Friday, February 26, 2010

Banks Continue To Pull The Rug Out From Under The Economy


BANK LOAN CHART OF THE DAY:

Joe Weisenthal and Kamelia Angelova | Feb. 22, 2010, 3:21 PM


Can the economy revive if banks don't start to lend again?

Let's hope so.

Today the St. Louis Fed released its latest monthly look at commercial and industrial loans at major banks -- a measure that some would say represents the essence of the US banking system.

As you can see, this measure is still falling like a knife -- a bad sign for the ongoing health of the economy. (And also not what we were promised when we bailed out the banks.)



http://www.businessinsider.com/chart-of-the-day-commercial-and-industrial-loans-at-all-commercial-banks-2010-2?utm_source=Triggermail

Thursday, February 25, 2010

In Middle of Economic Crisis and Record Deficits, Congress Announces NO NEW INCREASES in Already Waaay Tooo Low Public Lands Grazing Fees

Click on title above for press release from the Center for Biological Diversity,...the REAL scientists behind the fight to keep our public lands healthy and bio-diverse

Wednesday, February 24, 2010

FDIC Hits Record "Default" Level As Deposit Insurance Fund Plunges By $12.7 Billion To NEGATIVE 20.9 Billion

Submitted by Tyler Durden on 02/23/2010 10:13 -0500

From Dow Jones:

The U.S. banking industry continued to struggle in the fourth quarter, as the number of banks on the brink of failure continued
to rise and the government's fund to protect deposits fell sharply into the red.

The Federal Deposit Insurance Corp. said Tuesday that its deposit-insurance fund fell to $20.9 billion at the end of 2009, a $12.6 billion drop in the final three months of the year, as bank failures continued at a pace not seen since the savings and loan crisis. The fund's reserve ratio was -0.39% at the end of the quarter, the lowest on record for the combined bank and thrift fund.

The deposit insurance fund is unlikely to soon see a respite from a decline in the number of failing banks: The FDIC said the number of banks on its "problem" list climbed to 702 at the end of 2009 from 552 at the end of September and 252 at the end of 2008. The number of banks on the list, which have combined assets of $402.8 billion, is the highest since June 1993.

"The continued rise in loan losses and troubled assets points to further pressure on earnings," FDIC Chairman Sheila Bair said in a statement. "The growth in the numbers and assets of institutions on our 'Problem List' points to a likely rise in the number of failures."

Industry indicators deteriorated nearly across the board. The FDIC said loan losses for U.S. banks climbed for the 12th straight quarter, while the total loan balances for U.S. banks continued to fall. The agency said the quarterly net charge-off rate and the total number of loans at least three months past due both were at the highest level ever recorded in the 26 years the data have been collected.

Net charge-offs of troubled loans occurred across all major loan categories, led by a $3.3 billion increase in residential mortgage loans. The FDIC said U.S. banks' coverage ratio--reserves divided by the amount of noncurrent loans--fell to 58.1% in the fourth quarter from 60.1% in the third quarter.

The FDIC did cite some reasons for optimism. The banking industry was able to report a modest profit of $914 million in the fourth quarter, compared with a record loss of $37.8 billion in the final three months of 2008. And while the largest banks were the beneficiaries of much of the earnings improvement, the agency said more than half of FDIC-insured banks saw a year-over-year improvement in their net income.

Banks' profits were helped by improvements in trading revenue, which totaled $2.8 billion the fourth quarter, and servicing income, which represented a gain of $8.0 billion. The FDIC also said that more than half of all banks reported higher net interest margins in the fourth quarter compared with third-quarter levels.

"Resolving these credit market dislocations will take time," Bair said, describing banks as "bumping along the bottom of the credit cycle."

Click on title above for full abysmal Q4 FDIC report.

Secret AIG Doc Shows GS Minted Most Toxic CDOs

Click on title above for Bloomberg Report

Thursday, February 18, 2010

Increases in healthcare premiums may be here to stay

1.
By Victoria Forlini

Several health insurance companies--most notably Anthem Blue Cross in California--are under fire with calls for justification of premium increases. Unfortunately for consumers, a report from the Department of Health and Human Services finds that those numbers are in line with increases sought by insurers in other states, despite robust profit growth for the companies.

"This shocking increase isn't unique," the report says. "Experts predict these increases will continue."

For example, Anthem in Maine was denied an 18.5 percent increase in 2009, but recently requested a 23 percent increase. Michigan's Blue Cross Blue Shield requested increases of more than 50 percent last year. And according to the Des Moines Register, Wellmark Blue Cross Blue Shield in Iowa just announced average increases of 18 percent, which required approval from the state's insurance division. Wellmark insisted that its rate increases had nothing to do with new headquarters being built in Des Moines priced at $194 million.

"[The increases] are a combination of medical cost inflation and increased usage," Wellmark Rob Schweers said. "Also, people are getting sicker as a population. There are more chronic diseases."

The insurance industry's trade group, America's Health Insurance Plans (AHIP), disputed the idea of robust profit growth, pointing to Fortune's rankings of the most profitable industries. According to the rankings, the health plan industry profits at 2.2 percent, below other sectors of the health care industry.

"Increases in the cost of coverage in the individual market shine a spotlight on the urgent need to reduce the growth of underlying medical costs and to bring everyone into the system," said AHIP President Karen Ignagni in a statement. "If reform doesn't address these pieces, it will not solve the serious problems that individuals, families, and employers face. That is why health plans have proposed fundamental reform of health insurance markets and a long-term strategy to reduce rising health care costs."

The group targeted federal data that shows increased hospital and physician services and rising prescription drug use as reasons for rising costs. AHIP also noted that health plans must have actuarial justification for increases.

To learn more:
- read HHS report and this accompanying press release
- here's the Des Moines Register article
- check out AHIP's press release

Read more about: Wellmark, Kathleen Sebelius, Karen Ignagni, health insurance rates

Ex-NYC Cop / 9/11 Hero, Off to Jail

This guy was almost made a head of National Security! Click on title above to see article

http://www.aolnews.com/crime/article/former-nyc-police-commissioner-bernard-kerik-sentenced-to-4-years-in-prison/19364067

The Ambassador: Billionaire Bridge Over Troubled Waters



This secretive billionaire family owns the Ambassador Bridge
By Mitch Potter

DETROIT–The Moroun family seldom steps out of the shadows to show itself to the world. They may be billionaires. They may own the most important bridge Canada has ever known. But they are just shy that way.

Yet when the local media takes to calling you "crabgrass," when Forbes magazine slams you as "the troll under the bridge," when you are on the verge of all-out war with Ottawa, exceptions must be made.

So here we are, inside the American family's astonishingly private corporate headquarters in suburban Detroit, with Matthew Moroun sitting across the table like the proverbial deer in the headlights.

To call the conversation exclusive doesn't quite do it justice. At 37, the younger Moroun is in the process of taking over the company reins from his rags-to-riches father, 83-year-old Manuel "Matty" Moroun. The heir apparent has never given an interview. Until now.

"If I get slaughtered in your article, I'm going to regret this. All I ask is you treat us fairly," Moroun says.

After years of bruising lower-level skirmishes with the Canadian government, he has a "big ask," as they say in diplomatic parlance.

The Morouns know they are a bee in Stephen Harper's bonnet. Famously, during one of the Three Amigos summits, the Prime Minister pleaded for then-president George W. Bush's help in getting rid of the billionaire owners of the Ambassador Bridge – the aging link between Windsor and Detroit that accounts for a quarter of all trade between Canada and the U.S.

"Here's the thing. We have never had what I would call a real conversation with the Canadian government," says Moroun.

"All the talk so far has been at a lower level, and it starts with the Canadians saying, 'No matter what, we're going to build a new bridge and kill you. Now what did you want to talk about?' It's a pretty tough way to start off. It puts us in a position of saying, 'No matter what, we're going to stop you.' "

The Morouns say it's time to start anew. At the highest level.

If they can win an invitation to Ottawa, if the doors of the Prime Minister's Office will open, they are ready "to agree to what Canada needs to be able to sleep better at night. We can allay their concerns. We can be Canada's best friends."

Before weighing the sincerity of the Morouns' message, some necessary background. First, it may come as a shock to many Canadians that we do not own this crucial economic artery. Ottawa, after all, holds title to all but one of the other 25 major crossing points on the border. (The only other exception is a minor rail bridge at Fort Frances.)

But that is just the way history's cookie crumbled. Back in the 1920s, a group of U.S. businessmen bankrolled and built the majestic Ambassador in two years flat. When they cut the ribbon, it was the world's longest suspension bridge. Two weeks later the Great Depression hit, forcing the fledgling bridge company into bankruptcy.

Over the years, both Washington and Ottawa missed numerous opportunities to acquire the bridge. Then, in the late '70s, Matty Moroun – owner of a fledgling Detroit trucking firm – outsmarted everyone, including Warren Buffett, to gain outright control.

His timing was perfect. The age of free trade was about to dawn. The Big Three automakers were ramping up cross-border integration, with millions of truck crossings to come. Moroun shrewdly saw the future and it made him a billionaire.

And an aggressive monopolist, in the eyes of many.

The family's critics – and they are legion – accuse the Morouns of behaving like old-school robber barons. Using its chokehold on the bridge as leverage, critics say, the family has built a trucking empire with 5,000 employees on both sides of the border. And an insurance division that operates in 42 states.

Their private empire is now so great it dwarfs the bridge, which at an estimated $60 million a year in toll earnings is mere penny ante.

But the main issue today is this: the Ambassador Bridge is dying. For all its brilliance as the pinnacle of 20th century infrastructure, by 21st century standards it sucks.

Even the Morouns acknowledge this. They liken their piecemeal repairs to "trying to get a mechanic to fix your car while you are going 70 miles an hour on the 401."

