Wednesday, January 27, 2010


AP- WASHINGTON D.C. – In a move certain to fuel the debate over Obama’s qualifications for the presidency,the group “Americans for Freedom of Information”

has Released copies of President Obama’s college transcripts from Occidental College . Released today, the transcript school indicates that Obama, under the name Barry

Soetoro, received financial aid as a foreign student from Indonesia as an undergraduate at the The transcript was released by Occidental College in compliance with a court

order in a suit brought by the group in the Superior Court of California. The transcript shows that Obama (Soetoro) applied for financial aid and was awarded a fellowship for

foreign students from the Fulbright Foundation Scholarship program. To qualify, forthe scholarship, a student must claim foreign citizenship.

This document would seem to provide the smoking gun that many of Obama’s detractors have been seeking. Along with the evidence that he was first born in Kenya and there is no record of him ever applying for US citizenship, this is looking pretty grim. The news has created a firestorm at the White House as the release casts increasing doubt about Obama’s legitimacy and qualification to serve as President article titled, “Obama Eligibility Questioned,” leading some to speculate that the story may overshadow economic issues on Obama’s first official visit to the U.K. In a related matter, under growing pressure from several groups,

Justice Antonin Scalia announced that the Supreme Court agreed on Tuesday to hear arguments concerning Obama’s legal eligibility to serve as President in a case brought by Leo Donofrio of New Jersey . This lawsuit claims Obama’s dual citizenship disqualified him from serving as president. Donofrio’s case is just one of 18 suits brought by citizens demanding proof of Obama’s citizenship or qualification to serve as president.

Gary Kreep of the United States Justice Foundation has released the results of their investigation of Obama’s campaign spending. This study estimates that Obama has spent

upwards of $950,000 in campaign funds in the past year with eleven law firms in 12 states for legal resources to block disclosure of any of his personal records. Mr. Kreep

indicated that the investigation is still ongoing but that the final report will be provided to the U.S. attorney general, Eric Holder. Mr. Holder has refused to comment on

the matter.


Subject: RE: Issue of Passport?

While I’ve little interest in getting in the middle of the Obama birth issue, Paul Hollrah over at FSM did so yesterday and believes the issue can be resolved by Obama

answering one simple question: What passport did he use when he was shuttling between New York , Jakarta , and Karachi ?

So how did a young man who arrived in New York in early June 1981, without the price of a hotel room in his pocket,suddenly come up with the price of a round-the-world trip just a month later?

And once he was on a plane, shuttling between New York , Jakarta , and Karachi , what passport was he offering when he passed through Customs and Immigration?

The American people not only deserve to have answers to these questions, they must have answers. It makes the debate over Obama’s citizenship a rather short and

simple one.

Q: Did he travel to Pakistan in 1981, at age 20?

A : Yes, by his own admission.

Q: What passport did he travel under?

A: There are only three possibilities.

1) He traveled with a U.S. . Passport,

2) He traveled with a British passport, or

3) He traveled with an Indonesia passport.

Q: Is it possible that Obama traveled with a U.S.

Passport in 1981?

A: No.. It is not possible. Pakistan was on the U.S. State

Department’s “no travel” list in 1981.

Conclusion: When Obama went to Pakistan in 1981 he was

traveling either with a British passport or an Indonesian passport.

If he were traveling with a British passport that would provide proof that he was born in Kenya on August 4, 1961, not in Hawaii as he claims. And if he were traveling

with an Indonesian passport that would tend to prove that he relinquished whatever previous citizenship he held, British or American, prior to being adopted by his Indonesian step-father in 1967.

Whatever the truth of the matter, the American people need to know how he managed to become a “naturalborn” American citizen between 1981 and 2008..

Given the destructive nature of his plans for America , as illustrated by his speech before Congress and the disastrous spending plan he has presented to Congress,the

sooner we learn the truth of all this, the better.

If you Don’t care that Your President is not a natural born Citizen and in Violation of the Constitution, then Delete this and go into your cocoon.

If you do care then Forward this!




【圖話故事‧新星爆炸】科學家用日本和美國共同研發的X射線天文衛星“朱雀”,研究兩個超新星爆炸遺跡,圖為其中一個超新星爆炸遺跡W49B,在燃燒了數 百萬年後坍縮成黑洞,黑洞在吸進周圍氣體的同時,還將外層的一些物質,包括鐵、氣體拋射出去。當這些噴氣撞擊包圍恆星的稠密氣體時,便會發光。(圖:美聯 社)










































































中國‧新疆雪崩14死‧至今27人死於寒潮 Extreme weather kills Mongolia livestock







The United Nations has warned that extreme winter weather has killed more than a million livestock in Mongolia.

