OWS- a global syndrome or U.S. centric

So much of what has been written and opined upon on this issue that this blog has been stymied from any comment. So here's some recognition of the issue from this perspective, perhaps dated or already commented on by others.

Overall, this seems to be an anarchist movement or at at times a libertarian movement that is spontaneous but driven by real but uncoordintated issues. It seems real for certain and not just a passing moment. Unlike the civil rights movement of the early and mid-60's or the anti-war movement of the mid-60's to the early 70's there is no one goal that makes for a cohesive cause. We are the 99% is a phrase that means little but resonates with some(Paul Krugman notes that the phrase could more aptly be we are the 99.9% as only a small sliver of our society has these almost absurd level of assets that are being protected by conservative interests and resented by almost all citizens). Unlike the demonstrations and encampments of the Great Depression, those protesting today do not look poor or malnourished, in fact they look relatively healthy and prosperous generally speaking. That's

said with the exception of some homeless who have joined the group for food and shelter, some mentally challenged, and then some predators who have latched onto the group for criminal activity and sexual assaults.

The current precedents are the persistent unfocused anarchist protests at various world economic summits and to some extent the long overdue uprisings against the long established middle eastern regimes.

What is missing from OWS is an Occupy Congress event. Congress and the executive branch were the regulators of the financial markets, and Bush II and Clinton pushed Fannie and Freddie into the low credit markets. They also benefitted handsomely from the taxes generated by lightly regulated companies across all industries, camapaign contributions, and the revolving door that benefitted those who worked for them and then went on to high paying jobs in the industries that they supposedly regulated. Obama is simply missing in action on all of this, highlighting his oratory, social, and basketball skills.

The highjacking of the Republican Party by the tea party and by Grover Norquist is a complete roadblock to any compromise. The arrogant orthodoxy of Pelosi, Levin, and other members of Congress during the Democrats four years of opportunity ruined Obama's goal of all for one action that President Bush and Secretary Paulson has already started. And now here we are.

The frightening precedents, if this grows exponentially, are the Paris Commune of 1870 and the Russian uprisings of 1905 and 1917(the populist U.S. uprisings of 1893 drew much attention but were really minor in scope, an analogy that should not be ignored), and then the collapse of the monetary system in post world war 1 Germany that led to what we all know. Those thoughts are extremely remote, but the world is unpredictable in nanoseconds these days and previous events were led by anarchists with no real plans but to overthrow an existing world order that was facilited by inept and corrupt bureaucrats, bad decisions by family anointed leaders, and by so-called economists and market pundits who had no basis for their commentary - sound familiar.

The motivating fact of OWS is that the establishment is moribund and so completely insitutionalized that any change of supposed consequence is really miniscule. While technology and globalization have roared ahead leaving U.S. job losses in their wake, other aspects of U.S. society have not materially changed in 30 years or much more - infrastrusture, education systems except for the most advantaged, methods of healthcare, penal systems once that called for rehablilation and are now highlighed on popular televison shows as places for young people to get raped, immigration reform and an acceptance that that this is a historic aspect of America's growth and prosperity, and the functioning of a political system that has stagnated. It really started with the Supreme Court's completely contrarian validation of the Bush win in Florida. It went against all precedent of that court - not that Gore was any solution or even really sane.

The establishment is no longer functioning in a way that points to a better future either for near term future generations or for the majority of the current populace. That may be the OWS underarticuladed thesis and it seems to be an anti-intellecutual television generation point of view.

In the non-urban areas of this great country much of this brohaha may seem like a sideshow. Close down their local post office/ meeting places/ and gossip clubs and that may change. Let Alabama's draconian profiling rules become widespread and expect urban gangs, older people, and former middle aged office workers to harvest crops and mow lawns and then the whole order may break down, tea party or OWS or both.

There is no question that the U.S. economy is anemic. On the positive side, corporate profits are still strong, technology and globalization roar ahead, creating growth and dividends but leaving job creation stagnant or worse. Add to that the unmitatging attacks on the financial industry through regulation, litigation, and presidential distate and there is not an environment for growth. How can you have a growing economy of this scale without financial intermediries(the Mafia revived maybe). The contructive aspects of the financial industry are being undermined by Obama, and if by fiat he can tell them what to do he is simple minded and inexperienced.

All that said, OWS could become a positive catalyst if the anarchists and old hippies are thrown aside, and the young people realize that getting back to their books, their innovative thoughts, and their opportunies for entrepreneurship, all almost unique to this country, are more important than this mindless lark with no cohesive center.

