CALPERS to Vote Against Lewis at BofA

Today, the powerful California Public Employee Retirement System (CALPERS) announced that it would vote against the re-election of all 18 members of the Bank of America board of directors and would actively oppose the reappointment of Ken Lewis as the bank's CEO. Since CALPERS owns some 22 million shares, this is a big deal. Lewis, as The Author's previous post indicates, is under fire from all sides. With this last volley, his survival at the institution is in question to say the least. As it should be. Pop Impulse is impressed.

news
banking

Obama to Congress: Pass the Stimulus

Echoing the overwhelming will of the American people expressed so clearly in the November general election, President Obama tonight asked Congress to get busy and pass the much-needed stimulus bill.

The Author was very impressed with the content and substance the president's first press conference earlier this evening. Finally, a president who clearly understands the problems we face and the range of solutions that we need to bring to bear on these challenges. Now if the clueless Republican opposition would stop political posturing, end their obstructionism and put America back to work.

Of special note, was the president's unequivocal placement of blame for the economic crisis and the budget deficit directly at the feet of his predecessor George Bush and his Republican party cronies. Please, read the post immediately below to get an understanding of how and when this crisis arose. And if you know a banker or a diehard Republican, maybe its time to confront those individuals for their role and that of their failed policies in our current pain. Bipartisanship, you say? Bah. Not in this lifetime. If you or your family is feeling stressed out by the economy, burdened by the pain of unemployment and a loss of confidence and hope, go ahead and blame the Republicans and their banker friends. Don't be shy. You're in good company.

Populist Revot Erupts

We may not know much, but like the NY Times said in an editorial today: "...we do know that the system has been fixed for too long." True Dat. Fixed by the very rich oligarchs, and yes, America has its oligarchs in case you haven't noticed. Fixed by the banks, may they rot in hell for their fiendish and greedy maneuvering. Fixed by eight years of a Republican administration that not only looked the other way, but actively participated in gutting the regulatory system designed to prevent just such a meltdown. Shame. Anger. Revolt.

It's no wonder that a significant Populist revolt is already underway. Politicians and financiers, watch out! The depth, length and fury of the blowback will shock and astound. As well it should. Regression to the mean in this case is going to be a very painful exercise.

And as for not seeing this coming, as many of the pundits and so-called experts now plead, The Author was sounding the alarm on this site in multiple posts as early as 2007 - with this post about predatory business practices. A follow-up post askes: Is the US becomming a third-world nation? Prescient, don't you think? A third post on the subject in 2007 sounds the alarm about impending failures in the banking system. And a final post warns: Don't blame consumers for the sub-prime meltdown. This is in 2007!

In 2008, as the crisis unfolded, Pop Impulse stayed ahead of the main-stream-media and pundits with a series of posts on the deteriorating economy. A first-of-the-year post notes the market meltdown underway at the time. A second post notes that Fed Chair Ben Bernanke "bet the farm" with his first intervention. A February, 2008 post places the blame directly on corporate greed. Ya think? The Author worried in a follow-up post that the financial crisis would bankrupt cities. Well, that's definitely happening now. In June, this blog reported that "consumers were drowning." And by July, The Author was advising readers with big bank accounts pay attention.

Okay, so here's the question? Why the fu*k did the brainiacs in power miss this impending "perfect storm?" And while we're at it, who is benefiting from the carnage?
Technorati Tags: Economy, Banking, Finance

Financial Tsunami Drowns Consumer Confidence

Consumer confidence hit a 16-year low today. Read the Bloomberg report here. With good reason, it seems. Consumers aren't as dumb as business often thinks. They know a disastrous economic downturn when they see one. After all, if your mortgage has not been foreclosed, it is likely that the value of your home has gone down over 15 percent in the last two years. Just peachy. And of course, there's the mountain of credit card debt; the auto loans; the equity lines of credit - the list of liabilities just goes on-and-on. The Author has posted before about the roots of this recession, here and here. Readers have learned consumers are not to blame for the sub-prime crisis, rather it is predatory business practices based in corporate greed and excess. Previous posts have also looked at how the crisis will affect cities and schools (hint: very badly).