Which is why they have quietly amassed land on both sides of the river and already begun work on a second span – without many of the required permissions. Weird concrete ramps to nowhere, described by one Detroit shipper as "Dukes of Hazzard launch pads," appear to be part of a larger strategy involving a substantial investment in lobbyists and litigation.

The company says it is ready to do whatever it takes to twin its aging bridge with a new six-lane "cable-stayed" crossing. With the ramps already built, the Morouns say they can finish the job with less than $400 million of their own cash. And remain the gatekeepers. Forever.

Canada has another solution. For 10 years, Ottawa has worked with Washington and with the Ontario and Michigan governments on the DRIC (Detroit River International Crossing), a far more expensive bridge that would rise 3 kilometres downriver from the Ambassador.

Unlike the Morouns, the governments have gone about the job crossing every "t" and dotting every "i". Most of the money is already committed for next-century customs plazas and new highway links to the 401 and U.S. interstates. The lone remaining wild card is the Michigan legislature, which has yet to sign off on its $200 million stake.

What Canada and the U.S. backers fear is that the Morouns will employ wolverine business acumen to buy every vote needed in the legislature to stop the public project.

The Moroun firm, already well known for its litigious ways, may simply jam courtrooms with so much paper that nothing can happen until a new and friendlier crop of Michigan politicians takes power to kill the DRIC altogether.

A well-placed Canadian diplomatic source told the Star the recession is the complicating political factor. Hard times (and nowhere are things harder than in burnt-out Detroit) have some people in Michigan looking doubtfully across the border at "Ugly Canadians" – aggressive socialists looking to engineer a government takeover of a successful private operation.

"In Detroit, Moroun supporters have had some success in portraying the Canadians as bullies," the source told the Star. "The irony is that the Canadian government is forbidden from hiring lobbyists, so we can't fight back the way the Morouns can.

"It's like being in the Stanley Cup finals, except Canada's playing without skates or sticks."

However, if you ask in Detroit about the Morouns, the family appears to have no shortage of American enemies as well. Many point to the Gateway Project quagmire – a $300-million collaboration between the Morouns and various U.S. governments to streamline truck flow on the U.S. side of the Ambassador Bridge – as evidence of a company that promises one thing and does another, almost always to its own advantage.

A U.S. court delivered a major blow last week to the Morouns, ordering the family to tear down chunks of the profitable duty-free and filling stations it built improperly under the terms of the Gateway project. But it is just one in a flurry of court cases still underway.

"I feel like I'm living in an episode of the Sopranos. But this latest ruling against the Morouns shows that bullies don't always win," said Rashida Tlaib, an elected Michigan state representative who has challenged the Morouns on every front.

"We are dying for jobs right now but the Morouns are crushing everything that hinders their monopoly. And when they realized they can't buy me, suddenly I was faced with three recall petitions trying to kick me out of office," said Tlaib.

"I know the Morouns are desperate to change their public perception. I once met Matty and told him, `You have a whole generation of people in southwest Detroit who see you as the Big Bad Bridge Company, and that's what your son will inherit.' He got so angry.

"But the problem can't be managed away with lobbyists and lawyers. The answer is to actually be a good corporate citizen: get the permits, abide by the terms, be transparent."

The Morouns have answers to all this – but they hardly help their cause by what seems an almost obsessive desire to stay completely beneath the public radar.

Billionaire American dynasties tend to want their names in lights with great public endowments – think the Carnegies, the Rockefellers, the Guggenheims. While the Morouns contribute generously to charitable causes, the efforts are invisible. Amazingly, even the family's corporate headquarters bears no sign to announce what it is.

We ask why, and Matt Moroun struggles to answer. They are simply a down-to-earth family, he says, who don't put vanity foremost.

"It is disappointing and painful to see the characterizations of my family in the media," Moroun says.

"But my father is a low-key guy. He would rather not have his name on things. I don't want to bang a cheap drum, but grade us on our performance at the bridge. That's what counts."

The Morouns will refer you to the aftermath of 9/11, when cross-border trade all but collapsed, threatening tens of thousands of jobs in both countries. Within hours, the family established a "war room" to keep people working.

Dan Stamper, the Morouns' right-hand man, said he felt the weight of the Canadian economy on his shoulders that day. And for the next six months.

"Within an hour of the attacks, there were trucks backed up for miles. We called GM, Ford and Chrysler and said, `Your factories are about to close. Tell us which trucks you need to keep things going,'" said Stamper.

Once the key trucks were identified, the company quickly escorted them across the border, he said.

"We acted so quickly, so proactively. With no hesitation we started adding extra inspection booths on our own land, just to short-circuit the seven-year time frame the U.S. government takes to go from idea to ribbon-cutting."

Stamper said they went from six commercial inspection booths to 10 in two months and are at 13 now.

"That is the kind of effort that should be on our scorecard. Was this not in Canada's best interests?"

Ironically, 9/11 has come back to haunt the Morouns. One of Ottawa's arguments against twinning the Ambassador is that locating the two spans side by side could invite a terror attack on key infrastructure clustered close together.

Canada also objects to the location. What made sense 80 years ago doesn't any more, Ottawa argues, because the Ambassador Bridge lands in the heart of Windsor, 9 kilometres from Highway 401. The the DRIC bridge would link directly to the 401, bypassing the traffic lights that infuriate truckers and Windsor residents alike.

Ottawa likes to remind you that when you drive from Toronto to Texas or Florida – the so-called "NAFTA superhighway" – the only traffic lights are found on that stretch through Windsor.

The Morouns' we-do-it-well argument has some traction, even among those who favour building the DRIC. Sarah Hubbard, spokesman for the regional business council, which takes in Detroit, said the family's performance in bridge management should make it a prime candidate to operate the proposed DRIC.

"Love 'em or hate 'em, the Morouns have a history of getting things across. ... Don't forget the DRIC is presented as a public-private partnership. It will be owned by the governments but with a private operator. So why not have the Morouns involved in that?"

For now, at least, the Morouns dislike the taste of that option. Why? They say Ottawa and other backers of the DRIC bridge are wildly overestimating traffic projections.

Despite an uptick in traffic in recent months, the Ambassador is likely to see only 7 million crossings this year – a far cry from 12 million in 1999, prior to 9/11 and the collapse of the Detroit automakers.

Another bridge, the Morouns argue, won't simply be one too many: it will saddle both governments with long-term costs, not just for construction but for the staffing of massive customs operations.

Customs brokerage sources the Star spoke with challenged this argument. While auto sector truck flow remains flat, a range of other industries from information technology to green energy systems are showing new signs of life, with increased truck activity both ways.

"Trade is coming back," one customs broker told the Star. "Granted, it has a long way to go. But you need great crossings to grow it. The real tragedy is if nothing gets done. Build one, build both – but the main thing is to build ... .

"Think back to the foresight of those people that built the Ambassador Bridge 80 years ago. And now look at the mess today."

Steve Tobocman, a former Michigan legislator well versed in the Great Bridge Debate, agrees.

"Where is the foresight today? Eighty years ago, during the Great Depression, there were people saying the Ambassador Bridge was a huge waste of money," he said. "Yet it went on to become an economic driver for the wealthiest manufacturing region in the world."

Tobocman, who often locked horns with the Morouns during his two terms in office, is not ready to predict a winner. The DRIC project may look strong at the moment. But that could prove fleeting.

"It is like watching a game of seven-card stud. The cards are being turned, the odds seem to be going up for Canada and down for the Ambassador Bridge. ... But anyone who gives you a firm answer is misinformed or pushing an agenda.

"I would never count out the Morouns. Never."

This secretive billionaire family owns the Ambassador Bridge
By Mitch Potter
DETROIT–The Moroun family seldom steps out of the shadows to show itself to the world. They may be billionaires. They may own the most important bridge Canada has ever known. But they are just shy that way.

Yet when the local media takes to calling you "crabgrass," when Forbes magazine slams you as "the troll under the bridge," when you are on the verge of all-out war with Ottawa, exceptions must be made.

So here we are, inside the American family's astonishingly private corporate headquarters in suburban Detroit, with Matthew Moroun sitting across the table like the proverbial deer in the headlights.

To call the conversation exclusive doesn't quite do it justice. At 37, the younger Moroun is in the process of taking over the company reins from his rags-to-riches father, 83-year-old Manuel "Matty" Moroun. The heir apparent has never given an interview. Until now.

"If I get slaughtered in your article, I'm going to regret this. All I ask is you treat us fairly," Moroun says.

After years of bruising lower-level skirmishes with the Canadian government, he has a "big ask," as they say in diplomatic parlance.

The Morouns know they are a bee in Stephen Harper's bonnet. Famously, during one of the Three Amigos summits, the Prime Minister pleaded for then-president George W. Bush's help in getting rid of the billionaire owners of the Ambassador Bridge – the aging link between Windsor and Detroit that accounts for a quarter of all trade between Canada and the U.S.

"Here's the thing. We have never had what I would call a real conversation with the Canadian government," says Moroun.

"All the talk so far has been at a lower level, and it starts with the Canadians saying, 'No matter what, we're going to build a new bridge and kill you. Now what did you want to talk about?' It's a pretty tough way to start off. It puts us in a position of saying, 'No matter what, we're going to stop you.' "

The Morouns say it's time to start anew. At the highest level.

If they can win an invitation to Ottawa, if the doors of the Prime Minister's Office will open, they are ready "to agree to what Canada needs to be able to sleep better at night. We can allay their concerns. We can be Canada's best friends."

Before weighing the sincerity of the Morouns' message, some necessary background. First, it may come as a shock to many Canadians that we do not own this crucial economic artery. Ottawa, after all, holds title to all but one of the other 25 major crossing points on the border. (The only other exception is a minor rail bridge at Fort Frances.)

But that is just the way history's cookie crumbled. Back in the 1920s, a group of U.S. businessmen bankrolled and built the majestic Ambassador in two years flat. When they cut the ribbon, it was the world's longest suspension bridge. Two weeks later the Great Depression hit, forcing the fledgling bridge company into bankruptcy.