The organisation said this was likely to harm the country's food supply and worsen poverty.

It said 19 of Mongolia's 21 provinces had been hit by heavy winter snow and -40C temperatures.

Mongolia suffered a severe drought during the summer months, which prevented the stockpiling of food for livestock.

More than a third of Mongolians herd livestock for a living in the poor, landlocked country.

"The poor did not have the resources to stockpile food or fuel for heating, and the supplies in the now inaccessible villages as a whole are stretched," said Rana Flowers, the UN's resident coordinator in Mongolia.

Ms Flowers said UN agencies were trying to reach the worst-hit people, and are particularly concerned about pregnant women cut off from medical facilities by the heavy snow - three have reportedly died in childbirth so far, she said.

The agencies are also worried about pneumonia rates among children and pregnant women, and increasing malnutrition.

The UN is coordinating all donor contributions to Mongolia, after the government asked for food, medicine, heating supplies, warm clothing and money to buy and deliver food for livestock.




































Banks pull another $1 billion from small business lending

NEW YORK ( -- The nation's biggest banks cut their collective small business lending balance by another $1 billion in November, according to a Treasury report released late Friday. The drop marked the seventh straight month of declines.

The 22 banks that got the most help from the Treasury's bailout programs have cut their small business loan balances $12.5 billion since April, when the Treasury began requiring them to file monthly reports on the tally. The banks' total lending has fallen 4.6% in that seven-month period, to $256.8 billion.

As Wall Street megabanks return to health -- and celebrate with lavish bonuses -- President Obama and his administration have been pushing financiers to help spur a Main Street recovery. Small business owners are still reporting difficulty finding banks willing to extend the credit they need to launch, run and grow their ventures.

In December, the President met with a dozen CEOs of the nation's biggest banks to pressure them to reverse their small business lending declines.

Hitting bottom: There are some signs the credit drop may be at or near its nadir.

Five of the 22 banks reported higher small business loan balances in November than they did in April. At others -- such as Wells Fargo (WFC, Fortune 500), by far the biggest small business lender -- the totals have fluctuated month to month.

But 10 of the 22 banks have cut their small business balances every single month since April. That list includes firms such as JPMorgan (JPM, Fortune 500) that are now posting monster profits. In the past seven months, JPMorgan's small business loan balance has dropped by almost $962 million, or 3.7%.

On Friday, JPMorgan Chase reported earnings of $3.3 billion in the last three months of 2009. JP Morgan said its compensation expenses rose 18% during the year to $26.9 billion, much of which will be distributed as bonuses.

JPMorgan was the first major bank up to bat to report financial results. Later this week, Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), Wells Fargo, Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) are all slated to release their fourth-quarter and full-year numbers.

Bonus backlash: American taxpayers are sour on the idea that the bankers they bailed out are pocketing super-sized end-of-year bonus checks.

The day before JPMorgan reported its earnings, President Obama called on Congress to tax the largest banks in a so-called "financial crisis responsibility fee."

As the backlash gained steam, one representative in Congress proposed a bill that would siphon money from Wall Street bonuses directly to into small business coffers.

Rep. Peter Welch, D-Vt., introduced a bill on Thursday calling for a 50% tax on bonus compensation in excess of $50,000 at banks that received government assistance. All revenue raised from the tax would go directly to the Small Business Administration to fund a new direct lending program. Twenty-three members of the House of Representatives co-signed the bill.

"With double-digit unemployment in a recession they helped cause, there's no justification for seven- or eight-digit banker bonuses," said Rep. Lloyd Doggett, D-Texas, one of the bill's co-sponsors.

SBA-backed lending has begun to rebound from last year's wipeout. The agency's flagship program funded 37% more loans last quarter than it did a year earlier, totaling $3.8 billion.

Chicken or egg? Banks say they are lending less for two key reasons: Small businesses are risky borrowers, and fewer entrepreneurs are looking to borrow and take on more debt in the face of slower sales.

But small business owners tell a different story. They say that tighter lending standards leave too many viable businesses unable to access the credit they need to grow or finance routine operations like buying materials to fulfill customer orders. Lending standards have been growing steadily more restrictive for nearly three years, according to the Federal Reserve's most recent Senior Loan Officer Study, released in October.

Edward Yingling, CEO of the American Bankers Association, says that finding the right balance between caution and investment is critical to spurring economic recovery.

