Co., 127
Bank of America, 119
SunTrust Bank, 119
KeyBank, 112
PNC Bank, 109
Branch Banking and Trust Co. (BB&T), 92
Capital One, 73
JPMorgan Chase this week announced that it intends to expand its branch network into new U.S. markets, opening up to 400 new branches over the next five years. These new branches will directly employ about 3,000 people.
Still, JPMorgan Chase like other major national and regional banking companies, has been consolidating branches. Last year they closed 137 more branches than they opened. And since 2008, they’ve closed 1,467 branches and opened 1,251.
In 2017, CSX railroad cuts amount to over 4,000 jobs and idled hundreds of locomotives, and now, CSX layoffs for 2018 are expected to involve an additional 2,000 employees.
Jacksonville, Florida-based CSX Corporation is one of the county’s leading transportation suppliers. The rail company operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.
CSX’s layoffs for 2017 began in February, when it announced it was cutting 1,000 management positions, most of which were in Jacksonville. Later, CSX announced it was continuing its streamlining efforts by laying off another 1,300 employees across all 23 states where it operates.
Despite laying off 2,300 people and taking nearly 900 locomotives and 60,000 freight cars out of service, it wasn’t enough.
In July, CEO Hunter Harrison announced even more layoffs were on the horizon. According to company spokesperson Rob Doolittle, as many as 700 were expected to be out of work. This raised the number of layoffs in 2017 to around 3,000.
CSX is eliminating the infrastructure it doesn’t need and consolidating operations. That includes shutting down most of the railroad’s 12 railyards.
In fiscal 2017, CSX reported revenue of $11.4 billion, a three percent increase over the $11.0 billion recorded in fiscal 2016. Full-year 2017 net income was $5.4 billion, or $5.99 per share. In 2016, CSX reported net income of $1.7 billion, or $1.81 per share. Adjusted for the impacts of the new tax law and the company’s restructuring charge, adjusted earnings per share were $2.30.
FOXNews – Feb 4, 2003 WASHINGTON — Having managed to read President Bush’s five-volume budget in a matter of hours, US lawmakers responded quickly and predictably to the …
CNN – Apr 9, 2001 WASHINGTON (CNN) — President Bush sent his proposed budget for 2002 to Congress Monday, earmarking big increases in spending for education and defense but …
Washington Post – Feb 8, 2005 By Peter Baker. President Bush sent Congress a $2.57 trillion federal budget yesterday that is designed to project US power and priorities overseas while …
msnbc.com – Feb 4, 2008 Pablo Martinez Monsivais / AP. WASHINGTON – President Bush sent the nation’s first-ever $3 trillion budget proposal to Congress on Monday, contending that …
AFX News Limited Chicago Fed’s Evans mirrors Bernanke no-recession forecast
02.14.08, 2:02 PM ET
NEW YORK (Thomson Financial) – The Chicago Federal Reserve Bank has an economic index that is now signaling a greater than 50% chance of a recession, but the bank’s new President Charles Evans would not, in a speech Thursday, go beyond the same slow growth/late 2008 recovery outlook that Fed Chairman Ben Bernanke delivered earlier in the morning.
‘Our outlook at the Chicago Fed is for real GDP to increase in the first half of the year, but at a very sluggish rate,’ Evans said in remarks prepared for financial analysts in Chicago. ‘However, we expect growth will pick up to near potential by late in the year and continue at or a bit above this pace in 2009.’
That is essentially the same forecast Chairman Bernanke gave in congressional testimony Thursday morning, and it is relatively optimistic compared to some, though not all, private forecasters who now expect a recession.
Even the Chicago Fed’s own National Activity Index three month moving average fell to -0.67 in December, and Evans said based on research he did as a staff economist there, ‘readings like this indicate a greater than 50% probability that the economy is in a recession.’
There are reasons to discount this probability, Evans pointed out. Retail sales posted a modest increase in January, and the forward-looking data on orders for capital goods ended last year on a positive note.
Still, ‘it is clear that the U.S. economy currently faces substantial headwinds.’
And there are forces pushing growth against those headwinds, the Fed itself not least of them.
‘At 3%,’ Evans said, ‘the current federal funds rate is relatively accommodative and should support stronger growth. Indeed, because monetary policy works with a lag, the effects of last fall’s rate cuts are probably just being felt, while the cumulative declines should do more to promote growth as we move through the year.’
Then, too, the fiscal stimulus checks should be boosting consumer spending in the second half of the year.
The Chicago Fed’s forecast is for inflation to moderate over the next two years. ‘Slower growth in 2008 will limit price increases somewhat. Furthermore, futures markets point to a peaking of energy and commodity prices,’ according to Evans. And inflation expectations are still mostly contained.
For financial markets, despite the improvement in liquidity, overall credit conditions are still strained, and the lending environment is much less receptive to risk-taking than it was prior to last August.
‘So we are in the midst of a period of soft economic activity. We also are in a period of heightened uncertainty about the economic outlook,’ he concluded.
WASHINGTON — In the nation’s first-ever $3 trillion budget, President Bush seeks to seal his legacy of promoting a strong defense to fight terrorism and tax cuts to spur the economy. Democrats, who control Congress, are pledging fierce opposition to Bush’s final spending plan _ perhaps even until the next president takes office.
The 2009 spending plan sent to Congress on Monday will project huge budget deficits, around $400 billion for this year and next and more than double the 2007 deficit of $163 billion. But even those estimates could prove too low given the rapidly weakening economy and the total costs of the wars in Iraq and Afghanistan, which Bush does not include in his request for the budget year beginning Oct. 1.
Last year, when Democrats were newly in the majority, there were drawn-out veto struggles. This year’s fights could be worse because it is an election year.
As in past years, Bush’s biggest proposed increases are in national security. Defense spending is projected to rise by about 7 percent to $515 billion and homeland security money by almost 11 percent, with a big gain for border security. Details on the budget were obtained through interviews with administration officials, who spoke on condition of anonymity until the budget’s release.
The bulk of government programs for which Congress sets annual spending levels would remain essentially frozen at current levels. The president does shower extra money on some favored programs in education and to bolster inspections of imported food.
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/* Bush’s spending proposal would achieve sizable savings by slowing the growth in the major health programs _ Medicare for retirees and Medicaid for the poor. There the president will be asking for almost $200 billion in cuts over five years, about three times the savings he proposed last year.
There is no indication Congress is more inclined to go along with this year’s bigger cuts; savings would come by freezing payment rates for most health-care providers for three years.
In advance, Democrats attacked the plan as a continuation of failed policies that have seen the national debt explode under Bush; projected surpluses of $5.6 trillion wiped out; and huge deficits take their place, reflecting weaker revenues from the 2001 recession, the terrorism fight, and, Democrats contend, Bush’s costly $1.3 trillion first-term tax cuts.
“This administration is going to hand the next president a fiscal meltdown,” Senate Budget Committee Chairman Kent Conrad D-N.D., said Sunday in an interview with The Associated Press. “This is a budget that sticks it to the middle class, comforts the wealthy and has a set of priorities that are not the priorities of the American people.”
Bush’s budget reflects the outlines of a $145 billion stimulus plan that the president is urging Congress to pass quickly to combat the growing threat of a recession.
While the House passed a stimulus bill close to the president’s outline, Senate Democrats are trying to expand the measure to include cash relief for older people and extended unemployment benefits.
Bush’s five-year blueprint makes his first-term tax cuts permanent while still claiming to get the budget into balance by 2012, three years after he leaves office.
Republicans are pledging to protect those first-term tax cuts. But Democrats, including the party’s presidential candidates, want to retain the tax cuts that benefit lower and middle-income taxpayers while rolling back the tax cuts for the wealthy.
Democrats say Bush’s budget is built on flawed math. Beyond 2009, the budget plan does not include any money to keep the alternative minimum tax, which was aimed at the wealthy, from ensnaring millions of middle-income people. It also includes only $70 billion to fight the wars in Iraq and Afghanistan in 2009, just a fraction of the $200 billion they are expected to cost this year.
Reflecting strong lobbying by Secretary of State Condoleezza Rice, Bush’s budget includes a request to hire nearly 1,100 new diplomats to address severe staffing shortages and put the State Department on track to meet an ambitious call to double its size over the next decade.
In a change from last year, the administration is also seeking to increase spending on the State Children’s Health Insurance Program by $19.7 billion over the next five years. That request is midway between the $5 billion increase requested by Bush last year and the $35 billion increase in bills passed by Congress but vetoed by Bush in October and December.
Bush also proposes boosting spending in some areas of education such as Title I grants, the main source of federal support for poor students. But at the same time, Bush seeks to eliminate 47 other education programs that are seen as unnecessary including programs to encourage art in the schools, bring low-income students on trips to Washington and provide mental health services.
Deficits in the range of $400 billion would be very close to the all-time high imbalance, in dollar terms, of $413 billion set in 2004 during Bush’s first term. Many private economists are forecasting that the deficits this year and next will surpass the 2004 record in large part because they believe the country is heading into a recession.
Stanley Collender, a budget expert with Qorvis Communications, a Washington consulting firm, said it is very likely that the next budget year will begin with the government operating on a short-term spending measure. In that scenario, Democrats, unable to enact their spending priorities over Bush’s vetoes, would mark their time hoping the country will elect a Democrat to succeed Bush.
The $3 trillion Bush’s proposes spending in 2009 would be the first time that milestone has been reached. Bush also presided over the first budget to hit $2 trillion, in 2002. It took the government nearly 200 years to reach the first $1 trillion budget, which occurred in 1987 during the Reagan administration.
prweb.com – Feb 20, 2008
The County’s unemployment rate will average 4.9 percent in 2008 and 4.6 percent in 2009. – Ventura County could also be tiptoeing around a “spot” recession …
NEWS.com.au – Feb 12, 2008
THE US economy will continue growing in 2008 and avoid a recession despite a lingering housing … The CPI is forecast to tick up to 2.2 per cent in 2009. …
Pay-Per-View – Evening Standard – London – HighBeam Research – Feb 29, 2008 … the real world in 2009 when a slowdown and it will only be a slowdown and not a recession … Evening Standard – London; September 16, 2009 ; 358 words …
$2.95 – St. Paul Pioneer Press – NewsBank – Feb 29, 2008 The $935 million deficit in the budget through mid-2009 means state leaders … A brief, mild recession that will ease as Minnesotans begin spending money …
prweb.com – Feb 20, 2008
The County’s unemployment rate will average 4.9 percent in 2008 and 4.6 percent in 2009. – Ventura County could also be tiptoeing around a “spot” recession …
NEWS.com.au – Feb 12, 2008
THE US economy will continue growing in 2008 and avoid a recession despite a lingering housing … The CPI is forecast to tick up to 2.2 per cent in 2009. …
ORLANDO (MarketWatch) — The housing market will not stabilize until late in 2008 at best, with sales, starts and prices continuing their slide through most of the year, economists attending the International Builders Show here said Wednesday.
Housing starts, which fell 30% in 2007, could drop nearly that much again in 2008, said David Seiders, chief economist for the National Association of Home Builders. His forecast calls for new-home sales to fall to a 25-year low of 632,000 units in 2008, down more than 20%. Existing-home sales will drop as well, to a 20-year low, of 4.33 million units.
And while home-price trends will vary across the country, the national median price is projected to drop again in 2008. When housing does finally stabilize, probably in mid-2009, prices will have fallen about 15% from their peak in mid-2006, said David Berson, chief economist for the PMI Group Inc.
“The housing market, continuing the dramatic contraction that has been developing over the last two years, is putting a big hit on overall economic activity,” Seiders said. “The economy is in rather weak condition at the moment. We think the economy will avoid an actual recession, but we had a weak fourth quarter, we’re going to have a weak first quarter and the second quarter is not going to be so hot either.”
Seiders sees a pickup in housing activity for 2009, with sales and starts rebounding, although still clocking in below 2007 levels. But he said there are plenty of downside risks to that forecast.
“This easily could spiral downward the way things feel now,” he said.
Frank Nothaft, chief economist for Freddie Mac, thinks parts of the country are already in recession and that there is “clearly a risk of recession” nationwide. Even with the economic stimulus package passed by Congress that will put tax-rebate checks into the hands of millions of Americans, Nothaft said there will be little impact until late in the year.
“Even if we get an economy that is at best flat, it will be another negative for the housing market,” Berson told reporters. “You have to remember that all the problems we’ve had in housing finance have come in an expanding economy.”
A large number of homes remain for sale across the country, with vacant homes for sale at a record high, Berson noted. That will continue to place a major drag on home prices, which are likely to fall nationally in 2009 as well as 2008, he predicted, although more markets around the country should be seeing home-price increases in 2009.
“Home prices have fallen significantly in some parts of the country and will fall more,” Berson said. That has created a situation where foreclosures and mortgage delinquencies could jump substantially.
“You’ve heard about homeowner defaults on loans for which they can make their payment but where the value of their home has fallen below what they owe on the mortgage. We don’t have figures on that … but if there has been a behavioral change on the part of homeowners, and we don’t know if that is happening, it is possible credit losses could go up a lot.”
Credit crunch continues
Seiders said in addition to housing, one of the biggest drags on the economy is the credit crunch in financial markets that was spurred by massive problems in subprime lending. That has crimped the options not just for homeowners and buyers in the subprime market, but for those who use any kind of loan that is not “conforming,” meaning it fits the guidelines to be purchased by government sponsored mortgage enterprises Fannie Mae and Freddie Mac.
“The best news I can share is that if you are a prime borrower looking for a conforming loan, able to provide full documentation and make a down payment, things are looking pretty good,” Nothaft said, noting that the 30-year fixed-rate conforming mortgage is expected to average 5.5% this year.
“The problem is, a lot of people can’t make those requirements,” he said.
Seiders believes there will have to be a second round of economic stimulus this year, and he said the home builders would be pushing for some kind of temporary tax credit directed at buyers who purchase houses out of the existing vacant inventory.
“What we really need is something to get housing sales going again so this thing doesn’t degenerate into an absolute debacle,” he said. “The home-buying side has to be improved first before any of the other measures will rebound.”
Apparently with an eye on another round of stimulus, on Tuesday the National Association of Home Builders Political Action Committee, Build-PAC, said it was halting all approvals and disbursements of contributions to federal congressional candidates and their PACs until further notice.
“The NAHB Build-PAC board of trustees felt that over the past six months Congress and the administration have not adequately addressed the underlying economic issues that would help stabilize the housing sector and keep the economy moving forward,” said Brian Catalde, NAHB president. “More needs to be done to jump-start housing and ensure the economy does not fall into recession.”
Builders were not in a particularly optimistic mood in the days leading up to their annual convention here. The most recent NAHB/Wells Fargo Housing Market Index reading, a measure of builder confidence, rose only slightly in January after hitting a record low in December. According to the January reading, about one in five builders believe that the market is healthy.
Although figures aren’t finalized until after the show, planners said that the number of attendees who registered in advance is down about 12% compared with last year, reflecting the hard times in the industry. Still, more than 1,900 exhibitors are here hawking their wares; for many the show accounts for the majority of their sales for the year.
Steve Kerch is assistant managing editor and personal finance editor of MarketWatch in Chicago.
Pay-Per-View – International Herald Tribune – HighBeam Research – Feb 13, 2008 No recession, just slowing, White House economist predicts … find … International Herald Tribune 08-12-2009 White House counteroffensive in works on …
Feeble growth projected for Georgia in 2008
‘The only solution is time,’ says GSU’s economy expert
By MICHAEL E. KANELL
The Atlanta Journal-Constitution
Published on: 02/27/08
The local economic engines are shifting into low gear, but they will stay out of reverse, predicted Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University.
Georgia and Atlanta will grow at a tepid pace through the year, while still outperforming the national economy, he said during the center’s quarterly conference Wednesday.
“It is going to be at least 2009 before we come close to normalcy,” Dhawan said. “And 2010 is going to be a normal year.”
Among the drags on growth: a near-freeze in credit markets, high energy prices and a battered housing market that has undermined consumer finances.
Yet Georgia will avoid the worst of the damage, he predicted.
Metro Atlanta will add 19,100 jobs this year, accelerating to 45,400 next year and 66,100 in 2010, Dhawan said.
Atlanta will account for the lion’s share of additions to Georgia payrolls. The state will add about 27,900 jobs this year and 71,000 in 2009. With nearly 4.2 million jobs in the state, the impact of that new hiring will be modest, he said. “If your kid is going to graduate in 2009, there is a high probability that he will be living in your basement.”
All the state’s metro areas except Dalton will add jobs during the next two years, he said. Less encouraging is the mix of jobs: Just 6 percent of the jobs added in Georgia this year will pay more than $45,000 a year, he said.
Nationally, the economy will edge perilously close to recession, Dhawan said.
Gross domestic product will not grow this quarter. Next quarter, GDP will drop at a 0.2 percent pace. For the year, the economy will eke out an anemic 1.1 percent growth rate, he said.
Dhawan’s view has grown decidedly more bearish since his November conference. At that session, he acknowledged the headwinds hitting the economy but predicted a pickup in growth by mid-2008. During the center’s August conference, Dhawan projected expansion of Georgia payrolls by 79,700 jobs in 2008, with Atlanta’s economy accounting for 59,100 positions. That was roughly three times the growth prediction made Wednesday.
Among forecasters, Dhawan now sits close to the middle of the pack: Slightly more than half the nation’s forecasters say the economy will avoid recession. About 45 percent say recession is either here or imminent, while pessimists warn it will be painful and prolonged.
For instance, New York University’s Nouriel Roubini says recession will last about a year and a half.
While popularly defined as two successive quarters of shrinking GDP, recession’s definition is actually more nuanced. In fact, the 2001 recession did not include two consecutive down quarters. The labeling of a recession falls to the National Bureau of Economic Research. That designation usually comes months after the downturn begins.
While the NBER has issued no proclamations, some signals are flashing red: Purchases of big-ticket goods have dropped, consumer confidence has plunged, manufacturing reports have turned down and household spending has been weak. Last month, the economy lost jobs for the first time in four years.
The broadest economic measure, GDP, last quarter slid to growth of less than 1 percent.
Even if GDP can stay positive, economists say that anything close to zero growth can feel like tough times in the labor market. Regardless of the official label, jobs are harder to come by, pay boosts are anemic and layoffs rise.
“Does it make any difference whether it’s a recession or not technically?” Dhawan said.
Dhawan said the key problem for growth remains credit. Loans are the lubricant of a growing economy.
The Federal Reserve has poured money into the system. Yet that has not persuaded banks to take chances, Dhawan said.
Many lenders have been spooked by fears that billions of dollars in bad loans have percolated into various investments. Many institutions have been forced to take huge write-downs, while a dread of worse losses has permeated decisions about making more loans.
The result is a chill in borrowing for business as well as for home purchases, Dhawan said. “It’s not a problem of ‘Can I afford it or not?’ It’s a problem of ‘Can I even get the loan?’ ”
Still, the most recent data show a tentative recovery in the markets for those investments, he said. “That is why I am not predicting a deeper recession or a prolonged slowdown.”
Minneapolis Star-Tribune – Minneapolis Star Tribune – Feb 14, 2008 … turnaround that will gain steam in 2009, an economic forecast says. … Manufacturers will flirt with recession during the first six months of 2008 …
Los Angeles County should escape a recession in 2008 and 2009, according to a forecast to be released this morning from the Los Angeles County Economic Development Corp.
Although more slow growth lies ahead as the housing slump continues, enough sectors of the local economy are showing modest growth that the area should sidestep a downturn.
The LAEDC report forecasts that L.A. County should add about 30,000 jobs in 2008 for a sluggish growth rate of 0.7 percent. That’s the same pace as 2007, when 30,600 jobs were created.
“We’re on a two-track economy right now,” said Jack Kyser, chief economist with the LAEDC. “Housing, related activity and financial services are all struggling, while other sectors, chiefly tourism, international trade and health services, are doing modestly better.”
But Kyser said several wild cards are on the horizon that could slow job growth even further or even tip the county into job losses, the definition of a localized recession. Chief among these is the possibility of labor strife in several key industries, including entertainment and trade. Both the Screen Actors Guild and International Longshore and Warehouse Union are negotiating contracts.
Another wild card is the possibility of more shocks to the already beleaguered financial sector that could worsen the credit crunch.
If these setbacks don’t materialize, Kyser said growth should pick up later this year as the Federal Reserve’s interest rate cuts and the national economic stimulus package signed last week kick in. The forecast projects 50,000 jobs being added to the L.A. County market in 2009, for a growth rate of 1.2 percent.
If the projections for 2008 and 2009 hold, then later this year, the county should finally surpass its record employment level of 4,135,700 non-farm payroll jobs reached in 1990. “That’s a sorry record of 18 or 19 years without hitting a new employment high, given the economic base that we have,” Kyser said.
NEW YORK (CNNMoney.com) — The Bush administration’s top economists see annual unemployment remaining just below 5% through 2013, meaning an extended period when the jobless rate would top the full-year average in six of the last 10 years.
The annual outlook of the president’s Council of Economic Advisors, released Monday, also projects that the economy will keep growing this year and avoid a recession. In fact, real gross domestic product is forecast to rise by a healthy 2.7% when comparing the fourth quarter of this year to a year earlier.
But the report projects the full-year unemployment rate will rise to 4.9% in 2007, up from 4.6% each of the last two years. And it expects the unemployment rate will stay at the 4.9% rate in 2009 before starting to retreating slightly to 4.8% in each of the following four years.
Edward Lazear, chairman of the council, said at a news conference that the downturn in some economic readings since the forecasts were made in November could result in a lowering at its mid-year update. But he said he’s also hopeful that interest rate cuts by the Federal Reserve and the recently passed economic stimulus package could keep the economy growing at close to this forecast.
While the administration is always concerned about unemployment, the current level is low by historic standards, Lazear said.
“Even if we go with the most aggressive notion of what is a high unemployment rate – 5.7% – we’re still quite a ways from that right now,” he said. “I think by anybody’s measure 4.9% is still low unemployment.
“I would argue that the 4.9% unemployment that we have now still reflects a relatively tight labor market,” he added. “Obviously last month’s numbers were not as strong. That’s something we’re going to keep watching. I think that the concerns that people looking at the economy have are concerns we share as well.”
The seasonally-adjusted monthly unemployment rate, which had been as low as 4.4% in March, jumped to 5% in December before retreating slightly to a 4.9% reading in January. But that month also saw employers shave 17,000 jobs from U.S. payrolls.
The CEA forecast also sees soft job growth in the next six years. Average monthly job growth is expected to be 109,000 a month on a fourth-quarter-to-fourth quarter basis. That growth pace would be down 15.5% from 2007 levels and down 43% from the growth reported in 2006.
And while the CEA forecast sees 2009 job growth returning to 2007 levels, it then sees it falling off again in 2010 and for the following three years, falling to only an average gain of 92,000 a month by 2013. Rising retirements by baby boomers is one of the reason for the slower job growth going forward, according to the report.
Unemployment was between 4% and 4.7% in the period from 1997 though 2001, the final year being the period that included the last recession. It then spiked above 5% the next four years, reaching to 6% by 2003 before starting the decline that brought it down to 4.6% the last two years.
Bush received the report from his economic advisers in a White House ceremony at which he said he approved of the $170 billion economic stimulus package passed by Congress last week. He said that he looked forward to signing the legislation to give most taxpayers hundreds in tax rebates, although he repeated his earlier contention that the economy is sound.