Just how bad is it? Is the U.S. becomming a third-world nation? Well, Bennet Sedacca, president of money manager Atlantic Advisors LLC in Winter Park, Florida wrote the following in a report (source) issued yesterday:

"Whether it is anecdotal or statistical evidence, I see inflation everywhere, and this is where the financial tsunami cometh. `A battered, over-indebted consumer, if forced to retrench, could create even more problems for the banking system as loan delinquencies would begin to rise even further. All sorts of delinquencies are rising. This is now a systemic issue.''

consumer confidence
recession

Nikkei Loses 200 at Opening in Tokyo

Will tomorrow be "Black Tuesday" on Wall Street? We'll know in just a few hours. An early indicator is not good. The Tokyo Stock Exchange, open now, dropped 200 points in a heart beat. It seems that the international meltdown, driven by the economic policies and runaway spending of George Bush and the Republican Party, has caused the Bank of Japan to reduce estimates of national growth. Other central banks in other developed nations will find themselves in similar straits in short order. We're in uncharted territory here. Like our 401k plans haven't tanked enough already!

Markets Crash - Panic Selling

Stock markets worldwide came crashing down today, as investors large and small rushed to the relative safety of cash. You know there's trouble ahead when analysts are recommending that 85 percent of investment portfolios should now be in cash. After months of denial, it is like the Dutch boy took his finger out of the dike. One can actually hear the bubbles popping as I write. First the housing bubble went, then the credit bubble, and now the market bubble follows. Pundits are talking in terms of "panic" and "tail spins." Read The Economist's analysis of the conundrum here.

Oh the markets will attempt a rally, they've fallen so low we're all desparately seeking a bottom. But I am not opptimistic. Looks like a real crash to this observer. And I should know. I was standing on the corner of Wall Street & Broad in NYC on Black Monday in 1987 when the Post's headline screamed MELT DOWN. It is interesting to note that the trigger for this worldwide event was the enormous "thud" made by president Bush's recently announced stimulus package - which has obviously been already judged as too little, too late. Surprised? I didn't think so. As if this buffoon and his minions saw this coming or have the horsepower to turn it around. Not happening. So get ready for the grief. Because there will be grief. And say so-long to the American dream for now.

Looking for someone to blame? Well, that piece at least is pretty clear. Blame Republicans and their very greedy corporate sponosors. In power for 8 years, this sorry crowd has ruined the economy, plunged us into countless, costly wars, sent all of our good jobs overseas while adding trillions to the national debt. Yes, I'm bitter about this because it was all so avoidable. A little less greed, a little more responsibility and respect and we would have avoided this disaster completely. But no. It wasn't to be. I urge my US readers to hold the appropriate government officials responsible at election time. To those outside the US, my apologies on behalf of my countrymen for this economic calamity that has been visited on us all by large, multinational banks and corporations.

Don't Blame Consumers for Bad Loans

Now that it is clear the US economy has tanked behind the sub-prime loan scandal, the blame dogs are loose. And of course, it's the consumer's own fault they got screwed by system and owe their souls to the man. Yea, uh-huh. Like I believe that.

Here's the real story, told by countless victims across the country. For background, we all live hurried, complicated and stressed-out lives; and so we often turn to trusted professionals for counsel and advice. When those professionals turn into preditors, the system doesn't work. I know, because I have friends and relatives who were caught in the web of deceit. In the last few years, this is the counsel that an army of loan officers has been providing their trusting customers.

Let me show you the benefits of home ownership. Bottom line, it's like owning the bank. And I can get you into a house of your own no matter how bad your credit or insignificant your job. No problem. We can even finance 100 percent of the transaction, including my fees and the loan origination costs, to make it easier yet. Why wouldn't you want to do this? Look, this is the way that the very rich have been playing the system for years, now you can do it too. What's not to love. We'll just do an adjustable rate first, a second on top of that, and no down payment is necessary.

Often, I suspect, troubled spouses and partners asked: Are you sure we can afford this? Well, when my friends posed that question, they were told the following:

Look, real-estate is a sure thing. It just keeps going up in value. You will always be on the black side of the ledger and if worse-comes-to-worse, you can easily refinance. But you'll have to move fast to take advantage of these rates and this deal.