There is a serious unemployment problem in this country due to many factors - industrial dislocation, underwater housing disincentives, technology advances, and government incentives to not work that are being scammed. For the youth that participate in these OWS events, there are endless opportunties. From our 17 year old with a steady job to our 24 year old with a real company in her interests, it simply requires a willingness to get off the couch. My 17 year old and 24 year old have jobs, with possible long term opportunity. They want to work, and are not in a postion to need immediate financial assistance.

For the middle aged with family obligations that is not so simple, as for the elderly who saved their entire lives and now have no interest to live on. These are not easy times, and with no real serious leadership there is no end in sight. President Obama reminds me of Bush number 1, an effective leader in foreign policy but an ineffective leader in his home country.

Thanksgiving food expansion

Once upon a time Thanksgiving's meal was a turkey, a few traditional items, and maybe some special desserts. It was about conversation and football and relaxing. Maybe it still is in many places.

Today's foodie revolution has certainly changed that around here, for both better and worse. New exotic dishes show up on the table, untried recipes are unveiled, wonderful creations are presented, surrounding the lonely turkey with an array of unfamiliar fare. The fun for some is in the cooking and the experimenting with special offerings to family and friends, but the end result can be a buffet of food well beyond the capacity of the table. It can be sampled and tasted by all, and what's leftever can be saved or divided up and sent home with some or delivered to others unable, mostly by age restrictions, to attend. Little is wasted. That's all fine and festive.

What is not festive is the clean up from this massive undertaking of multiple talented cooks, many who vanish soon after mealtime. The simple old days become nostalgic when three hours after dinner the clean up and packing and sorting continue. Separating the fine chinaware from the mundane, separating what leftovers will go to whom in different packages, filling the dishwasher and still having a sink full of pots and pans to scrub, debating what to keep and what didn't really make the grade.

Back in my grandparent's days when extended famililies filled their houses, even folks with modest incomes had hired help to help with the task. In my childhood family it was all kept simple. Today, even with a small group, the food fascination of this generation overwhelms the table with delights, and wearies those few who clean up at nights. I was dragging by bedtime.

It was certainly worth the effort, but it was definitely work towards the end.

Should Corzine and Flowers be charged with a crime

The collapse of MF Global was painful to investors, and something that could not be foreseen in any way based on their financial statements and comments. Was the collapse just a liquidity panic that can happen to any financial firm with issues or was it a result of intentionally manipulated reporting, window dressing, and misleading statements.

Much has been said by some about the lack of charges against anyone associated with the mortgage banking fueled economic crisis of '08/'09 that is really in many ways still with us. From this viewpoint that was a systemic event that overwhelmed almost everyone in financial services. To charge anyone with a crime would require opening a new Federal prison for rating agency personnel, multiple regulators, some elected officials, bankers, processors, securities analysts, pension fund managers, mortgage brokers, etc. The key major players that benefitted from this systemic overlay were Fuld of Lehman(macho competitive arrogance), Killinger of Wamu(naive and purposeful ignorance), the Sandlers(the Ma and Pa Kettle of the mortgage market who sold Golden West to stupid Wachovia just before the collapse) and Mazzili of Countrywide(openly willful and almost gleeful exploitation of a market). Some would add Blankfein of Goldman to this list but the firm survives and no laws were broken. The aura of their actions is poor, but the legality is under no reasonable scrutiny, except by the odious Carl Levin who plays by no rules and benefits from his own stable of lobbyists.

MF Global's bankruptcy comes at a time when there is no systemic event that would wrap itself around the entire investing world. It stands alone in the U.S. at the moment. Here one can think back to Enron, Worldcom, and Tyco and the punishments received by managers. Worldcom obviously broke laws, in Enron's case it is certain that with Merrill Lynch's help the CFO(turned prosecutor's witness) broke laws but not really anyone else, and with Tyco the only real law broken was buying major artwork from a Vermont address to avoid New York tax and then displaying in a company paid for Manhattan apartment.

In these cases, not part of any systemic event, Ken Lay of Enron, a major philanthropist and good person, essentially got the death penalty, Schilling, the brilliant but alcoholic protagonist of the event got 24 years in prison, the turncoat CFO who orchestrated it all got 12 years, the Worldcom guy got 25, and Tyco's Koslowski(sp?) received 25 years in Attica for a state crime of tax fraud and partying too hard on company money that was approved by the Board of Directors of a firm that is ongoing and never caused shareholders any loss.

Why now are Jon Corzine and J. Christopher Flowers not subject to prosecution. Corzine ran the company and Flowers was the major investor who hired him and orchestrated the whole event. They manipulated financial statements and publicly misled investors. Other financial firms are now not producing the returns they once had and are working to reassure investors at all times, but in fact most are solid. It's the lack of a good growth outlook that concerns investors rather than any chance of failure. The President, regulation, and the economy have taken the sheen off of even the best financial companies.