“This report indicates that our economy is structurally sound for the long term, and that we’re dealing with uncertainties in the short term,” Bush said. He said that in addition to the economic stimulus plan, he believes it is important for Congress to make permanent tax cuts passed in 2001 and 2003 that are due to expire beginning next year.
AFX News Limited White House sticks with economic optimism in annual report to Congress UPDATE
02.11.08, 5:25 PM ET
(updates with White House briefing)
WASHINGTON (Thomson Financial) – The White House stuck with the same, by now relatively optimistic, economic forecast it made last November when it released the annual Economic Report of the President to Congress on Monday.
‘I don’t think we’re in a recession,’ and the administration is not forecasting one, declared Edward Lazear, Chairman of the Council of Economic Advisers (CEA) and President George W. Bush’s chief economist.
The official forecast prepared by the CEA is still for 2.7 pct gross domestic product growth in 2008, while both the Congressional Budget Office and the Blue Chip Economic survey have now cut back their predictions to 1.7 pct growth.
Lazear barely defended the higher growth number in his briefing for reporters, describing it more like a simple ‘plug-in’ for the prediction model.
‘We do only two formal forecasts a year,’ he said, and the 2.7 pct growth number comes from the November forecast. ‘Obviously there have been new data since then that might alter our forecast next time,’ he said. ‘Next time’ in the administration’s forecasting schedule will be June.
Private economists are predicting an actual recession in growing numbers. Among Blue Chip economists, 20 pct think there will be at least one quarter of GDP contraction, and private forecasters are approaching a consensus view of a 50-50 recession chance.
The White House has seen the same data as the other forecasters, Lazear said, and that was the motivation behind the stimulus package. ‘We were worried about lower growth and as a result of the we decided it was time to act.’
Later this week the president is expected is expected to sign the stimulus package, which includes rebates of 600 usd to 1,200 usd to most taxpayers and 300 usd checks to disabled veterans, the elderly and other low-income people.
‘The economy is structurally sound and we are dealing with the uncertainties,’ Bush said in a brief appearance before cameras today.
The 2008 Economic Report says ‘the period of somewhat slower-than-normal growth that began in 2007 is likely to continue into 2008,’ with slow growth in the first half of the year and recovery in the second half.
For 2008, on a Q4 to Q4 basis, the White House forecast includes the 2.7 pct GDP growth rate and a 2.1 pct increase in the Consumer Price Index (CPI). It projects an average 4.9 pct unemployment rate and average payroll growth of 109,000 jobs per month.
For 2009, the forecast is 3.0 pct economic growth with 2.1 pct CPI inflation. Payroll growth would increase to an average of 129,000 jobs per month but the unemployment rate would remain at 4.9 pct.
There are parts of the Economic Report publication that are hard to reconcile with the the faster-growth scenario. One is the projected decline in average monthly growth of payroll jobs from 129,000 in 2007 to 109,000 this year.
Also, for the economy to achieve a 2.7 pct Q4 to Q4 growth rate for the year as a whole, a one percent-plus first half rate would have to be followed by a three-per cent plus rate in the second half. That puts a lot of reliance on the Fed’s rate cuts and the stimulus package.
Lazear today declined to discuss whether an additional stimulus package might be needed, saying only that the current one was ‘the right thing to do.’
In its January forecast, the Congressional Budget Office predicted both slower growth and higher inflation and unemployment for 2008. It sees 1.7 pct GDP growth, 2.9 pct CPI inflation and 5.1 pct unemployment.
For 2009, the CBO growth outlook is slightly slower at 2.8 pct, with 2.2 pct for CPI and higher unemployment at 5.4 pct.
In Congressional testimony last week, Treasury Secretary Henry Paulson said the 2.7 pct growth assumption probably makes the administration’s 2008 federal deficit forecast of $410 billion about $15 billion to $20 billion smaller than it would be if the economy grew at the slower 1.7 pct rate.
More broadly, the Economic Report of the President says the US economy has been and still is in a period of ‘rebalancing,’ in which ‘higher growth of non-residential investment and exports offset the lower rates of housing investment.’
Looking longer term, the CEA sees a long-lasting economic slowdown for the US. The report says ‘potential GDP growth is expected to slow in the medium term as productivity growth reverts toward its long-run trend (about 2.5 pct per year), and to slow further during the period from 2008 to 2011 as labor force growth declines due to the retirement of the baby-boom generation.’
$3.95 – New York Times – Oct 10, 1974 ” I do not think the United States is in a recession,” said President Ford stoutly this afternoon, looking at a half year of declining real growth through …
Montreal Gazette – Google News Archive – Jan 6, 1975 WASHINGTON — President Ford called in VicePresident Nelson Rockefeller and other advisers Saturday for an anti-recession strategy session which …
Nixon’s New Worries About Recession Time Magazine – Time – Mar 30, 1970 Nixon’s New Worries About Recession. One trouble with the economic strategy practiced by Richard Nixon is that it makes awkward politics for his party. ..
$3.95 – New York Times – Mar 10, 1958 President Eisenhower has indicated his deepening concern over the current recession. His letter to the Senate and House Republican leaders lists seven steps …
$3.95 – New York Times – Feb 11, 1961 Secretary of Labor Arthur J. Goldberg, touring areas of high unemployment, said today: “We are in a full-fledged recession. I think it’s time to say this …
Sydney Morning Herald – Dec 2, 2008 A US recession began in December 2007, a panel of economists charged with the official designation of business cycles said Monday. …
NEWS.com.au – Oct 24, 2007 THE US economy still faces pressure from a drawn-out housing-market slowdown but will “probably not” slip into recession as a result, former US Federal …
msnbc.com – Oct 5, 2007 By John W. Schoen. The government’s report on job growth for September may help ease fears that the economy is on the verge of a credit crunch-driven …
msnbc.com – Apr 5, 2007 WASHINGTON – The US economy — despite a painful housing slump — should not fall into recession this year, the International Monetary Fund’s top economist …
Washington Post – Oct 6, 2007 AP. NEW YORK, Oct. 5 — Wall Street capped a huge week with a sharp advance Friday after the government’s employment report for September and its revision …
ABC Online – ABC Online – Oct 8, 2007 Alan Greenspan says the US market is recovering from the subprime crisis (File Photo). (Getty Images: Jason Lee). Former Federal Reserve chairman Alan …
USA TODAY – USA Today – Oct 12, 2007 By Emily Kaiser, Reuters. WASHINGTON — Retail sales rose solidly in September while inflation pressures appeared largely muted, data showed Friday, …
Reuters UK – Oct 1, 2007 LONDON (Reuters) – The probability of a recession in the United States has increased but is still less than 50/50, former Federal Reserve Chairman Alan …
Livemint – Oct 25, 2007 Washington, DC: Almost two-thirds of Americans say a recession is likely in the next year and a majority believes the economy is already faltering, …
Sky News – Oct 31, 2007 The Federal Reserve has cut the US interest rate for the second time this year.Confronted with surging oil prices and falling house prices, it cut rates by …
CNNMoney.com – Oct 18, 2007 Survey finds that 46 percent of respondents believe the US economy is in recession, while 51 percent disagree with the statement. …
Bloomberg – Oct 9, 2007 By Kristin Jensen and Matthew Benjamin. Oct. 9 (Bloomberg) — Republican presidential hopeful Fred Thompson, in his first candidate debate, said he doesn’t …
msnbc.com – Oct 5, 2007 WASHINGTON – Fears that the country could slide into a recession eased in … After the country’s last recession, in 2001, the unemployment rate peaked at …
CBC.ca – Oct 4, 2007 The United States should avoid a recession and Canada’s economy will likely escape without major problems from the sub-prime mortgage storm, two economic …
New York Times – Oct 4, 2007 By AP. The shriveled housing market was a drag on American business activity last month, with service industries slowing but still showing some growth. …
Jerusalem Post – Oct 11, 2007 By AARON LEITNER. The risks of recession in the US have declined, economists expect a “soft landing.” The Fed’s 50-basis point rate cut this month has …
Daily News & Analysis – Oct 20, 2007 New York-based Economic Cycle Research Institute has had an extended record of correctly predicting cyclical turning points in growth and inflation of …
Reuters UK – Oct 26, 2007 VALENCIA, Spain, Oct 26 (Reuters) – Europe should avoid falling into recession despite slower growth in the United States, said European Economic and …
Says indices show India healthier than America currently
New York-based Economic Cycle Research Institute has had an extended record of correctly predicting cyclical turning points in growth and inflation of economies.
The institute, started by Geoffrey Moore, once Alan Greenspan’s statistics professor, doesn’t proffer point forecasts such as 8.3% GDP growth expected in the first quarter, etc.
Instead, it tells when a cyclical turn will occur in an economy using what it calls are “reliable sequences of events”..
Lakshman Achuthan, managing director of the institute, told Raj Nambisan and Vivek Kaul in an email interview why, at the current stage of US economic cycle, major stock market corrections tend to be rare, and do not send important economic signals.
Are business and stock market cycles intertwined at all points in time? Is there a case for one leading the other? How does the relationship work?
Generally, yes. This is because stock prices are related to profits growth (which depends on the pace of economic activity) and interest rates (also dependent on economic growth). Stock prices usually have a short lead of a quarter or two over the economy, but they can give false signals so it is better to use a well constructed leading index instead for forecasting the cycle.
You have said in a recent report that sizeable stock price declines are probably not imminent, but even if they do occur, are unlikely to have important economic implications. Is this true even in the context of emerging markets like India?
No. The study we have done is for the US market specifically, but the general theory does hold for India too. Our Indian Leading Index is actually much healthier than the US. So that is in fact supportive of corporate profits, and therefore stock prices.
Stock markets have always been an indicator of where the economy is heading. What makes you say, that there is no longer a connect between stock markets and economic cycles. Would that be true in the case of India as well?
There is a connection between stock prices and economic cycles. Stocks are a “short-leader” of the economy. Our leading indexes look at other, unrelated leading indicators of the economy, some of them with longer leads than stock prices.
It is on the basis of these leading indexes that we gauge the “risk” associated with stocks, and this does hold for India.
Is the current Sensex correction of 1900 points in a week in India a harbinger of things to come?
This seems to be something more technical and having to do with a regulation as opposed to a harbinger of slower economic growth ahead. As indicated, Indian economic growth looks to improve over coming quarters.
You’ve said that corrections tend to be nastier when the ECRI leading indices point to slowing growth. You haven’t flagged a US recession yet. Still, do you see growth slowing with the subprime issue yet to fully pan out
Yes, US growth is slated to have a broadbased slowdown affecting all major sectors of the economy (services, manufacturing and construction).
However, growth is slowing from 3.8% growth in Q2, and roughly 3% growth in Q3 (we get the data on October 31) so there is room to slow without recession. The credit crisis is part of the reason for the slowing.
In the last two months, Alan Greenspan, former Federal Reserve chief, has reduced the odds of a US recession from one-third chance to one-half now.
ECRI hasn’t given its verdict yet. Is there a perceptible decrease in your estimates of a US recession in the last 2-3 months?
Over the past year, the consensus recession probability estimate has hovered around 25%, but it jumped this summer to somewhere between a third and a half.
In truth, a 50-50 probability of recession implies that a forecaster is clueless about whether or not a recession is likely, and a coin flip would be just as accurate. Edging the recession probability down closer to one-third is not much better.
While the recession probability is never zero, ECRI’s indicators suggest that the recession risk today is much lower than the consensus believes.
ECRI’s recession forecasts have always been based on objective leading indexes, rather than on plausible parallels with the past bolstered by gut feel and selective statistics.
Based on that time-tested approach, we do not see a recession at hand. When recession risks actually rise, that should show up first in our leading indexes.
Will the ARM mortgage resets that intensify from November aggravate the subprime crisis, and therefore increase the chances of a US recession?
Perhaps, but if so our leading indexes will pick that up. It is notable that Libor rates have declined since the Fed rate cut so the resets are not as bad as they were in late August.
Is there a timeline where, based on the ECRI leading indices, you can presage the weakest or most volatile period in the short-term for the Dow?
Yes, if and when our leading indexes signal a recession (they do not say that today).
Most major bear markets are associated with recessions.
Forbes – Oct 26, 2007 He also declined to say whether the US would be forced into a recession if oil … But I think we’re far short of a point where we’d say that a recession is …
New York Sun – Oct 2, 2007 By JULIE SATOW, Staff Reporter of the Sun | October 2, 2007. Amid increased investor confidence that the worst of the credit crunch has passed, …
NEWS.com.au – Nov 27, 2007 By Alister Bull in Washington. RECESSION risks have increased amid weakness in housing and financial markets but “real America” is still doing just fine, …
Reuters UK – Nov 23, 2007 By Wojciech Moskwa and Aasa Christine Stoltz. OSLO, Nov 23 (Reuters) – The US economy’s great flexibility has reduced the risk of recession from the …
CTV.ca – Sep 28, 2008 The White House and congressional leaders agreed Sunday to a massive US$700-billion bailout for the US financial sector, after a deal was made for …
CNN – Nov 17, 2008 Should Congress bail out the Big Three? Here’s what lawmakers are considering and what’s at stake. By Chris Isidore, CNNMoney.com senior writer …
Salon – Sep 30, 2008 Monday was the rarest event in American politics: Public opinion actually influenced what the government did. Whether you favor the $700 billion bailout or …
CNN International – Sep 22, 2008 THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. WOLF BLITZER, HOST: A new poll suggests prejudice could hurt Barack …
Christian Science Monitor – Sep 25, 2008 Is there a deal or not? It depends on who’s asked, but an outline is emerging from Thursday’s meeting at the White House. Senate Banking, Housing, and Urban …
USA TODAY – USA Today – Nov 17, 2008 by Evan Vucci, AP. By Jeannine Aversa, AP Economics Writer. WASHINGTON — Faced with exasperated lawmakers upset by shifts in bailout strategy, …
央视国际 – Sep 28, 2008 A group of House Republicans, who earlier resisted efforts to quickly pass a bailout package, on Saturday afternoon said they were about to rejoin the talks …
Sydney Morning Herald – Sep 21, 2008 Democrats and Republicans faced off Sunday over the US government’s landmark request for 700 billion US dollars to bail out financial institutions as …
Herald Sun – Oct 4, 2008 GEORGE Bush today signed a $US700 billion Wall St rescue bill just hours after the US House of Representatives approved it. The House, which sparked market …
Telegraph.co.uk – Jul 18, 2008 … economic projections – also sharply increasing its forecast for the US. … The IMF lifted its 2008 world growth forecast from 3.7pc to 4.1pc, …
Irish Times – Apr 3, 2009 THE DETERIORATION in the economy since the start of the year has wiped a further €5 billion from the economic projections made by the Government in January. …
USA TODAY – USA Today – Feb 20, 2008 … a downbeat view of the economy Wednesday, saying 2008 growth will be far … range from 5.2% to 5.3% in 2008, up from a 4.8% to 4.9% October projection. …
Washington Post – Feb 21, 2008 The forecasts for economic growth in 2008 from 17 top Fed officials range from 1 to 2.2 … Even that lowered projection does not indicate a recession. …
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By MarketWatch
WASHINGTON (MarketWatch) — Here is the prepared testimony of Federal Reserve Chairman Ben Bernanke at the Senate Banking Committee on Tuesday.
“Chairman Dodd, Senator Shelby, and members of the Committee, I am pleased to present the Federal Reserve’s Monetary Policy Report to the Congress.
“The U.S. economy and financial system have confronted some significant challenges thus far in 2008. The contraction in housing activity that began in 2006 and the associated deterioration in mortgage markets that became evident last year have led to sizable losses at financial institutions and a sharp tightening in overall credit conditions. The effects of the housing contraction and of the financial headwinds on spending and economic activity have been compounded by rapid increases in the prices of energy and other commodities, which have sapped household purchasing power even as they have boosted inflation. Against this backdrop, economic activity has advanced at a sluggish pace during the first half of this year, while inflation has remained elevated.
‘The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth.’
Ben Bernanke, Federal Reserve chairman
“Following a significant reduction in its policy rate over the second half of 2007, the Federal Open Market Committee (FOMC) eased policy considerably further through the spring to counter actual and expected weakness in economic growth and to mitigate downside risks to economic activity. In addition, the Federal Reserve expanded some of the special liquidity programs that were established last year and implemented additional facilities to support the functioning of financial markets and foster financial stability. Although these policy actions have had positive effects, the economy continues to face numerous difficulties, including ongoing strains in financial markets, declining house prices, a softening labor market, and rising prices of oil, food, and some other commodities. Let me now turn to a more detailed discussion of some of these key issues.
“Developments in financial markets and their implications for the macroeconomic outlook have been a focus of monetary policy makers over the past year. In the second half of 2007, the deteriorating performance of subprime mortgages in the United States triggered turbulence in domestic and international financial markets as investors became markedly less willing to bear credit risks of any type. In the first quarter of 2008, reports of further losses and write-downs at financial institutions intensified investor concerns and resulted in further sharp reductions in market liquidity. By March, many dealers and other institutions, even those that had relied heavily on short-term secured financing, were facing much more stringent borrowing conditions.
“In mid-March, a major investment bank, the Bear Stearns Cos., was pushed to the brink of failure after suddenly losing access to short-term financing markets. The Federal Reserve judged that a disorderly failure of Bear Stearns would pose a serious threat to overall financial stability and would most likely have significant adverse implications for the U.S. economy. After discussions with the Securities and Exchange Commission and in consultation with the Treasury, we invoked emergency authorities to provide special financing to facilitate the acquisition of Bear Stearns by J.P. Morgan Chase & Co. In addition, the Federal Reserve used emergency authorities to establish two new facilities to provide backstop liquidity to primary dealers, with the goals of stabilizing financial conditions and increasing the availability of credit to the broader economy.1 We have also taken additional steps to address liquidity pressures in the banking system, including a further easing of the terms for bank borrowing at the discount window and increases in the amount of credit made available to banks through the Term Auction Facility. The FOMC also authorized expansions of its currency swap arrangements with the European Central Bank and the Swiss National Bank to facilitate increased dollar lending by those institutions to banks in their jurisdictions.
“These steps to address liquidity pressures coupled with monetary easing seem to have been helpful in mitigating some market strains. During the second quarter, credit spreads generally narrowed, liquidity pressures ebbed, and a number of financial institutions raised new capital. However, as events in recent weeks have demonstrated, many financial markets and institutions remain under considerable stress, in part because the outlook for the economy, and thus for credit quality, remains uncertain. In recent days, investors became particularly concerned about the financial condition of the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. In view of this development, and given the importance of these firms to the mortgage market, the Treasury announced a legislative proposal to bolster their capital, access to liquidity, and regulatory oversight. As a supplement to the Treasury’s existing authority to lend to the GSEs and as a bridge to the time when the Congress decides how to proceed on these matters, the Board of Governors authorized the Federal Reserve Bank of New York to lend to Fannie Mae and Freddie Mac, should that become necessary. Any lending would be collateralized by U.S. government and federal agency securities. In general, healthy economic growth depends on well-functioning financial markets. Consequently, helping the financial markets to return to more normal functioning will continue to be a top priority of the Federal Reserve.
‘The economy has continued to expand, but at a subdued pace’
“I turn now to current economic developments and prospects. The economy has continued to expand, but at a subdued pace. In the labor market, private payroll employment has declined this year, falling at an average pace of 94,000 jobs per month through June. Employment in the construction and manufacturing sectors has been particularly hard hit, although employment declines in a number of other sectors are evident as well. The unemployment rate has risen and now stands at 5.5.%.
“In the housing sector, activity continues to weaken. Although sales of existing homes have been about unchanged this year, sales of new homes have continued to fall, and inventories of unsold new homes remain high. In response, homebuilders continue to scale back the pace of housing starts. Home prices are falling, particularly in regions that experienced the largest price increases earlier this decade. The declines in home prices have contributed to the rising tide of foreclosures; by adding to the stock of vacant homes for sale, these foreclosures have, in turn, intensified the downward pressure on home prices in some areas.
“Personal consumption expenditures have advanced at a modest pace so far this year, generally holding up somewhat better than might have been expected given the array of forces weighing on household finances and attitudes. In particular, with the labor market softening and consumer price inflation elevated, real earnings have been stagnant so far this year; declining values of equities and houses have taken their toll on household balance sheets; credit conditions have tightened; and indicators of consumer sentiment have fallen sharply. More positively, the fiscal stimulus package is providing some timely support to household incomes. Overall, consumption spending seems likely to be restrained over coming quarters.
“In the business sector, real outlays for equipment and software were about flat in the first quarter of the year, and construction of nonresidential structures slowed appreciably. In the second quarter, the available data suggest that business fixed investment appears to have expanded moderately. Nevertheless, surveys of capital spending plans indicate that firms remain concerned about the economic and financial environment, including sharply rising costs of inputs and indications of tightening credit, and they are likely to be cautious with spending in the second half of the year. However, strong export growth continues to be a significant boon to many U.S. companies.
‘Inflation seems likely to move temporarily higher in the near term’
“In conjunction with the June FOMC meeting, Board members and Reserve Bank presidents prepared economic projections covering the years 2008 through 2010. On balance, most FOMC participants expected that, over the remainder of this year, output would expand at a pace appreciably below its trend rate, primarily because of continued weakness in housing markets, elevated energy prices, and tight credit conditions. Growth is projected to pick up gradually over the next two years as residential construction bottoms out and begins a slow recovery and as credit conditions gradually improve. However, FOMC participants indicated that considerable uncertainty surrounded their outlook for economic growth and viewed the risks to their forecasts as skewed to the downside.
“Inflation has remained high, running at nearly a 3.5% annual rate over the first five months of this year as measured by the price index for personal consumption expenditures. And, with gasoline and other consumer energy prices rising in recent weeks, inflation seems likely to move temporarily higher in the near term.
“The elevated level of overall consumer inflation largely reflects a continued sharp run-up in the prices of many commodities, especially oil but also certain crops and metals.2 The spot price of West Texas intermediate crude oil soared about 60 percent in 2007 and, thus far this year, has climbed an additional 50 percent or so. The price of oil currently stands at about five times its level toward the beginning of this decade. Our best judgment is that this surge in prices has been driven predominantly by strong growth in underlying demand and tight supply conditions in global oil markets. Over the past several years, the world economy has expanded at its fastest pace in decades, leading to substantial increases in the demand for oil. Moreover, growth has been concentrated in developing and emerging market economies, where energy consumption has been further stimulated by rapid industrialization and by government subsidies that hold down the price of energy faced by ultimate users.
“On the supply side, despite sharp increases in prices, the production of oil has risen only slightly in the past few years. Much of the subdued supply response reflects inadequate investment and production shortfalls in politically volatile regions where large portions of the world’s oil reserves are located. Additionally, many governments have been tightening their control over oil resources, impeding foreign investment and hindering efforts to boost capacity and production. Finally, sustainable rates of production in some of the more secure and accessible oil fields, such as those in the North Sea, have been declining. In view of these factors, estimates of long-term oil supplies have been marked down in recent months. Long-dated oil futures prices have risen along with spot prices, suggesting that market participants also see oil supply conditions remaining tight for years to come.