"Bank regulators need to be prudent without being so punitive that they choke off lending in communities across the country," Yingling said last month. "Just as too much risk is undesirable, over-correction will impede economic recovery if banks are prevented from making good loans to creditworthy borrowers." To top of page

Copenhagen’s Elephant in the Room

Rather than accepting the tempting conclusion of overwhelming futility towards expressing any dissenting views about the present climate talks in Copenhagen, I have decided to use this space for any and all of its potential. and so, not so modestly, I propose ideas like this:

Recently in AM New York, one of our two free daily papers here in NYC, the headline was “A World Divided: Nations struggle over best way to stop global warming. To its left, one of the side headlines read, “Gifts for the little women in your life.” The bitter irony hit me like a sledgehammer — are they really that dim? Among all the international media hype about these talks (which hasn’t really been THAT much, considering the fate of all life on ear this at stake), among the specifics (whenever they are rarely mentioned) of “renewable energy,” “cleaner” technologies, and other “advanced” alternatives that different businesses and empires are proposing, there’s one question that’s so simple, so obvious, that no one (not even the guy from Moldives, bless his heart) dares to broach:

What about consumption?

Why is it that we don’t question our need to buy more (and, we believe, better) stuff every day — especially at this time of year — even when our credit card bills are looming, and our closets are full of things that we never use? Don’t you think there’s some correlation between the facts that the U.S. and China together produce 40% of the world’s greenhouse gases, and the U.S. is the world’s biggest economy, while it seems like everything here is made in China? (Everything from dollar-store knick-knacks to the high-tech iPhones, yes.) When Canada has the Tar Sands oil fields — possibly the most environmentally destructive project in the world — and China has the Three Gorges Dam, where a nation is willing to destroy the homes of millions of people for the mouth of more energy, we would be joking to claim we could build enough geothermal, wind, and solar power plants in the next 5-10 years (the window we have to turn around global warming, according to NASA climate scientist James Hansen) to replace all of these gigantic toxic power structures.

It’s time we start seeing every dollar we spend on new products as one dollar too many. It’s come down to that. There is simply NO WAY our global economy can continue this scale of production for the next 50 years and expect to be able to have enough resources left (and I’m talking basic things, like clean air, water, and land) to survive another generation. Take the example of oil. Everyone talks about oil when the greenhouse gas issue comes up…. people talk about cars and consider them inevitable for their lifestyles, and think wistfully or sarcastically about the new hybrids. But look inside the interior of that Prius, and what do you think it’s made out of? Derivatives of oil, of course! Look at the pen in your hand — OIL! Your tube of toothpaste, your lawn chairs, your insulation, your comb, even your medicines, and you’ll find the same thing — OIL. The media isn’t going to mention that when their broadcast tapes are made from oil. Nearly everything we buy is made from, if not oil, than dead trees, or some mass-produced monoculture crop that requires huge amounts of oil-based pesticide and fertilizer as well as water, or mined from some place that destroys its surroundings and will eventually run out.

So far, even in this short analysis, we’ve touched on two main sources of greenhouse gases: oil emissions/production and direct industry pollution. Then there’s the third – methane – as a result of livestock waste — not for any fault of the animals, but because we’ve bred BILLIONS of them, an increasing majority of which live in intensive confinement — and there’s no way any environment can support that long-term. The global agriculture industries have pushed intensive meat production at a much higher rate in the last few decades, causing even more production of a highly consumptive industry that harms everyone from the workers to the land to the water, and most of all, the animals themselves. And don’t forget the other major source of methane, landfill off-gassing! We throw away so much crap every day that it actually becomes more toxic over time; or else, the trash incinerators end up burning a lot of plastic, which people already know is a toxic thing to do.
So what are we supposed to do about this? Just sit and sulk, from Copenhagen to Christmas? No, actually, the unthinkable IS possible. There is a way we can all contribute. It all comes down to two words:


We have to learn to leave well enough alone. If we have something that already works, why get a new one? If it’s broken, seek out that old appliance repair shop before it goes out of business — it might be a simple fix. Shoe repair shops can be very affordable. Ask your grandmother how to sew and knit. Imagine how happy your loved ones would be if you made something new and beautiful out of some old clothes that needed repair! You could go the tech route and fix your friend’s old laptop, upgrade it to run really well, and decorate the front, to make it a truly unique piece. Make it easy to reuse. If you want some new clothes, music, toys, or furniture, scour the thrift stores or garage sales for the most enjoyable, unique pieces, and find something special. Find some music from previous generations, that costs next to nothing on vinyl or cassette, and convert it to CD or digital files. Learn how to fix your mp3 player! Teach the skills you’ve learned to your friends and family. The internet is such a vast resource that we can learn how to do almost anything.

