(173:  Swimming in Lake Michigan.  Chicago, IL.  October 2009.)

M and I had quite a day yesterday.  We rented a brush cutter (pretty much like this one) to mow the meadows.  It’s been at least two years since the meadows have been mowed.  They seem to benefit from a good cut every now and then.  My only regret is having to cut down the wildflower meadow at this time.  The birds and other animals chow down on the seeds throughout the winter months.  The seeds are still there, on the ground now.  That will make it a little more difficult for the birds to get to them once the snow starts accumulating.  But, we had the brush cutter now so it had to be done now.

M did the majority (about 99%) of the mowing/cutting.  I used the brush cutter for a little while to give him a break.  It’s a powerful tool, grinding up brush and small trees.  I had a little trouble turning the first time.  I was near the pond and the look on M’s face was priceless.  I’m pretty sure M thought the brush cutter and I were going right into the pond.  I did have the good sense to let go of the drive lever a few feet away from the edge of the water.  It’s nice to know M can move that fast if I (or an expensive piece of equipment) ever need saving.

I did most of my hard labor time in the garden, still trying to get it ready for winter.  It’s taking much longer than I thought it would.  I’ll be back out there today, if there’s time.  We have a long list of things to do today.  M is on his way back to Hartville to return the brush cutter and to pick up some lumber for some winter projects.  After that we’ll be headed over to a friend’s house to pick up a desk she’s giving us.  I don’t remember what other errands are on the list, just that it’s a good-sized list.

The weather has been perfect for working outdoors.  Clear, sunny, and in the 50’s.  It’s supposed to stay that way until Sunday.  We’re not used to this much sunshine this time of year.  It’s a wonderful thing.

I have not been taking many photos lately.  I don’t feel like it for some reason.  I didn’t even remember to take a picture of the brush cutter.  I did break out the camera briefly yesterday to capture some of the wildflower meadow before it was cut, but that’s about it.  I have taken tons of photos over the past year and barely had time to look at them so a break from taking more is in order right now.  I also have to come up with a better back-up system.  I’m running out of space.

That’s it from the Bogs for now.  I’m hoping to get caught up with everyone tomorrow.  Hope all is well out there in Blogland.

P.S.  I was looking over my search engine terms and noticed that a lot of people are looking for “Amish washing machines.”  Check out Lehman’s for all your non-electric laundry (and other) needs.  For those specifically looking for washing supplies, you’ll find it here.  Yes, it’s true.  They still make wringer washers.  All of which reminds me that it has been a while since M and I have made a trip to Lehman’s.  We ought to do that sometime soon.  It’s a great place to do some Christmas shopping.  Someday I may even get one of these.

sudouest.com, Chantal Roman, le 3 Novembre 2009

PYLA-SUR-MER. Dans le cadre des Journées de l’énergie organisées par le réseau des Espaces info énergie d’Aquitaine, visite d’une villa dite à « énergie positive »

Un exemple d’éco-construction exemplaire

Exemplaire, tel est le mot. À la fois au plan des ressources en énergie « positive » qu’au plan de la construction, bioclimatique. C’est ce que les visiteurs, nombreux, qui participaient à la semaine des Journées de l’énergie ont pu découvrir avec cette villa construite à Pyla-sur-Mer, avec vue sur les passes du Bassin.

« Il s’agissait pour nous de surélever une construction déjà existante, explique la propriétaire. Nous avions d’une part un budget serré et d’autre part la volonté de réaliser un projet entièrement bioclimatique, mais aussi porteur d’énergie positive ».

Excellente isolation

Le couple a fait appel à un architecte, Olivier Lehmans (cet architecte bordelais est spécialisé dans les démarches HQE-haute qualité environnementale, conceptions bioclimatiques, écoconstructions, etc.), et aux conseils du Creaq (Centre régional d’écoénergétique d’Aquitaine) pour la réalisation de la maison. L’architecte était d’ailleurs présent lors de la visite afin de guider les visiteurs, tandis que William Mazel représentant le Creaq, répondait aux questions des visiteurs. C’est donc une construction entièrement dirigée vers les économies d’énergie, une maison « passive », à très faible consommation énergétique, orientée sud et sud ouest, avec une façade entièrement vitrée. Tout a été conçu pour fonctionner sans chauffage conventionnel, mais avec un simple chauffage d’appoint, en l’occurrence une chaudière à condensation au gaz et une cheminée insert.

Ainsi, cette maison offre toute l’année une température ambiante agréable : « Sans chauffer, il fait 19°C tout le temps », annonce la propriétaire.

La construction a été réalisée avec des matériaux locaux : du bois de la forêt usagère coupé à la bonne lune pour la charpente, une isolation avec des fibres végétales, (du chanvre), du pin maritime des Landes pour les parquets et le bardage intérieur des pièces.

Un seul grand espace regroupe un vaste salon et une cuisine ouverte. Pas de cloison, ce qui permet à la lumière du jour d’entrer à plein… et donc d’économiser de l’électricité. Côté baies (avec double vitrage) un avant-toit protège du soleil durant l’été, mais le fait entrer l’hiver.