Over the years, both Washington and Ottawa missed numerous opportunities to acquire the bridge. Then, in the late '70s, Matty Moroun – owner of a fledgling Detroit trucking firm – outsmarted everyone, including Warren Buffett, to gain outright control.

His timing was perfect. The age of free trade was about to dawn. The Big Three automakers were ramping up cross-border integration, with millions of truck crossings to come. Moroun shrewdly saw the future and it made him a billionaire.

And an aggressive monopolist, in the eyes of many.

The family's critics – and they are legion – accuse the Morouns of behaving like old-school robber barons. Using its chokehold on the bridge as leverage, critics say, the family has built a trucking empire with 5,000 employees on both sides of the border. And an insurance division that operates in 42 states.

Their private empire is now so great it dwarfs the bridge, which at an estimated $60 million a year in toll earnings is mere penny ante.

But the main issue today is this: the Ambassador Bridge is dying. For all its brilliance as the pinnacle of 20th century infrastructure, by 21st century standards it sucks.

Even the Morouns acknowledge this. They liken their piecemeal repairs to "trying to get a mechanic to fix your car while you are going 70 miles an hour on the 401."

Which is why they have quietly amassed land on both sides of the river and already begun work on a second span – without many of the required permissions. Weird concrete ramps to nowhere, described by one Detroit shipper as "Dukes of Hazzard launch pads," appear to be part of a larger strategy involving a substantial investment in lobbyists and litigation.

The company says it is ready to do whatever it takes to twin its aging bridge with a new six-lane "cable-stayed" crossing. With the ramps already built, the Morouns say they can finish the job with less than $400 million of their own cash. And remain the gatekeepers. Forever.

Canada has another solution. For 10 years, Ottawa has worked with Washington and with the Ontario and Michigan governments on the DRIC (Detroit River International Crossing), a far more expensive bridge that would rise 3 kilometres downriver from the Ambassador.

Unlike the Morouns, the governments have gone about the job crossing every "t" and dotting every "i". Most of the money is already committed for next-century customs plazas and new highway links to the 401 and U.S. interstates. The lone remaining wild card is the Michigan legislature, which has yet to sign off on its $200 million stake.

What Canada and the U.S. backers fear is that the Morouns will employ wolverine business acumen to buy every vote needed in the legislature to stop the public project.

The Moroun firm, already well known for its litigious ways, may simply jam courtrooms with so much paper that nothing can happen until a new and friendlier crop of Michigan politicians takes power to kill the DRIC altogether.

A well-placed Canadian diplomatic source told the Star the recession is the complicating political factor. Hard times (and nowhere are things harder than in burnt-out Detroit) have some people in Michigan looking doubtfully across the border at "Ugly Canadians" – aggressive socialists looking to engineer a government takeover of a successful private operation.

"In Detroit, Moroun supporters have had some success in portraying the Canadians as bullies," the source told the Star. "The irony is that the Canadian government is forbidden from hiring lobbyists, so we can't fight back the way the Morouns can.

"It's like being in the Stanley Cup finals, except Canada's playing without skates or sticks."

However, if you ask in Detroit about the Morouns, the family appears to have no shortage of American enemies as well. Many point to the Gateway Project quagmire – a $300-million collaboration between the Morouns and various U.S. governments to streamline truck flow on the U.S. side of the Ambassador Bridge – as evidence of a company that promises one thing and does another, almost always to its own advantage.

A U.S. court delivered a major blow last week to the Morouns, ordering the family to tear down chunks of the profitable duty-free and filling stations it built improperly under the terms of the Gateway project. But it is just one in a flurry of court cases still underway.

"I feel like I'm living in an episode of the Sopranos. But this latest ruling against the Morouns shows that bullies don't always win," said Rashida Tlaib, an elected Michigan state representative who has challenged the Morouns on every front.

"We are dying for jobs right now but the Morouns are crushing everything that hinders their monopoly. And when they realized they can't buy me, suddenly I was faced with three recall petitions trying to kick me out of office," said Tlaib.

"I know the Morouns are desperate to change their public perception. I once met Matty and told him, `You have a whole generation of people in southwest Detroit who see you as the Big Bad Bridge Company, and that's what your son will inherit.' He got so angry.

"But the problem can't be managed away with lobbyists and lawyers. The answer is to actually be a good corporate citizen: get the permits, abide by the terms, be transparent."

The Morouns have answers to all this – but they hardly help their cause by what seems an almost obsessive desire to stay completely beneath the public radar.

Billionaire American dynasties tend to want their names in lights with great public endowments – think the Carnegies, the Rockefellers, the Guggenheims. While the Morouns contribute generously to charitable causes, the efforts are invisible. Amazingly, even the family's corporate headquarters bears no sign to announce what it is.

We ask why, and Matt Moroun struggles to answer. They are simply a down-to-earth family, he says, who don't put vanity foremost.

"It is disappointing and painful to see the characterizations of my family in the media," Moroun says.

"But my father is a low-key guy. He would rather not have his name on things. I don't want to bang a cheap drum, but grade us on our performance at the bridge. That's what counts."

The Morouns will refer you to the aftermath of 9/11, when cross-border trade all but collapsed, threatening tens of thousands of jobs in both countries. Within hours, the family established a "war room" to keep people working.

Dan Stamper, the Morouns' right-hand man, said he felt the weight of the Canadian economy on his shoulders that day. And for the next six months.

"Within an hour of the attacks, there were trucks backed up for miles. We called GM, Ford and Chrysler and said, `Your factories are about to close. Tell us which trucks you need to keep things going,'" said Stamper.

Once the key trucks were identified, the company quickly escorted them across the border, he said.

"We acted so quickly, so proactively. With no hesitation we started adding extra inspection booths on our own land, just to short-circuit the seven-year time frame the U.S. government takes to go from idea to ribbon-cutting."

Stamper said they went from six commercial inspection booths to 10 in two months and are at 13 now.

"That is the kind of effort that should be on our scorecard. Was this not in Canada's best interests?"

Ironically, 9/11 has come back to haunt the Morouns. One of Ottawa's arguments against twinning the Ambassador is that locating the two spans side by side could invite a terror attack on key infrastructure clustered close together.

Canada also objects to the location. What made sense 80 years ago doesn't any more, Ottawa argues, because the Ambassador Bridge lands in the heart of Windsor, 9 kilometres from Highway 401. The the DRIC bridge would link directly to the 401, bypassing the traffic lights that infuriate truckers and Windsor residents alike.

Ottawa likes to remind you that when you drive from Toronto to Texas or Florida – the so-called "NAFTA superhighway" – the only traffic lights are found on that stretch through Windsor.

The Morouns' we-do-it-well argument has some traction, even among those who favour building the DRIC. Sarah Hubbard, spokesman for the regional business council, which takes in Detroit, said the family's performance in bridge management should make it a prime candidate to operate the proposed DRIC.

"Love 'em or hate 'em, the Morouns have a history of getting things across. ... Don't forget the DRIC is presented as a public-private partnership. It will be owned by the governments but with a private operator. So why not have the Morouns involved in that?"

For now, at least, the Morouns dislike the taste of that option. Why? They say Ottawa and other backers of the DRIC bridge are wildly overestimating traffic projections.

Despite an uptick in traffic in recent months, the Ambassador is likely to see only 7 million crossings this year – a far cry from 12 million in 1999, prior to 9/11 and the collapse of the Detroit automakers.

Another bridge, the Morouns argue, won't simply be one too many: it will saddle both governments with long-term costs, not just for construction but for the staffing of massive customs operations.

Customs brokerage sources the Star spoke with challenged this argument. While auto sector truck flow remains flat, a range of other industries from information technology to green energy systems are showing new signs of life, with increased truck activity both ways.

"Trade is coming back," one customs broker told the Star. "Granted, it has a long way to go. But you need great crossings to grow it. The real tragedy is if nothing gets done. Build one, build both – but the main thing is to build ... .

"Think back to the foresight of those people that built the Ambassador Bridge 80 years ago. And now look at the mess today."

Steve Tobocman, a former Michigan legislator well versed in the Great Bridge Debate, agrees.

"Where is the foresight today? Eighty years ago, during the Great Depression, there were people saying the Ambassador Bridge was a huge waste of money," he said. "Yet it went on to become an economic driver for the wealthiest manufacturing region in the world."

Tobocman, who often locked horns with the Morouns during his two terms in office, is not ready to predict a winner. The DRIC project may look strong at the moment. But that could prove fleeting.

"It is like watching a game of seven-card stud. The cards are being turned, the odds seem to be going up for Canada and down for the Ambassador Bridge. ... But anyone who gives you a firm answer is misinformed or pushing an agenda.

"I would never count out the Morouns. Never."





http://license.icopyright.net/user/viewContent.act?clipid=454688391

Tuesday, February 16, 2010

The Bag Lady Papers: Alexandra Penney on Losing It All to Bernie Madoff

Crying the Gamblers Lament

By BRUCE WATSON Posted 8:00 AM 02/16/10 People, Media, Books

On Dec. 10, 2008, Alexandra Penney, the former editor of Self and Glamour magazines, was enjoying a second career as a professional photographer and artist. She had financial security, the apartment of her dreams in the Upper East Side of Manhattan and a sprawling studio in which she was launching her budding new career. The next day, she discovered that her investment adviser, Bernard Madoff, had massively defrauded his clients, including her. Over the next few months, Penney scrambled to sell her houses in Florida and Long Island, drastically cut back on her expenses and set off in a new career direction as a blogger and writer.

In her forthcoming book, The Bag Lady Papers: The Priceless Experience of Losing It All, Penney writes about her experiences dealing with the loss of her money and trying to rebuild her life. She shared some of the lessons of that experience with DailyFinance's Bruce Watson.