“The decline in the foreign-exchange value of the dollar has also contributed somewhat to the increase in oil prices. The precise size of this effect is difficult to ascertain, as the causal relationships between oil prices and the dollar are complex and run in both directions. However, the price of oil has risen significantly in terms of all major currencies, suggesting that factors other than the dollar, notably shifts in the underlying global demand for and supply of oil, have been the principal drivers of the increase in prices.
“Another concern that has been raised is that financial speculation has added markedly to upward pressures on oil prices. Certainly, investor interest in oil and other commodities has increased substantially of late. However, if financial speculation were pushing oil prices above the levels consistent with the fundamentals of supply and demand, we would expect inventories of crude oil and petroleum products to increase as supply rose and demand fell. But in fact, available data on oil inventories show notable declines over the past year. This is not to say that useful steps could not be taken to improve the transparency and functioning of futures markets, only that such steps are unlikely to substantially affect the prices of oil or other commodities in the longer term.
“Although the inflationary effect of rising oil and agricultural commodity prices is evident in the retail prices of energy and food, the extent to which the high prices of oil and other raw materials have been passed through to the prices of non-energy, non-food finished goods and services seems thus far to have been limited. But with businesses facing persistently higher input prices, they may attempt to pass through such costs into prices of final goods and services more aggressively than they have so far. Moreover, as the foreign exchange value of the dollar has declined, rises in import prices have put greater upward pressure on business costs and consumer prices. In their economic projections for the June FOMC meeting, monetary policy makers marked up their forecasts for inflation during 2008 as a whole. FOMC participants continue to expect inflation to moderate in 2009 and 2010, as slower global growth leads to a cooling of commodity markets, as pressures on resource utilization decline, and as longer-term inflation expectations remain reasonably well anchored. However, in light of the persistent escalation of commodity prices in recent quarters, FOMC participants viewed the inflation outlook as unusually uncertain and cited the possibility that commodity prices will continue to rise as an important risk to the inflation forecast. Moreover, the currently high level of inflation, if sustained, might lead the public to revise up its expectations for longer-term inflation. If that were to occur, and those revised expectations were to become embedded in the domestic wage- and price-setting process, we could see an unwelcome rise in actual inflation over the longer term. A critical responsibility of monetary policy makers is to prevent that process from taking hold.
“At present, accurately assessing and appropriately balancing the risks to the outlook for growth and inflation is a significant challenge for monetary policy makers. The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth. At the same time, upside risks to the inflation outlook have intensified lately, as the rising prices of energy and some other commodities have led to a sharp pickup in inflation and some measures of inflation expectations have moved higher. Given the high degree of uncertainty, monetary-policy makers will need to carefully assess incoming information bearing on the outlook for both inflation and growth. In light of the increase in upside inflation risk, we must be particularly alert to any indications, such as an erosion of longer-term inflation expectations, that the inflationary impulses from commodity prices are becoming embedded in the domestic wage- and price-setting process.
‘The new rules will help to restore confidence in the mortgage market’
“I would like to conclude my remarks by providing a brief update on some of the Federal Reserve’s actions in the area of consumer protection. At the time of our report last February, I described the Board’s proposal to adopt comprehensive new regulations to prohibit unfair or deceptive practices in the mortgage market, using our authority under the Home Ownership and Equity Protection Act of 1994. After reviewing the more-than 4,500 comment letters we received on the proposed rules, the Board approved the final rules yesterday.
“The new rules apply to all types of mortgage lenders and will establish lending standards aimed at curbing abuses while preserving responsible subprime lending and sustainable homeownership. The final rules prohibit lenders from making higher-priced loans without due regard for consumers’ ability to make the scheduled payments and require lenders to verify the income and assets on which they rely when making the credit decision. Also, for higher-priced loans, lenders now will be required to establish escrow accounts so that property taxes and insurance costs will be included in consumers’ regular monthly payments. The final rules also prohibit prepayment penalties for higher-priced loans in cases in which the consumer’s payment can increase during the first few years and restrict prepayment penalties on other higher-priced loans. Other measures address the coercion of appraisers, servicer practices, and other issues. We believe the new rules will help to restore confidence in the mortgage market.
“In May, working jointly with the Office of Thrift Supervision and the National Credit Union Administration, the Board issued proposed rules under the Federal Trade Commission Act to address unfair or deceptive practices for credit card accounts and overdraft protection plans. Credit cards provide a convenient source of credit for many consumers, but the terms of credit-card loans have become more complex, which has reduced transparency. Our consumer testing has persuaded us that disclosures alone cannot solve this problem. Thus, the Board’s proposed rules would require card issuers to alter their practices in ways that will allow consumers to better understand how their own decisions and actions will affect their costs. Card issuers would be prohibited from increasing interest rates retroactively to cover prior purchases except under very limited circumstances. For accounts having multiple interest rates, when consumers seek to pay down their balance by paying more than the minimum, card issuers would be prohibited from maximizing interest charges by applying excess payments to the lowest rate balance first. The proposed rules dealing with bank overdraft services seek to give consumers greater control by ensuring that they have ample opportunity to opt out of automatic payments of overdrafts. The Board has already received more than 20,000 comment letters in response to the proposed rules.
“Thank you. I would be pleased to take your questions.”
Footnotes
1. Primary dealers are financial institutions that trade in U.S. government securities with the Federal Reserve Bank of New York. On behalf of the Federal Reserve System, the New York Fed’s Open Market Desk engages in the trades to implement monetary policy.
2. The dominant role of commodity prices in driving the recent increase in inflation can be seen by contrasting the overall inflation rate with the so-called core measure of inflation, which excludes food and energy prices. Core inflation has been fairly steady this year at an annual rate of about 2%.
msnbc.com – Feb 10, 2006 Ric Francis / AP. WASHINGTON – The US trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward by record imports of oil, food, …
Boston Globe – Nov 23, 2008 By Michael Kranish. WASHINGTON – President-elect Barack Obama will enter office in January facing an unprecedented budget deficit that will probably top $1 …
MarketWatch – Dec 11, 2008 By Greg Robb, MarketWatch. WASHINGTON (MarketWatch) — The weak US economy pushed down exports and imports in October, but the nation’s overall trade …
FOXNews – Jul 28, 2008 By ANDREW TAYLOR, AP Writer. WASHINGTON — The government’s budget deficit will surge past a half-trillion dollars next year, according to gloomy new …
San Francisco Chronicle – Dec 11, 2008 By JUDY LIN, AP Writer. California’s budget deficit will hit $41.8 billion over the next 18 months, potentially forcing the state to issue IOUs for …
Reuters UK – Nov 3, 2008 By David Lawder. WASHINGTON (Reuters) – Facing the need to borrow up to a staggering $2.1 trillion in the current fiscal year to fund economic rescue …
But none of the US budget figures include the Iraq war, the war in Afghanistan and countless other military and financial bailout funds that were used at the time? What were the real numbers? And, how could economic forecasters, experts, economists and financial /investment firm advisors have been so completely wrong on such a large scale? How is it that they could not see what was going to happen, especially those in the Treasury and Federal Reserve from 2007 to 2009? Why was it considered a matter of opinion or “rhetoric” in defining whether it was a recession, would be a recession or even whether there was really a problem in the economy or not? How is that possible?
– cricketdiane
****
A $500 Trillion dollar risky asset portfolio was held by Lehman? Currently there are over $600 Trillion dollars in credit default swaps and financial derivatives globally? Off-balance sheet accounting is still acceptable? Lack of transparency is still tolerated? There have been no financial regulations of corrections to the system, nor reform of financial regulations? Nothing has changed except that our futures are still at risk? I don’t get it.
The U.S. Supreme Court this week hears arguments on a provision of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 — or as it is more familiarly known, the Patriot Act.
The U.S. Senate Finance Committee released a 334-page report Saturday showing a link between the Type 2 diabetes drug Avandia and thousands of heart attacks.
**
**
My Notes – from 08-21-09
Lookup proof of Republican stalemating –
Whatever marketing genius convinced you that you must serve the Republican “brand” – failed to note the unique capacity and position in which you serve and its broader demands.
The actions you take or fail to take, the decisions you make or decide against supporting will last long after the Republican Party ceases to exist and have lasting effects far beyond the ability of any narrowly focused conservative group to perceive.
– Cricketdiane
**
**
Plundering the Amazon
Alcoa and Cargill have bypassed laws designed to prevent destruction of the world’s largest rain forest, Brazilian prosecutors say. The damage wrought by scores of companies is robbing the earth of its best shield against global warming. (Sept 2009)
Washington’s Other Handout
While taxpayers and lawmakers fret about the $700 billion bank bailout, the Treasury and Commerce departments are among a list of agencies that waste as much as $100 billion a year on contracts, often managed in secret. (March 2009)
Busting the Chip Cartel
U.S. antitrust prosecutors sent 15 executives from four companies to jail for price fixing of memory chips. There was a rub: The collusion failed. (June 2008)
The Subprime in the Schoolhouse
The mortgage contagion has hit state-run investment pools that handle $200 billion in funds for schools and cities. Taxpayers are in the dark. (Jan 2008)
Unsafe Havens
U.S. money market funds have invested $11 billion in subprime debt, much of it managed by Bear Stearns. (Oct 2007)
The Insurance Hoax
Property insurers use secret tactics to cheat customers out of payments—as profits break records. McKinsey’s advice to Allstate: Use “boxing gloves” instead of “good hands.”
(Sept 2007)
Markets Magazine
The editors of BLOOMBERG MARKETS™ magazine would like to hear from you, our readers. Tell us what you think about the articles we publish. Tell us which people or companies you’d like to see us write about more—or less. Praise us, criticize us, ask us questions. We regularly publish letters from our readers in the print version of our magazine, reserving the right to edit them for length and clarity. Please include your full name, address and telephone number. Thank you.
Ronald Henkoff
Editor BLOOMBERG MARKETS
**
Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs
By Richard Teitelbaum
(see article on bloomberg for the full report – also, Robert Dietrich, bloomberg markets magazine has a full article and appeared with a segment on bloomberg news today, 02-23-10, at 1.55pmET – about the story – worth seeing the segment)
CDOs Identified
The document Issa made public cuts to the heart of the controversy over the September 2008 AIG rescue by identifying specific securities, known as collateralized-debt obligations, that had been insured with the company. The banks holding the credit-default swaps, a type of derivative, collected collateral as the insurer was downgraded and the CDOs tumbled in value.
The public can now see for the first time how poorly the securities performed, with losses exceeding 75 percent of their notional value in some cases. Compounding this, the document and Bloomberg data demonstrate that the banks that bought the swaps from AIG are mostly the same firms that underwrote the CDOs in the first place.
[ . . . ]
“It’s almost too uncanny,” Calacci says. “If these banks had insight into the underlying loans because they had relationships with banks, originators or servicers, that’s at the least unethical.”
The identification of securities in the document, known as Schedule A, and data compiled by Bloomberg show that Goldman Sachs underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured — more than any other investment bank. Merrill Lynch & Co., now part of Bank of America Corp., created $13.2 billion of the CDOs, and Deutsche Bank AG underwrote $9.5 billion.
[ . . . ]
AIG paid its counterparties — the banks — the full value of the contracts, after accounting for any collateral that had been posted, and took the devalued CDOs in exchange. As requested by the New York Fed, AIG kept the bank names out of the Dec. 24 filing and edited out a sentence that said they got full payment.
Paid in Full
Before the New York Fed ordered AIG to pay the banks in full, the company was trying to negotiate to pay off the credit- default swaps at a discount or “haircut.”
[ . . . ]
In May 2009, AIG again filed Schedule A, this time with about 400 redactions. It revealed that Paris-based Societe Generale got the biggest payout from AIG, or $16.5 billion, followed by Goldman Sachs, which got $14 billion, and then Deutsche Bank and Merrill Lynch. It still kept secret the CDOs’ identification and information that would show performance.
[ . . . ]
Bad to Worse
Tavakoli also says that the poor performance of the underlying securities (which are actually specific slices or tranches of CDOs) shows they were toxic in the first place and were probably replenished with bundles of mortgages that were particularly troubled. Managers who oversee CDOs after they are created have discretion in choosing the mortgage bonds used to replenish them.
[ . . . ]
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, who delivered a report on the AIG bailout in November, says he’s not finished. He has begun a probe of why his office wasn’t provided all of the 250,000 pages of documents, including e-mails and phone logs, that Issa’s committee received from the New York Fed.
Schedule A provides some answers — and raises questions that need to be tackled to avoid the next expensive bailout.
FOXBusiness – Nov 18, 2009
Wagner also recommended that all Pennsylvania school districts, … maintained inadequate controls over more than $11.5 million of laptop computers and also …
Wagner also found that the district was the victim of a variety of deceptive marketing tactics: fees that were characterized as being paid by the investment banks were actually ultimately charged to the district; the agreements resulted in huge hidden profits for the investment banks that were not required to be, and have not been, disclosed to the district; the intermediaries involved in the deals – such as the district’s former financial advisor – had apparent conflicts of interests as a result of representing the interests of counterparties as well as the district; and at least two of the transactions were structured to provide the district with substantial up-front cash payments at the inception of the agreements as an additional inducement, totaling $5.8 million, while failing to disclose to the district that the investment bank was making a huge and immediate profit on the deal that was far in excess of the cash paid to the district. As a result, Wagner recommended that local governments should hire their financial advisers through a competitive selection process and periodically evaluate the quality, cost, and independence of the services provided.
Wagner urged the General Assembly to act on his legislative recommendations immediately. “These toxic products are being peddled to well-meaning but relatively unsophisticated local officials every day throughout the commonwealth,” he said. “The risk of huge losses is compounded by a lack of transparency in the deals and the failure of federal regulators to impose accountability on firms who created and marketed these products in the first place. These dangerous deals work in favor of the gambling houses and not the gamblers, and they must stop now.”
Wagner referred his findings to numerous state, federal, and independent entities. Among the recipients are the Pennsylvania Office of Attorney General, Pennsylvania Securities Commission, State Ethics Commission, U.S. Departments of Justice and the Treasury, U.S. Securities and Exchange Commission, and U.S. Commodities Futures Trading Commission.
(So, they did the opposite – and likely still have this legislation in place, where it started in the first place, my note)
In 2003, the General Assembly passed, and the governor signed, Act 23, which amended state law to explicitly permit local governments to enter into “qualified interest rate management agreements” or “QIRMAs,” commonly referred to as interest rate swaps, or just swaps, which are a type of derivative. Swaps were an attractive investment instrument when interest rates on variable-rate bonds and notes were low in comparison to fixed-rate bonds and notes, because they allowed local governments to take advantage of the lower rates while, in theory at least, providing a hedge against large increases in those rates. These exotic financial instruments are neither investments nor debt; they are contracts between a bond issuer (such as a school district) and an investment bank to exchange (“swap”) cash flows during an agreed-upon term based on other securities or indices. When the two sets of cash flows are exchanged, the side that generates the larger payments receives the difference between the sums.
Wagner noted that, while Act 23 was written primarily for the benefit and protection of the financial services industry, the swaps problem is not peculiar to Pennsylvania. The state of Tennessee has banned local governments from using these risky investments, New York State’s attorney general is investigating a possible ban, and the U.S. Congress is considering federal regulations.
(Excerpted from -)
NEWS RELEASE For Immediate Release
Contact: Steve Halvonik 717 787-1381 Report Text
Auditor General Jack Wagner Calls on General Assembly to Ban Risky “Swap” Contracts by Schools, Local Governments
Urges new efforts to recover millions in taxpayer losses in Bethlehem Area School District and throughout Pennsylvania
HARRISBURG (Nov. 18, 2009) – Auditor General Jack Wagner said today that the General Assembly should ban the use of “swaps,” after a special investigation completed by his department found that the Bethlehem Area School District lost at least $10.2 million of taxpayers’ money in these risky and complex financial instruments. Wagner also recommended that all Pennsylvania school districts, local governments, and municipal authorities stop entering into swap agreements and immediately terminate any active swaps to which they are a party.
“Quite simply, the use of swaps amounts to gambling with public money,” Wagner said. “The fundamental guiding principle in handling public funds is that they should never be exposed to the risk of financial loss. Swaps have no place in public financing and should be banned immediately.”
While the investigation focused on the Bethlehem Area School District, Wagner called his report a “case study” of the use of swaps by all local governments in Pennsylvania. The Department of Community and Economic Development’s records indicate that 626 swap filings were made in Pennsylvania between October 2003 and June 2009, which related to $14.9 billion in debt. The precise number of different swaps and the precise amount of debt cannot be determined because the DCED data may include some double-counting.
During this time period, 107 of Pennsylvania’s 500 school districts, or 21.4 percent, and 86 other local governments reported to DCED that they entered into swap agreements. At least 13 investment firms, including Citibank, Goldman Sachs, J.P. Morgan, and Morgan Stanley, have entered into swap agreements with Pennsylvania school districts and other local governments.
In 2003, the General Assembly passed, and the governor signed, Act 23, which amended state law to explicitly permit local governments to enter into “qualified interest rate management agreements” or “QIRMAs,” commonly referred to as interest rate swaps, or just swaps, which are a type of derivative. Swaps were an attractive investment instrument when interest rates on variable-rate bonds and notes were low in comparison to fixed-rate bonds and notes, because they allowed local governments to take advantage of the lower rates while, in theory at least, providing a hedge against large increases in those rates. These exotic financial instruments are neither investments nor debt; they are contracts between a bond issuer (such as a school district) and an investment bank to exchange (“swap”) cash flows during an agreed-upon term based on other securities or indices. When the two sets of cash flows are exchanged, the side that generates the larger payments receives the difference between the sums.
Until September 2008, the swap agreements were generally favorable to the Bethlehem Area School District, and it received cash payments from its investment bank counterparties. However, the swaps became unfavorable to the school district after the worldwide collapse of the banking system. The district was forced to pay $12.3 million to investment bank J.P. Morgan in May 2009.
Wagner’s investigation focused on the Bethlehem Area School District’s swap agreements entered into between April 29, 2003 and June 27, 2006. During that period, the district entered into 13 different swaps – the most of any school district in Pennsylvania. The 13 agreements related to $272.9 million in debt for school construction projects.
Wagner reviewed just two of the district’s swaps because those were the only two that had concluded by the time of his investigation. The two swaps cost district taxpayers $10.2 million more than if the district had issued a standard fixed-rate bond or note. Ironically, the swaps cost taxpayers $15.5 million more than if the district had simply paid the interest on the variable-rate note without any swaps at all. The district’s losses were largely due to excessive fees and other charges and the termination payment. “Because the district has many other swaps still in effect, the ultimate financial impact on the taxpayers remains to be seen,” explained Wagner.
Wagner noted that, while Act 23 was written primarily for the benefit and protection of the financial services industry, the swaps problem is not peculiar to Pennsylvania. The state of Tennessee has banned local governments from using these risky investments, New York State’s attorney general is investigating a possible ban, and the U.S. Congress is considering federal regulations.
Wagner also found that the district was the victim of a variety of deceptive marketing tactics: fees that were characterized as being paid by the investment banks were actually ultimately charged to the district; the agreements resulted in huge hidden profits for the investment banks that were not required to be, and have not been, disclosed to the district; the intermediaries involved in the deals – such as the district’s former financial advisor – had apparent conflicts of interests as a result of representing the interests of counterparties as well as the district; and at least two of the transactions were structured to provide the district with substantial up-front cash payments at the inception of the agreements as an additional inducement, totaling $5.8 million, while failing to disclose to the district that the investment bank was making a huge and immediate profit on the deal that was far in excess of the cash paid to the district.
As a result, Wagner recommended that local governments should hire their financial advisers through a competitive selection process and periodically evaluate the quality, cost, and independence of the services provided.
Wagner urged the General Assembly to act on his legislative recommendations immediately. “These toxic products are being peddled to well-meaning but relatively unsophisticated local officials every day throughout the commonwealth,” he said. “The risk of huge losses is compounded by a lack of transparency in the deals and the failure of federal regulators to impose accountability on firms who created and marketed these products in the first place. These dangerous deals work in favor of the gambling houses and not the gamblers, and they must stop now.”
Wagner referred his findings to numerous state, federal, and independent entities. Among the recipients are the Pennsylvania Office of Attorney General, Pennsylvania Securities Commission, State Ethics Commission, U.S. Departments of Justice and the Treasury, U.S. Securities and Exchange Commission, and U.S. Commodities Futures Trading Commission.
“I encourage the law enforcement agencies, in particular, to investigate and prosecute any conflicts of interest involved in these transactions,” Wagner said, “and to pursue all avenues that may be available to recover funds for the taxpayers of this district and elsewhere.”
Wagner conducted his investigation at the request of State Sen. Lisa Boscola, following a series of investigative reports by the media about the Bethlehem Area School District’s use of swaps. This is the second investigation report of the district released by Wagner in as many months. In October, Wagner reported that the district had maintained inadequate controls over more than $11.5 million of laptop computers and also had exercised poor oversight of an internal investigation related to the drug arrest of a former middle-school principal that cost the district $52,726.
Wagner commended the district for its cooperation with the investigation and its positive response to most of the recommendations in the report. He said that he would follow up in the future to determine the status of action on his recommendations by both the district and the General Assembly.
Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts more than 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s Web site at http://www.auditorgen.state.pa.us.
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Taxpayers could be on the hook for $1 trillion in pension and retiree health benefits.By Tami Luhby, senior writerFebruary 18, 2010: 7:31 PM ET
NEW YORK (CNNMoney.com) — Just as they are contending with massive gaps in their operating budgets, states and localities must also deal with a $1 trillion deficit in public employees’ retirement benefits’ funds, a new report found.
The shortfall amounts to more than $8,800 for every household in the nation, according to the Pew Center on the States, which published its findings Thursday.
States largely got themselves into this mess by failing to make annual contributions while also enhancing benefits, the study found. Now, they are behind by a total $452 billion in their pension accounts and $555 billion in their retiree health funds, as of the end of fiscal 2008, which ended June 30 for most states.
[ . . . ]
In the most trouble
The consequences of the shortfall could be severe. It comes at a time when states are wrestling with a cumulative $180 billion budget gap for fiscal 2011.
[ etc. ]
The study looked at 231 state-administered pension plans and 159 state-administered retiree health care and other non-pension benefit plans, which include some localities’ and teacher plans.
By Tami Luhby, senior writerFebruary 13, 2010: 8:29 AM ET
NEW YORK (CNNMoney.com) — States are looking to the federal government for more help balancing their budgets, but the Senate is not heeding their call.
Federal aid to the states was among the top priorities in an early Senate job creation bill, as well as in a $154 billion measure passed by the House in December. But it has fallen off the list as Senate Democrats look to craft legislation that will attract bipartisan support.
[ . . . ]
Big budget gaps
States are looking at a total budget gap of $180 billion for fiscal 2011, which for most of them begins July 1. These cuts could lead to a loss of 900,000 jobs, according to Mark Zandi, chief economist of Moody’s Economy.com.
[ etc. ]
Already, states laid off 44,000 workers in the 12 months ending in January, according to federal labor statistics.
In California, for instance, Gov. Arnold Schwarzenegger is proposing deep cuts to health care, education, the state workforce and social services programs. The governor is looking to Washington D.C. for $6.9 billion for its fiscal 2011 budget, on top of the $6 billion in stimulus funds it is using.
Mixed support on Capitol Hill
While many Democratic lawmakers on Capitol Hill back another federal bailout of the states, Republicans have said they don’t think it’s the best way to create jobs.