Du photovoltaïque sur le toit

sudouest.com

C’est une toiture végétalisée de 100 m² qui a été réalisée, et cette couche naturelle offre une meilleure isolation, surtout l’été. Elle permet aussi un stockage des eaux de pluie, lesquelles sont récupérées pour l’arrosage du jardin. Autre installation, celle de capteurs solaires et panneaux photovoltaïques thermiques. La propriétaire est d’ailleurs ravie du bilan économique : « C’est extrêmement intéressant, EDF rachète le courant des particuliers jusqu’à six fois le prix de vente réglementé. Le bénéfice réalisé permet d’amortir en quelques années le coût de l’investissement. Nous devons dépenser aux alentours de 200 euros, car nous revendons pour 1 500 euros d’électricité (EDF s’engage à racheter l’électricité pendant vingt ans à 0,57 € par kWh). » De plus, un plein d’astuces « zéro énergie » a été conçu : un préau séchoir au toit translucide sous lequel le linge sèche à grande vitesse et à l’air libre, un garde-manger « comme autrefois » ventilé qui permet d’avoir une température constante d’environ 15°C. « Il n’y a rien dans cette maison qui ne soit naturel, du sol au plafond [...] Pour moi, l’idéal a été d’avoir Olivier Lhemans qui a suivi le chantier de A à Z. »

sudouest.com, Jean-Paul Vigneaud, le 26 Octobre 2009

RICHELIEU. L’ex-bureau de recrutement des dockers transformé en maison éco-citoyenne

La maison verte sur les quais

Les joggeurs ou promeneurs ont été les premiers à s’en apercevoir, les premiers aussi à devoir contourner les barrières. Quai Richelieu, l’ancien Bureau central de recrutement de main-d’œuvre (BCMO) commence à vibrer au rythme des marteaux-piqueurs. C’est le début du chantier de construction de la maison éco-citoyenne.

Le bâtiment concerné est l’un des derniers « vestiges » de la partie sud du port de Bordeaux. Ce bâtiment sans étage a été construit au début des années 50. Un lieu qui ne désemplissait pas. Il y avait 3 000 dockers à l’époque à Bordeaux et tous devaient passer par ce bureau de recrutement central. Selon les règles en vigueur, ils ne pouvaient pas décrocher plus de huit heures de boulot d’un coup (deux fois quatre heures) mais rien ne leur empêchait de revenir le lendemain, pour refaire la queue et s’il y avait des bateaux à quai, décrocher un nouveau contrat. C’est dire les bousculades qu’il y a eues en ces lieux, les coups de gueule aussi.

Du faux XVIIIe

Contrairement à ce que l’on pense en le voyant de loin, ce bâtiment ne date pas du XVIIIe. C’est du faux ! L’architecte d’alors a respecté le site mais il a tout réalisé en béton et recouvert l’ensemble avec de fausses pierres pour ne pas gâcher le paysage.

Aussi, Olivier Lehmans, l’architecte bordelais retenu pour construire la maison éco-citoyenne, ne se retrouve-t-il pas les mains liées devant un monument historique indéformable. Il a pu faire courir son imagination à la condition bien évidemment qu’il respecte à son tour l’environnement architectural immédiat.

La construction de cette maison éco-citoyenne entre dans le cadre de la démarche de développement durable et de la mise en route de l’Agenda 21 de la Ville de Bordeaux. Cette maison verte est sur rails depuis longtemps. « Pour créer une dynamique, nous avons déjà créé la maison éco-citoyenne mobile », explique Anne Walryck, adjointe au maire chargée de mettre en œuvre la politique de développement durable à la mairie.

Cette « maison » est allée de quartier en quartier et même participé à des événements « grand public » majeurs comme la foire internationale. Parallèlement, des débats ont été organisés avec des experts reconnus. Sur les thèmes forts du moment et mettant en avant la nécessité de se mobiliser pour défendre l’environnement et faire les bons choix pour sauver la planète.

Un lieu de vie

La future maison éco-citoyenne sera le top de ce que l’on peut faire en la matière. Sous un grand chapeau « développement durable », ce sera un centre de recherches et de documentations, un lieu de débats et de réflexions, une galerie d’exposition pour valoriser tout ce qui va dans le bon sens, un lieu de création et de productions…

« Ce sera aussi un lieu de vie », précise Anne Walrick. « Rien ne sera figé de façon à ce que le site demeure attractif et tout sera fait pour que les gens s’y sentent bien. Que ce soit les membres des associations avec lesquelles nous travaillons déjà (celles rattachées à la Maison de la nature et de l’environnement), les habitants ou les visiteurs de passage. Voilà pourquoi il y aura un petit restaurant, un lieu convivial où tout le monde pourra se retrouver autour de bons produits bio. »

Des ruches et des nichoirs

La future maison répondra évidemment aussi aux normes HQE en vigueur (voir image ci dessous). À elle seule, la toiture sera un modèle du genre. Elle ondulera comme les vagues du mascaret, sera en partie végétalisée et recouverte de 300 mètres carrés de panneaux photovoltaïques. Et, tenez-vous bien, cette toiture sera également dotée de nichoirs pour les oiseaux et de ruches pour les abeilles.