Our production is so bloated right now that we have enough right here, already, to satisfy our needs for the foreseeable future. If we can rely on what we have, we can cut down on the never-ending waste stream of industrialized nations like ours, survive better on less money while incurring less debt, and finally reclaim the creative skills we have neglected for most of our lives. Sure, all the media will say that “consumer spending is down,” that this is hurting the economy — but on the long term, this is the only thing that will save us. We have to consider the impact of every purchase, every material that our possessions are composed of, the transportation and the labor involved in every facet of every last thing that we buy, and realize that THIS, from global warming to habitat destruction to species extinction – is what is destroying our planet. It may look pretty pretty good to us right now, but by the time the effects of global warming really kick in, it will be too late to reverse. The global warming symptoms that we’re seeing now are from the pollution of 50 years ago – when our global population was a small fraction of what it is now. Global warming WILL get worse — but if we don’t radically change our lifestyles right now, our fate will be inevitable.

Obama's proposed budget cuts spare foreign aid

Um, Hellooo!!! Am I the only one who sees something seriously wrong with this picture???

Obama's three-year spending freeze will be part of the budget Obama will submit Feb. 1, senior administration officials said, commenting on condition of anonymity to reveal unpublished details.

* * *

The savings would be small at first, perhaps $10 billion to $15 billion, one official said. But over the coming decade, savings would add up to $250 billion.

* * *

The Pentagon, veterans programs, foreign aid and the Homeland Security Department would be exempt from the freeze.

A country that can't afford to spend on its own domestic expenditures has no goddamn business "aiding" other countries!

Apparently, we'll never see any real change in America unless Americans thrash their congressmen and women right there in front of their precious obelisk, for all the world to see.

Verizon to Cut 13,000 Jobs as Businesses Reduce Lines (Update2)

(Updates share price in fifth paragraph.)

By Amy Thomson

Jan. 26 (Bloomberg) -- Verizon Communications Inc., coping with subscriber losses at its fixed-line phone business, plans to cut about 13,000 jobs at the division this year after posting fourth-quarter revenue that missed analysts’ estimates.

The cuts will follow reductions of a similar size last year, Chief Financial Officer John Killian said on a conference call today. This year’s eliminations equal to 11 percent of the staff at the unit, which had about 117,000 workers at year-end.

Sales rose 9.9 percent to $27.1 billion, missing the $27.3 billion average of estimates compiled by Bloomberg. Fixed-line revenue fell 3.9 percent, muting mobile-customer gains that beat some analysts’ projections. High unemployment hurt sales to companies and damped growth at Verizon’s FiOS Internet and TV service, said Stifel Nicolaus & Co. analyst Christopher King.

“The economy, first and foremost, we really see no signs of improvement there,” said Baltimore-based King, who advises investors to buy the shares and doesn’t own any. “I would have expected to see a little bit more signs of stabilization in the fourth quarter.”

Verizon, the second-largest U.S. phone company, fell 51 cents, or 1.7 percent, to $30.17 at 4:01 p.m. in New York Stock Exchange composite trading. The New York-based company’s stock declined 2.3 percent last year.

The company had a pretax expense of $3 billion last quarter related to job cuts, pushing it to a net loss of $653 million, or 23 cents a share. A year earlier, it had a profit of $1.24 billion, or 43 cents.

Excluding some costs, profit fell to 54 cents a share, matching analysts’ projections.

Fixed-Line Slump

Sales to global enterprises declined 4.5 percent from a year earlier. The company has said that its fixed-line unit will recover alongside the unemployment rate, which reached a 26-year high in October, according to U.S. Labor Department data.

Consumers also appeared to cut back. Verizon added 153,000 subscribers each to its FiOS Internet and TV services, missing the 225,000 forecast by Todd Rethemeier, a New York-based analyst at Hudson Square Research.

Earlier this month, Verizon said 2009 earnings per share fell as much as 15 cents, signaling that fourth-quarter profit missed analysts’ original estimates. The company coped with a higher pension expense and subsidized phones for new customers.

“It could be a while before there’s any uptick in the trend in enterprise, and we’re starting the year with a price cut in wireless,” said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York, who rates Verizon “underperform” and doesn’t own the shares. “2010 looks like it’s going to be another tough year.”

Apple Tablet

Verizon Wireless, which the company co-owns with U.K.-based Vodafone Group Plc, added 1.2 million retail subscribers, beating its own goal. Brett Feldman, an analyst at Deutsche Bank Securities in New York, estimated 1 million contract-customer additions for the quarter.