A recent Congressional Budget Office report showed that sending money to the states for needs other than infrastructure does spur hiring, but not as much as increasing aid to the unemployed or cutting employers’ payroll taxes.
Still, CBO Director Douglas Elmendorf said in testimony Friday that providing aid promptly would probably have a significant effect on employment and economic output.
“Without further aid from the federal government, many states would have to raise taxes or cut spending by more than they would if aid was provided,” Elmendorf said. “Such actions would dampen spending by those in government and by households in those states, and more state and private jobs would be lost.”
Not only would state workers be impacted, but government contractors and suppliers would be too, Shure said. If the states curtain their spending, the companies that do business with them will likely downsize too.
By Blake Ellis, staff reporterFebruary 19, 2010: 11:23 AM ET
NEW YORK (CNNMoney.com) — Consumer prices rose from a year ago amid climbing gasoline prices but the pace of price increases slowed, the government said Friday.
The Consumer Price Index, the government’s key inflation reading, rose 2.6% during the past 12 months, according to a report from the Labor Department. In December, prices rose 2.7% from the previous year.
Laptop theft in schools is rampant. The Racine Unified School District in Wisconsin reported dozens of computers stolen from its schools this fall. In Northern California, three custodians were arrested in connection with a series of thefts at the Oakland Unified School District, involving computers and other electronics. A library aid for the Del Olmo Elementary School in Los Angeles was arrested in September for the theft of five computers at her school.
So when staff at a middle school in the Los Angeles Unified School District (LAUSD) discovered the disappearance of 32 notebook computers in early October, it didn’t generate much attention. That wasn’t because the school doesn’t care about the loss. It was simply because the district has an efficient process in place to follow for reporting the missing equipment, including the use of a secret weapon to help in its recovery.
A Secret Weapon in Laptop Recovery
According to Joe Oliver, director of instructional technology for LAUSD, when a computer is stolen in the district, the school files a report with instructional support services, as well as with the district’s own police department. That department acts as a liaison with the city police department to file a report; plus, it puts into action its secret weapon: Absolute Software’s Computrace.
When a school or district purchases a license for Computrace, it actives a hibernating agent already embedded into the computer’s BIOS. According to David Hawks, business development manager for the education industry division of Absolute, about 70 million notebook computers have the agent in the BIOS, including laptops from Dell, HP, Lenovo, Toshiba, and several other manufacturers.
The agent contacts the Absolute data center to say it’s activated, and it creates a small application on the machine’s hard drive, explained Hawks. From that point forward, every 24.5 hours, the application sends a small update to the data center, to maintain a current profile of hardware, software, and licensing for the computer, including the IP address that’s being used to send the update from. When a theft of a particular computer is reported, he said, a flag goes up in the system that the computer has been stolen. The next time contact is made with the data center through the Internet, the computer is told, “instead of every 24.5 hours, we want you to report back every 15 minutes.”
The data center uses a set of forensic tools to begin recording historical data, including IP address information and keystroke logging. Unless the user is sophisticated enough to use an IP address anonymizer, that IP address can be used to track the computer to a specific Internet service provider. Absolute’s recovery services team, made up of retired and former police officers, works with local law enforcement agents to accumulate the facts necessary to obtain a subpoena. That, in turn, can be used to find out from an ISP what customer is using a particular IP address and where that Internet access is originating from.
In the case of the October theft at LAUSD, the investigation led to the residence of a woman who was found in possession of one of the stolen computers. She confessed to police that her boyfriend had given it to her. That resulted in a sting operation, in which the Los Angeles Police Department recovered an additional 12 laptops. Upon making bail, the boyfriend led police to an additional 11 computers, as well as a school projector, microscope, and entomology kit. Three suspects were arrested, and the investigation continues.
When a computer theft is solved, frequently, so are other cases. As Hawks pointed out, “Usually, the bad guy is doing a lot of other crimes besides just stealing a laptop.”
By virtue of the technology being embedded in the BIOS of the computer, local persistence remains, explained Hawks. A thief can “reimage the machine; they can rip out the hard drive. But the agent can heal itself on any hard drive that’s put in there.” If the hard drive from the stolen computer is placed into a different notebook, “then we have two computers calling into the center,” he said.
Eventually, Hawks predicted, computers will include some form of GPS technology that will aide in equipment recovery. Absolute’s software already encompasses the capability of working with computers that provide GPS capabilities, such as those that include the Qualcomm Gobi chipset. “With these 3G chips being embedded on the motherboard, it allows us to wake up the PC and track that machine using GPS triangulation,” he said. But first, he added, “It has to become pervasive, like WiFi is now.”
Embedded into the BIOS, Embedded into the Deal
LAUSD has been using Computrace since 2002. Just a year earlier the district had received a sizable federal grant to put laptops into a large number of classrooms. “At that point we were dealing with 88 classrooms, 20 laptops per classroom, about 1,600 to 1,700 laptops,” said Oliver. “We knew that laptops were–for better or worse–going to be targeted by a number of people who didn’t necessarily have the best of intentions. We also knew there were a few pieces of technology that would help us to track and make better use of our technology dollars in getting some type of asset tracking.”
The district wrote the use of tracking technology into the request for proposal that vendors had to include as part of their package to win the bid. The Absolute solution was suggested by the vendors. “There was nothing tricky about deploying [Computrace],” said Oliver. “The laptops arrived with the software embedded.”
Now, he said, when a school or other entity purchases a computer, it comes with the software loaded.
The same agent can be used not only for theft recovery, but also for asset tracking and remote deletion. Absolute’s Hawks said that some districts have misplaced computers and used the technology to track them down. If a computer can’t be recovered quickly, the remote deletion function allows for all selected data on the machine to be deleted the next time contact is made with the data center. IT administrators can access those profiles from a browser to view assets and generate reports.
LAUSD Uses Secret Weapon in Laptop Theft Recovery
11/11/08
The Absolute approach isn’t failsafe. “In some cases we’ve been very successful and been able to get all of [the computers],” said LAUSD’s Oliver. “In some cases we haven’t been able to.”
But he has noticed a pattern. “It’s kind of like stroke victims. The quicker they get to the hospital, the better the chances of their survival.” Thus, he advised, “In terms of being to recover computers, the shorter the period between the police being able to get the report and the system being activated, the better.”
About the Author
Dian Schaffhauser is a writer who covers technology and business. Send your higher education technology news to her at dian@dischaffhauser.com.
In support of the Privaris family of personal identity verification tokens for secure physical and IT access, an updated version of its plusID Manager Version 2.0 software extends the capabilities and convenience to administer and enroll biometric tokens. The software offers multi-client support, import and export functionality, more extensive reporting features and a key server for a more convenient method of securing tokens to the issuing organization.
from Government Security magazine – “Access Control”
My Note – so who is really deciding for all of us, whether it is school systems that spy on their students at home or in uses for technology on the rest of our communities’ members? Do any of them play by the same rules that most of us would agree to?
– cricketdiane
**
Emissions from Energy Related and Industry / Transportation of CO2
LONDON, Feb 19 (Reuters) – British Prime Minister Gordon Brown said on Friday that the next meeting of the G20 group of leading and emerging countries should be a deadline for agreeing on a new global regulation system for financial markets.
Addressing a centre-left political conference in London where Greek Prime Minister George Papandreou was also a speaker, Brown said Papandreou had inherited a very difficult situation from the previous Greek government and was working to fix it.
LONDON, Feb 19 (Reuters) – Below are highlights of a speech by British Prime Minister Gordon Brown to the Progressive Governance conference, a meeting of centre-left European leaders in London, on Friday.
“I believe first of all that we now need nothing short of a world constitution for the global financial system.”
“I believe that each country needs national growth and jobs strategies that are founded on science, innovation and skills for the future, but also … growth for the each of us will be lower and therefore low growth will affect us all unless there is a strategy for global growth agreed between the G20 countries and beyond.”
FINANCIAL REGULATION
“We are doing what we can in Britain to give our banks a sound capital base from which to move forward.
“But we need a global solution: common rules for capital and liquidity, common standards for supervision, common rules for bonuses and a shared way of assessing the contribution banks should make to society, free of the unfair and disproportionate use of regulatory and tax havens which penalise countries doing the right things.”
“We are now discussing with the IMF and other countries the prospect of a global levy that will embody the contribution global banks should make to the public interest.
“I hope that all these things can be agreed in the coming months in the meetings in Canada and Korea.”
FISCAL STRATEGIES
“Now we face a new choice for 2010 about that fiscal stimulus — whether to continue the stimulus to make sure that a fragile global recovery does not dip into a further recession or whether we take the necessary measures to ensure that growth in 2010 is stronger and more stable.
“So this is the critical question economies round the world face now: whether to go for growth in 2010. Progressive rounds the world say rightly that we have to go for growth and do nothing to put the recovery at risk.
“So instead of helping the recovery, in our country Conservative dislike bordering on hatred of government action would risk the recovery now.”
DEFICIT REDUCTION
“And we have been crystal clear that we will halve the deficit over the next four years – indeed more than halve it.
“That does mean that we must raise taxes and cut some programmes. But the vast majority of the increase in our deficit since the global financial crisis hit the UK has been caused by a decline in estimated tax revenue.
“We will remain resolutely focused on progressive priorities — protecting the key front line services and targeting investment to take our country forward.”
ON CONSERVATIVES AND EUROPE
“I know that people have been deeply concerned by recent developments on the British right, by the decision of the British Conservative Party to leave the mainstream right grouping in the European Parliament to join an alliance of the extremes and the fringes.
“So let me reassure you today; as long as I remain Prime Minister, Britain will stay firmly in Europe’s mainstream, never in its backwaters, and we will resist the attempts of the Conservatives to pull Britain into isolation and irrelevance.”
(Reporting by Matt Falloon, Estelle Shirbon and Adrian Croft)
LONDON—U.K. Prime Minister Gordon Brown, acknowledging he is the underdog heading into a spring general election, will outline an election campaign focused heavily on economic recovery.
Mr. Brown’s Labour Party has consistently trailed the opposition Conservative Party in the run-up to the election, which hasn’t yet been called but must be held by June. He has been damaged by the U.K.’s downtrodden economy, the country’s involvement in the Afghanistan and Iraq wars, and voter fatigue from Labour’s 13 years in power.
To combat that, Mr. Brown on Saturday plans to outline four themes he will emphasize during the campaign as he aims to persuade Britons they should return Labour to power.
Gordon Brown
Mr. Brown’s game plan, named “Operation Fightback,” calls for securing an economic recovery before aggressive debt cuts; supporting new industries; protecting key public services; and pledging to “stand up for the many and not the few.”
Some of the themes are familiar ones, and Mr. Brown, trailing the opposition Conservatives, could need more to secure his party a fourth term.
On Friday, James Purnell a former cabinet minister who launched the most destabilizing of a series of coup attempts against Mr. Brown in June, said he won’t run for re-election to Parliament. Mr. Purnell said he wants to focus on interests outside frontline politics. However, the departure of a relatively young politician was interpreted by some as a sign that many in the party are resigned to a long period out of power.
On Saturday, Mr. Brown will direct his fire at the Conservative Party, telling an audience of Labour party workers that beneath the “veneer” of Tory leader David Cameron’s rebranding of the party as “progressive,” it remains a party that will return to old habits by cutting public spending and damaging the U.K.’s fragile economic recovery.
“At every stage the Tories want to kick away the ladders of opportunity, because they are not the party of Britain’s mainstream majority and have policies that give most benefit for the few,” Mr. Brown will say, according to excerpts from his speech.
The run-up to this election has been particularly long, with Mr. Cameron kicking off his campaign in January.
Though the actual election date has yet to be announced, Mr. Brown is expected to call an election in May in what is seen as the most dramatic U.K. ballot since his party swept to power in 1997.
The Webcam spy case in the Lower Merion School District near Philadelphia has raised concern as to whether others with Webcams are vulnerable to remote spying. The school district admitted to activating the Webcams 42 times during a 14-month period, claiming that it did so only to track lost or stolen laptops.
But for anyone with a Webcam (and Webcams are now built in to many laptops and desktops), the question is whether you are vulnerable to having your Webcam remotely turned on. The answer is yes, though the newest version of the software used by the district to monitor its computers can no longer be used to activate Webcams or even track stolen computers.
According to Harriton High School student Phil Hayes, officials at the Lower Merion School District used a program called LANRev to manage and track the Macintosh laptops issued to students. The product was published by Pole Position Software, which was acquired last year by Vancouver, B.C.-based Absolute Software. An Absolute Software spokesman verified that it is also his understanding that the school used LANRev software.
The Philadelphia Inquirer reported that Mike Perbix, a network technician from the district, had recorded a Webcast where he talked about his use of LANRev. In a YouTube video attributed to Perbix, he says, “I’ve actually had some laptops we thought were stolen which actually were still in a classroom because they were misplaced, and by the time we found out that they were back I had to turn the tracking off and I had a good 20 snapshots of the teacher and the students using the machines in the classroom.”
End users can no longer track machines
Absolute has changed the name of the program to Absolute Manager and will be marketing it for remote management of PCs, Macs, and iPhones, but the product will no longer be used for theft or loss recovery. For those functions, Absolute offers Computrace for enterprise customers (including schools) and LoJack for Laptops for consumers.
[ . . . ]
Both the Computrace and LoJack products can be used to turn on a Webcam and photograph the user in the event of a theft investigation. But unlike the old LANRev, only Absolute engineers can track devices and activate recovery features. Company policy, according to Midgley, prohibits them for doing that until a police report is filed. “For us to begin a theft recovery process, we need a case file from the police,” he said.
[etc.]
I spoke with a student at Harriton who said some students are employing a very low-tech solution to block their Webcams: they’re pasting black tape over the lens. Now all they need to do is figure out how to disable the microphone.
NEWS RELEASE For Immediate Release
Contact: Steve Halvonik 717 787-1381 Report Text
Auditor General Jack Wagner Calls on General Assembly to Ban Risky “Swap” Contracts by Schools, Local Governments
Urges new efforts to recover millions in taxpayer losses in Bethlehem Area School District and throughout Pennsylvania
HARRISBURG (Nov. 18, 2009) – Auditor General Jack Wagner said today that the General Assembly should ban the use of “swaps,” after a special investigation completed by his department found that the Bethlehem Area School District lost at least $10.2 million of taxpayers’ money in these risky and complex financial instruments. Wagner also recommended that all Pennsylvania school districts, local governments, and municipal authorities stop entering into swap agreements and immediately terminate any active swaps to which they are a party.
“Quite simply, the use of swaps amounts to gambling with public money,” Wagner said. “The fundamental guiding principle in handling public funds is that they should never be exposed to the risk of financial loss. Swaps have no place in public financing and should be banned immediately.”
BUENA PARK, Calif. — Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.
[ . . . ]
Warm, outgoing and prone to the positive, Ms. Eisen has worked much of her life. Now, she is one of 6.3 million Americans who have been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s.
Men have suffered the largest numbers of job losses in this recession. But Ms. Eisen has the unfortunate distinction of being among a group — women from 45 to 64 years of age — whose long-term unemployment rate has grown rapidly.
In 1983, after a deep recession, women in that range made up only 7 percent of those who had been out of work for six months or longer, according to the Labor Department. Last year, they made up 14 percent.
[ etc. ]
During periods of American economic expansion in the 1950s, ’60s and ’70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade, job growth fell to 0.9 percent annually.
“The pace of job growth has been getting weaker in each expansion,” Mr. Achuthan said. “There is no indication that this pattern is about to change.”
Before 1990, it took an average of 21 months for the economy to regain the jobs shed during a recession, according to an analysis of Labor Department data by the National Employment Law Project and the Economic Policy Institute, a labor-oriented research group in Washington.
After the recessions in 1990 and in 2001, 31 and 46 months passed before employment returned to its previous peaks. The economy was growing, but companies remained conservative in their hiring.
Some 34 million people were hired into new and existing private-sector jobs in 2000, at the tail end of an expansion, according to Labor Department data. A year later, in the midst of recession, hiring had fallen off to 31.6 million. And as late as 2003, with the economy again growing, hiring in the private sector continued to slip, to 29.8 million.
It was a jobless recovery: Business was picking up, but it simply did not translate into more work. This time, hiring may be especially subdued, labor economists say.
Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.
At the same time, the continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs.
All of which helps explain why Ms. Eisen — who has never before struggled to find work — feels a familiar pain each time she scans job listings on her computer: There are positions in health care, most requiring experience she lacks. Office jobs demand familiarity with software she has never used. Jobs at fast food restaurants are mostly secured by young people and immigrants.
If, as Mr. Sinai expects, the economy again expands without adding many jobs, millions of people like Ms. Eisen will be dependent on an unemployment insurance already being severely tested.
“The system was ill prepared for the reality of long-term unemployment,” said Maurice Emsellem, a policy director for the National Employment Law Project. “Now, you add a severe recession, and you have created a crisis of historic proportions.”
Fewer Protections
Some poverty experts say the broader social safety net is not up to cushioning the impact of the worst downturn since the Great Depression. Social services are less extensive than during the last period of double-digit unemployment, in the early 1980s.
On average, only two-thirds of unemployed people received state-provided unemployment checks last year, according to the Labor Department. The rest either exhausted their benefits, fell short of requirements or did not apply.
“You have very large sets of people who have no social protections,” said Randy Albelda, an economist at the University of Massachusetts in Boston. “They are landing in this netherworld.”
When Ms. Eisen and her husband, Jeff, applied for food stamps, they were turned away for having too much monthly income. The cutoff was $1,570 a month — $25 less than her husband’s disability check.
Reforms in the mid-1990s imposed time limits on cash assistance for poor single mothers, a change predicated on the assumption that women would trade welfare checks for paychecks.
Yet as jobs have become harder to get, so has welfare: as of 2006, 44 states cut off anyone with a household income totaling 75 percent of the poverty level — then limited to $1,383 a month for a family of three — according to an analysis by Ms. Albelda.
“We have a work-based safety net without any work,” said Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin, Madison. “People with more education and skills will probably figure something out once the economy picks up. It’s the ones with less education and skills: that’s the new poor.”
[ . . . ]
Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.
Some labor experts note that severe economic downturns are generally followed by powerful expansions, suggesting that aggressive hiring will soon resume. But doubts remain about whether such hiring can last long enough to absorb anywhere close to the millions of unemployed.
A New Scarcity of Jobs
Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce — particularly for older, less-educated people like Ms. Eisen, who has only a high school diploma.
Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.
“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”
As it battled the global financial crisis, the Fed printed more than $1 trillion in new money and kept interest rates near zero, prompting criticism that it was setting the stage for rampant inflation.
Georgia Now Third In U.S. In Late Mortgage Payments
Weeks said the worst thing for her is the uncertainty. She said she just got a job but says she hasn’t been able to get answers from her bank.
“Now that I have a job, I actually have money, but I won’t get paid until March 11. So I just am hoping they will work with me but I don’t even know if it’s already been sold from under me and I haven’t heard from them in two months,” Weeks said.
She said she plans to meet with the bank this week. She is far from alone. Fourteen out of every 100 mortgage holders in Georgia are late in making mortgage payments – making the state third only to Mississippi and Nevada. But there is a way for homeowners to deal with delinquencies and avoid foreclosure.
ATLANTA – When he took office last month, Atlanta Mayor Kasim Reed promised to fix one of the city’s most crushing problems — its $3.5 billion pension bill, a bill that could soon cripple the city.
One out of every five city budget dollars now goes toward pensions and the percentage is rising rapidly.
When one hears the word “spy,” one normally thinks of places like Moscow, London, and Washington rather than Rosemont, Pa. However, the controversy swirling around Rosemont’s Harriton High School and the Lower Merion School District increasingly makes for bizarre reading. And even more bizarre thinking.
The school district has been accused of remote-controlled Webcam spying on its students. The student at the center of the allegations, Blake Robbins, claims the school, having produced a still photograph taken remotely by a school official, falsely accused him of selling drugs (I have embedded the video of CBS News interview with Robbins and his family).
One fact, though, has emerged that seems mystifying in the extreme.
According to the Washington Post, the school district has admitted activating students’ laptop Webcams 42 times over a 14-month period. The district claims each activation was merely an attempt to locate a stolen or missing laptop.
[ etc.]
While the school scrambles to defend itself against accusations of violating the Fourth Amendment, as well as transgressing the Electronic Communication Privacy Act, the Computer Fraud Abuse Act, the Stored Communications Act, Section 1983 of the Civil Rights Act, the Pennsylvania Wiretapping and Electronic Surveillance Act, and Pennsylvania common law, it becomes increasingly difficult to see how it will defend its actions.
It’s one thing to attempt to install security procedures to protect against the loss of a laptop. It’s quite another when those procedures appear to have been enacted without the knowledge of students or parents and leave the school open not only to all of the charges already leveled in the Robbins’ lawsuit, but also–as in the case of a student who leaves her laptop open in the shower to listen to music–to charges of child pornography.
As part of an ongoing effort to protect Penn’s assets and to comply with Federal regulations and standards to protect the privacy, confidentiality, and integrity of institutional data, the ComputracePlus Laptop Security Program has been implemented at the School of Medicine. This program enables law enforcement officials to track and potentially retrieve lost and/or stolen laptops.
Criteria
It is highly recommended that the Computrace Agent be installed on ALL laptops regardless of their specific function.
ALL laptops purchased with Institutional funds (including research grants and funds from federal agencies and industry sponsors) MUST have the Computrace Agent installed. All personal laptops with ePHI MUST also have it installed. It is recommended that all other personal laptops have the agent installed, especially those with other confidential but non-patient related information.
According to PennMed policy, confidential data is defined by UPHS/SOM as data such that, if compromised, would likely result in an adverse impact to UPHS/SOM, its patients, partners, and/or workforce members.
Laptop Owner Roles
To maintain the recovery guarantee, it is the responsibility of the laptop owner to ensure their device is connected to the Internet at least once every 30 days. If this requirement is not upheld and the device is stolen, attempts to recover the device will be made, but replacement monies will not be paid out if the device is not recovered.
It is vital that the laptop owner stores their laptop serial number and Emergency contact information in a safe place separate from the laptop. SOMIS has wallet-sized cards for storing this information. If you would like a card, please contact Michael Herzog at 215-573-4382 or mherzog@mail.med.upenn.edu. This information will be crucial in the recovery process.
In the event of a loss or theft, it is also the responsibility of the laptop owner to follow the appropriate steps outlined below.
Q. What is installed on my computer?
A. The ComputracePlus agent is a small, software client that resides on the host computer.
Q. Exactly what is ComputracePlus designed to do?
A. This Agent is designed to create both a deterrent for theft, which exposes the privacy and confidentiality of electronic Protected Health Information (ePHI) to outside parties, and to assist in the recovery of stolen laptop computers.
Q. What is ComputracePlus NOT designed to do?
A. The product is not:
A means of tracking, obtaining an inventory, or monitoring normal laptop activity
A means of knowing what other software is resident on the laptop
A guarantee of loss prevention
An agent known to disrupt routine computing on the laptop
An automatic trigger for finding a lost or stolen device
Q. Through what means are licenses paid?
A. The cost of this software is $65 per computer for a 3-year contract, and fees will be charged to the department, center or institute based on the laptop inventory.