Au bout du compte, ainsi, ne devraient rester que les quatre murs du vieux BCMO. À l’intérieur, le sol va être creusé pour la création d’une sorte d’agora, un lieu de rencontres et de conférences autour duquel seront aménagés les autres pôles d’expositions et d’animations.

Coût de l’opération : 1,6 million d’euros, une dépense que la Ville compte couvrir avec l’aide de l’Europe et si possible d’autres collectivités. Si tout va bien, cette maison sera terminée en mai prochain.

Fall’s return and the coming of winter may bring chilly weather to Cleveland Plus, but the seasons also bring to life the welcoming warmth of Amish Country in Geauga and Holmes counties.

Just southeast of Cleveland, Geauga County’s forested and farm-dotted landscape bursts with autumn. There is the silent, dazzling explosion of fall foliage ideal for touring and the harvest-time bustle of more than a dozen farms and farmers’ markets. Restaurants like Mary Yoder’s Amish Kitchen in Middlefield showcase the fresh local ingredients and traditional cooking in mouthwatering and satisfying fashion.

And if the crisp air suits your style, get outside and explore the Geauga Park District, which boasts 6,000 acres in its 12 parks, with hiking and cross-country skiing trails traversing scenic woodlands and meadows. Or wrap yourself in blankets and the majesty of a snowy winter wood on a horse-drawn sleigh ride through the surroundings of Ma and Pa’s Gift Shack in Burton.

But don’t lose track of time: “Before you know it,” Geauga tourism director Lynda Nemeth (www.tourgeauga.com) notes, “once we’re back into February, they’ll start tapping trees for maple sugar season” at the region’s 20 sugar houses.

Southwest of Cleveland, Holmes County is home to the world’s largest concentration of Amish settlements, making for an immersive cultural experience like no place else. From the famous Lehman’s Amish supply store, which includes three pre-Civil War-era buildings to the dozen shops that take part in the annual make-your-own Amish Quilt Shop Hop, you can put your hands on reminders of a simpler life.

Amish dining offerings include the renowned Amish Door in Wilmot and Berlin’s Farmstead Restaurant, or you can surround yourself in the atmosphere for a whole weekend: Packages like those at the Garden Gate Get-A-Way Bed and Breakfast include a day of meals in Amish homes, buggy rides and shopping, and during the holiday season you can get a taste of a traditional Amish Christmas with a holiday feast and an evening of games and Christmas caroling. –Submitted by John Booth

Back to being a boring economist for a bit . . .

The stupidist thing I’ve heard on Lehmans: “I was taught in Economics 101 that you should not finance long-term investments with short-term money”.

No, that is what banks do.  They promise you can have your money immediately.  They then take your money and put it into longer/less liquid things, and earn a spread for taking the risk that you all remove your money at the same time.  It generally works, unless they choose stupid investments.

[This was meant to be the big moral punchline to the the BBC's Love of Money programme, 'The Bank that Broke the World.'  It was more fun to watch than my earlier post indicated - more about the deal-making that didn't happen, than the weird dynamics of banking.]

After Liam Halligan, I’m on an Austrian Look out.  Here is the (rather more cerebral) Arnold Kling, denying MV= PY, and seemingly attacking both Keynesian AND the idealist-monetarist views of Scott Sumner:

In my view, the fall in nominal GDP was due to the fact that real GDP had to fall. Real GDP had to fall, because the economy was beginning a Great Recalculation. The Great Recalculation was mostly due to the end of the housing bubble and the shrinking of the financial sector. It was probably exacerbated by the panic generated by Paulson and Bernanke. I do not see how the Recalculation was helped by the bailouts, which were huge transfers from future U.S. taxpayers to current large creditor institutions, including many overseas. I do not see how the Recalculation would have been helped by the Fed suddenly printing a whole lot more money.

Hat-tip: the never-sleeping Tyler Cowen. (whose question No 5 about European outcomes defeats the simple monetarist views)

Crudely, I’m defining as Austrian anyone who thinks the problem was malinvestment/the wrong shape of the economy, therefore cushioning the fall was a bad idea.  I disagree with it, obviously: allowing such steep falls produces longlasting damaging effects (hysteresis), and the economy’s structure was not so distorted (see previous post on Size of Financial Sector).

Simon Ward’s blog is a must for anyone interested in Money data and what it means for the economy.  (That’s both of you).  The answer to “why” is in the title: “Money Moves Markets”.

It was 1 year ago Sept 15th when Lehman Brothers did the previously unthinkable, and dissolved in inglorious bankruptcy. This Reuters piece catches up with Dick Fuld who commutes from his mansion in the Rockies to Manhattan 3 or 4 times weekly for expensive lunches and some consulting work.

With the combined $310 million package and sale of Manhattan spot for $25 million he is managing. The observation of ex Lehmans emoloyee is illustrative of his approach though.