Verizon is focused on building up the wireless business, which accounts for more than half of revenue. The company is adding new devices and cutting prices for some of its plans to encourage customers to buy subscriptions for data use. Verizon is the largest U.S. wireless-phone carrier and is second to Dallas-based AT&T Inc. in total phone customers.

Growth in devices such as a tablet computer that Apple Inc. is expected to unveil tomorrow should drive growth industrywide, Killian said in an interview today.

“It will attract more and more data customers, more and more usage over the network,” Killian said. “Devices like that will be, long term, very positive for the wireless industry.”

(The company held a conference call to discuss the results at 8:30 a.m. New York time. For a replay, go to LIVE .)

--Editors: Ville Heiskanen, Lisa Wolfson

What happened to those inventions of the future?

The launch of Apple's new iPad is set to change computing forever but real life hasn't always lived up to the visions of science fiction in books and movies.

A child robot with biomimetic body

The launch tomorrow of Apple's new iPad, or iSlate, the all-singing, all-dancing gizmo that's expected to change computing forever, has led many people to claim that we're finally catching up with the visions of the future laid out in science-fiction.

Yet the shameful truth is that the modern world has been a letdown. If you grew up in the 1950s, by 2010 you would have expected to see bases on the moon and a robot in every house. As recently as the 1980s, we were told to expect flying cars and hoverboards by now. And what do we have? Touchscreen mobile phones and Wikipedia. It's not what we signed up for.

So, in the absence of jetpacks – or even an old-fashioned post-apocalyptic dystopia – it's time to hold people to account. What were we promised? When were we promised it by? Who are the liars who got our hopes up?

A totalitarian new world order

When 1984

Where Nineteen Eighty-Four

Who George Orwell

We suspect that a lot of people will be thinking Orwell was largely spot-on in his prediction of a world where personal freedoms are trampled and our every move is recorded on camera; we leave that judgment to you. But what Orwell got wrong was the idea of an all-powerful government that controls every facet of its subjects' lives. Instead, we have governments that can't even control their own ministers. It's comforting, in a way.

Androids indistinguishable from human beings

When 1992

Where Do Androids Dream of Electric Sheep?

Who Philip K Dick

The robots in Dick's novel, loosely adapted by Ridley Scott into the film Blade Runner, were so similar to humans that when they went rogue, trained bounty hunters were called in to perform psychological tests to see whether suspected androids lacked human empathy. Yet the nearest thing available today is "the world's first sex robot", the profoundly creepy Roxxxy, which went on sale this year.

Time travel

When 1994

Where Timecop

Who Peter Hyams

In an audacious move, the film Timecop – a vehicle for the arguable talents of Jean-Claude Van Damme – posited that time travel would take place in the year that it was released. It was wrong.

Cryogenic freezing

When 1996

Where Demolition Man

Who Marco Brambilla

We should qualify this: cryogenic freezing that actually works. Rich Americans have been freezing themselves for years in the hope that science will discover the secrets of immortality; it is widely, and falsely, rumoured that Walt Disney's head has been kept in a Californian chiller cabinet since his death in 1966.

Unfortunately, the technology to bring them back to life is nowhere to be seen. So when Sylvester Stallone's maverick cop is incarcerated in a "CryoPrison" in a dystopic 1996, we can safely say they've jumped the gun. Although there's still time for a non-violent, Utopian society to develop by 2032, when Stallone's character is defrosted, we have to be suspicious of the predictive powers of a film whose homicidal arch-criminal glories in the name of Simon.

War with the machines

When 1997

Where Terminator 2

Who James Cameron

"Skynet began to learn at a geometric rate," intones Sarah Connor portentously. "It became self-aware on August 29, 1997." This from a film that was made in 1991. They weren't completely off the mark; in 1997, a computer did beat humanity in a battle that gripped the world. Fortunately, that computer was IBM's Deep Blue; humanity was represented by Garry Kasparov; and the battle took place on a chessboard.

Intelligent robots

When 1998

Where I, Robot

Who Isaac Asimov

Not the appalling 2004 film starring Will Smith, which danced merrily over Asimov's grave by cannibalising one of the author's greatest works for exactly the sort of sub-Faustian morality tale he despised. This was his original 1949 short story collection; specifically the first story, Robbie. Powered by a "positronic brain", Robbie is a robot nursemaid, confidant and friend to a child called Grace.

In real-life 1998, robots were still largely limited to spray-painting Ford Mondeos. However, in an interesting twist, robot carers for the elderly are sometimes used in Japan, preparing food and carrying out domestic tasks for those incapable of looking after themselves. We doubt, however, that they're especially cuddly.