DailyFinance: After your money disappeared, you quickly began rebuilding your life. How long was it before you had another job?
Alexandra Penney: The next day. The morning after I found out about Madoff, I woke early, but couldn't look for work because nobody was open before 9:00. Then I remembered that my old friend Ed Victor was in London and would be up. Ed is a very prominent literary agent, and after I told him my story, he said that he would see what he could do. Ten minutes later, he called me back and told me that Tina Brown, an old colleague of mine from Conde Nast, wanted me to write a blog. So I just wrote about my experience, with no filter.

In your book, you talk about your luxurious lifestyle before Madoff defrauded you. What was the hardest luxury to give up?
Luxuries are easy to give up; the hard part is the things that you don't realize are luxuries. I found that the equilibrium and peace of mind that I got from having some money in the bank was a luxury, too. When that was gone, I was in a panic.

Before your Madoff experience, you had four properties that you owned or rented: a house in Long Island, a house in Florida, an apartment in Midtown and a studio. What happened to these places?
My landlord lowered the rent on my studio by a third, which made it possible for me to keep my work space. I'm trying to sell the house on Long Island. In the meantime, I'm renting it out. I sold the house in Florida and still have my apartment.

In the book, you spend quite a bit of time talking about Carmina, your maid. Does she still work for you?
Carmina still comes in for three hours a week. I do most of my own housekeeping, but she needs the money, and I need her. I couldn't not let her have income.

Suicide is a recurring theme in your book. After you learn about the Madoff scandal, one of your first impulses is to look into suicide, and your photographs after the event have also explored that. How have you dealt with those feelings?
After Madoff, I felt like I had lost control over my savings, my life and my identity. I felt like I had lost my dignity, my ability to do work. For example, I need a large work area, because the photographs that I work with take up a great deal of space, and it looked like I was going to lose my studio.

According to my internist, the realization that I could commit suicide -- along with the fact that I didn't do it! -- helped me regain my feeling of self worth and control.

Reading this book, it seems like this experience really helped you learn about what is valuable. Do you still hate Madoff?
I never hated him. I had a weird reaction: I was really angry one day after I spent 10 hours Xeroxing documents related to my case. Xeroxing isn't cheap!

Anyway, I never met the man; he was abstract to me. What I hated was the horrific feeling that I didn't have a cent in the bank.

What about your finances now? How is your life after Madoff progressing?
Well, the art market is improving, and I have a show in Chelsea that is going up soon. A friend of mine, Richard Story, is editor of Departures magazine, and he flew me out to Africa to do a story. I got to see amazing things that I never would have seen in my pre-Madoff days.

I was impressed with how quickly your son offered to put you up.
What a darling he is! His first words after Madoff were "Mom, you can come live with us."

And so many of your other friends jumped to your aid.
Isn't that amazing? People are so immediately thoughtful and generous. Before I knew it, I had friends saying: "Can you do this?" "Will you come here?" "Here's some work for you to do!"

Three of my friends -- Richard Story, Alex Mays and Patty Matson -- all jumped to my aid. They literally came to my apartment and told me that "we have to find ways for you to make money." Richard helped me with the Departures story, Patty sent art collectors to my studio and Alex helped me when I was first learning to write my blog.

And Ed Victor. Ed is like my guardian angel. How many agents call you every day to see how you're doing? When I think of Madoff's other victims, poor old women who never worked, I'm so completely lucky.

The Bag Lady Papers is being released by Hyperion books and will be in stores on Feb. 16.
Tagged: Bernie Madoff, interview, personal finance, Ponzi scheme


http://www.dailyfinance.com/story/media/madoff-victim-writes-about-rebuilding-life-finances/19354140

Praeger issues cease-and-desist orders for 4 Insurance companies

BY KAREN SHIDELER

The Wichita Eagle
Kansas Insurance Commissioner Sandy Praeger has ordered four insurance companies to stop selling misleading insurance products in Kansas.

The four companies are Real Benefits Association, Serve America Assurance, American Trade Association and Smart Data Solutions. All are headquartered in other states. Praeger also issued cease-and-desist orders for Bart Posey, Richard H. Backman, John Miller and Dave Clark. They are officers with one or more of the companies.

Serve America Assurance, American Trade Association and Smart Data Solutions have been the subject of consumer protection orders, warnings and fines in other states, including Oklahoma, North Carolina, Indiana, Connecticut, Arkansas and Michigan, Praeger's office said.




http://www.kansas.com/topstories/story/1183476.html

A closer look at dark pool regulation

Frum FierceFinance;

Last November, the SEC proposed a set of regulatory changes regarding trading in "dark pools," with an emphasis on the use of IOIs (indications of interest) as a means of passing information to privileged traders. The SEC sees the practice as an impediment to market transparency. Others have claimed it perpetuates a "two-tier system," whereby only certain traders have access to complete share information. While it is impossible to predict the wider effects of new regulation with certainty, there are several possible outcomes.

A return to "upstairs markets"

Back before the advent of dark pools, institutional traders carried out large trades through dealings in "upstairs markets," trading floors which run parallel to major exchanges. These offered large investors the same advantages offered by dark pools: The opportunity to locate counterparties and negotiate trade terms, while significantly reducing the market impact that could follow trading through a public exchange.

These upstairs markets still exist, however, and still provide a valuable service for large investors. Large investment banks offer general traders access to their research analysts and elaborate predictions about market activity. Investors pay a hefty commission for this information, and the upstairs markets have remained useful for this reason. But dark pools still offer a venue through which trades may be executed more cheaply and more quickly.

IOIs, in this case, have provided a service similar to what the upstairs markets provided, by allowing investors to locate counterparties and make large over-the-counter trades without exposing their actions to the public. The SEC proposals have targeted IOIs in an attempt to force traders to translate their IOIs into the quote system, thereby making the information available to the public. The problem is that this might only force traders to find new routes for transfer of this information, one of which may be a return to upstairs markets for trading. According to Traders, attempts to regulate privileged access to such flows of information are futile because such information is, in fact, far too valuable: "Until a rule change comes along that confronts this reality, regulations intended to eliminate the upstairs market will be exercises in regulatory vanity.



Click on title above for full story;

http://www.fiercefinance.com/story/closer-look-dark-pool-regulation-continued/2010-02-16

Wednesday, February 10, 2010

Wild West Founder Found Guilty

Click on title for full story;

http://www.kansas.com/news/breaking/story/1175200.html

Gambling a Good Investment: Sands to Open Another Casino Abroad

In addition to its casino in Macau,"The New Las Vegas of the East,"

the Sands is building a new gambling establishment in Singapore: The Marina Bay Sands;



Las Vegas and all of Nevada may be hurting but the Casino Biz apparently is not. People turn to gambling in desperate times, espically those that can least afford it.

by Tony Sagami

I was raised on a vegetable farm in western Washington, so I've always felt more at home in the country than in big, crowded cities. That's why I choose to raise my children in Montana.

When it comes to crowds, it doesn't get more crowded than places like Jakarta, Tokyo, Beijing, Shanghai, Taipei, and Hong Kong, so I seldom turn down a chance to spend some time in an Asian version of Petticoat Junction.

I found that piece of rural heaven in the Thai countryside last weekend at the home of one of my best Thai friends.

It has been a long time since I woke up to the crowing of a sunrise-welcoming rooster instead of a buzzing alarm clock, and even longer since I've been somewhere where the cows, pigs and chickens outnumbered humans.

The water we drank came from rain water captured in a homemade cistern, and three generations of the same happy family shared a one-bedroom, one-bath, 600-square-foot house.

I loved every minute of it, and can't wait to go back. I even learned a very valuable investing lesson while I was there.


My recent stay in the Thai countryside taught me a valuable investing lesson — Asians love to gamble.

Early Sunday morning, a middle-aged Thai woman on a bicycle stopped at the home where I was staying and was greeted like a long, lost friend by my hosts. I assumed she was a neighbor and a good friend.

Well, she was probably both of those things, but she was also a numbers runner. She was there to pick up the lottery numbers from my host family. We're not talking about the multi-million lotto that you see in the United States, but just a small-time lottery for the locals.

How small-time? My host had recently won the local lotto and pocketed what she considered to be a huge windfall ... roughly 30 U.S. dollars.

Whether you're talking about a $30 lotto in the Thai countryside or a bunch of millionaires betting $100,000 on the turn of a card at the luxurious Venetian Macau, Asians love to gamble. Japanese, Chinese, Thai, Vietnamese, Koreans ... they all love to gamble.

Macau, the Las Vegas of Asia

Let me give you an example. I was traveling around Asia with my 25-year-old son Ryan and we went to the Hong Kong Port to catch a high speed ferry to Macau. We were stopped in our tracks by the huge line! Even though they had high-speed ferries leaving every 15 minutes, we ended up waiting for two hours!

The 50-minute boat ride was spectacular ... dozens of sampans filled with Chinese fisherman in traditional coolie hats ... freighters with cargo containers stacked to the sky ... a dense urban jungle of huge condominium towers, many still under construction, hugging the Hong Kong shoreline.

Upon arriving in Macau, we were greeted by yet another ugly picture — more lines! Twisting snakes of people were waiting to clear customs. Heck, I've seen shorter queues at Disney World's most popular rides. Fortunately, they had a separate line for non-Chinese visitors, so Ryan and I were able to avoid much of the madness.

As I quickly found out, these gigantic crowds were the first sign of one of the best investment stories I've ever seen. More on that in a moment.

First, let's look at why all these people are heading to Macau ...

Because it juts into the South China Sea, Macau has a rich history as an Asian trading hub. The Portuguese first arrived there in 1554, and over time they established it as the dominant port of trade between China and Europe. For roughly the next 400 years, Macau was one of the wealthiest and most important cities in Asia.

That changed in 1841 when the British settled in Hong Kong, which had the advantage of deeper-water harbors. Soon, Hong Kong became the major commercial center, and Macau's prosperity slid.