Google Earth

Fuld says being “dumped on” for Lehman failure | Reuters

Lawrence McCarthy, who was head of distressed bond trading at Lehman and works for Rafferty Capital now, told Reuters he quit after warning, several times, that the real estate market was living on borrowed time and that Lehman was becoming too leveraged.

“Other than six or seven people, no one really knew him. It was like he was in his own world on the 31st floor,” McCarthy said of Fuld. “He was never in touch with the troops. In my four years there, he never came down to the trading floor. Not once.”

Researched by Nobuyo Henderson

Silence Dogood here. It’s Monday, and that means it’s time for another Frugal Living Tip here at Poor Richard’s Almanac. Today, I want to talk about car games.

Say what? In today’s world of backseat TVs with DVD players, iPods, laptops, and the like, “Are we there yet?” may be history, gone the way of the superhighway. (And soon, we fear, the rest area.) But what if your car (or kid) isn’t equipped with all this expensive, high-tech gadgetry? What if it’s just, well, a car?

How to keep your kids entertained through the hours of travel? Okay, there’s the radio, CD player, and audiobooks. But the arguments that can break out over what to hear can be excruciating to adults, however engrossing they are to the backseat bunch. And once the argument’s been won, the results can be even more excruciating. (“Can we play that Eurotech CD again? And check out these dance moves… I am NOT blocking the rear window!” “NO! Lynyrd Skynyrd! Put on that retro station!!!” “Hit 5, would you?” “I want to listen to the Barney book again!” “No, Walter the Farting Dog!!!” “Owww!!! Stop pinching me!” “BARNEY!!!!” “Mommy, he’s still pinching me!” “WAAAHHHH!!!!”) Ugh.

I remember my mama’s elaborate preparations for our long, looong road trips from Nashville to Pensacola every summer, and for the shorter but more frequent trips from Nashville up to Springfield, Kentucky to see our beloved grandparents. With three kids less than four years apart total jostling around in the back seat, keeping the peace wasn’t a trivial matter, especially since our father wasn’t about to tolerate any backseat fighting.

Amazingly, in retrospect, Mama never loaded up on junk food for our trips—I don’t remember any road food at all, I think we just stopped for lunch or whatever as we went along—but she made sure to drop into the five and dime, the dollar store of the day, to get lots of little handheld games that we could play while we were on the road. And she was also enthusiastic about involving us in playing family road games, such as trying to spot license plates from all 50 states (we never managed this) or calling out the names of any animals we saw along the way. (My father, no country boy and nearsighted besides, was not exactly an ace at this; I still recall the time he said “Look at those nice horses!” while indicating a field of cows. I suspect he remembers it also, after all the ribbing he took for the rest of the ride.)

Believe it or not, our friend Ben and I still play the “call out the animals” game on our road trips. We also call out favorite landmarks, ludicrous billboards, and other entertaining roadside phenomena. Unlike my mama, I’m a big believer in road-trip junk food; it’s the only time OFB and I actually eat it, and it makes long hours in the car much more enticing when you can anticipate sour cream and chives potato chips, cream-filled chocolate rolls, or almond M&Ms en route, knowing that you won’t set eyes on them again until the next vacation rolls around. (I do bring along trail mix, pepitos, aka roasted pumpkin seeds, cheese sticks, and other healthier snacks so we don’t keel over from cholesterol and sugar overload before we reach our destination. And yes, we even eat them.) But if you’re travelling with kids, I have to say, do as I say, not as I do: no junk food or sugar- and caffeine-laden drinks.

You may not find tiny puzzles with hatpin-sized silver balls or the infamous Etch-a-Sketch at your local dollar store. But fortunately, you can still find low-tech, road-friendly games for kids that will help eat up the miles without eating up your budget in the process. Two of our favorite mail-order sources are The Vermont Country Store (www.vermontcountrystore.com) and Lehman’s (www.lehmans.com). The Vermont Country Store offers two kinds of old-style solitaire puzzles in wood with marbles that you can store inside the puzzle when not playing, a handheld pinball machine, three pioneer pocket puzzles, a handheld “Fifteen Puzzle” (the Rubik’s Cube of its day), and a wooden tic-tac-toe game. Lehman’s also has the Fifteen Puzzle, tavern puzzles, a farm cube puzzle, the original Etch-a-Sketch (gasp), magnet sets, and its own wooden tic-tac-toe set. 

Speaking of Rubik’s Cubes, if you can find some, you can always keep your kids occupied (or drive them crazy) with those. Or play a version of the alphabet game: Have the kids take turns finding the letters of the alphabet at the beginning of the state’s name on license plates or on billboards. You can also play a game where the kids recite the funniest bumper stickers on passing cars. (Admittedly, bumper stickers aren’t as common as they used to be, but there are always personalized license plates.)

Here’s a way to encourage creativity on the road: Ask each kid to describe the ongoing adventures of their favorite toy, either left at home or brought along. Or ask them to create an adventure that the family dog or cat is going on while the family is on the road. (Our friend Ben and I actually do this to this day when we’re travelling and have to leave our beloved pets at home or board them. “What do you think Linoose is doing right now?” “Oh, he’s opened the deck door and is enjoying a barbecue down the road after having a beer over at Ollie’s.”)