Overpopulation-inspired cannibalism

When 1999

Where Make Room! Make Room!

Who Harry Harrison

The novel that inspired the film Soylent Green, Harrison's story, written in 1966, suggested that Earth's rapidly increasing population would force us into a horrible necessity: eating each other, both to provide food and to keep the population down. That has not materialised, but the reality is almost as unpalatable: an explosion of smug cooking programmes in do-gooders patronisingly explain how to feed your children on polenta and curly kale for less than £5 a day.

Manned interplanetary flight

When 2001

Where 2001: A Space Odyssey

Who Arthur C Clarke and Stanley Kubrick

The 1968 film and novel made many bold predictions: homicidal computers, bases on the Moon, suspended animation, video phones (they got that one right, sort of, although they've never been all that popular). Chief among them was the idea of frequent, easy space flights, with "MoonBuses" regularly shipping people to our lunar satellite, and oddly dressed space-hostesses serving drinks on a rotating space station. The trip to Jupiter (or Saturn in the novel) on which the plot centres is seen as more of an event, but still comfortably within the technology of the time.

In the real world, a mere nine years after Clarke and Kubrick's deadline, Sir Richard Branson reckons he'll soon be able to take a few super-rich thrill-seekers briefly into a low orbit for several hundred thousand pounds a time, while Nasa seems to be quietly shelving plans to send astronauts to Mars. Nearly right, then.

Discovering alien life

When 2010

Where 2010: Odyssey 2

Who Arthur C Clarke

Nine years after the events of 2001: A Space Odyssey, a second trip to the outer planets finds alien life in the oceans of Europa, one of Jupiter's moons, and gaseous beings in the clouds of Jupiter itself. Apart from the fact that no one is likely to be going near Jupiter any time soon, this is not too unreasonable: Europa is considered by astrobiologists the most likely candidate for extraterrestrial life of any world in our solar system, due to its liquid water and geothermal activity. The next bit of the novel, where Jupiter collapses and forms a second sun, is probably less likely. Still, there's another 11 months left before we can fully rule it out.


When 2015

Where Back to the Future II and III

Who Robert Zemeckis

According to the Back to the Future series, the inarticulate youth of the future will be hurtling across the nation's car parks a foot above the ground, using anti-gravity skateboards. A generation of children grew up wanting one in their Christmas stocking. What they got instead was a series of disappointingly "futuristic" toys such as Tamagotchi or Robosapiens. Unless someone working for Mattel invents anti-gravity in the next five years, Zemeckis will be blamed for single-handedly ruining Christmas for kids worldwide.

Deadly game shows

When 2019

Where The Running Man

Who Stephen King (writing as Richard Bachman)

Say what you like about the decline of television: whatever Jonathan Ross has done recently, it's not as bad as The Running Man, the mercifully fictional government-sanctioned game show in which political prisoners are chased by deadly hitmen through a ruined America for the diversion of its enslaved populace. Although it was made into a camp film starring Arnold Schwarzenegger, which looked like a no-holds-barred version of Gladiators, the original novel was a darker, sadder affair. However, real
life has singularly failed to keep up, despite the valiant efforts of Endemol and Channel 4.

Commercial Real Estate and Tishman and Blackrock Walking Away from a $4.4 Billion CRE Deal. How to Lose 66 Percent on an 11,000 Unit Property. ......

Commercial Real Estate and Tishman and Blackrock Walking Away from a $4.4 Billion CRE Deal. How to Lose 66 Percent on an 11,000 Unit Property. Why Walking Away from CRE is no different from Walking Away from Residential Real Estate.

It is becoming more of a preferred strategy to systematically walk away from commercial real estate debt. We have now had two large Wall Street organizations in Morgan Stanley and Tishman and Blackrock Inc. deciding, by voluntary choice, to walk away from their contractual obligations on commercial real estate. Now much has been made regarding the commercial real estate debacle because some $3.5 trillion in commercial real estate debt is outstanding. This number is enormous and many of the bank failures that we’ll be seeing on Fridays this year will come from bad loans in the commercial sector.