Please note: each license is valid for a 3 year contract period. After that point, a new license will need to be purchased.
Q. Are devices other than laptops covered by this program?
A. At this time, only laptops are being covered with this program. However, the Agent can be installed on desktops, including local and out-of-office devices.
Q. Is my laptop protected when I travel?
A. The software is designed to work in both the USA and Canada. In other locations, reliance on the cooperation of local law enforcement is not necessarily as consistent.
Q. What happens to my laptop protection if I leave on sabbatical?
A. The device must check in through an Internet connection once each 30 days in order to maintain the recovery guarantee. Otherwise, if it is reported stolen during the leave period, attempts to recover it would be made, but the replacement monies could not be paid out if the device is not recovered. Once the device regularly reports in again, it is under the standard warrantee.
Q. Is there a means through this contract by which the data on my computer can be viewed by others?
A. No.
Q. What are the kinds of laptop losses covered by this service?
A. Internal Loss, Internal Theft, and External theft.
Q. What are the minimum system requirements to run ComputracePlus?
A. Computrace Agent Hardware & Operating System Requirements:
For PCs:
486 or faster processor
Hayes-compatible modem or connection to the Internet
Windows 95/98/2000/NT/Me/XP
For Macs:
G3 processor or above
Connection to the Internet
Mac OS X version 10.2
Q. Does ComputracePlus interfere with applications that are in operation?
A. No. ComputracePlus does not affect system performance or security. The agent itself occupies a small amount of memory when idle. When placing a call to the Monitoring Center, it occupies approximately 27 KB during the data transfer.
Q. Can the Computrace Agent dial through various telephone systems?
A. The Computrace Agent works from any phone line in the United States and Canada, even those requiring a special prefix number, such as 8 or 9. If the Agent is set to dial with a special prefix, it will first dial using that prefix but will try all common prefixes (and no prefix) until it makes a successful connection. When the Computrace Agent uses a phone connection to communicate with the Monitoring Center, it uses a toll-free telephone number.
Q. How long does it take to install the ComputracePlus service?
A. For individual installations it only takes a few minutes to run through the wizard- based installation tool and install the Computrace Agent.
A group of anti-Castro activists wonders if spies may have stolen a laptop computer from their office during Hurricane Wilma. The office of the Cuban Liberty Council was not forcibly broken into and nothing was taken except for the Apple laptop. The burglary of the laptop seemed to have occured as Miami shut down in October, 2005 during Hurricane Wilma.
The laptop contained information about donors to the council, as well as the dissident groups in Cuba that receive the council’s contributions. The office building where the council has a suite had been closed for a week and it is unclear exactly what day the laptop was taken.
Recently, two Florida International University staffers were arrested for not registering as foreign agents and allegedly providing information about the exile community to Cuba.
‘’It could be a burglary like any that happens a thousand times in this city,’’ council president Ninoska Perez-Castellon said Thursday. “But there’s always the possibility when you hear about cases of Cuban spies.’’
PORTLAND, Ore. — Several Portland area schools have been burglarized in recent months, according to a spokesperson with GadgetTrak.
One school “had enough” and used the company’s software on a number of its laptops. When the school was again burglarized, the spokesperson said “the wrong laptop” was stolen.
GadgetTrak’s software activated and began photographing the suspect and his location.
Ken Westin with GadgetTrak said police were able to work with the company to locate the device.
Suspects have been identified thanks to the software, Westin said.
The European Parliament has approved proposals on data retention that would compel telecom firms to keep customer email logs, details of internet usage and phone call records for between six months to two years.
The plan – designed to assist law enforcement in the fight against terrorism and serious crime – leaves it up to individual governments to decide how long service providers will be obliged to keep data.
It is vital to understand that any data stored on a remote server has been backed up and now forcibly retained by governments in the EU for at least 6 months but probably 2 years or more, depending on the country and ISP.
The obvious solution is public key encryption, and we will soon detail the available e-mail encryption and IM encryption solutions.
A laptop security program at Lower Merion schools was, when triggered, set up to snap multiple photos of whoever was using the computer, a district computer employee said in a 2008 webcast.
As an example, network technician Mike Perbix said, the system snapped as many as 20 photos of a teacher and some students without their knowledge while they were in a high school classroom during regular classes.
It would keep recording photos from the webcam and screen shots of whatever the computer user was doing until it was turned off, he said.
“It’s a fantastic feature,” Perbix said, chuckling at times as he talked about the theft-tracking feature in the software. “I can’t speak highly enough of it.”
The webcast provides new details about a system that first surfaced last week, in a federal lawsuit filed by a Harriton High School sophomore and his parents.
Blake Robbins, 15, said in the suit that an assistant principal confronted him last November with a photo from the laptop – supposedly evidence he was involved in “improper behavior” in his Penn Valley house.
The teenager has said that he was holding Mike & Ike candy in his hand, and that the assistant principal thought they might be drugs.
The system was triggered 42 times this school year, in an attempt to track lost or missing computers, school officials say.
District spokesman Douglas Young yesterday repeated that the security program was developed to help recover lost or stolen laptops, and added: “This included tracking loaner laptops that may, against regulations, have been taken off campus.”
The wealthy Lower Merion district purchased Apple MacBook laptops for all 2,300 students in its Harriton and Lower Merion High Schools.
But the district requires all students to pay a $55 insurance fee, with a $100 deductible if they are damaged or lost, according to a 2009 letter to parents from Harriton principal Steven R. Kline. “No uninsured laptops are permitted off campus,” Kline wrote.
Each school has a pool of “loaner laptops” available for students who haven’t paid the fee. Asked if Robbins took a loaner computer home without authorization, Young declined to comment.
The district defended the Harriton High administrator who confronted Robbins, assistant principal Lynn Matsko, saying she has been “unfairly portrayed and unjustly attacked in connection with her attempts to be supportive of a student and his family.”
“The district never did and never would use” a photo taken from a school-issued laptop to discipline a student, the statement said.
The Robbins family declined to comment to a reporter who visited their house yesterday. Their lawyer, Mark S. Haltzman, did not respond to requests for comment.
Since the suit was filed, federal prosecutors have issued a subpoena and Montgomery County authorities have opened their own probe. Meanwhile, the district has already apologized for not telling parents, and it has hired the law firm of Ballard Spahr to conduct an internal investigation and to recommend policy changes.
“These are important issues and we view them seriously,” said a statement issued yesterday by attorney Henry E. Hockeimer Jr., the former federal prosecutor leading the effort. While the investigation is under way, he said, people should not jump to conclusions.
“Important issues like these often generate misinformation and unjustified speculation. This situation is no exception.”
Other new details are surfacing about the controversy that students are already calling “Webcamgate.”
More than a year ago, two Harriton High School student council members privately confronted the principal when they learned that the school could covertly photograph students using the laptop’s cameras.
When Kline said it was true, the students told the principal they were worried about privacy rights, and asked questions about other kinds of monitoring. Could, for example, the school system read saved files on their computers? At a minimum, the student leaders told the principal, the student body should be formal warned about any surveillance.
But nothing happened, according to other council members who were briefed afterward, and the student leaders returned a short while later to once again tell the principal that they were greatly concerned about a potential invasion of privacy. Again, nothing happened.
Kline and district spokesman Young did not respond yesterday to requests for comment about the meeting with the principal.
The Web presentation by Perbix is featured on a site touting the benefits of the software system known as LANrev. He talked in detail about the program’s different features – including the remote tracking.
Once the feature is activated and a computer goes online, he said, “that computer will start sending back, at regular intervals . . . screen shots [pictures of what is on the computer’s screen] and if you have a built-in iSight [the Apple camera], it will start sending in camera shots.”
The security system also shows the computer’s unique “address” and shows what Internet server it was logged into, which Perbix said can “help the police try to track down your stolen computer.”
“Yes, we have used it, and yes, it has gleaned some results for us . . . especially when you’re in a school environment and you’re worrying about laptops getting up and missing,” he said.
Once, he said laptops he thought were stolen were just misplaced – in a classroom.
“And by the time we found out they were back, I had to turn the tracking off, and I had a good 20 snapshots of the teacher and students using the machines in the classroom.”
Perbix declined to talk about the webcast this weekend, saying that any comment would come from the school district.
Student council members, who spoke on condition of anonymity, said that they did not necessarily disagree with the laptop policy, but that they believed students should have been informed.
“I don’t think they were spying on us as the media has portrayed it – that’s ridiculous,” said a Harriton student council member. But, she said, the administration should have been transparent about what it was doing.
“What would allow them to begin a search? What is installed on my laptop?” she said. “In the immediate future – like, Monday – we look forward to communicating with the administration about this.”
Some of the nation’s largest banks including Bank of America (NYSE: BAC), JP Morgan Chase (NYSE: JPM) and Citigroup’s Citi Mortgage division (NYSE: C) have been accused of finding unethical ways of making money from distressed homeowners who are trying to avoid foreclosure, including allegations that banks are making illegal requests for up-front cash payments from buyers and real estate agents as part of their agreement to close the deal on short sales.
Short sales require banks to accept less than the full amount due on the mortgage.
Industry-insider, Jeremy Brandt, recently said in an interview with CNBC that “at least 200 real estate agents said they have had these requests made by representatives of Citi Mortgage, JP Morgan Chase, Bank of America and other large banks.”
Since the cash that lenders receive is not listed on the final HUD settlement statement as mandated by the Real Estate Settlement Practice Act (RESPA), the cash payments are illegal.
Brandt said that this type of fraud appears to be more prevalent in the case of banks that hold a second mortgage on a homeowner, which often end up with nothing in short sales.
JP Morgan Chase was recently questioned about the practice by the Examiner and declined to comment. Bank of America and Citigroup’s Citi Mortgage division denied that the practice was happening.
If a recent notice in your bank statement from Citigroup (C: 3.4395, n.a., n.a.%) has you fretting that you won’t get your money out when you need it, the bank has a message for you: Don’t sweat it.
Citi recently sent notices to a large majority of its checking account customers informing them – in no uncertain terms – that the bank has the right to require account holders to provide advanced notice before withdrawing money. The notice had some customers buzzing over whether the cryptic language meant Citi was preparing for an onslaught of customer withdrawals – an old-fashioned, “It’s a Wonderful Life” kind of bank run.
“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change,” the notice read.
But according to Citi officials there is nothing nefarious behind the notification, which they say amounts to nothing more than a technical requirement for all banks that offer interest on checking account balances. Citi says that when the FDIC began offering unlimited account protection in 2009, the bank converted all of its interest- and promotion-eligible accounts that did not currently pay an interest payment into what is known in bank circles as a Demand Deposit Account to take advantage of the FDIC change.
When the bank moved back to standard FDIC coverage this year, it converted the accounts back to interest-eligible accounts – known as NOW accounts – triggering the account notification. According to a spokeswoman for Citi, all banks that offer NOW accounts are required to reserve the right to require advanced notice of withdrawals.
“However, we have never exercised this right and have no plans to do so in the future,” according to a statement from the bank explaining the notice.
It was unclear if the notice caused Citi customers to attempt to withdraw funds at a higher rate than normal. However, a person familiar with the notice pointed out that customers would have been notified by their branches that it was a technical matter.
Spokespeople for Bank of America (BAC: 16.21, n.a., n.a.%) and JPMorgan Chase (JPM: 40.87, n.a., n.a.%) did not immediately return calls for comment.
NEW YORK (TheStreet) — Citigroup(C Quote) is adding annual fees to many popular credit cards a week before the CARD Act goes into effect.
Some Citigroup cardholders are receiving letters about a $60 annual fee that is being attached to their account effective April 1. If consumers make $2,400 in purchases during the year, the annual fee will be credited to their account. Only about 20% of credit cards in the U.S. have annual fees, according to data compiled by LowCards.com.
It appears that Citigroup’s test of adding an annual fee to a small share of customers in August 2009 proved to be successful for the issuer, which competes with Visa(V Quote), MasterCard(MC Quote) and Capital One(COF Quote).
At that time, Citigroup began charging some cardholders an annual fee of $30 to $90 unless they spent at least $2,400 a year. Now a far greater number of customers are receiving this notice.
“The reason we are making this change is to maintain the quality of our service amid the rising cost of doing business,” said Ken Stork of Citibank in a letter to the cardholders receiving this notice.
Citigroup’s decision may be a sign of things to come. Issuers such as Citigroup have been squeezed weaker consumer spending, higher default rates and the enactment of the CARD Act, which puts limits on some interest-rate increases. Adding annual fees is a way to easily generate revenue.
For consumers who spend at least an average of $200 a month on their Citigroup cards, the fee may not be a big deal. Those who own credit cards for emergencies will now have to pay for that safety.
Holders can always ask issuers to waive annual fees. It may not work, but it doesn’t hurt to try. If consumers have a good history with the Citigroup card and it is building up their credit score, they can shift some spending to reach the $2,400 limit and pay off balances each month.
Of course, you can opt out of the card, close the account and shop for a new credit card.
— Reported by Bill Hardekopf, CEO of LowCards.com.
Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs
By Richard Teitelbaum
Feb. 23 (Bloomberg) — When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.
Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system.
A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.
These were the deals that pushed the insurer to the brink of insolvency — and were eventually paid in full at taxpayer expense. The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year, even when AIG wanted it released.
That lack of disclosure shows how the government has obstructed a proper accounting of what went wrong in the financial crisis, author and former investment banker William Cohan says. “This secrecy is one more example of how the whole bailout has been done in such a slithering manner,” says Cohan, who wrote “House of Cards” (Doubleday, 2009), about the unraveling of Bear Stearns Cos. “There’s been no accountability.”
CDOs Identified
The document Issa made public cuts to the heart of the controversy over the September 2008 AIG rescue by identifying specific securities, known as collateralized-debt obligations, that had been insured with the company. The banks holding the credit-default swaps, a type of derivative, collected collateral as the insurer was downgraded and the CDOs tumbled in value.
The public can now see for the first time how poorly the securities performed, with losses exceeding 75 percent of their notional value in some cases. Compounding this, the document and Bloomberg data demonstrate that the banks that bought the swaps from AIG are mostly the same firms that underwrote the CDOs in the first place.
The Constitution represents a contract between the people and our government. All officials in Washington swear an oath upon taking office that they will uphold and defend the Constitution. It clearly defines what the federal government can and cannot do.
One of the powers granted to the government is the levying of taxes. The 16th Amendment adds income tax to that.
However, the fact that our elected officials have forsaken their oaths of office and for decades now have increasingly acted in outright defiance of the Constitution effectively puts the government in breach of contract. They are now using the Constitution to hold us accountable for the taxes they choose to impose while simultaneously side-stepping our outright ignoring the Constitution with just about everything else. This is wrong. It is oppressive and flirts with outright tyranny
More Details Emerging About School Laptop Spying, And It Doesn’t Look Good
from the a-bit-proud-of-your-spying… dept
Following up on this morning’s post, new details are emerging about the school spying scandal in which a student was punished for apparently chowing down on Mike&Ike candy (which the school thought were drugs). In our comments, someone named Paul points us to a blog post from a security consultant, who digs much deeper into the story — focusing on one of the techies who worked at the school and apparently had a noticeable internet presence, having said a few things that could come back to haunt him. Note, that the school itself has said that only two techies on staff had the power to initiate the use of the remote spying tool.
Apparently, in various forums, blog posts and videos, one of the school’s techies talked about the technology they were using and how to set it up so that the user would not realize they were being spied on. He also discussed how to prevent a laptop using this software from being “jailbroken,” so users couldn’t discover that their computers were being used in this manner. Other forum posts from students at the school show that they were told they could not use other computers, could not disable the cameras and could not jailbreak their laptops on the risk of expulsion.
This investigation into the remote spying allegedly being conducted against students at Lower Merion represents an attempt to find proof of spying and a look into the toolchain used to accomplish spying. Taking a look at the LMSD Staff List, Mike Perbix is listed as a Network Tech at LMSD. Mr. Perbix has a large online web forum footprint as well as a personal blog, and a lot of his posts, attributed to his role at Lower Merion, provide insight into the tools, methods, and capabilities deployed against students at LMSD. Of the three network techs employed at LMSD, Mr. Perbix appears to have been the mastermind behind a massive, highly effective digital panopticon.
PanoMasterMind
I’ll be watch-in you – Mike Perbix
The primary piece of evidence, already being reported on by a Fox affiliate, is this amazing promotional webcast for a remote monitoring product named LANRev. In it, Mike Perbix identifies himself as a high school network tech, and then speaks at length about using the track-and-monitor features of LanRev to take surreptitious remote pictures through a high school laptop webcam. A note of particular pride is evident in his voice when he talks about finding a way outside of LANRev to enable “curtain mode”, a special remote administration mode that makes remote control of a laptop invisible to the victim. Listen at 35:47, when he says: “you’re controlling someone’s machine, you don’t want them to know what you’re doing”
-Mike Perbix
In a September 2009 post that may come to haunt this investigation, Perbix posted a scripting method for remote enable/disable of the iSight camera in the laptops. This post makes a lot more sense when Perbix puts it in context on an admin newsgroup, in a post which makes it clear that his script allows for the camera to appear shut down to user applications such as Photo Booth but still function via remote administration: “what this does is prevent internal use of the iSight, but some utilities might still work (for instance an external application using it for Theft tracking”
What’s the purpose of shutting down a camera for the user of the laptop but still making it available to network administrators? Ask yourself: if you wanted to convince someone that a webcam blinking was a glitch, would disabling the cameras help make your case?
We Found the Glitch, Mrs. Buttle
The truly amazing part of this story is what’s coming out from comments from the students themselves. Some of the interesting points:
Possession of a monitored Macbook was required for classes
Possession of an unmonitored personal computer was forbidden and would be confiscated
Disabling the camera was impossible
Jailbreaking a school laptop in order to secure it or monitor it against intrusion was an offense which merited expulsion
When I spoke at MIT about the wealth of electronic evidence I came across regarding Chinese gymnasts, I used the phrase “compulsory transparency”. I never thought I would be using the phrase to describe America, especially so soon, but that appears to be exactly the case. On a familiar note, the authorities are denying everything. As one reads comments on this story, a consistent story begins to emerge:
Browse as many web forums as you like, the comments above are highly representative. Students were told green webcam activation lights going off at home were a glitch, were required to use a jailed computer, were threatened with expulsion if they attempted to jailbreak the computer to find the truth, and were not allowed to use computers they controlled.
Inside LANRev
With some of my colleagues, I began a reverse engineering effort against LANRev in order to determine the nature of the threat and possible countermeasures. Some of the things we found at first left us aghast as security pros: the spyware “client” (they call it an agent) binds to the server permanently without using authentication or key distribution. Find an unbound agent on your network with Bonjour, click on it, you own it. The server software, with an externally facing Internet port… runs as root. I’m not kidding. For those unfamiliar with the principle of least privilege- this is an indicator of a highly unskilled design. Unfortunately, when we got down to basic forensics, LANRev appears to cover its tracks well. Here’s a screenshot of the server application monitoring a tracked host:
[etc.]
Here’s one last capture from the Windows version of the administration console, showing a forced remote webcam snapshot. We’ve pixellated this, but rest assured the real thing looks very detailed
(from the comments – this one below was interesting, my note)
This is absolutely a case closed scenario you just posted. I read it 4 times and cannot find any holes to poke into it. If people do not go to jail over this, then there is really no justice at this point. The primary highlights for where three-fold. The first one was that students, by force, were required to use only state-school appointed equipment, namely these laptops. and that any other laptops as a function of personal property would be confiscated. The second is the remote admin curtain mode camera function built into the LANrev software being used without the users permission and without any highlighting, at least contractually that this a possible use with respect to EULA/TOS. The third is Mr. Pervix, er, I mean, Perbix’ commentary on the usage of the LANrev software. Who sanctioned him to use it and under what circumstances.
This is beyond anything I’ve ever with respect to personal privacy intrusions. The insidious nature of this situation is even more disturbing because of the fact that it’s from a state run school. This is the state on the hook, so now who’s head will roll and who will be protected.
What proof exists that this product can be used for remote monitoring of students? Remote observation and control of target computers is plainly listed in the Apple Remote Desktop 3 Feature List. But the best evidence is this PBS documentary (about a different school), in which a high school assistant principal is shown listing, monitoring, and remotely taking pictures of high school students using Apple Remote Desktop 3:
Five minutes, twelve seconds into the video:
“They don’t even realize that we are watching. I always like to mess with them and take their picture.”
-Assistant Principal Dan Ackerman
This story is only a day old, and if the published numbers are correct, nearly 1800 children and their families may have been exposed. I don’t have information yet on what forensic traces this spying may have left on the computers, however, I can recommend best practices for any parent who believes their school system may be using issued hardware to spy on their children (in Lower Merion or elsewhere):
Understand that most laptops have a microphone and a video camera embedded, and that remote activation of microphones can be utterly silent.
If the issue becomes public, as is the case above, connecting the laptop to a school administered network or VPN may allow administrators to remove forensic traces of spying. Do not network the computer until evidence collection is complete.
Seek out a computer security professional or your helpful neighborhood hacker to perform a full forensic hard drive capture of the potential spy platform.
Consult a lawyer before confronting school officials. Capturing live network forensic evidence of remote spying can be far more powerful than word-of-mouth allegations.
This story is generating a lot of questions in the press, questions about how cameras should be deployed by schools in children’s homes, and what guidelines should be set for their use. Personally, I believe these are the wrong questions. I believe the right question is: should students be subject to remote surreptitious monitoring by their school systems at all? Do we want our kids to grow up always wondering who’s watching?
With comments like Five minutes, twelve seconds into the video:
“They don’t even realize that we are watching. I always like to mess with them and take their picture.”
-Assistant Principal Dan Ackerman Teachers have long felt like students have no rights and the comments emphasize that the administrators had no concept that what they were doing was wrong. I expect we’ll hear from a lot more students in the near future — if the schools haven’t already turned to students into Orwellian sheep.
A few days ago, we filmed at IS 339, a middle school in the Bronx that until recently had been chronically underperforming. The current principal, Jason Levy, brought in a 1:1 laptop program and is using digital tools like Google to completely revamp the school. We’ll be posting some of the video we shot there next week.
While the laptop program has indisputably been a success, the kids, being kids, spend a good chunk of time goofing off. Since they all have laptops with wireless access to the internet, they tend to goof off online. They all have the proxies to get around DOE restrictions on sights like YouTube and MySpace. The boys play video games, and the girls in particular love Photo Booth, which allows them to use the camera in their laptop like a live video mirror.
One of the highlights of the day was when Assistant Principal Dan Ackerman showed us how he can access what’s going on on every student’s laptop using a program called Apple Remote Desktop. Ackerman has access to the laptop of every kid in the school through this program, and he can switch from one to another and watch what the kids are doing on their computers in real time. The sixth and seventh graders all have cameras enabled in their laptops, so not only can Ackerman see their screens, he can see their faces. He can push a button and see a seventh grade girl in social studies class two floors away, peering at herself in video, putting on lip gloss, fixing her hair. He can also communicate with her: to freak the kids out and remind them they’re being watched, he sometimes will take a picture of them (he can control their laptops remotely) in Photo Booth, or interrupt their IM conversation with his own message, telling them to get back to work.