Any of these options costs chump change compared to an electronic device. And many of them will involve everyone in the family in a lively game. I don’t know about you, but to me, that’s worth more than any amount of money. The memories you’ll build on those trips are priceless.

              ‘Til next time,

                            Silence

An earlier posting in the wake of the Lehman’s failure criticises the insolvency sector and in particular Price Waterhouse Coopers(PwC) for its ability to rack up huge bills without proper policing.  The posting also suggested that it was almost immoral that in the light of the banking failures generally, a group of prosperous accountants were going to benefit even more.  I suggested that perhaps the insolvency industry should be government controlled.

You can imagine my joy when I read in the May edition of Accountancy that 234,578 hours have so far been billed by PWC at Lehmans.  Apparently, that works out at 9,774 days or nearly 27 years.  Yes, that’s over 230,000 hours.  Even at an average and very modest rate of £150 per hour, (and I suspect the average rate is considerably higher than that), that amounts to over £35m in fees.  In fact, the level of fees earned by them so far during its administration is £77m, equating to an average rate of £328 per hour.

Personally, I feel the whole thing stinks.  Banks and bankers are one of the major causes of the situation we find ourselves in and I don’t like the idea that another group of greedy people in the finance sector that I am a part of, should earn so much money clearing up the mess.

I still can’t see any reason why some insolvency services can’t be run by the government.  Why in theory is it any different to the CPS and the administration of legal cases.  Surely it is in the public interest for certain types of insolvency proceedings to be run by central government.  High profile insolvency administrations such as Lehmans, and other cases that are definitely in the public interest, particularly where there have been sizeable job losses, should be administered centrally.

HG

There are stores everyone registers at. Belks, Macy’s, Nordsrom, Bed Bath & Beyond, and Target if you are wanting gift cards. I’m registered at Belks and BB&B. But there are plenty of things I want for a home that I can’t register for.

Many of those things come from Lehman’s. No, not the sorry banking boys, but Lehman’s the Old Order store. They cater to non-electric living and that’s something I really dig. I don’t hate electricity (hello KitchenAid!), but it can be used much less than it is, and I love housework. It is very theraputic and housework is somewhat a holy thing to me. I can get kitchen appliances, mechanical doorbells, clotheslines (I love hanging my clothing), and LAMPS. I cannot tell you my love of gas and oil lamps.

Sadly, Lehman’s does not have a registery and I think most people I know would consider my crazy for liking this lifestyle.

But I’m a high strung person, and the best thing for me is a slow lifestyle. Requiring a whole day to do laundry is in my best intrest. And really, doing things by hand is the best way.

Howard Schultz Starbucks

Fred the Shred takes the fall

Pressure mounted on Sir Fred Goodwin to resign as chief executive of Royal Bank of Scotland (RBS) as the bank seeks to tap the Government’s £500 billion rescue fund. The Government is reluctant to a deal with RBS’s participation unless he relinquishes his role. Although he clung on tenaciously this has been a very bad week for Sir Fred. Another former city hero exits ignominiously.

Sir Fred Goodwin 0

Gordon Brown is no dead cat

The deeper the crisis, the more polls seem to swing towards Prime Minister Gordon Brown. David Cameron and George Osborne grudgingly offer support the government. Are we seeing a ‘dead cat bounce’, or is there life in the political career of Gordon Brown? He appears more relaxed in the last two weeks than he has been since taking over from Tony Blair as Prime Minister.

Brown 1, Cameron 0, Osborne 0

Boris Forces Resignation of Sir Ian Blair in Leadership Battle

The resignation of Sir Ian Blair [October 2nd 2008] develops into a political story. The BBC traced his turbulent career. Boris Johnson, incoming Mayor of London, is proving a hands-on leader willing to act forcefully. Sir Ian, under pressure on operational and personal fronts, was called into a ‘meeting without coffee’ by the Mayor before tending his resignation.

Boris 1 Blair 0

Obama and McCain Round 2

The second televised debate between the two candidates [October 7th 2008, Nashville, Tennessee] is as stage-managed as the first.
A key negative moment was was reported widely as

Jabbing his finger and spitting out “that one” instead of naming Barack Obama, John McCain showed an angry side

Polls suggest that Barack Obama is moving ahead.

Obama 1 McCain 0

Dick Fuld faces the music

Dick Fuld, controversial CEO of Lehmans has had a very bad few weeks. When ‘invited’ to testify before a hostile congressional committee following the crash of his company, he demonstrates his robust leadership style, denying wrong-doing or ethical weakness. He ticks the boxes for the callous Wall Street fat cat. Fuld very much the loser here.

Dick Fuld 0

Darling’s drastic rescue bid of the banks and maybe Gordon Brown

As The Times sees it
Chancellor Alistair Darling [October 8th 2008] launched a drastic rescue of Britain’s high street banks [to avoid] a cataclysmic failure of confidence by announcing a part-nationalisation plan with £50 billion of taxpayers’ money. Alistair Darling, like Gordon Brown has had a better week.