Tourists are flocking to Macau, the Las Vegas of Asia, to gamble.

Then, on Dec. 20, 1999, Portugal transferred Macau to China. The Chinese now let the island operate as a special administrative region, giving it rules and quasi-independence. That's helping to restore Macau to its glorious past in a new millennium.

Macau has a unique mixture of Chinese and Portuguese cultures. To this day, it looks more European than Asian. And its popularity with tourists is exploding — an estimated 18 million visited Macau last year. The majority (55%) came from mainland China, but many more visited from Hong Kong (30%) and Taiwan (9%).

These tourists are flocking to Macau not because of its history or picturesque seaside location. They're coming to GAMBLE.

Macau has become the Las Vegas of China. It is the only city in the region with fully legalized gambling. And gambling is deeply engrained in Asian culture.

How to Play the Macau Card

Plus, Macau is within a five-hour flight of 3 billion people — nearly half the world's population. To put this into perspective, Las Vegas is the same distance from only 450 million people!

Inside Macau's Sands casino, it felt like all 3 billion of those people had picked the same day to visit. The casino ballroom was so crowded, it took me 10 minutes to travel 50 feet from the top of the escalator to the bathroom. The last time I was in a mob that thick was at a Paul McCartney and Wings concert in 1976!

You'd never find those types of crowds in Las Vegas, but I suspect I'll soon be able to find the same mega-crowds in Singapore. That's because the first of two casinos, the Resorts World Sentosa casino, is set to open this month.

This four-hotel, 10-restaurant casino complex will open a Universal Studios in a matter of months, and is expected to pull in more than $2.5 billion of revenues this year.

Boy, wouldn't you like to have a piece of that business? Well you can! This new Singapore casino is owned by Genting Malaysia (4715.KL), which is traded on the Kuala Lumpur stock exchange.

There's more! Las Vegas Sands (NYSE:LVS) will open its Marina Bay Sands casino in May. Like the Las Vegas and Macau Venetian, the Singapore casino is a masterpiece of architecture and over-the-top opulence.

While my simple country friends from rural Thailand can't afford a trip to Singapore or Macau to gamble, there are millions of affluent Asians who can. And they'll be wagering a lot more than the few pennies on a small, country lottery.

They will show up in droves though and that, my friends, will translate into some very hefty earnings for Asian casinos.

Best wishes,

Tony
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For more information and archived issues, click on title above to visit http://www.uncommonwisdomdaily.com

Tuesday, February 9, 2010

Meetings held with banks in Dubai, London and US: Fresh financial advisers to re-assess value of national assets

By Ijaz Kakakhel

ISLAMABAD: To get maximum benefits from the sale of public sector entities, the government on Monday announced that it would re-assess the value of national assets on privatization list through fresh appointment of financial advisers.

In this regard, the government had held useful meetings in Dubai, London and the US with reputed investment banks for appointment of financial advisers, Minister for Privatization Senator Waqar Ahmed Khan told journalists on Monday.

At present, some 23 out of 80 public sector enterprises, were on the privatization list of the country and efforts were being made to include few more Public Sector Enterprises (PSEs) on the list.

The value of these PSEs on the privatization list was assessed at over $100 billion. After appointment of financial advisers, the valuation process would be completed in 90 days and results would be shared with the investors as well as other stakeholders.

Quoting the example of Pakistan Petroleum Limited (PPL) and Oil and gas Development Company Limited (OGDCL), the minister said according to the cash flows of both companies, the value stood at $2.5 billion, however, when market cap was kept in view, the value of these companies went up to $8 billion. “If, we take, 10 percent market cap while determining the value of such companies, these companies can fetch $25 billion,” he said.

The minister said this time the government had changed the procedure for the appointment of financial advisers. The government would bid for it as against the previous practice of direct appointment. The financial advisers would be paid for their consultancy charges after completion of the transaction, as against the past practice of payment in advance.

Strategic investors had strong interest in Pakistan’s privatization programme and there were huge surplus funds available with the investors to invest in Pakistan, the minister maintained.

He said Privatization Commission Board was being revamped and under the new transparency policy all four provinces would be given representation in the board and renowned jurists, journalists, bankers, academics and women would be included in the Board for transparent decision making.

To avoid any government influence on decision making at PC Board, he said he had surrendered his right of vote and decisions would be taken by the board independently.

He defended the present policy of privatization of 26 percent shares along with management control to the investors and said that at a time when global economic slowdown was having impact on all economies, it would be difficult to attract investors for 51 percent share.

He mentioned that policy of privatization of 26 percent shares along with management control would help realize more price of public assets as the private management would restructure and improve the efficiency of the public sector enterprises and it would increase the value of the government’s shareholding in such PSEs. The government, through value addition, would enhance efficiency and competitiveness of state-owned entities to maximize earning through privatization,

“We want to realize maximum potentials of the state-owned enterprises (SOE) by enhancing their cash value through value addition, besides enhancing their efficiency and competitiveness in the process of privatization for the benefit of the country,” he said.

Senator Waqar, while highlighting his recent meetings with international investors on the sidelines of Friends of Democratic Pakistan (FODP) in Dubai, said that major international financial institutions and investors had expressed their satisfaction on the prudent economic policies of the government and shown their keen interest to participate in the privatization programme of the government.

Pakistan, he said was a land of opportunities for investors adding Pakistan wanted to realize the maximum potentials of its resources and enhance production for the benefit of the people in the country.

Answering a question, he said the government and Etisalat wanted to resolve the outstanding dispute amicably and hoped that the issue would be resolved next month and $800 million to be released to Pakistan soon.

The minister said that besides strengthening and enhancing the SOEs, the president and prime minister wanted to empower employees of the institutions. He specially mentioned the launching of Benazir Employees Stock Option Scheme (BESOS) to achieve this objective.

Senator Waqar said the BESOS was the hallmark of the present government’s pro-workers policies, which would ensure improvement in efficiency, quality and production.

He said it would make workers responsible in further improving the overall performance of the entity and their representation on the Board of Directors would directly involve them in the decision making process for the progress of the entity. The scheme was historic and would usher a new era of workers’ revolution who were being given free of cost 12 per cent of the GoP shares in the SOEs and the entities already privatized. The scheme was not limited only to the non-privatized entities as it also includes all the privatized entities having GoP shares. The scheme was expected to benefit around 500,000 employees of 80 entities.


http://www.dailytimes.com.pk/default.asp?page=2010\02\09\story_9-2-2010_pg5

Monday, February 8, 2010

Paradigm Shift: Challenging Corporate Authority

Dozens of New Strategies are Sprouting Up

Across the US and Canada -

Some of Them Dating Back to Previous Centuries -

That Challenge Illegitimate Corporate Authority and Privilege


by Paul Cienfuegos



For most of the 20th century, American citizens have become accustomed to challenging corporate harms and corporate abuses of authority one harm at a time - one clearcut Timber Harvest Plan at a time, one toxic spill at a time, one plant closure at a time. It wasn't always like this. From the American Revolution through to the end of the 19th century, in the words of Richard Grossman, "Earlier generations of Americans were quite clear that a corporation was an artificial, subordinate entity with no inherent rights of its own, and that incorporation was a privilege bestowed by the sovereign people. For example, in 1834 the Pennsylvania Legislature declared:

‘A corporation in law is just what the incorporation act makes it. It is the creature of the law and may be molded to any shape or for any purpose that the Legislature may deem most conducive to the common good.’"

Grossman continues, "People understood that they had a civic responsibility not to create artificial entities which could harm the body politic, interfere with the mechanisms of self-governance, and assault their sovereignty. They also understood that they did not elect their agents to positions in government to sell off the sovereignty of the people."

Here are a few examples of how different the rules were in the US until the late 1800's. In many states, corporations were prohibited from owning other corporations, prohibited from donating to political candidates or charitable organizations, and prohibited from owning any land beyond what was necessary for the carrying out of their chartered duties. Boards of directors and stockholders were held personally liable for all harms and debts. The ‘limited liability corporation’, as we know it today, did not exist.

Sadly, as we enter the 21st century, few Americans have any idea that such a history even existed in this country. Yet this is starting to change. Beginning in the early 1990's — thanks to the seminal work of Richard Grossman and his colleagues at the Program on Corporations, Law and Democracy (POCLAD) - Americans started to rethink how we go about challenging the harms that corporations get away with day in and day out in every city and town in America. We began to rediscover what an appropriate relationship looks like in a democracy between we the people and the fictitious subordinate creation we call the ‘corporation’. And we began to learn how to reframe our analysis of what the problem is.

Yes, of course, clearcut logging and sweatshop labor and genetically engineered "food" are a big problem. But the much bigger problem is that we’ve allowed fictitious corporate "persons" to usurp our authority as citizens to make these and other critical societal decisions which affect all of us and the natural world.

If we no longer pleaded with corporate leaders to cause a little less harm, what would we do? If we no longer celebrated as victories every brief delay in the corporate devastation of our world, what would we celebrate?

By the mid-1990’s, new groups were sprouting up across the US and Canada, and asking themselves these questions. Each was beginning to experiment with a different set of tools than anyone had used for a century. Groups like ‘Democracy Unlimited’ in California, ‘Reclaim Democracy!’ in Colorado, ‘180/ Movement for Democracy and Education’ in Wisconsin, ‘Friends of the Constitution’ in Nebraska, and ‘Citizens Council on Corporate Issues’ in British Columbia, are all examples of this fledgling new movement.

Clearly, to ask people of every ideology to rethink how they respond to corporate harm is a very big task, so a number of groups are beginning with public education strategies. For example, in my community, 600 local residents came together for nine hours of Town Hall meetings last year to discuss the question, "Can we have democracy when large corporations wield so much power and wealth under law?" (Videotapes are available.)