Given the fact that the middle-class is always working diligently to move up and improve their lot, it doesn't surprise me that many were swayed by these hard-sells. And yes, some even attempted to leverage real-estate speculation to launch themselves into the upper-class. It's the American Dream, after all. But no, they should have known better. What made all these sincere and enthusiastic investors think they could actually "invest" their way to prosperity and a share of the wealth? All consumers deserve, it seems, is scorn and ridicule from the pundits, from shocked bankers and from smug corporate CEO types. What should make this day different than any other?

Green Econometrics

If you are curious about the numbers involved in the emerging "green economy," surf by my friend Michael Davies' really wonderful site, Green Econometrics. Someone's got to mine the data; do the numbers, and analyse the results for the rest of us. At least if you are as averse to counting beans, or worse yet predicting bean totals, as I am. Econometrics is the science of applying statistical methodologies and quantitative analysis to study, analyse and understand economics.

I first met Mike in the eighties when he hired me to join Marketing Strategies International, a small skunk-works marketing research team that consulted with Ron Roner to help Apple target market niches prior to the introduction of the first Macintosh. Even back then, Mike's favorite book was the Statistical Abstract of the United States. That's right. And fancy regressions were his forte. Since that time, he's gone on to a bunch of Wall Street jobs, crunching numbers and developing data for financial mavens. He got his Bachelor's from Columbia, and his MBA from UCLA. Sort of a bi-coastal guy. And then, he got his CFA to top it all off. You want numbers, Mike is your guy.

So what's the big deal? Just this: we're entering into uncharted waters right now in our journey through endless economic cycles - as we shift from resource exploitation and excess to conservation and alternative resources. Nobody is sure just exactly what's going to happen, and when. So who do you call? The denizons of data; number crunchers extraordinaire; trend prospectors; and, heavy weight analysts. Who else?

Rhetoric & Costs of War - Make Love not Stress

As candidates for president parade for the cameras and conduct their first series of presidential debates, the war in Iraq is never far from the surface. No wonder. The entire country is reeling from the human and financial costs involved and our very reputation as a world power is being called into question.

In this scenario, the Bush White House is rushing to shape perceptions, control the message and frame events in a positive light - only to have reality on-the-ground lay waste to all their efforts. Can you say: poetic justice? Mark Danner, professor of journalism at UC Berkeley and author of a number of books on war and the war in Iraq recently delivered the commencement address at the University's "School of Rhetoric." In that address, reprinted in its entirety in the Asia Times, he holds forth on the rhetoric of war and how politicians manipulate language to their own ends. The upstart is, in this case, that reality has outpaced the administration's ability to frame events and control the message. It is a very long piece, but way worth the read.

One of my favorite online sources of opinion and news, the Asia Times also takes a much-needed look at "Financing the Imperial Armed Forces" of the US. The hard-hitting and fact-filled piece notes that we're going to spend $1 trillion this year alone, in the absence of any credible threat. Living in a county that has just closed all of its libraries due to cutbacks in federal timber subsidies (hey, we take care of the roads and steward the land), I can tell you that this kind of expense is hard to justify. The country is suffering financially, with millions of families and children without health insurance and a decaying transportation infrastructure, and we're sending this kind of money overseas. I recall Paul Bremer, the first Duke of Iraq, reporting that he gave away billions in unaccounted for cash that was literally loaded onto palates in bundles for distribution. A government investigative report issued in 2005 found that under Bremer's leadership, $9 billion in reconstruction funds (taxpayer $$) just plain disappeared. Uh huh.

What has this staggering investment bought us other than a host of deceased young men and women and countless misspent dollars? Certainly not the end of terrorism as we know it, which has fed on our folly. And if you believe as many do that Bush is on a crusade against Islam and you buy into the "Clash of Civilizations" scenario, consider this: Muhammad is now the most popular name for newborn boys in Great Britain, and maybe in the entire world. That's right. Check it out.

On a lighter note, Der Speigel reports today on the dangers of all work and no nookie. German scientists (bless their hearts) have finally established a direct link between a lack of sex and increased stress. Flip side: the more sex, the less stress. Like we didn't know that. But the study went further, indicating that postponing resolution of sexual frustration leads to more work - and even less sex. Read the study, there are some thought-provoking observations as well as a few wickedly clever lines.