Sitting next to Ackerman watching him watch his students was a really profound experience. Sure, the kids all know they’re being monitored, and they don’t seem terribly upset about it. After all, they’re in middle school, and the laptops don’t belong to them, so they have no real expectation of privacy. But there’s something about having access to a moment as intimate as someone else looking in a mirror that says volumes about how our relationship to privacy as a society is changing. It rattled me, not because I necessarily disapprove of what Ackerman is doing, but because I realized how relatively easy it has become for anyone to watch anyone else at any time.
Today, I had two meetings via video Skype, a relatively new thing for me. The meetings went well, but when I signed off and the camera went to black, I had a momentary shudder. I realized I wasn’t completely confident that the camera in my laptop was no longer recording me. Was there a chance that the people on the other end of the call– or anyone else– could still see me? After all, there was the camera in my laptop, still pointed straight at my face. Who’s to know if anyone was watching?
New York, Feb. 22 (UPI) – Three New York police officers accused in the subway beating of a suspect were acquitted Monday of sexual abuse, assault and trying to cover up the attack.
A Brooklyn jury deliberated a full day before acquitting officers Richard Kern, Alex Cruz, and Andrew Morales.
Kern was cleared of a charge of using a baton to sodomize Michael Mineo, 25, who Kern and other officers saw smoking marijuana in a subway station. Cruz and Morales were accused of attempting to help Kern cover up the incident.
“It’s not over,” the New York Times quoted Mineo as saying after the verdict. “I ain’t even surprised. I kind of had a feeling it would turn out this way. If you want to commit a murder, join the NYPD (New York Police Department) and you get cleared off.”
Mineo has filed a multimillion-dollar lawsuit against the city. Federal prosecutors also are considering charges.
A New York transit police officer testified he saw another officer use his baton to sexually assault a man as officers tried to arrest him.
Officer Kevin Maloney, 27, said he was helping cuff the prisoner, Michael Mineo, as he lay on the floor of a subway station when he saw officer Richard Kern gripping the baton then move it, the New York Daily News reported Tuesday.
“It was pressed on Michael Mineo’s left buttock,” Maloney testified Monday. “I saw it move from left to right . . . . Yes, there was pressure being applied. It went from left to right, into Michael Mineo’s butt crack.”
The testimony was the first solid corroboration of Mineo’s claims that he was sodomized with an object after being wrestled to the ground following a street chase. Kern, 26, is charged with carrying out that assault. Officer Alex Cruz, 28, and officer Andrew Morales, 27, are accused of covering it up.
Maloney, who was not charged, also reported hearing Mineo question what was happening after which Kern described the suspect as an emotionally disturbed person.
Maloney also testified that Mineo, once in the patrol car, reached his cuffed hands around his waist then showing officers a bloody fingertip.
My Note – weren’t the New York officers that shot the man coming from his bachelors’ party to his car, cleared of wrongdoing as well? Are any of the cases involving police brutality, abuse of power, conflict of interest, or crimes against civil and human rights in the United States holding any of the officers of our government accountable who have caused loss of life, loss of property, loss of money, loss of basic human and civil rights? Why do they think it is okay to spy on us, brutalize us, deny us our rights, ignore our basic human dignity and basic human and civil rights? What country’s ideology and what type of government ideology are they serving because it sure isn’t ours and it sure isn’t the United States Constitutional guarantees? Why did they decide that we, the American people, are their enemy?
Center for Research on Globalization – Andre Damon – Feb 22, 2010
The top income earners received a total income of $138 billion in 2007. This figure is larger than the yearly output of most of the world’s countries, …
State Representative Virgil Fludd, D-Tyrone, wants to add a “temporary” 1 percent income tax surcharge on Georgia’s highest earners as a way to raise more …
Almost three-quarters of the highest earners‘ income was in capital gains and dividends taxed at a 15 percent rate set as part of Bush-backed tax cuts in …
Almost three-quarters of the highest earners‘ income was in capital gains and dividends taxed at a 15 percent rate set as part of 2003 tax cuts supported by …
The top 400 earners saw their tax rates drop as their income soared. No one gives us this information better than David Cay Johnston. He says that these top…
… every earned income level except the top 10%, average household income hasn’t changed a bit for 10 years, and that for the bottom 60% of wage earners it …
In fact, only 5 percent of the households in America earn more than $180000 to begin with, so “high earners” comprise something less than 5 percent of the …
By Don Bauder | Posted February 22, 2010, 7:46 a.m.
The National Association for Business Economics will release today a poll of economists who say a recovery is firmly on track, although there will be no drop in unemployment below 9 percent for another year. Lynn Reaser, chief economist at Point Loma Nazarene University, and president of the NABE, says “We see a healthy expansion,” although there will be bumps along the way. She is an excellent economist, but should not have used the word “healthy.” The NABE prediction is an oxymoron.
There can be no firm or healthy expansion if unemployment remains at 9 percent, particularly since consumer spending is 70 percent of the economy. New York Times pointed out in a front page story Sunday that 6.3 million people have been out of work for longer than six months. Even in the megrims of the mid-70s, that figure was below 2 million. In the deep recessions of the early 1980s it was below 3 million. The NABE sees jobs growing at 103,000 a month in 2010. That is optimistic, but even if it eventuates, still very weak. The NABE economists see consumer spending rising 2.2% this year, according to the A.P.
The economists expect the stock market, as measured by the Standard & Poor’s 500, to rise 23 percent over the next two years. But it is almost impossible to say stocks and commodities WON’T move up when the Federal Reserve is lending money at around zero percent interest rates to banks. These markets are increasingly disconnected from economic reality. They are driven by the liquidity. Expectations of continued liquidity, or essentially free money, seem to be driving the NABE economists, too.
Response to post #2:
You’re right to reference more considerations SurfPuppy619, it’s not just the special interests and politicians who are the root cause of our economic failures, it is far too many people who vote without thinking of consequences of letting political zealots run amuck in Washington, Sacramento and San Diego as if taxpayers were funding their own personal piggy banks to maximize the lusts for greed and power for special interests only.
Meanwhile, the tales of suffering and harm done to hard working Americans are escalating to the breaking point while our representatives don’t give a damn about families, voters, taxpayers, Americans who simply want to work hard, produce honest goods and services to provide a good quality of life for our families.
Economists such as Don refers too frequently have never been known to face reality, just figures on their computers instead of the fact that these figures represent the hopes and dreams of living, breathing, human beings that they fail completely to help.
Economist, scientists, and all academics for that matter live in Ivory Towers and fail us just as much as politicians, and far too many other institutions.
The poor keep getting poorer, the rich are raking it in (to 30K-300K income earners), and if you take out the over paid public sector there is basically no …
In line with the rest of the country, an income of $250000 or more put you in the top 2.5 percent of taxpayers. Neither Denver’s mayor nor Colorado’s …
Ron Eley, 67, also from Jackson, said he does not want to pay an income tax and that the tax burden on the state’s lowest earners is not his problem. …
In 2006, the top one percent of earners made the highest share of income in American history (22%) and their effective individual income tax rate was 19%. …
About what the average earner (who makes a little more in a year than a top 400 person made in an hour in 2007) has a realistic right to expect that the …
… getting paid in shares, moving offshore … professional advisers have a host of strategies to help high-earners keep as much of their income as possible. …
Jan 14, 2010 … After a yearlong effort by the Obama administration to reform how Wall Street pays its executives, some of the nation’s biggest banks … http://www.washingtonpost.com › Politics
Jan 11, 2010 … NEW YORK — As resurgent Wall Street banks prepare to hand out billions of dollars in bonuses — their first since returning federal bailout … http://www.washingtonpost.com › Business
Jan 15, 2010 … For the sake of fairness, Congress should pass a one-off windfall tax on banking bonuses, The New York Times’s editorial board argues.
dealbook.blogs.nytimes.com/2010/01/15/whose-bonuses-are-they/
**
My Note – whose money do they think they are using – their business losses and bad bets were covered by us. They depleted our families’ and communities’ resources. They made money borrowing from our Treasury taxpayer moneys at 0% interest while not loaning to any of us and while telling us to grow up and be responsible for the debts and mortgages we took – even though, they are charging us around 30% for the money we’ve borrowed by the time they finish tallying it up the way they do on our mortgages, credit cards and loans. – And after laying off everybody that was actually showing up and doing their jobs at every company in America. Who are these deranged thieves that hold none of us as valuable?
Money has no value without us. Where do they think they will live safely when this is all done – these are people that never cook a meal for themselves, don’t mow their own lawns, can’t buy their own groceries if they had to, don’t do their own accounting, can’t fix the pipes in their own houses and can’t use nail clippers to trim their own toenails . . . In fact, it probably takes most of their brain’s ability to wipe their own asses when their spouse, valet, girlfriend, hired help, or special prostitute isn’t there to do it for them. What schools of higher education bred these pieces of shit running our country and its economy into hell? There isn’t an inbred aristocrat in old world history that has a thing on this bunch, Wall Street brokers to corporate CEOs to politicians who think they are a business to insurance companies who own our Treasury as a personal bank account to hedge fund managers that keep on stealing no matter what happens as a result of their actions to the bankers who can’t live on less than $400 million a year without bitching about “roughing it”. Do they know what the basic amenities available on the other planets look like, because once they’ve finished screwing up this one and screwing the rest of us – they may want to leave and I sure don’t see where they are thinking they will go . . .
– my note, I know a friend who placed $2,000 with Hancock investments in 1995, now they are returning $300 dollars – that’s three hundred dollars total – a loss of $1700 – or rather, a theft of seventeen hundred dollars while getting to use that money which belonged to my friend at 0% rate plus returning none of it except $300. That is nothing short of grand larceny and embezzlement, considering the massive numbers of people across the US and the world that they’ve done that same thing to, at the same rate of depletion in real cash resources to individuals, to families, to 401Ks, to pension funds, to state budgets, to cities, to counties, to building funds, to non-profits, to trusts, to endowments, to people – to real people who did not agree to have those funds at risk nor agreed to give them as fodder for massive thefts of their earned resources.
The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership. Failed Financial Institution Contact Search displays point of contact information related to failed banks.
This list includes banks which have failed since October 1, 2000.
AIG Decides to Keep Unprofitable Mortgage Insurer (Update1)
February 12, 2010, 04:20 PM EST
AIG, which was rescued in September 2008 after losses from bad bets tied to housing markets, posted a $1.43 billion operating loss from mortgage insurance in the first nine months of 2009 as U.S. foreclosure filings climbed to a record. The company said in November that it tapped the Treasury Department line within its $182.3 billion rescue package for about $4.2 billion, in part to restructure United Guaranty.
Feb. 12 (Bloomberg) — American International Group Inc., the insurer divesting assets to repay a government bailout, opted to keep its money-losing U.S. mortgage guarantor after selling Canadian and Israeli subsidiaries of the unit.
AIG made a “recent decision” to hold onto Greensboro, North Carolina-based United Guaranty, Arlene Isaacs-Lowe, a Moody’s Investors Service analyst, wrote yesterday in a research note. AIG executives told her of the move within the past few months, Isaacs-Lowe said today in an interview.
United Guaranty was founded in 1963 and sold to AIG in 1981. The business generated $2.8 billion in operating income and $600 million in dividends for AIG in the eight years prior to the housing slump, the company has said.
United Guaranty was ranked the fourth-largest U.S. mortgage insurer in the first six months of 2009, behind No. 1 MGIC Investment Corp., Radian Group Inc. and PMI Group Inc., according to Inside Mortgage Finance, a trade journal. All the firms were unprofitable in the first nine months of 2009.
Essent Guaranty Inc., backed by investors including Goldman Sachs Group Inc. and JPMorgan Chase & Co., became the first newcomer to the U.S. mortgage-guaranty business since the housing collapse, leaving it unburdened by policies sold in 2005 and 2006 when underwriting standards were lower.
Until 2007, private mortgage policies had been among the most profitable types of coverage sold by insurers. From 2004 to 2006, members of the Mortgage Insurance Companies of America reported a profit margin of at least 35 cents for every dollar they collected in premiums. Auto insurers made less than 5 cents on every dollar in 2006, according to A.M. Best Co.
Last week offered some sobering news on the housing market: Even with broad government support for housing, data from the National Association of Realtors showed that the median price of single-family homes continued to decline in 2009. RealtyTrac, an online marketer of foreclosed properties, said foreclosure filings rose by 15 percent in January compared with a year ago.
Foreclosure is generally a long process, with multiple filings as delinquent borrowers fall ever further behind. What is most ominous about the latest RealtyTrac numbers is that nearly 88,000 people had their homes repossessed in January, a 31 percent increase from a year ago. The big jump indicates that many foreclosures that were in process in 2009 are now beginning to move to repossession and, eventually, auction. With more than four million homes in that pipeline, the foreclosure crisis shows no sign of abating.
[ . . . ]
There is an emerging consensus among financial experts and policy makers that the key to successful modifications is to reduce the amount of the borrower’s loan balance, rather than merely reducing the monthly payment. The goal is to lower the payment while restoring equity, thus giving borrowers both the means and the incentive to keep up with their payments.
Administration officials have resisted that approach, in part because they believe it would be too expensive. Another obstacle is the lenders themselves. In general, a lender is unwilling to take losses by reducing principal unless the owners of the second mortgage on a home also take a hit. For banks that own the second mortgages, such losses would be huge — something they clearly would prefer not to face up to.
Banks’ unwillingness to take losses on second mortgages may also be holding up so-called short sales, in which a lender agrees to retire a first-mortgage debt by taking the proceeds from the sale of the home, even when the amount is less than the mortgage balance.
The number of Americans who owed more than their homes were worth was virtually nil when the real estate collapse began in mid-2006, but by the third quarter of 2009, an estimated 4.5 million homeowners had reached the critical threshold, with their home’s value dropping below 75 percent of the mortgage balance.
They are stretched, aggrieved and restless. With figures released last week showing that the real estate market was stalling again, their numbers are now projected to climb to a peak of 5.1 million by June — about 10 percent of all Americans with mortgages.
“We’re now at the point of maximum vulnerability,” said Sam Khater, a senior economist with First American CoreLogic, the firm that conducted the recent research. “People’s emotional attachment to their property is melting into the air.”
Suggestions that people would be wise to renege on their home loans are at least a couple of years old, but they are turning into a full-throated barrage. Bloggers were quick to note recently that landlords of an 11,000-unit residential complex in Manhattan showed no hesitation, or shame, in walking away from their deeply underwater investment.
[ . . . ]
It would cost about $745 billion, slightly more than the size of the original 2008 bank bailout, to restore all underwater borrowers to the point where they were breaking even, according to First American.
Using government money to do that would be seen as unfair by many taxpayers, Mr. Barr said. On the other hand, doing nothing about underwater mortgages could encourage more walk-aways, dealing another blow to a fragile economy.
With prices now down by about 30 percent, underwater borrowers fall into two groups. Some have owned their homes for many years and got in trouble because they used the house as a cash machine. Others, like Mr. Koellmann in Miami Beach, made only one mistake: they bought as the boom was cresting.
Guy D. Cecala, publisher of Inside Mortgage Finance magazine, says he does not hear much sympathy from lenders for their underwater customers.
“The banks tell me that a lot of people who are complaining were the ones who refinanced and took all the equity out any time there was any appreciation,” he said. “The banks are damned if they will help.”
David Rosenberg, the chief economist of the investment firm Gluskin Sheff, wrote recently that borrowers were not victims. They “signed contracts, and as adults should also be held accountable,” he wrote.
Of course, this is not necessarily how Wall Street itself behaves, as demonstrated by the case of Stuyvesant Town and Peter Cooper Village. An investment group led by the real estate giant Tishman Speyer recently defaulted on $4.4 billion in debt that it had used to buy the two apartment developments in Manhattan, handing the properties back to the lenders.
Moreover, during the boom, it was the banks that helped drive prices to unrealistic levels by lowering credit standards and unleashing a wave of speculative housing demand.
[ . . . ]
Mr. Koellmann applied last fall to Bank of America for a modification, noting that his income had slipped. But the lender came back a few weeks ago with a plan that added more restrictive terms while keeping the payments about the same.
“That may have been the last straw,” Mr. Koellmann said.
For the truth is that lack of fiscal discipline isn’t the whole, or even the main, source of Europe’s troubles — not even in Greece, whose government was indeed irresponsible (and hid its irresponsibility with creative accounting).
No, the real story behind the euromess lies not in the profligacy of politicians but in the arrogance of elites — specifically, the policy elites who pushed Europe into adopting a single currency well before the continent was ready for such an experiment.
Consider the case of Spain, which on the eve of the crisis appeared to be a model fiscal citizen. Its debts were low — 43 percent of G.D.P. in 2007, compared with 66 percent in Germany. It was running budget surpluses. And it had exemplary bank regulation.
But with its warm weather and beaches, Spain was also the Florida of Europe — and like Florida, it experienced a huge housing boom. The financing for this boom came largely from outside the country: there were giant inflows of capital from the rest of Europe, Germany in particular.
The result was rapid growth combined with significant inflation: between 2000 and 2008, the prices of goods and services produced in Spain rose by 35 percent, compared with a rise of only 10 percent in Germany. Thanks to rising costs, Spanish exports became increasingly uncompetitive, but job growth stayed strong thanks to the housing boom.
Then the bubble burst. Spanish unemployment soared, and the budget went into deep deficit. But the flood of red ink — which was caused partly by the way the slump depressed revenues and partly by emergency spending to limit the slump’s human costs — was a result, not a cause, of Spain’s problems.
(etc. – he claims that the single currency Euro has created the problem – – I don’t agree, but it does mean that some options for currency adjustments are not available to use for fixing the situation as a result of the single currency – my note)
My Notes – Who decided that the value and costs of property, including basic shelter / housing would be at a price far beyond the reach of any real wages made in a year or in five years of a citizen’s efforts?
When was that created and was it by the natural laws of supply and demand at the time or was it constructed with intention?
And, what has it become now / as a natural outgrowth of housing values having exceeded the real income of the majority of our population, along with the uses of mortgages as an asset class to be bought and sold and leveraged against – what do we have now as a result of this huge disparity between income and housing costs?
What happens when banks are allowed to borrow at 0% interest from our Treasury using our money, although they are a bad credit risk in every respect at the time they are allowed to borrow many millions at 72 to 1 (or more) against every dollar of assets they pretend to have? (and at asset valuations they pretend are at a level that was taken before the economic downturn)?
Not only are people walking away from their upside down mortgages, they are also not being employed in any reasonable period of time after being dumped by companies whose only interest was to pad the bottom line for a short period of time to inspire conditional confidence in their stock shares?
What happens when people realize that they are not going to be employed anytime in the next five years, are not going to be able to own another house in their lifetimes, watch their children not have access to a higher education because the money intended for it was returned to them depleted of over 75% of its initial value, and begin to understand the disparity of return on their time and efforts if and when companies do choose to hire them back?
Who was it that decided the next natural progression in the economic foundation of our country would drop manufacturing and replace it with money making money industries? Who decided that it would be a strong, healthy foundation for our economic future? What bunch of ninnies came up with that?
So, now that companies do not have to profit or to be profitable in the primary business model under which their business operates, but simply have to manipulate investment portfolios to their advantage, what real value do those companies (and state budgets and Wall Street firms) have to the employment base, in interactive services and products available to the benefits of our population, and in our longterm financial growth as a nation?
When large corporate and institutional players are the only ones basically manipulating the markets, the stock markets, the commodities markets, the futures and speculative plays marketplaces, and international economies and markets, what actual real values exist for any of the things being traded?
Just as when in 2008, the speculative increase in the oil futures drove prices up to record profits for those speculators and their firms, entire industries across the United States suffered massive losses as they covered the extra costs of those oil prices at the consumer level. But, the entire play was no more than a manipulated construct. It wasn’t the real value of the commodity in any sense but it was passed along to the consumers, including throughout the increased business costs passed along secondarily to consumers.
And, what value do those speculators have and the profits they skimmed off that play when their time, effort, talents, resources, and availability of cash isn’t used for anything productive that enhances the overall economic foundation and future of the United States? It isn’t being used to underwrite alternative energy options, it isn’t the speculators that are inventing something which solves real problems in our communities nor that solves climate change causes nor do those resources make our companies more solvent and more competitive. What good do they do?
When housing mortgages are packaged and sold, then resold and a number of financial products are made based on them, including the credit default swaps, the mortgage insurance products, leverages are made against them in huge loan packages based on their value, then what real value do they have going forward? Are they real? Are they a pretense with no more value than what someone in Wall Street or the backrooms of a banking firm somewhere says that they have? Are they real capital formation, or are they in fact, not worth the paperwork they are printed on? What trade actually exists on them in any solvent form once people across the world in every aspect of our society and financial systems are aware that the values are unfairly being manipulated and don’t exist in the real world?
Trickle down economics is a failed economic policy from the Reagan years and beyond Greenspan’s idea of an unregulated economy – at what point do the Wall Street firms and gigantic banking conglomerates realize the basis of their comparative valuation structures have re-valued real assets somewhere below zero? Why don’t they know that now? Losses that required a loan over $180 Billion dollars for AIG seem to be a clear indication of what that means. As they have tried to sell off assets, which have borne little of their estimated and accounting values – it would indicate the disparity that exists between the real economy, the real values and their perceptions of values? Why does it not tell them anything that makes sense to them in a broader understanding of what they are doing?
To me, it indicates that using a “money making money” basis for our overall economic foundation is not a sound choice, among other things. It also shows me that the integral factors of trading values are manufactured and not real.
Over the course of all these elements put together, it tells me that our economy and our economic growth, our economic foundation, our economic future, it set out over air with no real foundation whatsoever. The basic relationships that should exist to maintain a stable structure of values for the purposes of comparison and realistic values being set to actual assets, values, housing, properties, corporations, loans, loan products or whatever financial instruments does not exist in any actual sense.
It also shows me that the rules do not exist for either the values nor for the plays that can be made with them which makes the system more like a polished poker game of bluffing than a real market or any other monetary concept of actual values.
What happens when those banks, financial firms, investment banks, investment houses, stock brokerages, financial investment funds, insurance companies acting as hedge funds, and other exaggerated examples of financial imprudence get to play by a set of rules which offers large grants, loans and offsets when they are insolvent, defaulting on loans, exemplify a bad credit score and a bad credit risk, whose past behavior indicates bad choices and even tremendous bad judgments and bad plays, insider trades, conflicts of interest and abuse of their fiduciary trust?
What basis of economic growth and what new understanding of fiduciary trust does that become when those same people and institutions are refusing credit to anyone whose credit score resembles what they had when they used and continue to use the American taxpayer’s money and our National Treasury to cover their losses?
(An implicit obligation of the United States means what now?)
– cricketdiane, 02-15-10
I watched as the economic forecasters and analysts continued to say it is all better now, the same way they said in 2008 that we weren’t in a Recession (while not being willing to even use the word in many cases). Either they don’t know what the hell they are doing or they are lying about what they do know. I’m not sure which it is, but to continue paying analysts and advisors whose sole intent is to propagate lies in the name of instilling a falsely founded confidence in a system whose values are distorted, at best – is beyond me to understand.