Part of the problem with commercial real estate is the way deals got financed. Many of the loans are made under 5 to 10 year terms and unlike a 30 year loan, need to be refinanced at the end of the deal. Well this is a problem when the property securitizing the loan is now valued at 30, 40, or even 50 percent lower. Unlike residential real estate that saw loan and home values peak in 2005 and 2006, commercial real estate loans saw volume peak in 2008:

So what we have is a similar situation as in residential real estate except it is delayed by two to three years. In other words, the major problems start this year. Bad commercial real estate deals are not something new. But this time the amount of bad loans made is astronomical because of the way the banking system securitized the loans. Just think for a minute how a loan is usually made. A careful evaluation of the property is made assuring the loan is actually reflecting the value of the underlying asset. The loan is then made under the assumption the borrower will pay the loan back under the contractual terms. If the borrower doesn’t pay the amount back, then you as a responsible lender will be able to take back a property that ideally would be valued at terms that would make a sale to recoup some money realistic. At least this was the older system of doing business.

This time, property values were never realistically assessed and banks never had in their equation the possibility of taking the property back:

“(WSJ) The decision comes after the venture between Tishman and BlackRock Inc. defaulted on the $4.4 billion debt used to help finance the deal. The venture acquired the 56-building, 11,000-unit property for $5.4 billion in 2006-the most ever paid for a single residential property in the U.S. The venture had been struggling for months to restructure the debt but capitulated facing a massive debt load and a weak New York City economy that has undercut rents and demand for high-priced apartments.

The property’s owners signaled they would be unable to reach a deal with lenders and instead decided to allow creditors to proceed with what amounts to an orderly deed-in-lieu of foreclosure, which means a borrower voluntarily gives the property back to lenders to avoid a foreclosure proceeding.

“It has become clear to us through this process that the only viable alternative to bankruptcy would be to transfer control and operation of the property, in an orderly manner, to the lenders and their representatives,” the venture said in a statement to The Wall Street Journal. “We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city.”

Now you might be asking yourself, this is a rather significant deal and certainly anyone loaning out $4.4 billion is going to make sure that they place some kind of conservative valuation on this commercial real estate deal. So how much is the property currently worth?

“By some accounts, Stuyvesant Town is only valued at $1.8 billion now, less than half the purchase price. By that measure, all the equity investors-including the California Public Employees’ Retirement System, a Florida pension fund and the Church of England-and many of the debtholders, including Government of Singapore Investment Corp., or GIC, and Hartford Financial Services Group, are in danger of seeing most, if not all, of their investments wiped out.”

Now walk through this deal. The place was purchased at $5.4 billion. It was financed with $4.4 billion in commercial real estate loans. The place is now estimated to be valued at $1.8 billion. This is a $3.6 billion loss. Now the first buyers are making a conscious business decision to walk away from their obligation to pay on this property. Clearly Tishman and Blackrock have the money to make the payment if they wanted to but they don’t. But who is the big loser here? Those that they sold the securities to. This is how the banking industry is setup. It is designed to punish those who really have little knowledge of the interworking of Wall Street finance yet the current system is designed to use taxpayer money to gamble on these sorts of deals. This is what we are bailing out and why there is such outraged geared towards Wall Street.

The reason this is important is because there has been this moralizing of walking away. There has been this guilt trip put on average Americans that they need to put every penny to their house payment even if it means starving. Yet here we have Wall Street organizations with billions in funds making a conscious business decision to walk away from billion dollar deals. This isn’t some homeowner unable to make a $100,000 mortgage payment on a home valued at $70,000. The bank will technically lose $30,000 in this case by taking the home back. Here, someone somewhere is going to lose billions. As John Getty once said, “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”

And that is the core of the commercial real estate problem. Values have collapsed:


By most estimates, commercial real estate values are down over 40 percent from their peak. Many loans that are now coming due for refinancing will simply fail. In fact, there are claims that many borrowers have already stopped making payments but banks simply keep rolling over the loans like some debt snowball as to avoid writing down the real value of the underlying asset.

This is an enormous problem. It is amazing so little is discussed about this in the open. My guess is the government and Wall Street realize that bailing out the commercial real estate market would garner little to no sympathy from the American public. After all, these were big banks that supposedly knew a thing or two about financing big deals. So for them to come out publicly and say they had no idea, which is really the reality, would not play well in bailing out a $3.5 trillion industry. The bottom line is someone is going to pay and so far most of the paying has come from the American taxpayer through bailouts to the corporatacracy.

And So The Great Recession Continues...

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Economy flounders, despite the stimulus

Editor's note: Ron Paul is a Republican congressman from Texas who ran for his party's nomination for president in 2008.

(CNN) -- A year after a nearly $800 billion stimulus package was passed, the U.S. economy still finds itself mired in mediocrity.

Economic growth is stagnant, unemployment remains higher than almost any time since the Great Depression and millions of Americans are upset that trillions of taxpayer dollars have been committed to numerous government bailout programs with no improvement of the economy within sight.

