Sunday, December 28, 2008

National Guard and Three Doors Down team up, not in a good way

Funny you should mention the Natl Guard.

Went to see "Doubt" today (as great as advertised) and one of the promos was for the Natl Guard. Actually, it was a propaganda piece rudely disguised as a music video.

While watching it we wondered aloud if any of the clowns in the band were in the Natl Guard or military. And some guys at the back booed. No doubt we were all reported to the proper authorities.

Wednesday, December 17, 2008

Breathtakingly bad news from the coast and Midwest

Bad news on CalPERS*, and as California likes to remind us - as they go, so goes the nation. Illinois, with its unsettled political position (Blagogate) and stressed cash position is forced to pay 4x the yield on its bond issues.

Illinois reaches deal on bond issue [Reuters]
State Treasurer Alexi Giannoulias believes the borrowing was essential as his office was receiving calls from state creditors that had not been paid since May or June. . .
Illinois sells $1.4 billion in bonds [Chicago Tribune]
Illinois Treasurer Alexi Giannoulias said the state is paying $20 million more in interest on the debt as a result of the Blagojevich scandal.

[Ed. note: Illinois leapfrogged over California to win "Most Screwed."]

CalPERS loses 103% on land deals [WSJ]
Calpers in recent weeks said it expects to report paper losses of 103% on its housing investments in the fiscal year ended June 30. That's because Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed. [Emphasis mine]

[Ed. not: Is the hair on the back of your neck standing straight up yet?]

"No one in the marketplace knew how swiftly the housing market would fall -- not the Federal Reserve, not the Treasury," said Ted Eliopoulos, head of Calpers's real-estate portfolio, in an interview.

Ed. note: Eliopoulos clearly does not understand the concept of bubbles. Worse for you Mr. Elipoulos: plenty of people did predict this very scenario.

Calpers recently estimated that if its declines for the current fiscal year are greater than 20%, it would trigger an increase of 2% to 5% of an employer's payroll. Currently, the average employer-contribution rate for public agencies, including cities and counties, is 13% of payroll, Calpers said, which is already on the high side for state pension funds, according to industry analysts. [Emphasis mine]

Ed. note: The writer is being disingenuous here. The EMPLOYERS are the State of California and municipalities, and they don't have an extra 5% to cover CalPERS costs.

*California Public Employees Retirement System

Thursday, December 11, 2008

The Flotsam and Jetsam for the week of Dec. 8 2008

Chinese Exports Fall Further Than Expected. Financial Times reports Chinese exports declined 2.2% from a year earlier. Imports fell 17.9% from a year earlier. The slump in exports increased fears that China will implement measures to boost exports. This, naturally, would heighten trade tensions.
Ed. note: So much for decoupling. And will Smoot-Hawley make a triumphant return?

Busy week for the FBI. Tuesday, Dec. 9, they nab Illinois Governor Rod Blagojevich. Thursday they grab Bernard Madoff* for securities fraud. (Former Nasdaq chairman)
Ed. note: We're going to need scapegoats for this colossal f***-up of an economy. And it's not going to be Paulson or Bernanke. Or Greenspan.

Blagojevich had a nice intersect with the Chicago Tribune, who filed for bankruptcy (Chapter 11 reorganization) on Sunday, Dec. 7. Among Blagojevich's many charges is that he tried to shake down the Chicago Tribune. If they fired certain editorial writers who were critical of him, he (as the State of Illinois) would provide assistance in certain tax mitigation schemes regarding the sale of Wrigley Field.
Ed. note: Is it too much to ask that the people of the State of Illinois have crooks running the state show a little panache? Or at least not be such out-and-out thugs? Or not be sociopaths?

Detroit in Distress. At the time of this writing news outlets are reporting that the Big Three Bailout is mortally wounded. The Financial Times reports that Sen. Mitch McConnell (R-KY) rejected the bill and backed other Republican Senators in imposing more conditions. Sen. Harry Reid (D-NV) reported that the House version (which passed 237-170) is dead in the Senate. Any deal worked out in the Senate would have to go back to the House for a vote. The $14 billion package is for GM and Chrysler.
Ed. note: Where was this outrage for the never-ending parade of bailout packages extended to Wall Street? Lousy f*cking Congress.

Bank of America announces 35,000 job cuts. [FT]
Ed. note: Really? Like we didn't see this one coming.

So let's tie that in with this headline: US Jobless Claims Surge to 26-Year High.
Ed. note: Ho, ho, ho.