The economic models that I understand are dimensional and well-founded in larger pictures of integrated values. When the Reagan administration cronies and Republican administration policy makers decided to fudge the numbers throughout statistical data sets that they had to collect and make public by law, it did not change the facts. The unemployment numbers inclusively are not the numbers published by the US Labor Department as a result of the changes made by Republican administrators, however – it didn’t change the facts on the ground in this country. And, since everyone making analyses knows that those employment and unemployment numbers have been divided into unnatural categories of data and statistically manipulated by that division, they should know better than to assume the rate of unemployment is anywhere close to 10% in the United States. Even adding the admitted unemployment figures across every state, yields a figure much higher on any given date and even those do not include those citizens who are in our prisons at the moment, put in mental hospitals for some reason, having to work part-time when they can’t afford to live at that rate, retired by having to go back to work because their pensions have been stolen by Wall Street, and those who have not continued to collect unemployment benefits but are still unemployed. The real loss in consumer buying power can be significant enough that even China knew to put its focus on other markets that don’t include the United States.
Don’t tell me that everything is all okay now – that isn’t even close to the truth.
***
***
If nobody can afford to buy a house except those people who “flip houses” – then what is a house really worth?
If 90% of the bread produced goes unsold and into the trash bin, then what is a loaf of bread worth? Is it really worth the $4.29 that is being charged for that loaf of bread?
– cricketdiane
(everything from my notes on down are my thoughts about it – understandably I still have more questions that are unanswered – I will study it some more.)
Today – 01-21-10
President Obama is announcing financial reform guidelines including the exclusion of banks from engaging in proprietary trading and investing their own funds into internal hedge funds while having inside knowledge of auctions / trades and using taxpayer dollars to cover their losses. Also announced the intention for risk to no longer be concentrated due to consolidating many smaller and mid-sized firms into large conglomerate ones – President Obama described the intention to proceed with regulations that would no longer allow huge banking, investment, brokerage and financial institutions to become conglomerate concentrations of risk and of such size to jeopardize the entire system if they were to fail.
On CNN 11.41 – 11.44 amET
check transcript and WhiteHouse website for transcript / video clip of announcement
(34) – CNN – LIVE
President (Uncle Barack) Obama and Vice President (Uncle Joe) Biden
***
Paul Volcker has been talking about these things for a year – anchor’s comment
***
Proprietary trading
From Wikipedia, the free encyclopedia
Proprietary trading, proprietary trading desk, or “prop desk” are terms used in investment banking to describe when the firm’s traders actively trade stocks, bonds, options, commodities, derivatives or other financial instruments with its own money as opposed to its customers’ money, so as to make a profit for itself. Although investment banks are usually defined as businesses which assist other business in raising money in the capital markets (by selling stocks or bonds), in fact most are also involved in trading for their own accounts as well. They may use a variety of strategies such as index arbitrage, statistical arbitrage, merger arbitrage, fundamental analysis, volatility arbitrage or macro trading, much like a hedge fund. Many reporters and analysts believe investment banks purposely leave ambiguous the amount of non proprietary trading they do versus the amount of proprietary trading they do because it is felt that proprietary trading is riskier and results in more volatile profits.
Contents
* 1 The relationships between trading and investment banking
* 2 Arbitrage
* 3 Conflicts of interest in proprietary trading
* 4 Famous trading banks and traders
* 5 References
* 6 External links
The relationships between trading and investment banking
Investment banks are defined as companies that assist other companies in raising financial capital in the capital markets, through things like the issuance of stocks and bonds. Trading has almost always been associated with investment banks however, because they are often required to make a market in the stocks and bonds they help issue.
For example, if General Store Co. sold stock with an investment bank, whoever first bought shares would possibly have a hard time selling them to other individuals if people are not familiar with the company. The investment bank agrees to buy the shares sold in order to find a buyer. This provides liquidity to the markets. The bank normally does not care about the fundamental, intrinsic value of the shares, but only that it can sell them at a slightly higher price than it could buy them. To do this, an investment bank employs traders. Over time these traders began to devise different strategies within this system to earn even more profit independent of providing client liquidity, and this is how proprietary trading was born.
The evolution of proprietary trading at investment banks has come to the point whereby banks employ multiple desks of traders devoted solely to proprietary trading with the hopes of earning added profits above that of market-making trading. These desks are often considered internal hedge funds within the investment bank, performing in isolation away from client-flow traders.
Proprietary desks routinely have the highest value at risk among other desks at the bank. Investments banks such as Goldman Sachs, Deutsche Bank, and Merrill Lynch are known to earn a significant portion of their quarterly and annual profits through proprietary trading efforts.[citation needed] Unlike other type of auctioneers, the traders in investment banks are allowed to bid shares while conducting the auction.
If you think a trader’s ability to see the incoming orders for the trade gives him a built in advantage when trading for himself, you are not wrong. It is like being in the card game in which only one of the players has the ability to see everyone else’s hand. Arbitrage
One of the main strategies of trading traditionally associated with investment banks is arbitrage. In the most basic sense, arbitrage is defined as taking advantage of a price discrepancy through the purchase/sale of certain combinations of securities to lock in a profit.
Many people confuse arbitrage with what is essentially a normal investment. The difference between arbitrage and a typical investment is the amount of risk: the risk in what is known as arbitrage today (to distinguish it from theoretical arbitrage, which effectively does not exist) is market neutral. From the second the trade is executed, a profit is locked in. Investment banks, which are often active in many markets around the world, constantly watch for arbitrage opportunities.
One of the more notable areas of arbitrage, called risk arbitrage, evolved in the 1980’s. When a company plans to buy another company, often the price of a share in the capital of the buyer falls (because the buyer will have to pay money to buy the other company) and the price of a share in the capital of the other company rises (because the buyer usually buys those shares at a price higher than the current price). When an investment bank believes a buyout is imminent, it often sells short the shares of the buyer (betting that the price will go down) and buys the shares of the company being acquired (betting the price will go up). Conflicts of interest in proprietary trading
There are a number of ways in which proprietary trading can create conflicts of interest between a trader’s interests and those of its customers.[1]
Some suspect that traders engage in “front running”, buying shares in companies the traders’ customers are buying so as to profit from the price increase resulting from the customers’ purchases and thereby harming the customers’ interests.
Some suspect that investment bank salesmen (who encourage customers to buy particular securities) assist their firm’s proprietary traders by encouraging customers to buy securities performing poorly after the proprietary traders have bought them for the firm.
Lastly, because investment banks are key figures in mergers and acquisitions, a possibility exists that the traders could use prohibited inside information to engage in merger arbitrage. Investment banks are required to have a Chinese wall separating their trading and investment banking divisions, however in recent years, dating most recently back to the Enron saga, these have come under great scrutiny.
One example of an alleged conflict of interest can be found in charges brought by the Australian Securities and Investment Commission against Citigroup in 2007.[2]
[edit] Famous trading banks and traders
Famous proprietary traders have included Robert Rubin, Steven A. Cohen, Edward Lampert, and Daniel Och. Some of the investment banks most historically associated with trading was Salomon Brothers and Drexel Burnham Lambert, and currently Goldman Sachs. Nick Leeson took down Barings Bank with unauthorized proprietary positions. Another trader, Brian Hunter, brought down the hedge fund Amaranth Advisors when his massive positions in natural gas futures went bad.
[edit] References
Register now for Black Hat DC, the largest and the most important security conference series in the world. It happens Jan. 31-Feb. 3, 2010, in Arlington, Va. Find out more and register.
Office of the Press Secretary
For Immediate Release
January 21, 2010
President Obama Calls for New Restrictions on Size and Scope of Financial Institutions to Rein in Excesses and Protect Taxpayers
WASHINGTON, DC- President Obama joined Paul Volcker, former chairman of the Federal Reserve; Bill Donaldson, former chairman of the Securities and Exchange Commission; Congressman Barney Frank, House Financial Services Chairman; Senator Chris Dodd, Chairman of the Banking Committee and the President’s economic team to call for new restrictions on the size and scope of banks and other financial institutions to rein in excessive risk taking and to protect taxpayers.
The President’s proposal would strengthen the comprehensive financial reform package that is already moving through Congress.
“While the financial system is far stronger today than it was a year one year ago, it is still operating under the exact same rules that led to its near collapse,” said President Barack Obama. “My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see record profits at some of the very firms claiming that they cannot lend more to small business, cannot keep credit card rates low, and cannot refund taxpayers for the bailout. It is exactly this kind of irresponsibility that makes clear reform is necessary.”
The proposal would:
1. Limit the Scope – The President and his economic team will work with Congress to ensure that no bank or financial institution that contains a bank will own, invest in or sponsor a hedge fund or a private equity fund, or proprietary trading operations unrelated to serving customers for its own profit.
2. Limit the Size – The President also announced a new proposal to limit the consolidation of our financial sector. The President’s proposal will place broader limits on the excessive growth of the market share of liabilities at the largest financial firms, to supplement existing caps on the market share of deposits.
In the coming weeks, the President will continue to work closely with Chairman Dodd and others to craft a strong, comprehensive financial reform bill that puts in place common sense rules of the road and robust safeguards for the benefit of consumers, closes loopholes, and ends the mentality of “Too Big to Fail.” Chairman Barney Frank’s financial reform legislation, which passed the House in December, laid the groundwork for this policy by authorizing regulators to restrict or prohibit large firms from engaging in excessively risky activities.
As part of the previously announced reform program, the proposals announced today will help put an end to the risky practices that contributed significantly to the financial crisis.
Commerce Secretary Locke Announces New Commerce Initiatives to Foster Innovation and Entrepreneurship
WASHINGTON—U.S. Commerce Secretary Gary Locke announced today his plans to create a new Office of Innovation and Entrepreneurship within the Department of Commerce and launch a National Advisory Council on Innovation and Entrepreneurship. Both substantial new initiatives will help leverage the entire federal government on behalf of promoting entrepreneurship in America. The new office is expected to announce additional initiatives in the coming months.
The new Office of Innovation and Entrepreneurship, which will answer directly to the secretary, will be geared toward the first step in the business cycle: moving an idea from someone’s imagination, or from a research lab, into a business plan.
“We’re not lacking for groundbreaking ideas in this country; nor are we short on smart entrepreneurs willing to take risks,” Locke said at the Inc. 500/5000 Conference today. “What we need to do is get better at connecting the great ideas to the great company builders. And I think The Office of Innovation and Entrepreneurship is a big step in the right direction.”
The National Advisory Council on Innovation and Entrepreneurship will advise the Commerce Department on policy relating to building small businesses and help to keep the department engaged in a regular dialogue with the entrepreneurship and small business communities. The council is expected to be comprised of successful entrepreneurs, innovators, investors, non-profit leaders and other experts.
The Obama Administration is committed to helping America’s entrepreneurs succeed, evidenced by its efforts to free up credit markets, unprecedented investments in America’s physical and intellectual infrastructure, and variety of tax credits and other incentives to help foster promising industries like renewable energy and smart grid technologies.
Working toward the Obama Administration’s vision, the Department of Commerce will lead the effort to encourage high-growth entrepreneurship through these new initiatives, among others.
Office of Innovation and Entrepreneurship
The mission of the Office of Innovation and Entrepreneurship is to unleash and maximize the economic potential of new ideas by removing barriers to entrepreneurship and the development of high-growth and innovation-based businesses. The office will report directly to Locke and focus specifically on identifying issues and programs most important to entrepreneurs. Working closely with the White House and other federal agencies, this new office will drive policies that help entrepreneurs translate new ideas, products and services into economic growth. The office will focus on the following areas:
Encouraging Entrepreneurs through Education, Training, and Mentoring
Improving Access to Capital
Accelerating Technology Commercialization of Federal R&D
Strengthening Interagency Collaboration and Coordination
Providing Data, Research, and Technical Resources for Entrepreneurs
Exploring Policy Incentives to Support Entrepreneurs and Investors
National Advisory Council on Innovation and Entrepreneurship
The National Advisory Council on Innovation and Entrepreneurship will advise Locke and the administration on key issues relating to innovation and entrepreneurship. The council will include successful entrepreneurs, innovators, angel investors, venture capitalists, non-profit leaders and other experts who will identify and recommend solutions to issues critical to the creation and development of entrepreneurship ecosystems that will generate new businesses and jobs. It will also serve as a vehicle for ongoing dialogue with the entrepreneurship community and other stakeholders.
Locke to Lead U.S. Delegation to Chile for the Americas Competitiveness Forum
Washington (Sept. 25)—U.S.Commerce Secretary Gary Locke will travel to Santiago, Chile, September 27-29, to participate in the third Americas Competitiveness Forum (ACF). The ACF brings together representatives from the public and private sectors to discuss ways to spark innovation, create jobs and expand trade among the countries of the Western Hemisphere. The U.S. Department of Commerce hosted the first two ACFs in Atlanta in 2007 and 2008. Secretary Locke will be joined by the Presidents of Chile and Guatemala, as well as ministers of trade and economy from throughout the region and senior representatives from business and academia. (More) (ACF Web site)
Special American Business Internship Training Program (SABIT). A technical assistance initiative of the International Trade Administration of the U.S. Department of Commerce, SABIT offers organizations competitive grants and an opportunity to host industry-specific delegations. SABIT serves as an initial entry point for U.S. businesses seeking funding to establish long-term relationships with potential customers, distributors, or partners in the former Soviet Union. The program trains Eurasian managers and scientists in commonly accepted business practices as a means of facilitating cross border relationships. In turn, these personal relationships serve as a basis for business development and reduce market access barriers for U.S. businesses
National Institute of Standards & Technology (NIST)
The Department of Defense (DoD) SBIR and STTR programs fund a billion dollars each year in early-stage R&D projects at small technology companies — projects that serve a DoD need and have commercial applications.
The SBIR Program provides up to $850,000 in early-stage R&D funding directly to small technology companies (or individual entrepreneurs who form a company).
The STTR Program provides up to $850,000 in early-stage R&D funding directly to small companies working cooperatively with researchers at universities and other research institutions.
Small companies retain the intellectual property rights to technologies they develop under these programs.
Funding is awarded competitively, but the process is streamlined and user-friendly.
Learn more by going to Overview and other sections. Also visit our Resource Center at www.dodsbir.net.
New Kauffman Foundation Study Offers Insights Into the Earliest Years of a New Business
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Contacts:
Barbara Pruitt, 816-932-1288, bpruitt@kauffman.org, Kauffman Foundation
Tom Phillips, 212-935-4655, comptwp@aol.com, Communication Partners
Kauffman Firm Survey findings provide insights for policymakers interested in encouraging new business development and growth
(KANSAS CITY, Mo.) March 12, 2008 — Understanding the characteristics of new business formation and sustainability can help lead to policies that encourage entrepreneurial businesses, which are a major driver of economic growth.
A new report released today by the Ewing Marion Kauffman Foundation fills a gap in the study of entrepreneurship. As the largest longitudinal study of new businesses ever conducted, the Kauffman Firm Survey (KFS) follows nearly 5,000 businesses founded in 2004 and tracks them over their early years of operation.
“New businesses play an important but not-well-understood role in our dynamic economy,” said Robert Litan, vice president of Research and Policy at the Kauffman Foundation. “These insights into the earliest years of a firm’s existence are essential for creating public and private programs that encourage new business development, innovation and sustainability.”
According to Kauffman researchers, the data provide a unique opportunity to study a panel of new businesses from start-up to sustainability or closure. Data are being collected annually from the same firms, centering on the topics of debt and equity financing, employee benefits, business innovations and outcomes such as sales and profits. In addition, detailed data are collected on the characteristics of business owners.
Following are some of the highlights:
A little more than 2 percent of businesses reported owning patents during their first year of operation, while nearly 9 percent reported having copyrights. The percent of businesses with patents and copyrights was much higher for businesses that were considered to be high tech, at 4 percent and 11 percent, respectively. About the same percentage of businesses had trademarks (13.5 percent), regardless of their tech status.
Nearly 60 percent of the businesses had no employees in their first year. Just under three-quarters of businesses had one employee or less, while about one-quarter of businesses had two or more employees. Very few businesses (less than 4 percent) had more than 10 employees.
More than a third of businesses (37 percent) had no revenue in their first year of operation. About 45 percent of businesses in the KFS experienced a profit during their first year, compared with about 55 percent of businesses that experienced a loss in their first year. About 17 percent of businesses had profits in excess of $100,000.
Nearly 44 percent of new businesses had no debt financing during their first year of operation. Many businesses were started with very little debt financing: 17 percent of businesses started with $5,000 or less; nearly 11 percent started with $100,000 or more.
About 80 percent of businesses had some positive equity investment in their business in the first year. Nearly 10 percent invested $100,000 of equity into their business, while another 33 percent invested between $10,001 and $100,000. About one-quarter of businesses invested some amount less than $5,000.
The vast majority of equity invested came from the business owners themselves. Just 10 percent of the businesses in the KFS used external equity sources in their first year. Parents were the most common source of external equity (3.4 percent), while spouses provided equity to 1.6 percent of businesses. Non-family informal investors and venture capitalists were used very infrequently (2.7 percent and 0.6 percent, respectively).
Nearly 70 percent of businesses in the KFS data were owned by men and just over 30 percent were owned by women. Whites owned more than 81 percent of the businesses, while blacks owned 9 percent, Asians owned 4 percent, and the remaining 5 percent were owned by Native Americans, Pacific Islanders and individuals of other racial groups. About 6.6 percent of the businesses were owned by Hispanics.
Just under 9 percent of firms closed in calendar year 2005, and the survival rates vary by owner demographics. For example, 88 percent of black-owned businesses survived, compared with 92 percent of white-owned businesses and 91 percent of Asian-owned businesses. Women-owned businesses had a survival rate of 89 percent, about three percentage points lower than businesses owned by men.
According to Alicia Robb, principal investigator on the KFS, as additional years are added to the study, the data will allow researchers to investigate ongoing financial infusions, changes in strategy and innovation, and survival and growth. “Many important topics can be investigated, including the determinants of business growth and survival, as well as the roles that financial and human capital play in business outcomes,” said Robb.
GOP near-unity on Sotomayor sends message
Published: July 29, 2009 at 7:46 AM
WASHINGTON, July 29 (UPI) — U.S. Republicans have sent a message to President Barack Obama that even moderate Supreme Court candidates he nominates will be opposed, analysts say.
Only one Republican member of the Senate Judiciary Committee, Sen. Lindsey Graham of South Carolina, Tuesday voted to confirm the nomination of the nation’s first Hispanic high court nominee, Judge Sonia Sotomayor, despite her mainstream legal credentials in a show of party solidarity, the Los Angeles Times reported.
I didn’t vote for none of yah – I didn’t get to do that, due to events in my own life, but I guarantee you that I couldn’t have begun to have done as crappy a job as y’all have with it.
And, I know better than what you are doing right now with the opportunities you have in Washington – because I know this –
As American Citizens, we didn’t hire you to read off the damn opinion of some backroom Republican crony who told you what you are to think about something – whether its the Sotomayor nomination or health care or climate change legislation or anything else.
We did not cast a vote that ever elected some Republican or conservative crony in a backroom somewhere to think for you. Most people in America don’t even know who they are and certainly weren’t given the chance to vote for them to think everything through that would be in front of you. They are not the ones sitting in those seats to legislate and make decisions.
We elected you to represent our interests as Americans. Even though I didn’t get to vote for you or against you, I know beyond a shadow of doubt that you are given that seat to represent my interests as an American citizen. Every dime of my money and everybody else’s money is at your hand, every intelligent resource is available to you and paid for by us and every last opportunity available to the United States is sitting right there at your side within your hand’s reach. Do not tell me that you are there to represent the Republican Party instead of me and my fellow citizens.
We sent you to Washington to think through whatever was in front of you and represent our interests in the matter. If you can’t do that and think through some of this stuff for yourself with the staff you have and resources available to you, then you don’t need to bed warming that chair up in Washington. And, you sure don’t need to be using it to provide a “united front” for the conservative caucus, the Republican Party, the US Chamber of Commerce which is being run by bankers, nor for the other cronies backing your breakfast. They didn’t elect you and believe it or not – you don’t represent them unless you work in their corporation. That is not your job as an elected official and decision-maker in the United States government.
You are there in Washington to represent me and the people of the United States – the interests of the citizens and the interests of our nation, along with our futures. Without that, there is no reason for you to be there. Using that seat to get in the way of anything constructive being accomplished, is a waste of everyone’s time, effort, money, goodwill and trust. You sure don’t need to warm a seat where decisions must be made for the good of us all and the good of our country, if stalemating, blockading, undermining, and bastardizing are the only things you are there to do.
Not one of us put you up there in Washington to have the Republican Party, conservative caucus, bankers, oil companies, big businesses, Wall Street junkies nor anybody else think for you. We didn’t elect you to do that, not this time and in fact, not ever. We didn’t hire you to be a good little soldier for the Republicans and tote the party line – this isn’t Stalin’s USSR where you’re sitting.
This is the United States of America and in case you haven’t noticed, your perverse follies, previous decisions and Republican policies have left us in an economic war zone where America used to be and we are all losing. You’ve taken America from the first class world leader status that we had enjoyed right up until the reign of the Republican conservative takeover, and torn it to shreds. You’ve left the United States in a position that resembles third world underdeveloped or undeveloped economic conditions, and where crime, violence and oppressive state and local government corruption is rampant and common.
If the Republican Party and business leaders haven’t noticed, where the America we have before us is now because of their “leadership” –
there is pervasive poverty, homelessness, decimated communities, foreclosures, unemployment, destitution, families in crisis, pervasively common domestic violence and death without ever leaving home, massive sickness and death from food poisoning because of FDA and Dept. of Agriculture failure to regulate, staggering numbers of bankruptcies, staggering numbers of commercial bankruptcies, inflation in the basic commodities for everyday life, empty community halls and gymnasiums, crumbling infrastructures in every town and county in America, failing schools and children who cannot read despite our “no child left behind” programs, staggering numbers of commercial and industrial “accidents”, cities and suburbs filled with violent crimes, massive ponzi schemes that defrauded huge numbers of citizens and generally very expensive, massively incompetent government systems doing none of the things they were designed or intended to do.
And that’s only the tip of the iceberg.
You’ve done a real bang ’em up job up there in Washington for the past thirty years of letting somebody else do your thinking for you and even I couldn’t have mucked it up worse than you’ve managed to do. How dare you waste our time now with stalemating tactics and a bunch of strategic Republican Party nonsense. Who the hell do you think you are and who do you think you are going to have to deal with when they’re done with you? We put you into office, we pay your salaries, we pay for your taxi rides, limousines and plane trips, we are paying for you to live in nice houses and sit your shitty asses in $6,000 chairs. We are paying for your staff members and the research you have done to make decisions where you sit. What the hell do you think is going to happen to the United States if you keep on doing it the way you’ve been doing it?
It’s time to stop dicking around, get off your dead Republican asses and get with the others we’ve elected up there in Washington to get something done. Get in there, use your brains and fix this mess. Eventually you will have to notice that you aren’t the ones cooking your own dinners, mowing your grass, cleaning your houses, shining your shoes, washing your clothes, fixing your toilets, driving your family where they go, filling the car with gas or in fact, doing any of the number of other things that are required for you to wipe your hairy ass.
Personally, I wouldn’t trust any of you to lead me from one side of the street to the other safely – but since, you have been elected by my fellow citizens to positions of leadership you need to know this –
Whether you know it or not – every one of you up there in Washington is a member of a team and it isn’t the Republican Party, Democratic Party nor conservatives nor big businesses nor liberals. You are either on our team USA to serve the interests of the citizens of the United States and the interests of our national concerns or you are nothing that serves the United States and you don’t belong there wasting time, energy and resources that could be used to the good of us all.