Alistair Darling 1

Starbucks, Schultz and the running taps

Howard Schultz, returned to the chief executive role at Starbucks earlier this year, faced with serious loss of froth in the business. Poor figures and closures continue. This week [October 8th 2008] the ‘running taps’ story threatens to sully the firm’s good environmental reputation.

Starbucks 0, Howard Schultz 0

And in the long run?

Not all these cats are dead. And, as we know, cats have seven lives.

Luke 6:39 (New American Standard Bible) And He also spoke a parable to them: “A blind man cannot guide a blind man, can he? Will they not both fall into a pit?

In this $700 billion bailout scheme we have been asked to trust the “wise men” and institutions that created this mess to begin with. Just a few months ago, President Bush assured us that the economy is sound. Senator Dodd and Congressman Frank told us that Fannie Mae and Freddie Mac were sound in mid-July. It was the Federal Reserve that inflated the currency that created the housing bubble and now the Federal Reserve is going to control private corporations and safely guide us through the darkness?

“In 2003, Barney Frank said in reaction to the Bush plan for increased regulation under the Treasury Department, ‘These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’” (The Chalcedon Foundation)

Now Democrat Frank demands more regulation and claims that he is innocent; that it is all the fault of the previously Republican controlled Congress and the Bush Administration. I’m not a fan of Bush but we could respond to Fran with, “Liar, liar, pants on fire.”

Frank cannot make a case that he is innocent, he is in fact as much a perpetrator of the financial fiasco than anyone. He is a leader in the destruction of the economy and should confess to such. He advocated low standards so that housing can be affordable to low income people who cannot afford a housing loan! He did the opposite and made housing unaffordable by flooding the market with easy credit. Now those poor people lost their houses anyway, and so did more responsible, hard working people. Iceberg ahead, Captain Frank of the banking Titanic.

Additionally, the SEC changed the rules so the companies like Lehmans could increase their leverage from 12-1 to 30-1. The Democratically controlled Congress with Jimmy Carter’s help passed legislation that forced banks to lend with virtually no down payment to people lacking creditworthiness lest they be accused or racism. This is now called sub-prime lending.

Although the CEO’s and others in these corporations were undoubtedly greedy and corrupt, it was the corruption, socialism and humanism of Congress, the courts and Congress that should receive the most blame.

Do you think they are going to repent? No, they are merely going to point the finger at someone else. You can watch Barney Frank do this in the video below as O’Reilly holds his feet to the fire.

Copyright © 2008 –Bruce Townsend

Just how did the banks manage to loose so much money?  Could it involve fraud, massive fraud a la Enron?  Its beginning to look very much as if it does.

Within days of the Lehman bankruptcy the market price of its bonds collapsed revealing a whopping $110bn black hole in its balance sheet just days after they were saying that a mere $10bn would fix their problem.  As a posting on the Naked Capitalism blog earlier today puts it: 

Now is there a precedent in this history of bankruptcy–excluding cases of accounting fraud–where bonds collapsed like this once a bankruptcy court opened up the books? I’m thinking the answer is ‘no.’ Which then makes you re-evaluate the premise that there wasn’t fraud at [Lehmans] in marking the value of their assets.

Now extrapolate this reasoning across the entire banking system and, voila, you have the seizure of the interbank lending market.

In general banks are quite happy to provide liquidity (in effect a bridging loan) to cover a temporary shortage of ready cash.  Proping up failed enterprises is a different matter altogether; it’s just throwing good money after bad which is why interbank lending has seized up – the banks have good reason to suspect that some of their number have liabilities that far outweigh their assets – in short that they are insolvent, the walking dead, and any loans made to them are unlikely to be repaid.  Unfortunately they don’t know which of their number are in this group.

The suspicion is that some banks have been goosing the mathematical models used to calculate the value of their sub-prime mortgages and the like.  Inevitably this involves forecasting the likely future value of a great many parameters – default rates, interest rates and so on.  Small changes in the assumption about any single one can make a huge difference to the calculated value; when many input parameters are changed simultaneously the calculated value swings wildly.

Could it be that under pressure some banks have decided that ‘in the opinion of the directors’ an optimistic view of ALL input parameters is ‘appropriate’?  You bet!  And of course GIGO.

The policy implications are clear.  There is really no point in central banks pumping vast amounts of liquidity into the system since that is not the issue.  Nor should they attempt to prop up insolvent banks.  What they need to do is identify and take down the bad banks to prevent their contagion spreading.  Then the financial system can be rebooted.

But does this amount to fraud?  Legally speaking, I don’t know – ask a lawyer.  In the court of public opinion, undoubtedly and also guilty of criminal negligence and misrepresentation.  These people have held themselves out as Masters of the Universe with salaries and bonuses to match.  If they are that good then ordinary mortals are entitled to hold them to correspondingly stellar standards of performance and integrity.