They question, rightfully, is where this money is going and why it hasn't been as helpful as the government has claimed.

The problems with stimulus packages are manifold. The primary reason they fail is because they do not address the roots of the problem. If you are unable to identify the cause of your problem, then your solution is doomed to fail.

In the case of the current economic crisis, it had its root in loose monetary policy and easy credit that skewed the allocation of resources within the economy.

Combined with other measures to promote home ownership, these easy money policies caused a massive housing bubble. Money that would have been put to other uses was used to produce raw materials, hire workers and loaned to homebuyers, all while home prices spiked.

The boom was, of course, unsustainable, as many prognosticators pointed out during the housing bubble's peak. But the damage was done, and now that the bubble has burst, we need to stand back and allow the mess to unwind. Yet the government does everything in its power to stave off true recovery and is attempting to re-inflate the bubble.

Rather than allow prices to fall so that the housing market returns to a sustainable level, the government does everything in its power to try to keep housing prices elevated.

The reasoning behind the stimulus package was that underconsumption was to blame for the collapse of the housing bubble and the resulting economic crisis. The government seems to think that if consumption can be spurred, then the economy will be return to normal.

In reality, the collapse of the economy was not caused by a sudden lack of consumption but rather a malinvestment of resources into sectors of the economy that were unsustainable without easy credit. The rise in housing prices was not, in fact, indicative of the new normal but rather an indicator that something was seriously wrong.

Government attempts to boost the economy through measures such as stimulus packages merely take money from hardworking taxpayers and throw that money into unproductive endeavors, into the sectors of the economy that already suffer from malinvestment or into make-work projects. Washington is throwing good money after bad, wasting hundreds of billions of taxpayer dollars and accomplishing nothing.

As the eminent economist Frederic Bastiat once pointed out, there is a difference between what is seen and unseen.

The government likes to tout the number of jobs that have been created or saved by the stimulus. But even if these numbers are accurate, they do not count the number of jobs that are not created in other more productive or self-sustaining sectors of the economy. Nor do they count the jobs that will be lost in the future when tax rates will have to be increased to pay off the interest on the debt that is financing much of the stimulus package.

Finally, the stimulus package enables the government, rather than the market, to pick winners and losers.

Whenever the government doles out money, political factors come into play. Firms that are politically well-connected or located in important congressional districts will benefit, while those firms without political connections, the ability to navigate bureaucratic hurdles or that exist in isolated areas unimportant to Washington will lose out.

Once the stimulus money runs out, the companies and jobs dependent on that handout will find themselves once again struggling.

A company that cannot satisfy consumer needs in the marketplace and that requires a government stimulus to remain competitive is a company that should not be in business.

The last thing this country needs is more government spending, especially on such wasteful measures as stimulus packages. We have wasted trillions of dollars in the past year and a half in stimulus packages, bailouts and guarantees to unsound companies.

We have run up our national debt to unprecedented levels. We are destroying the dollar. And it seems as if there is no end in sight.

Loose monetary policy, easy credit and too much debt created the bubble and got us into this economic crisis. Unless the government learns its lesson and opts for restrained monetary and fiscal policy, it risks a complete implosion of the U.S. economy.

The opinions expressed in this commentary are solely those of Ron Paul.

Pete DuPont: Coming Tax Hikes Will Cause Greater Economic Collapse Than 2008-09

Wall Street Journal op-ed, An Economic Time Bomb: Even If Congress Does Nothing, Tax Hikes Will Hit Hard a Year From Now, by Pete DuPont (Chairman of the Board, National Center for Policy Analysis):

Weather-wise it has been a very cold January, and politically the Scott Brown Senate victory has chilled Washington Democrats even further. But if the Democratic economic policies continue nevertheless, this year will be nothing like the bitter economic January we will be living in a year from now.

Government spending has already hugely increased, and so has the size and scope of government, but next year there will also be substantial tax increases for a great many Americans. ...Add on to all of these increases the biggest government deficits and spending increases (to 26.5% of gross domestic product from 21%) in half a century, the protectionism of free trade downsizing through the "buy American" requirements, China import restrictions, and the administration limitations of Columbia, South Korea, and Panama free trade agreements, and we have a very different, and not very prosperous, America ahead of us. ...

[W]hen the huge tax-increase agenda arrives a year from now, the economy will begin to decline, and will be some 3% to 4% smaller than it otherwise would have been. The artificially high growth in 2010 followed by artificially low growth in 2011 would "represent a larger collapse than occurred in 2008 and early 2009," Mr. Laffer writes.

Faber on Alex Jones - World Economy Is Doomed

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"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem

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