I am going to share with you dozens of stories of American and Canadian citizens educating and organizing themselves and others — no longer simply challenging individual corporate harms, but going after corporate privilege and illegitimate corporate authority. There is tremendous diversity in our goals and strategies — just what one would expect in a fledgling new social movement.

Yes, it's still a small number of groups, but the number is beginning to grow rapidly, and there's no question in my mind that this growth represents a profound shift beginning to take place in the consciousness of citizens.

Our world is in terrible crisis. We need to focus on what strategies have the best chance of success, rather than those which simply postpone the destruction. Consider these dozens of projects as a guide for you and your community. Contact the organizers. Learn from their mistakes. Replicate the projects that seem to work. There is no time to lose.


(I have organized the list into thirteen categories for easier perusal.)

------------------------------------------------------------------------------------------------------------

1. Bold Responses to Corporations Which Chronically Break the Law

• The ‘Wayne Township Ordinance’ (Mifflin County, PA) was enacted into law in 1998 by a 3-0 vote, and has since also passed in Thompson Township. It prohibits any corporation from doing business in the township (even those that are already located there) if it has a history of consistently violating any regulatory laws (environmental, labor, etc), and further prohibits any corporation from doing business there if any of its current directors sit on other corporate boards which consistently violate regulatory law.

Contact: Community Environmental Legal Defense Fund (CELDF), 717-530-0931 or www.celdf.org

• Residents of Shasta County, CA are circulating a ‘10 Strikes and You're Out’ ballot initiative in the town of Shasta Lake City near Redding in order to try to stop a large German corporation (Knauf) from building a fiberglas manufacturing plant there (and other toxic industry which may follow).

Contact: Protectors of Community Health, POB 1053, Shasta Lake City, CA 96019, or phone Heidi Silva at 530-472-1355

• The Clinton administration is proposing an Anti-Scofflaw regulation which would prevent the federal government from entering into contracts with companies that chronically violate regulatory law.

Contact: Robert Weissman at rob@essential.org

• A Boulder, CO organization - Reclaim Democracy! — introduced for discussion (in 1998) a statewide ‘Three Strikes and You're Dissolved’ ballot initiative.

Contact: 303-402-0105 or www.reclaimdemocracy.org



2. Challenging Public/ Corporate Partnerships

• The Berkeley and San Francisco School Districts are effectively challenging corporate advertising in school buildings and working to get tobacco corporation food out of school cafeterias.

Contact: ‘Center for Commercial-Free Public Education’ (‘UNPLUG’) at 800-867-5841 or unplug@igc.org or www.commercialfree.org



3. Local Communities, Locally Owned Businesses and Entire States Organizing to Defend Themselves Against Corporate Power

• In November ‘98, hundreds of campus organizers from across North America met at the Campus Democracy Convention and formed the ‘180/ Movement for Democracy and Education’, a chapter-based organization that stands in opposition to the corporatization of education as well as other forms of institutionalized hierarchy and oppression, and calls for a 180 degree turn towards democracy. Since then, ‘Democracy Teach-Ins’ have been organized on hundreds of college campuses, many of them with their own active chapters. They strive to unite students, campus workers, and the working public in asserting democratic authority over our schools. Ongoing projects include: challenging the authority of corporate-controlled boards of regents, mobilizing opposition to the WTO, forcing administrators to stop purchasing from sweatshops, and exposing corporate-controlled research programs.

Contact: 608-262-9036 or clearinghouse@tao.ca or http://corporations.org/democracy

• The Boulder Independent Business Alliance (BIBA) unites independent businesses to compete effectively against corporate chain stores. Recent work includes the ‘Community Vitality Act’ currently under consideration by the Boulder City Council. This legislation helps demolish the myth of the "business interest" by supporting alliances among small businesses that are victims of the chain stores. BIBA is also facilitating the creation of IBA's in other cities (two to date).

Contact: 303-402-1575 or info@boulder-iba.org or www.boulder-iba.org

• A new ballot initiative campaign in Oregon was launched in winter/spring 2000 - the ‘Oregon Human Rights Initiative’ - which attempts to statutorily codify the UN's Universal Declaration of Human Rights (signed into law 51 years ago by virtually every nation in the world), making adherence to these principles a requirement to do civic or commercial business in Oregon. Non-compliance can result in charter revocation.

Contact: chief co-petitioner Paul Van DeVelder, 541-752-8450 or oneworld@peak.org or

www.oregonrights.com

• A number of years ago, the town of Jay, Maine passed an ordinance which gave the town the power to license, monitor and enforce the same environmental regulations that the state Dept of Environmental Protection, and the federal E.P.A. do. In the town is a pulp&paper mill owned by International Paper company.

Contact: Peter Kellman, 207-676-3356 or pkellman@cybertours.com

• The San Francisco County Board of Supervisors has passed a law requiring all corporations doing business in the county to offer full benefits for same-sex partners. It has already withstood a court challenge.

Contact: City of SF at 415-554-6141. Read the full text at www.cisf.ca.us/infoleg.html

• The Institute for Local Self Reliance (ILSR) in Minnesota launched the ‘New Rules Project’, which helps local communities to organize against the ravages of absentee corporate decision making by "identifying the rules that could close the gap between those who make the decisions and those who feel the impacts — new rules that could bring both authority and responsibility to the local level."

Contact: 612-379-3815 or www.newrules.org



4. Prohibiting (or Defining) Corporate Involvement in Particular Industries

• New farming laws in Nebraska (‘Initiative 300’ - 1982), South Dakota (‘Amendment E’ - 1998), and Pennsylvania (1999) ban non-family-owned corporations from engaging in farming or ranching, or owning farmland. Nebraska and South Dakota achieved their success through ballot initiatives which amended their state constitutions. ‘Friends of the Constitution’ is a Nebraska coalition of 18 farm, church, and environmental groups which joined together to defend and enforce ‘Initiative 300’. A similar measure was achieved by two Pennsylvania townships (Wells and Thompson) through ordinances passed by their respective township governments. There are also a number of PA townships discussing similar legislation which would ban corporate logging or forest land ownership.

Contacts: South Dakota - Dakota Rural Action, 605-697-5204 or drural@brookings.net or www.worc.org/member.html#dra

Nebraska - Nancy Thompson at FoC, 402-494-9117 or nanthomp@pionet.net or www.i300.org

Pennsylvania — Tom Linzey at Community Environmental Legal Defense Fund (CELDF), 717-530-0931 or www.celdf.org

• In Sonoma County, CA, the Occidental Arts and Ecology Center's 'Food Systems, Corporations and Democracy Program' has two local projects aimed at shifting local decision making from the realm of private, property-based, corporate, "market" decisions to the realm of public, democratic decisions focused on the "commonwealth":

1) ‘Sonoma County Green Genes’ is organizing to pass resolutions at city councils and school boards calling for a moratorium on the release of all genetically engineered crops and foods, and for full corporate liability for harms resulting from any releases of GMO’s. (The city of Sebastopol has already passed the resolution); and

2) The ‘Occidental Town Hall Coalition’ has organized a dozen town hall meetings around the county - each attended by 250 to 500 people - to discuss the problem of and strategize solutions to the expansion of corporate-owned industrial vineyards, and the resulting loss of diverse small and family farms and local agrarian culture. They are writing ordinances that redefine "farming" and county land use policies away from corporate interests, and toward the interest of the people and wild nature.

Contact: Dave Henson, 707-874-1557 ext 4 or dhenson@oaec.org



5. Suing Governments for Violating the Federal Constitution

• A British Columbia-based organization - Defence of Canadian Liberty Committee — is suing the Canadian government alleging that Canada's participation in the MAI/WTO process of global corporatization is unconstitutional.

Contact: Connie Fogal, 604-687-0588 or cfogal@netcom.ca or www.canadianliberty.bc.ca



6. From Corporate Ownership To Public Ownership

• Campaigns are heating up (or are already successful) at the municipal level to return utilities to public ownership and management from the corporate giants that currently control them. Two examples follow:

1) The city of Ashland, OR is installing a fiber optic network to provide citizens with low-cost cable TV and high-speed data access. This public utility is providing service below the cost charged by large corporations.

Contact: Wes Brain at 541.482.6988 or brain@mind.net or www.ashlandfiber.net or www.ashland.or.us/committees/committees.asp.net

2) After four years of research and debate, a diverse coalition of people in Davis, CA has gathered enough signatures to place an initiative on the local ballot to create a Davis Municipal Utility District (DMUD). DMUD would be a community-owned energy co-op. The steering committee has formed a cooperative organization to pursue the effort, with a working title of ‘Sustainable Utility Network Cooperative (SUN Co-op). The initiative vote would not commit DMUD to purchase the system but does create a legal entity to study the system and then conduct negotiations with PG&E Corporation. DMUD could operate like the nearly 900 electric co-ops and hundreds of citizen-owned utilities in the US, and further demonstrate the viability of ecological and democratic business practices.

Contact: info@dmud.org or milbrodt@2xtreme.net or www.dmud.org



7. Revoking Corporate Charters

• The New York Attorney General’s office has shown surprising leadership recently in challenging corporate charters. The previous Republican AG (Dennis Vacco) successfully revoked the charters of two non-profit tax-exempt front groups for the tobacco corporations (Tobacco Institute and Council for Tobacco Research), and seized and distributed their assets to two public institutions. The current Democratic AG (Eliot Spitzer) proposed - in a pre-election speech - a "death penalty" for corporations that cause serious harm, though he has failed to take any action since his election.

Contact: Attorney General's office in Albany, www.oag.state.ny.us

• On 10 September ’98, the National Lawyers Guild (joined by 30 other groups and individuals) filed a 129-page legal petition to California’s previous Republican Attorney General Dan Lungren requesting that he revoke the charter of Union Oil Company of California (UNOCAL corporation) for its decades of lawbreaking and global harms. He responded with a terse non-explanation. On 19 April ’99, now joined by 150 additional endorsing organizations and individuals, the petition was resubmitted to the newly elected Democratic Attorney General Bill Lockyer, who also promptly responded with a brief non-response. (A book including the petition, information about how to file such a document, and details about the endorsing organizations can be purchased for $12 from the Alliance for Democracy, 681 Main St, Suite 16, Waltham, MA 02451.)