All the happenings over the last couple of weeks has been hectic to say the least. As a banker myself, my phone has been ringing off the hook since news of Lehman brothers and AIG hit, followed by the latest BEA. Things aren’t looking good for the market.

However, in times like this, I really start to wonder if Singaporeans are really that ‘ignorant’ as they claim. On the day itself before tv news reported the problems at Lehmans and AIG, I already started having calls from my customers. That is the power of the internet. Latest news is that an online petition on ex-NTUC income head Tan Kin Lian’s Blog has been set up by consumers who claimed to have been ‘cheated’ through mis-selling and misrepresentation by their bankers calling them liars, cheats etc and sob stories of how they have been cheated.

My personal view? Most of them are probably the liars themselves. I would presume that an internet savvy person in Singapore would be able to read english right? They are just lazy, not to have read through the documents when given, not to mention greedy. The simple saying as always is that if something is too good to be true, it probably isnt true. Greed overtook their logic. Now when things go wrong, they started pointing their fingers around at the bank, the bankers, the MAS for not doing enough. Basically everyone but themselves.

Granted, I admit there will always be black sheep in the industry. Old people and especially those that are illiterate are especially at risk. I do not condone that. I fully agree that more should be done to protect these customers.  But the majority of what I have seen online and in the forums of newspapers so far are well crafted letters in perfect english. Yet they claim they do not understand the documents given to them. If you do not understand something, yet want to throw your life savings in it, is it really anyone’s fault but your own? You are just paying the penatly for your own laziness, greed and ignorant, and now you want to point fingers at others. It sickens me.

                                              by Cameron Salisbury

This is the reverse of the way deregulation was supposed to work.  It was supposed to be trickle down prosperity, remember?  Ronald Reagan and successive cadres of snake oil salesmen repeatedly convinced our bought-out, brain dead representatives in Washington  that the way to make everyone better off – to lift all boats, they said – was to shred the regulatory safety net that had functioned so effectively since the Great Depression to protect the economy, the country and the consumer from the insatiable, creative greed of Wall Street. The sole purpose of the decades of deregulating rules and markets, every step of the way, was to make the rich richer at the expense of everyone else. And, boy, did it work!  When shredding the rules didn’t make the rich filthy rich fast enough, they cut taxes, too!

On Main Street, millions of jobs were lost as employers were rewarded by the American government for packing up and scurrying overseas or importing cheap foreign labor.  The deficit skyrocketed as Americans bought foreign goods that were no longer manufactured at home.  As oil prices ballooned thanks to Wall Street speculators, everything became more expensive, and the formerly well paid workforce, many of whom now slaved for minimum wage at McDonalds or Wal-Mart, was barely keeping up.  The recession hit Main Street but there was no talk of relief, bail out, re-engineering trade agreements, or in any way helping desperate citizens.

The foreclosure crisis was the latest blow brought to U.S. citizens by the not-so-invisible hand of Wall Street.  It didn’t take a rocket scientist to foresee the reckoning that has now settled in.  When drive-by mortgages are handed out like candy at Halloween; when documentation is barely needed to prove identity much less an income; when money is thrown at people with an interest-only repayment plan; when loans are given with no down payment and then the unholy mess is passed off to securities firms to butcher and repackage as top grade mortgage backed investments and sold to trusting investors, well, everyone  remotely connected to the real estate industry could see it coming.  Everyone, that is, with the exception of investors with pension plans and 401Ks who were kept in the dark, and are now being castigated as ‘speculators’ whose losses, Secretary of the Treasury Paulson quaintly observes, they deserve. (“They were in it for the good times; they have to take their medicine when times aren’t good.”) He’s made no such pronouncement about the bail outs for AIG, Bear Stearns, money market mutual funds, Freddie or Fannie.

The pain from Main Street threatened to trickle up to Wall Street, and Paulson is doing his level best to make sure all his Wall Street friends are inoculated against it.

Exactly who is Henry Paulson, this white knight of Wall Street who is now screeching that, for the good of the Whole World, the Street must be protected from the consequences of its own fraud, deception and irresponsibility?  Well, until two years ago he was the head of Goldman Sachs.  Since Paulson was at Goldman Sachs as late as 2006, he is directly involved in the current circumstances of a shaky Goldman Sachs and of the Wall Street meltdown.  Bringing this fox into the hen house to fix the financial mess is nothing less than a travesty.  His conflict of interest is palpable; his complicity, transparent. He shrilly threatens Congress with an instant Armageddon if his bailout demands aren’t met NOW! and appears on every talk show that will have him to do his Chicken Little routine.  It’s been a remarkable display of overweening, self righteous, arrogance and narcissism.  There is never any voice of reason sharing the stage with him.

What unadulterated hogwash!

The scare tactics that railroad decision makers into instant action with no time for responsible discussion are the way that the Patriot Act was passed and Homeland Security established. It’s the method of a huckster.  And just to make sure everyone understands that they’re being taken for a one-way ride to the edge, Paulson insists that his decisions are not to be reviewed by ‘any court or any administrative body.’  Wouldn’t that make him king?  Unprecedented.

We have some questions.