Illinois delays bond issue in wake of Governor Blagojevich's arrest. And is California leading the nation in stupidity? Once again, from the Financial Times: "State legislators thought they had solved California’s financial problems in the summer when, three months late, they agreed a budget. But it recently emerged that the budget was based on growth assumptions that have proved incorrect as the economy has deteriorated."
Ed. note: Just this past summer they were still projecting GROWTH! In the name of all that is holy, what kind of crackmethamphetamineheroinesctasyjaegerbomb were they hitting up?

And just to wrap up today's news: Greek Violence Flares for Sixth Day. If this happened as reported, it will confirm my suspicion that you just never know what the tipping point is, but once it's breached all hell breaks loose. Last weekend Greek police officers killed a fifteen year old, claiming shots richoted which struck the youth. The lack of immediate action by Greek authorities inflamed the populace but the strikes and protests have not abated even though the officer has been charged along with his partner. Greeks in Paris, Berlin, London, Rome, The Hague, Moscow, New York, Italy and Cyprus also protested. Attacks on a police station and bank by Spanish youths in Madrid and Barcelona are causing concerns that the disturbances will spread beyond the Greeks.
Ed. note: Wait a minute - Greeks? They're not black. The press has always made it seem that only black people go crazy and mob the streets. Maybe that's only American blacks.

Wednesday, December 03, 2008

Financial Times goes drinking at CBOT

Oh sure, they changed the names & locations to protect the indigent at everybody's favorite abattoir in the CBOT, but you couldn't fool me - I knew it was Ceres. (I provide the decoded text at the end of each paragraph, via my Little Orphan Annie decoder ring.)

Wall Street* drowns its sorrows
[*LaSalle Street]

By Greg Farrell in New York*
Published: November 29 2008 00:16 | Last updated: November 29 2008 00:16

[*Chicago]

The titans of Wall Street* have taken a battering in the financial markets recently, but they are eating well and drinking more, according to the people who run Manhattan’s** “power” dining spots. At the 21 Club***, a longtime redoubt of corporate chieftains and big names, alcohol sales are up 9 per cent from last year, and businessmen can be seen drinking $14-a-glass cocktails as early as 3pm**** on a weekday.
[*LaSalle Street. **Chicago. ***Ceres. ****10:00am]

“Where people used to have one vodka on the rocks, now it’s a second one or maybe a third,” says Roger Rice*, the floor manager. “I don’t know what to attribute it to. Maybe it’s the last year of the expense account.” Others say their customers are drinking more to drown their sorrows. “People want to feel a little numb because it’s numbing out there,” says Steve Millington**, general manager at Michael’s***, the restaurant of choice for publishing and media executives.
[*Terry Duffy. **Ken Griffin. ***Totally fictitious occupation.]

He reports that alcohol sales are up a fifth* from last year. “At dinner**, hard liquor sales are up, cocktails and martinis. It’s less so at lunch***. People are drinking wine at lunch, less the high-end wines and more medium-priced wines.” The increase in alcohol sales is clear, says Mr Millington****, because overall customer levels are on a par with last year. “There’s a scent of fear,” he says.
[*No pun intended. **Lunch. ***Breakfast. ****Terry Duffy, again.]

Times are good at Delmonico’s*, the 181-year-old fine dining restaurant, says Dennis Turcinovic, managing partner. “It’s scary to say, but our business is up 6 to 7 per cent,” he says. “Alcohol sales . . . help a lot, they’re about 15 per cent up this year. The bar’s busy all day. I’ve had to hire extra barmaids**.”
[*Tutto Italiano. **Right, "barmaids."]

There are few signs that people are saving money on food either. At San Pietro*, an upmarket Italian restaurant, business remains brisk. Gerardo Bruno**, president, says overall business is up 12 per cent from last year. In spite of the turmoil in the markets, one rule has held firm at San Pietro. “Americans, they never drink at lunch***,” Mr Bruno says. As for dinner, hard liquor sales are down, but after-dinner drinks, particularly grappa**** and cognac, are up, he adds.
[*Tutto Italiano, again. **Mayor Daley. ***Futures traders excepted. ****Maddog 20/20.]

Wine sales remain strong, especially at dinner, except for one noticeable change. “When times are fantastic, the host does not lead, he lets his guests lead in choosing the wine,” says Mr Bruno. However, in the current climate, dinner hosts are turning to him to ask for wine recommendations*, a clear sign that restraint is in order, according to Mr Bruno. Yet not everyone has suffered in the economic downturn. Mr Bruno produced two empty bottles of 1947 Petrus**, consumed recently by a Chinese customer who called ahead to order the wines. The price? A mere $12,000 each.
[*City contracts. **CME stock.]