Contact: Robert Benson, 213-736-1094 or heed@igc.org or www.heed.net

• In June 1998, a retired Alabama judge acting as a private citizen filed for the charter revocation of five tobacco corporations that, he asserted, have broken state laws (some dating back to 1901) and therefore should be shut down (Philip Morris, Brown & Williamson, R.J. Reynolds, The Liggett Group, and Lorillard Corporations). The list of violated laws includes: contributing to the dependency of a minor, unlawful distribution of material harmful to a minor, endangering the welfare of a child, assault in the third degree, recklessly endangering another, deceptive business practice, and causing the delinquency of a child. The case was ultimately transferred from state to federal court and then back again, where it was dismissed with no opinion given to explain a reason. Both the governor and attorney general have close links to the tobacco industry. (Federal Citation of the case: 51 F.Supp.2d 1232)

Contact: William Wynn, 205-978-5546 or sabrinawyn@aol.com

• In March 2000, Ohio State Representative Barbara Pringle (with the help of American Friends Service Committee) wrote to the Ohio Attorney General asking that the AG initiate corporate charter revocation proceedings against the Cleveland Clinic (a non-profit corporation). The Clinic sought to purchase two Cleveland area hospitals to shut them down, thereby reducing the availability of healthcare to many Clevelanders, and continuing the trend towards consolidation. This exercise of citizen authority over corporations contributed to the Clinic's decision to instead sell the hospitals to another healthcare corporation rather than closing them.

Contact: Barbara Pringle at 614-466-5921 or www.house.state.oh.us/reps/bios/bio.cfm?DISTRICT=13



8. Rewriting State Corporate Codes

• In 1999, a small group of citizen activists wrote a model ‘Corporation Code’ for the state of New Jersey that reins in illegitimate corporate privileges. Their choice of states was not a coincidence, as New Jersey was known as the "traitor state" at the turn of the century for overturning more than a century of legal tradition regarding the defining of and citizen control over corporations by state legislatures. The draft document may be useful to anyone wishing to organize to amend their state’s corporate codes.

Contact: Ward Morehouse, 212-972-9877 or cipany@igc.org



9. Amending State Constitutions

• Montana’s Supreme Court - in a landmark ruling on 20 Oct 1999 - found the State (without showing a compelling state interest) cannot allow activities to continue that have the potential to poison the environment. The ruling came in an appeal by two environmental groups challenging an exemption allowing mining activities to degrade rivers. This was the first time that the court had tested a Montanan's constitutional "right to a clean and healthful environment" (Article II, Section 3 passed at their 1972 Constitutional Convention). The court stated, "Our constitution does not require that dead fish float on the surface of our state’s rivers and streams before its farsighted environmental protections can be invoked."

Contact: Tom France at National Wildlife Federation Resource Center in Missoula, 406-721-6705 or www.nwf.org

• Long-time Oregon citizen activist Lloyd Marbet announced in May 2000 his intention to organize a state ballot initiative campaign which, if successful in November 2002, would amend the OR Constitution to prohibit anyone other than a "natural person" (no corporate "persons") from donating to any candidate or ballot initiative campaign. He is also running for Oregon Secretary of State in the November 2000 election on a platform which includes defending "the sovereignty of natural persons."

Contact: Lloyd Marbet, 503-637-3549 or marbet@mail.com or www.marbet.org

• Anti-corporate farming laws have passed in South Dakota and Nebraska, created by citizens who won ballot initiatives to amend their state constitutions. (See section #4 for details and contact info.)



10. Challenging Corporate Personhood

• In a small community on California’s north coast, a ‘Resolution on Corporate Personhood in the City of Point Arena’ was passed by the City Council in a 4-1 vote on 25 April 2000. The resolution, among its many points, disavows the personhood status of corporations, encourages public discussion on the role of corporations in public life, and urges other cities to foster similar public discussion.

Contact: Jan Edwards at Redwood Coast Alliance for Democracy, 707-882-1818 or janedwards@mcn.org or www.iiipublishing.com/alliance.htm



11. Strengthening American Democratic Processes by First Educating Citizens About Our History, and Thus Beginning to Reclaim Our Culture and Our Language

• "Citizens Over Corporations," a unique 52-page pamphlet on the history of corporate power and democratic movements in Ohio, was published in 1999 by the ‘Ohio Committee on Corporations, Law and Democracy’, a project of the Northeast Ohio American Friends Service Committee. (Send $3.50 to obtain a copy - checks to AFSC, 513 W. Exchange St, Akron, OH 44302.) Pamphlets such as this need to be researched and written for every state in the Union as a necessary first step in designing campaigns to reclaim our authority over our corporate creations. Other as yet unpublished state histories include Maine and Massachusetts.

Contact: Greg Coleridge, 330-253-7151 or afscole@aol.com

• ‘Measure F: The Arcata Advisory Initiative on Democracy and Corporations’ won by 58% of the vote in November ’98 in Arcata, CA. It called for:

1) two Town Hall meetings (April and May '99) on the topic: "Can we have democracy when large corporations wield so much power and wealth under law?" - attended by about 600 residents - almost 5% of local voters; and

2) the creation of a standing committee of city council on 'Democracy and Corporations' (forming Spring 2000 after much hemming and hawing by the council) to begin to rein in the authority and privileges of large corporations doing business in Arcata.

Contact: Democracy Unlimited, 707-822-2242 or cienfuegos@igc.org or www.monitor.net/democracyunlimited

• As part of the Women's International League for Peace and Freedom's ‘Challenge Corporate Power, Assert the People's Rights’ national campaign, six-session study groups are being formed around the country to "explore the history and roots of corporate power, examine global corporatization, decolonize our minds, and participate in democratic conversation." Copies of study materials are available.

Contact: Charmaine Sprengelmeyer, 215-563-5527 or wilpf@wilpf.org or www.wilpf.org

• At its third annual national convention in May ‘99, the Alliance for Democracy (AfD) - with more than 60 chapters in 21 states - adopted three national action campaigns. One of them is titled, "Transforming the nature of large corporations to subordinate them to democracy". The AfD has also recently launched dozens of local ‘Democracy Brigades’ to add a nonviolent direct action campaign component to its work.

Contact: 781-894-1179 or peoplesall@aol.com or www.afd-online.org

• In December ’99, a new US/Canada-wide Democracy Network was formed - partially inspired by the provocative analysis of Richard Grossman and his colleagues at the Program on Corporations, Law and Democracy. It has established seven working groups that include 'Movement Building', 'Research', and 'Language' (a dictionary project entitled "Defining Democracy").

Contact: No official central contact, each group has a contact person, so feel free to ask me, Paul Cienfuegos, and I’ll connect you up - 707-825-0740 or cienfuegos@igc.org



12. Existing Organizations Reframing or Expanding Their Work in Order to More Effectively Challenge Corporate Authority

• The General Assembly of the Unitarian Universalists has founded a new organization in the US and Canada titled 'UU’s for a Just Economic Community' that has a mandate to pursue eleven economic justice campaigns, including: to work on the "Periodic review, renewal, or, if necessary, revocation of corporate charters, depending on assessment of performance consistent with the public interest".

Contact: Neil MacLean, 415-641-6299 or neil@warmcove.com

• In November ’98, at the Labor Party’s first Constitutional Convention, a resolution was passed unanimously — entitled ‘A Workplace Bill of Rights’ - which reframes the rights of workers to include worker (i.e. citizen) authority over their subordinate corporate institutions.

Contact: Ed Bruno, 617-531-0901 or laborpne@aol.com

• United for a Fair Economy, a national organization based in Boston, has added to their existing workshops and resources - on America's income and wealth gap and the global economy - with a new training model for "Ending Corporate Rule".

Contact: 617-423-2148 or info@ufenet.org or www.ufenet.org

• A new U.S. campaign was launched in June '99 by the Women's International League for Peace and Freedom (WILPF - one of the world's oldest peace organizations) titled ‘Challenge Corporate Power, Assert the People's Rights’. Phase I is study groups (see section #11 for details and contact info); Phase II is designing local campaigns.

• The Northeast Ohio American Friends Service Committee (AFSC, the Quakers) is challenging state for-profit and not-for-profit corporate codes, looking at charter revocation, and unmasking federal and state regulatory agencies.

Contact: Greg Coleridge, 330-253-7151 or afscole@aol.com

• In 1999, the National Lawyers Guild launched a new campaign to challenge corporate authority coordinated by its new ‘Committee on Corporations, the Constitution and Human Rights’.

Contact: Eric Palmer at 212-627-2656 ext 12 or radicalawyer@igc.org or www.nlg.org/committees/corporations.htm



13. Relatively new organizations which have as their primary mission to challenge corporate authority and corporate privilege, and reclaim democracy from corporate "persons", rather than focussing on particular corporate harms or industries...