And, right now considering the economic and social crises that we all face, when you use your positions to antagonize, undermine, stalemate, block, and degrade the efforts of others – you are acting as an anathema and an enemy to all that is good and that could be done while you are there.
– cricketdiane, 07-29-09
***
And by the way, whether you know it or not – every one of you up there in Washington is a member of a team and it isn’t the Republican Party, Democratic Party nor conservatives nor big businesses nor liberals. You are either on our team USA to serve the interests of the citizens of the United States and the interests of our national concerns or you are nothing that serves the United States and you don’t belong there wasting time, energy and resources that could be used to the good of us all.
***
Another note –
Whatever marketing genius convinced you as a politician and legislator that you must serve the Republican “brand” – failed to note the unique capacity and position in which you serve and its broader implications.
The actions you take or fail to take, the decisions you make or decide against supporting will last long after the Republican Party ceases to exist and will have lasting effects far beyond the ability of any narrowly focused conservative thinktank, party, or group to perceive.
– cricketdiane
***
“But McConnell said Friday, in an appearance at the National Press Club, that, “The normal constituencies must be widened,” signaling a likely strategy for Republicans in the months ahead.” – from article below (FoxNews – January 2009)
**
Republicans Craft Careful ‘Resistance’ in Congress
Senate Minority Leader Mitch McConnell says his party will pose a “principled resistance” when appropriate, but will also try to work with the Obama administration.
FOXNews.com
Friday, January 23, 2009
Senate Minority leader Mitch McConnell of Ky. gestures as he answers questions at the National Press Club in Washington, Friday, Jan. 23, 2008. (AP Photo/Pablo Martinez Monsivais)
Rest assured, Republicans in Congress will put up a “strong, principled resistance” to the Democratic majority when called for, Senate Minority Leader Mitch McConnell said Friday.
But with Republicans’ numbers diminished in the Senate and virtually weightless in the House of Representatives, mounting that resistance will be no easy task.
The GOP, wounded badly in the 2006 and 2008 elections, is still trying to rally and redefine itself, not only to make gains in 2010 but to put its stamp on policy.
To do so, McConnell and other Republican leaders plan to strike a fine balance between bipartisan cooperation and thorn-in-the-side politics.
“Stylistically, it is somewhere between cooperation and confrontation,” said Stuart Rothenberg, editor of the Rothenberg Political Report. “It took them eight years to get in this hole. It’s going to take a while to get out.”
On the other hand, he said, “The nature of the opposition is they’re supposed to oppose.”
Among those leading that opposition in the early stages are Georgia Rep. Tom Price, chairman of the Republican Study Committee, and Texas Sen. John Cornyn, who is heading up re-election efforts in the Senate.
Cornyn, one of former President Bush’s top defenders, is already biting at the ankles of Democrats at every turn and could play the prickly counterpart to his more bipartisan colleagues.
Cornyn was the lone senator who prevented Clinton from being confirmed on Inauguration Day by raising concern about donations to her husband’s foundation. (He later dropped his opposition after a talk with Sen. John McCain.)
Plus Cornyn raised critical questions about Eric Holder, Obama’s nominee for attorney general, contributing to a delay in his confirmation vote before the full Senate.
And he warned Democrats not to seat Al Franken as Minnesota’s next senator until his Republican rival, Norm Coleman, exhausted all legal options.
Most recently, on Wednesday, Cornyn’s committee took on Senate Majority Leader Harry Reid in a news release for inviting lobbyists to an inaugural brunch two days earlier. Spokesman Brian Walsh said in the statement that in order for President Obama to change the culture in Washington, he’d first have to change Reid.
“I didn’t come to the Senate to be a wallflower, and the only tools you really have available in the Senate are your voice and your vote,” Cornyn said.
Meanwhile, Price vigorously opposed the release of the second half of the $700 billion financial bailout. And he, along with Cornyn, blasted Obama for ordering the closure of the Guantanamo Bay detention facility Thursday. “It’s unfortunate that national security has taken a back seat to political appeasement,” Price said in a statement.
Conservative talk show host Rush Limbaugh told FOX News’ Sean Hannity that leaning moderate is the wrong way to go for the Republican Party. He said the moderate wing got their candidate in McCain and lost.
[My Note – Rush Limbaugh is the Republican Party in America. To have that thinking to run the United States into the ground, who needs enemies . . . ]
“The blueprint for landslide electoral victory is right there, and the Republican Party and conservative movement has just washed it away,” Limbaugh said. “The people that are running our party now have such a defeatist inferiority complex. … They want to be accepted by people that hate them.”
But McConnell said Friday, in an appearance at the National Press Club, that, “The normal constituencies must be widened,” signaling a likely strategy for Republicans in the months ahead.
John Feehery, a Republican strategist and one-time aide to former House Speaker Dennis Hastert, said the GOP only hurts itself by ignoring the center.
To appeal to more Americans, he advised Republicans to target Democrats in Congress instead of Obama, and to use the president’s “change rhetoric” against hyperpartisan members. He said Republicans can regain the moral high ground by exposing hypocrisy and corruption in the rival party.
[etc.]
A string of corruption cases led to huge Republican losses in the 2006 congressional elections, and now the GOP is trying to shine a light on Democrats improprieties.
The National Republican Congressional Committee, for instance, lambasted House Speaker Nancy Pelosi for keeping Rep. Charles Rangel, D-N.Y., as chairman of the House Ways and Means Committee despite the fact he’s being investigated for tax problems.
House Republicans are now so outnumbered that they have few options for pushing through their agenda in Congress. They can try to partner on some issues with the conservative Blue Dog Democrats, but they may be more successful just making noise in the media.
In the Senate, however, Democrats still do not have a filibuster-proof majority, so Republican senators are in a position to carry more weight and squeeze concessions out of Democrats.
Moderates in particular have a chance to hold clout. Maine Sen. Susan Collins, for instance, just got a coveted seat on the Appropriations Committee, and Maine Sen. Olympia Snowe is a senior member of the Senate Finance Committee. Rothenberg said Sen. John Thune, R-S.D., and Sen. Lamar Alexander, R-Tenn., are two rising stars to watch. Alexander is Republican Conference chairman and Thune has moved into the ranks of leadership as a lead deputy to Whip Jon Kyl, R-Ariz. Thune has been a quiet voice of compromise on energy issues but a tough fiscal conservative.
[ . . . ]
Conservatives have long criticized the financial bailout package, charging that the distribution of funds was irresponsible. And in the upcoming stimulus package, Republicans are pushing against Democratic spending proposals and pushing for items like tax cuts. House Minority Leader John Boehner of Ohio and Republican Whip Eric Cantor of Virginia on Friday presented Obama with proposals that rely exclusively on tax cuts and envision none of the federal spending backed by Democrats and the White House.
Some of the GOP resistance is symbolic, though it provides political cover. For instance, Republicans in the House — along with Democrats — voted on Thursday to withhold the second half of the $700 billion stimulus package, even though a prior Senate vote in favor of releasing the money trumped any action from the House.
But Republicans caused headaches for Democrats earlier in the week when they waved around a report that showed the Democrats’ economic stimulus proposal could take as long as 10 years to work its way into the economy.
[ etc.]
In response to the study, Peter Orszag, the director of the White House Office of Management and Budget, sent a letter to Senate Budget Committee Chairman Kent Conrad, D-N.D., late Thursday pledging that at least 75 percent of the stimulus package would be spent in 2009 and 2010.
[ . . . ]
Analysts suggested Republicans should also reach out to friendly think tanks to bolster their agendas.
Republican National Committee Chairman Mike Duncan, who is running for another term, is doing that with his newly created Center for Republican Renewal, a think tank he says will help the GOP “reclaim the mantle as the party of ideas.”
FOXNews.com’s Judson Berger and FOX News’ Trish Turner and The Associated Press contributed to this report.
Blaise Hazelwood, who served as the political director of the Republican National Committee and spearheaded the famed “72 Hour Project,” proved her mettle again last week — shepherding Steele to his unexpected victory in the race for RNC chairman. Hazelwood, who worked with a team of political pros including the Anderson brothers (Wes and Curt), Brad Todd and Jim Dyke on Steele’s behalf, is now in line for a plum position at the RNC if she wants it.
Hazelwood’s whole life has been politics. She is a fifth-generation Arizonan whose grandfather was close to former senator Barry M. Goldwater. She was president of Teen Republicans in Arizona as well as an intern on Capitol Hill and at the White House.[8]
Despite her Arizona lineage, however, she was born in Washington because her father was working at the Interior Department during the Nixon administration.
Why is it that everyone in the Republican Party and Conservative Groups that hijacked it over the past thirty years has some relationship to Barry M. Goldwater and Richard M. Nixon? That includes the unbelievable number of people appointed to cabinet positions in the Republican administrations over the last thirty-six years, the agency heads, the decision-makers, the policy makers, and in the thinktanks that have diverted charitable money intended for community supports and programs for the poor into their own coffers.
Why is it that the conservative fundamentalist right-wing political parties and groups are some of the most vice-ridden, vile, vicious, cruel, intolerant, greedy, corrupt, sexually immoral, criminal and malicious groups that have ever walked the earth regardless of where they are operating? What makes it like that? They have perpetrated the most violent anti-social psychotic police and military policies and practices, they’ve tortured with cruelty and disregard – both in the US and around the world, they’ve encouraged their friends, children and authorities in their command to beat the homeless, poor and disadvantaged to death.
They’ve incited intolerance, removed personal rights and freedoms, undermined the Constitution of the United States and lawful Constitutional rights given to citizens around the world, practiced religious, social, economic and cultural / racial intolerance across the United States and generally, instituted a caste system in a country where democracy, freedom and individual rights used to be. Who are these vile slags of humanity and why do they get away with it just because they dress better than I do?
Hazelwood first came to prominence as the driver behind the “72-Hour Task Force” in 2001, the party’s last major revision to its tactical campaign playbook which is credited with revolutionizing the Get Out the Vote efforts.[2] Hazelwood has led and managed political operations, high-profile grassroots programs and political campaigns.[3] She received a lot of praise for her work as Political Director at the Republican National Committee in 2002 and 2004, spearheading their successful online Team Leader program and the construction of Voter Vault, the RNC’s voter file database.[4] She went on to serve as the Director of Media and Political operations for the National Republican Senatorial Committee during the 2006 cycle under Senator Elizabeth Dole.[5]
Beginning in November 2008, Hazelwood managed Michael Steele‘s campaign for Chairman of the Republican National Committee.[6] Steele was elected as the new RNC Chairman on January 30, 2009.[7] Hazelwood followed the new Chairman to the RNC and served as his Chief of Staff through the transition until March 2009. She then returned full-time to her companies in Alexandria, Virginia but continues consulting as a top advisor to Chairman Steele and the RNC.
Hazelwood’s whole life has been politics. She is a fifth-generation Arizonan whose grandfather was close to former senator Barry M. Goldwater. She was president of Teen Republicans in Arizona as well as an intern on Capitol Hill and at the White House.[8]
Despite her Arizona lineage, however, she was born in Washington because her father was working at the Interior Department during the Nixon administration. She was named for St. Blaise. The name was chosen by her mother, who wrote a dissertation on the Roman Catholic saint while studying for a doctorate in early Christian art at Georgetown University. Hazelwood has admitted that being named after a little-known male saint caused confusion when she was younger.[9]
Arizona Campaigning
Hazelwood began door-to-door canvassing as a 10-year-old in Arizona when her father was running for precinct committeeman, and she learned firsthand the value of human contact, meticulous organization and volunteer muscle in political campaigns. Her grandmother was a campaign volunteer in the days before computers, when voter files were kept on index cards. She told the Washington Post in 2003, “I always heard stories about my grandmother. It was all personal contact, and it obviously worked.”[10]
Career
Early career
After graduation from Vassar College, Hazelwood’s first job was staff assistant at the RNC, but shortly after the 1994 GOP landslide, her days appeared numbered. The new political director, Curt Anderson, was planning to clean house, and told Hazelwood and others they should start looking for work somewhere else.[11]
“I didn’t like that answer,” she told the Washington Post. “I decided that I wanted to stay here, that I wasn’t done at the RNC, so I started getting there at like six o’clock in the morning. He was a very early person, too. I would read the papers and brief him as he came in, do whatever I could to get his attention, and so he finally decided to keep me.”[12]
Her career since has been a succession of campaigns and grassroots organizing across the country, often anchored by positions at the Republican National Committee. She worked for Bob Dole’s 1996 presidential campaign and for James S. Gilmore III’s successful 1997 gubernatorial campaign in Virginia.[13]
After those campaigns, she joined Curt Anderson’s political consulting firm. Then, in the summer of 2001, moved back to the RNC to help the Bush team manage its outreach to parts of the conservative coalition.[14]
Republican National Committee
“Blaise Hazelwood is credited with bringing back the culture of grassroots campaigns into the Republican Party.”[15]
Hazelwood worked as Political Director at the RNC in 2002 & 2004. Matthew Dowd, Senior Advisor at the time said, “She’s got good intuition, and she’s exceptionally well organized. She’ll do whatever it takes to get the job finished. She’s not concerned about being the last person to leave the office or getting on an airplane to get the job done.”[16]
72 Hour Program
“When the history of the Republican Party’s midterm election victories of 2002 is written, President Bush will get the headline and much of the credit, but a large footnote will go to a young political operative named Blaise Hazelwood.”[17] -The Washington Post, 2003
Hazelwood, only 31 at the time, was serving as political director of the Republican National Committee (RNC), and it was her responsibility to coordinate the party’s “72-Hour Program,” an 18-month effort designed to put shoe leather back into politics and beat the Democrats in turning out the vote, especially in the final three days, 72 hours, of the campaign. The 72-Hour Project was born of necessity after the 2000 election, when Republicans discovered that Democrats had done a better job of getting their voters to the polls in one of the tightest presidential races in history.[18]
With prodding from White House senior adviser Karl Rove, White House political director Ken Mehlman and RNC Deputy Chairman Jack Oliver, the party undertook a top-to-bottom review of its get-out-the-vote operation, poured more than $1 million into more than 50 experiments to test how best to reach out to voters and then methodically set about implementing their findings in the midterm campaigns.[19]
“I’m confident from the testing and from human life experience that making a volunteer telephone call or knocking on someone’s door makes much more impact than just doing it paid,” Hazelwood said.[20]
Her weekend routine was a mind-numbing series of conference calls consuming as much as 16 hours in which she updated her checklists state by state: how many volunteers signed up; how many people on the streets; how much literature distributed; how many voters identified. The overall goal was to flood precincts in competitive states with GOP volunteers going door to door in the final 72 hours of the campaign. Three weeks before the election all the planning and execution began to converge. She told the Washington Post, “All of a sudden this one weekend, everything started clicking. All of the work that everyone had put into this for the past year and a half started happening.”[21]
Her work paid big dividends on Election Day, when a surge of Republican voters in states such as Florida, Georgia, North Carolina and Missouri overwhelmed the Democrats and turned what many had called one of the most competitive midterm campaigns in history into a substantial Republican victory.[22]
Voter Vault
In addition to implementing the 72 hour program, Hazelwood is also credited with creating Voter Vault, the Republican Party’s voter file database which is used by campaigns all over the country.[23]
National Republican Senatorial Committee
In 2005, Hazelwood moved over to become Elizabeth Dole’s right-hand-woman, serving as campaign and media director for the National Republican Senatorial Committee (NRSC) through the 2006 election cycle.[24]
Consulting
Grassroots Targeting
Hazelwood founded Grassroots Targeting in 2005, turning her expertise in the practice of microtargeting into a business. In 2004, few top campaign staff knew what to do with raw microtargeting data. The young staffers who had time to play with the data were the ones in the remote field offices. In 2008, they’re now running the show and want to be able to get their hands on the data. Grassroots Targeting is the first firm to create its own software, called GT InAction, so campaigns can do just that. It lets a campaign manager select the voters he’d like to reach, such as married men who are regular churchgoers who make above $100,000. Since the software is web-enabled, direct mail and phone vendors can go in and use the data as well. Hazelwood believes, “if you’re spending this much time and money to put this together, people should actually use the data.” She also adds that she tries “to empower the campaigns as much as possible, because they know their campaigns the best.”[25]
With respect to the 2008 Presidential race, she recently explained,
“With Bush, our targeting efforts focused on turning out the base. Now with McCain, it’s about convincing the swing voters. It’s a different audience we’re going after, and we’re able to find those swing universes much better than we would have in the past. But sometimes microtargeting isn’t user-friendly enough — a lot of campaigns get a book that explains it, and then that book goes on the shelf. I’ve built software that allows campaigns to understand their microtargeting data more easily. They can pull their own email and phone universes. The software will tell you, ‘These are the swing groups, these are the people who are most likely to turn out.’ All the end users have to do is pick what groups they want to target. If you have the budget to mail to only 40,000 people, you can decide which group you want and enter into the calculator exactly what you want your numbers to be.”
Microtargeting for Bobby Jindal
One of Grassroots Targeting’s most notable clients is Louisiana Governor Bobby Jindal who has been talked about as a future presidential candidate.[26] Most microtargeting models focus on issues and likelihood to vote Democrat or Republican. However, that wasn’t necessarily going to help Bobby Jindal win his 2007 gubernatorial race in Louisiana, where most voters are registered Democrats who typically vote Republican. Strategists realized that to avoid a run-off, Jindal needed 42 percent of culturally conservative Democrats to vote for him on Election Day.[27]
Hazelwood built her model around that core group. She said, “usually when you build models, you are building them on everyone [in a district], but the cultural conservatives were our target universe. We actually did survey work and tracked them all summer long.” Using that research, Jindal talked to voters in each segment of this custom universe. And on Election Day, he hit the magical 42 percent and won the race.[28]
iWeb Strategies
In 2007, Hazelwood cofounding iWeb Strategies with Brian Lyle. Lyle has been working in technology for over a decade and with Hazelwood since 2003. He served as the Deputy Director for the RNC’s Team Leader online program in the 2004 election cycle. In 2006, he worked with Hazelwood at the NRSC as eCampaign Director before joining her to found iWeb. He designed and managed one of the “Top 5 Mold Breaking Websites” of the 2002 election cycle according to Campaigns and Elections magazine.[29]
Steele Campaign
In November 2008, Hazelwood signed on to lead Michael Steele’s campaign to become the next RNC Chairman in the first open race since 1997. The telegenic former Maryland Lieutenant Governor had developed a national following with his Fox News commentary. Also, those who saw Steele behind-the-scenes of his 2006 Senate race knew him as a free spirit whose first instinct is to rethink campaign conventions. An insurgent campaign in a time of internal party unrest fit his personality well.[30]
That Steele won the chairman’s race didn’t surprise many Republican activists across the country; however, Steele’s Jan. 30 win did shock the old bulls of the Republican establishment. The core of Steele’s winning coalition were the RNC’s newer members. In fact, half of Steele’s 21-person “whip team” on the committee rose to their current Party leadership roles after the election of 2006. Steele made sure his campaign screamed “change.” Under Hazelwood’s leadership in what looked like a sleepy Christmas-time race, Republicans responded in ways few inside the Beltway press corps noticed. Though the race is decided by the 168 party insiders, Steele asked Republican activists around the country to sign up to support his bid for chairman. In the two months after Obama’s victory, his website enlisted 42,000 such activists.[31]
Hazelwood put the 42,000 to work with the same innovative thinking that led to the 72 Hour Program. She asked those online supporters to email their national committee members. While urging a vote for Steele, the supporters pledged a specific donation of volunteer hours to their state parties which caught the eye of hungry state chairmen.[32]
With Hazelwood, Steele built a leadership team, and a winning campaign, with tactics, ideas, and coalitions rarely before used in the GOP. Steele promised to shake things up at party headquarters, and to the old guard’s surprise, the new RNC was in a mood to shake.[33]
Following Chairman Steele’s election, Hazelwood went with him to the RNC and served as Chief of Staff through the transition period. During this time, Steele brought in RNC Members from around the country to assist him in assessing each division within the RNC and make recommendations for improvements.
In a press release, the RNC announced that “the transition team will help implement the sweeping changes Steele proposed during his campaign for chairman. Under Chairman Steele’s leadership, the RNC will focus on recruiting a new cadre of top-notch candidates and operatives, build new volunteer networks, and forge new working relationships with state and local parties. The team will also immediately begin preparing for the gubernatorial and local elections later this year in Virginia and New Jersey.” Hazelwood was integral to these transition efforts and also to supporting the Chairman in beginning to fulfill his mission to “bring this Party to every corner of the country and ask people to join us and work with us.” The Chairman added that “by standing on our principles, we can expand and grow. My transition team will take a fresh look at everything with an eye toward preparing to win the campaigns of the future.”[34]
Having overseen the first two months of the Steele administration at the RNC, Hazelwood, in an e-mail to Republicans around Washington on March 12, announced veteran GOP strategist Ken McKay would take over as the RNC’s chief of staff.[35]
Hazelwood is now working full time at Grassroots Targeting and iWeb Strategies based in Old Town Alexandria, Virginia while staying very involved in an advisory role with the RNC and Chairman Steele.
Who was running the show when the World Trade Towers had two planes run up their asses, bringing the city of NY to a standstill and killing thousands of people? Who was at the helm when umpteen different terrorist acts occurred across the free world and the United States without hindrance despite all the money we’ve been paying for specialists and resources to take care of it?
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Who was running the states and federal government when thousands of people were sickened and hundreds died from E.Coli in hamburgers they bought at restaurants or ate at school lunches? And, who was running the country when thousands were poisoned and hundreds died from peanut butter sold to nursing homes and schools and meals on wheels programs?
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Who was running the United States when thousands of American children died at the hands of bad judgments made by social service workers either because they were taken from homes where they shouldn’t have been and put into the homes of foster care and mental health institutions that killed them or were returned to people that were abusing them in the first place?
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Who was it that had the reins of power when the CEOs, bankers and Wall Streeters were being given hundreds of millions of dollars in salaries, perks and bonuses while running their companies into the ground and laying off hundreds of thousands of workers who actually did do their jobs?
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And, who was the group in power while this country created the greatest impoverished landscape that has ever existed in this nation since the Great Depression which as a matter of fact, was also created by the hands of greed in the same party who were also running things at that time?
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Who was it that diverted money from every program intended to help people get on their feet and demanded that faith-based organizations take on that job while stealing those charitable funds to underwrite their own conservative thinktanks, lobbyists and pet projects for the rich?
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Weren’t the Republicans in power? Weren’t the conservatives getting things done the way they wanted when all this resulted? Wasn’t it the big business interests which were running the show that were served over everyone else’s interests? Wasn’t it the right wing fundamentalists that had their way with all of it? Is it now to be believed that they had nothing to do with it? And, that the way they didn’t do it or did do it resulted in something other than what we see, what the facts indicate and what we have experienced? Are they kidding?
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And, just for note – the prosperity which they created for themselves did not extend to the rest of us and as it turns out, wasn’t real anyway. It was a pretense without foundation which is exactly why our economy is mucked up to the extent it is today without much recourse to stabilize it in any due measure, let alone to rebuild it.
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– cricketdiane, 07 – 09
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(Tell me something, why should anybody want to innovate , invent or create solutions for a bunch of bastards that can’t do anything but put their feet in the ground and make nothing possible.)
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