First, if Lehman Brothers didn’t need bailing, why did Bear Stearns?  Was Bear Stearns just the first of many bad decisions?

Second, the Federal Housing Administration, a stodgy, effective agency of the U.S. government, has been ethically and efficiently helping people buy homes for many years before anyone had ever heard of privatizing profits and socializing losses through the likes of Freddie and Fanny.  Why does Paulson want to bail out those corrupt, badly managed, agencies? Let the FHA take over their function and flush away those poorly conceived travesties.  No Bail Out!

He also wants to bail out private money market funds, to save the big guys who could have had insured deposits in a bank money market but chose to go for a better return. Are you melting with sympathy yet?  Who is next?  Starbucks?  What utter idiocy.  No Bail Out!

If Paulson’s next questionable proposition, that AIG needs to be saved to keep the world’s financial system from crumbling, is true, why hasn’t the federal government moved in lock, stock and barrel and tossed the bums out? If AIG is so important, it clearly needs the adult supervision sorely lacking in its private sector management, the type of management provided everyday by the maligned federal bureaucracy. The federal workforce is among the most ethical, intelligent and corruption-free set of workers anywhere.  Why?  Partially because they work within a set of strict regulations. 

Why do taxpayers need the bail out that Paulson is trying to railroad through congress?   What is there to gain? What is he saving us from? 

Pension plans and 401Ks have already taken their hit.  The foreclosure crisis shows little sign of abating. Does he think that he can save American financial hegemony if he just taxes us enough?  Too late.  No country, no international institution, will trust Wall Street or the American financial system again for a very long time, bail out or no.  So No Bail Out! 

Our overweening financial hegemony is a thing of the past, and the value of the dollar is quickly following. If Paulson wanted to save Wall Street, he could have made a good start during the decades he spent there by firing his lobbyists.  But that was never what he wanted.  What he has always wanted is the utter freedom to act recklessly and have the taxpayer pick up the tab.  And it’s a last gift that he wants to leave his friends before he leaves office with Bush.

So here is an idea or two on how we might solve the problem of the Wall Street-Washington ‘elite’, as they so nauseatingly like to think of themselves, who have done us so much damage.

First, abandon Washington.  Let it return to the swamp from which it arose or turn it into an extension of the Smithsonian.  Help to balance the budget by keeping all congressmen and senators home in the districts that elected them. Their constituents will have daily contact with them, making sure the elected ‘elites’ remember who brought them. The elected will be given a budget to maintain local offices, their staffs and for limited travel.  All communication will be carried out by teleconferencing and other nifty 21^st century techniques currently used by many organizations. One of the numerous benefits of this plan is that the lives of lobbyists will become significantly more difficult. 

Second, ban the appearance on national airwaves of any expert, pundit, or talking head living in the corridor between New York and Washington, D.C.  We don’t need to hear from even one more political analyst from NYU, economics professor from Yale or China expert from Columbia.  We don’t need Sally Quinn’s fatuous Washington gossip or Brian Williams’s intense eyebrows.  Since they only listen to each other, being ‘elites’ and all, not one of them has had an original thought or creative idea in years. 

The people who are capable of a realistic sense of the health and well being of the country live inside the country, not on the Atlantic edge.  We should get our economics analysis from a professor at the University of Iowa, our assessment of the S. Ossetia situation from an unbiased analyst from the University of Minnesota, a discussion of the real meaning of the Wall Street fraud scandal from someone at, say, the University of Oregon.  You get the idea.

With an unknown number of Henry Paulsons running amok through the East Coast government and media, its time we shifted our class of experts far away from their old geographic comfort zone.

Send an email to your senators and congressman now.  Go to http://www.congress.org for easy access.  Say it in small words that they will understand.  No Wall Street Bail Out!  No Paulson Railroad!

And the jaw-dropping news just continues… Huffpo linked over to this story at the Independent UK. In case you were wondering why that proposal of a blank check to ol’ Secretary Paulson should worry us:

 

The revelation sparked fury among the workers’ former colleagues, Lehman’s 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.

. . . In addition to the $2.5bn cash pool, Barclays is also in negotiations with about 30 executives it considers to be Lehman’s best assets and plans to offer them contracts worth tens of millions of dollars. British employees of Lehman described the bonus payments as a “scandal” as they waited anxiously yesterday to see whether a deal could be struck with buyers circling the bank’s European operations.

Many of Lehman’s UK staff are particularly angry about the US payouts because it has emerged that in the days running up to the bankruptcy, some $8bn in cash was transferred out of the account of the bank’s European business into accounts at the New York head office.

There is no suggestion any of this cash was used to supplement the bonus fund, but partly as a result of the transfers, PricewaterhouseCoopers (PWC), the administrator to the European business, initially found it impossible to guarantee salaries would be paid. The September wages of thousands of European staff were only secured in the middle of last week, when PWC negotiated a £100m loan to fund the payments. PWC wrote to Lehman Brothers’ head office in New York last week, requesting the repayment of the $8bn, but a spokesman said yesterday that the administrator had received no formal response.