•Program on Corporations, Law and Democracy (POCLAD)

South Yarmouth, MA

Contact: Mary Zepernick

508-398-1145 or people@poclad.org or www.poclad.org

•Alliance for Democracy (AfD) — see also section #11

Waltham, MA

781-894-1179 or peoplesall@aol.com or www.afd-online.org

•180/ Movement for Democracy and Education (180/MDE) — see also section #3

Madison, WI

608-262-9036 or clearinghouse@tao.ca or http://corporations.org/democracy

•Democracy Unlimited of Humboldt County (DUHC) — see also section #11

Arcata, CA

Contact: Paul Cienfuegos

707-822-2242 or cienfuegos@igc.org or www.monitor.net/democracyunlimited

•Reclaim Democracy! — see also section #1

Boulder, CO

303-402-0105 or info@reclaimdemocracy.org or www.reclaimdemocracy.org

•Citizens Council on Corporate Issues (CCCI)

Vancouver, BC, Canada

Contact: Gil Yaron

604-734-1815 or ccci@corporateissues.org or www.corporateissues.org

•Polaris Institute

Ottawa, Ontario, Canada

Contact: Tony Clarke

613-746-8374 or tclarke@web.net or www.polarisinstitute.org

•Defining Democracy Workgroup (of the Jeannette Rankin Peace Center)

Missoula, MT

Contact: Dean Ritz

406-543-3955 or democracy@jrpc.org or www.jrpc.org

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Copyright Paul Cienfuegos 2000

Paul Cienfuegos is the co-founding director of Democracy Unlimited of Humboldt County based in Arcata, CA, and the co-author of ‘Measure F: the Arcata Advisory Initiative on Democracy and Corporations’. For information about the work of his organization or the workshops he leads (‘First Steps in Dismantling Corporate Rule’), or to comment on this article, contact him at 707-825-0740 or cienfuegos@igc.org . Paul also runs a social change bookstore with over 200 titles on democracy and corporations (100fires.com). Paul wishes to sincerely thank Dean Ritz, Molly Morgan, and Patrick Reinsborough for the substantial research assistance they provided for this article.





http://www.envirolink.org/external.html?www=http://www.rachel.org/bulletin/bulletin.cfm?Issue_ID=1282

Itty Bitty Blurb about a Really Big Crime;

Mn. businessmen Tom Petters

http://www.startribune.com/83813957.html?elr=KArksUUUU

Saturday, February 6, 2010

G7 to Convine at Artic Circle




Pack your parkas, finance ministers
G7 convening in a town fewer than 200 miles away from the Arctic Circle

By Liana B. Baker, MarketWatch

SAN FRANCISCO (MarketWatch) -- Finance ministers will trek to Iqaluit this weekend, meeting on the southern tip of Baffin Island where facemasks, snowmobiles and seal meat are hot and the temperatures less so.

In February, the average temperature in Canada's most northern capital dips to minus 18 degrees Fahrenheit. That's a lot chillier than the past February's Group of Seven meeting in Rome.

As the host of the February meeting, Canada had its pick of the location. Officials chose the venue to showcase its Canadian Arctic and to bring the G7 back to the group's roots, where ministers could talk less formally in fireside chats.

The queen of England has been to Iqaluit three times and other dignitaries have visited, but the ministers' arrival will mark the biggest international conference in, and spotlight on the town of fewer than 7,000 people. See story about G7 meeting in Iqaluit.


Iqaluit Fire Department

G7 finance ministers will gather this weekend in icy Iqaluit, Canada's gateway to the Eastern Arctic.

Challenges
Jim Bell, the editor of the Iqaluit's weekly newspaper, Nunatsiaq News, said he was surprised when his home of 30 years was chosen, because of the logistical problems it poses.

"It's not a kind of place that has the resources to completely support a gathering like this," Bell says. "Even in the best of times the telecommunications services can be dicey."

NorthwesTel, the major telecommunications company in the area, warned residents to expect dropped calls and spotty Internet connections.

Thanks to its one-runway airport, Iqaluit is considered the major gateway to the Eastern Arctic. The city is a three-hour plane ride away from Montreal and Ottawa, the nearest large cities.

"It's as far away as you can go in three hours from a cultural perspective," says David Scott, the director of the Northern Canada division of the Geological Survey of Canada. "It's exotic, and the landscape is unlike anything else in the south."

Ministers and their entourages could also be stranded if the weather doesn't cooperate, and Iqaluit's newspaper editor said it hasn't been great lately.

"The weather has been very unsettled," Bell says. "We had two really bad snowstorms last weekend. If the weather turns bad, the ministers can be stuck here for far longer than expected."

Lisa Gregoire, who worked as a reporter in Iqaluit in the 1990s, said she thinks Iqaluit was chosen to avoid protestors, who won't be able to afford round-trip airfare ranging from $1,500 to $2,300.

She also called the city exceedingly expensive and a curious choice for a summit during frugal times. Prices are high because food and building materials have to shipped or flown into the city. She remembered a club sandwich and fries costing $20.

"Is it economically feasible in this climate of financial restraint?" asks Gregoire, who added that she thought it ironic that finance ministers would meet in such an expensive location.


Click on title above for full story;

http://www.marketwatch.com/story/pack-your-parkas-finance-ministers-2010-02-04?dist=afterbell

Thursday, February 4, 2010

Lifting the Curtain



By David Geracioti

Keith McCullough's book, Diary of a Hedge Fund Manager (Wiley; January 2010), is a short but interesting tale of a hayseed from Western Ontario who skated for the Pemberton Lumber Kings and then finds himself as a 20-year-old freshman at Yale. ("I got in because I could shoot a hockey puck," McCullough told me. "My first paper was deemed ‘ungradable.'")

With finance and economics courses under his belt (including a class taught by Robert Shiller, the respected founder of the Case/Shiller real estate indexes), McCullough lands on Wall Street. He eventually launches and then sells a successful hedge fund to Magnetar Capital. He accepts an offer from the Carlyle Group, the private equity group who were launching a hedge fund ("at the exact top of the market," says McCullough).

But McCullough was fired from Blue Wave, the Carlyle joint venture with two ex-Deutsche executives, because he went short too early in 2007. By November, just as his bets were paying off and the financial crisis began to widen, his bosses at Blue Wave let him go.

As a portfolio manager, McCullough kept a diary of his investment decisions in a "marbleized," school-kid notebook. Now 35, he says he "enjoyed the ride, made eight figures and notched positive returns in 21 of 24 quarters." But, as he notes in his introduction to his book, in the wild, wild world of hedge funds, "unless you run the place, the hedge fund business is about being right each and every quarter. Being right early is called being wrong."

In the days after his firing, and in an effort to shine some light on the secretive world of hedge funds, McCullough began to publish a blog, MCM Macro, "my token attempt to bring some semblance of transparency to the investing world."

He currently runs Research Edge, a nearly 40-person research house meant to bring hedge-fund investing into the open. For $225 per month, you can subscribe to his site, Hedgeye Risk Management (hedgeye.com), and receive real-time, fully transparent investment research (and calls upon which to act) - but without all the Wall Street herd-like "groupthink," as he is fond of saying. Here is one former hedge fund manager's road to transparency.

Excerpt:

The trades [recommended on McCullough's blog], I should point out, were done "on paper," but I conducted my PM [portfolio management] process as I always had, and kept at my blog every day to hold myself and the industry accountable for whatever came next. I wrote from a standpoint of full disclosure, total transparency, accountability, concepts desperately lacking in the fund industry, which may as well have operated out of windowless underground bunkers. No, there was one window in: the client letter.

Nothing quite sums up the arrogance and opaqueness of the hedge fund industry as the monthly or quarterly Dear Client letter, the only public peephole a fund will offer its investors and which at their best are as readable and informative as one of those holiday cards from the self-important family needing to catch you up on various members' trivial goings on. Most hedge funds don't want clients to know much, if anything, about the activities of the fund. Because client letters often find their way into the hands of the media, they are issued reluctantly and crafted lawyerly inside pressurized chambers of compressed air. I'm not sure it's even relevant to refer to hedge funds as having investor relations.

(During a January 2009 panel discussion sponsored by Institutional Investor magazine and attended by a few dozen hedge fund marketing executives, the state of client communication was a source of consternation, according to a panelist, Thomas Walek, a top PR Man for hedge funds. Describing that II event during the course of a subsequent presentation, Walek said: "Overall the audience was frustrated and confused about its inability to communicate with clients … to quote one observer ‘the environment is brutal, just brutal.'")

True enough that a lot of rich guys give money to the best hedge fund managers, and leave them alone, and don't want to know and only think to seek out any transparency when things go bad. By that time, there are lawyers involved, and it's too late. The best money managers hate to be trifled by pedestrian investors asking uninformed questions, especially when they call only when things go wrong, never when the fund is roaring along. But having no clients and only trading on paper, I figured, why not let people know exactly what I am doing?

In addition to establishing some transparency, I'd set the stage [with the daily blog] for at least a debate between the bears and the levered long crowd. I received plenty of feedback, some dismissive, some constructive. Once in a while I'd get a hateful email, usually from a hedge fund guy who was levered long. That just made me chirp all the louder because I knew I was going to be right. Here's another post from Sunday, January 6, 2008:

MCM Macro Weekend Strategy, 1/6/08 … ‘Real Hedge Funds Hedge'
If you really want to annoy the mentally inflexible, levered-long and/or concentrated hedge fund managers in this business, remind them how right you were in making a "macro" market call on the bearish side, and then ask them why they didn't see it coming …

The most recent edition of the Hedge Fund game has become very peculiar that way; it's really the only game i [sic] know where losing is met with relative performance justifications. On Monday, the internal dialogue at most U.S. hedge funds will go something like this: ‘but we're only down a couple percent … ‘hearing another guy is getting wrecked, though' … ‘have you heard anyone else's numbers?' … ‘how's Stevie doing - hearing he's upset' … ‘did you call the CFO yet? what's [sic] going on in this stock' … ‘this stock is just too cheap here' …

Now, imagine if real athletes (the only other professionals I can find with the same performance-based compensation packages) behaved this way. What if Pittsburgh Steeler's quarterback, Ben Roethlisberger, went back to the dressing room after last night's 31-29 playoff loss to Jacksonville last night and whispered to the guy next to him ‘but the Redskins lost to the Seahawks by more' … or, worse, ‘those interceptions i [sic] threw don' t matter; i [sic] have my contract guarantee' …

Excerpted with permission from the publisher, John Wiley & Sons, from Diary of a Hedge Fund Manager, by Keith McCullough. Copyright © 2010 by Keith McCullough.



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