Full disclosure here, as a retail investor I bought some MF Global, no big amount but not completely trivial either, when Corzine took over. My assumption was that the addition of Corzine, former co-CEO of Goldman, and the role of Flowers, former head of the financial services practice at Goldman and a hedge fund manager focused on that sector, would stabilize a global firm that had already been through a fall and would benefit from the Volcker initiative that would, I thought, lead to a spreading out of derivatives trading to the benefit of mid-sized firms like MF Global. Obviously I am either too far away from the business now to make such judgements or, given some of the major shareholders of MF Global until the last weeks, I had no way of knowing what was going on.

Continuing personal disclosure, I bought in the high 7's on the annoucement, sold in the mid-4's several weeks ago, about 2/3rd's of what I had, on concerns that all was not right, and the last third is a total write off. I definitely have a bias in this post.

Why would Corzine and Flowers not be criminally prosecuted. There is no systemic event in the U.S. going on. Corzine obviously misled investors, a Reg FD crime in itself. Flowers facilitated this although he lost a lot of his investors' money as well. If Koslowski is up at Attica for what he did at a firm that is ongoing in all parts and prospering, why would Corzine for sure, and Flowers perhaps, not be charged with a crime of defrauding investors.

This at least deserves some attention. I wish prison on no one, but do think that this is a unique case of inadequate and misleading disclosure by egomaniacs who let their success at Goldman become their guiding light. They deserve no special treatment. If there is anything that signifies the Goldman culture it was the attention to detail, and these guys knew what they were doing.

THE 6:53am --- Recovery?

The 6:53am is the LIRR train that I took most often when I worked full time in Manhattan and had moved to the suburbs. With lots of errands to do in the city today I took that train. It was not due to any urgency, but just the fact that I woke up early and with no chance to go back to sleep had already read the NYT, had my coffee, juice, toast, and jam and was ready to get out.

The 6:53 out of my suburb, 26 minutes to Penn Station, was until my last days of regular work a complete scrum. People jammed at the entrance doors on our platform, had planned their spots in advance based on previous experience, and did the aggressive save seating act if they got there in front of any companion. New York. I figured it out and got used to it. I learned to never get a middle seat.

Today was a revelation. I had not tried this train in 3 or 4 years, and went to my usual experienced advantage point. The car was almost empty. It's an express train so at the next stop we added more and some would have been standing in the past. The LIRR has since added one additional stop to this express and while it for the most part filled the train there was still no one standing and no one seated next to me in my three seater( and I had taken a shower for sure).

The 6:53am from my town was, was, a train of financial service folks like myself, garment district workers at the higher and middle levels, and legal firms both major attorneys and their sub-partners or assistants.

So to get the point of this post, this was an amazing observance of what has happened to our economy and how broadspread the damage has become.

To me, the 6:53 was totally annoying and vibrant at the same time. Multi-cultural and linguistic, in hindsight it was the signpost of a vibrant economy. Now there is simply no comparison to four years ago. I'm not kidding you, no pushing, no shoving, extra seats, I was astonished today. Today is not a holiday, no special day, what I saw was what is going on.

My take, just a signficantly lower amount of economic activity, everyone stuck in place, no one hiring, using part timers, no optimistic outlook, and no clear way to invest for productive futures. The redepression of 2008 and 2009 is behind us, but there is now no new path. People that survived are stuck. People that did not are stuck. Entrepreneurship at the personal level is still alive and well, vigorously in some sectors like tech(potentially productive but no immediate payback) and restaurants(rarely productive ever if books and tv don't follow).

Today the old 6:53am with all of its annoyances seems like something we will never get back to. I hope that I am wrong. Today was alarming.

Pack your bags Jimmy

Daniel Ortega is running for a second term for his klepto dictatorship, aka socialist in this part of the world, and this time is widely viewed as leading in the polls by those in control of the political process. Control leads to more control in these types of governments. His family now has a significant ownership in the largest oil company in Nicaragua in partnership with Hugo Chavez, his man, or should I say dealer at discount prices.

Five years ago Ortega re-established himself as the leader of this country in a three way presidential race. He won with 38% of the vote after coming to an agreement with the outgoing leader, from one of the other parties, to drop all of the already filed and well documented corruption charges against him in exchange for his support. With that support and stolen loot behind him, he won a slim victory.

Jimmy Carter went to Nicaragua to certify that the elections were fair, and assured the world that they were. More publicity and attention for Jimmy, and it is unclear whether he was simply unknowingly used or just can't get enough of the spotlight. The election was obviously rigged by behind the scenes agreements and who knows what else.

Mr. President, it's almost time for another trip.